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LLC v. United States Liability Insurance Co.

United States District Court, N.D. Texas, Fort Worth Division

December 7, 2017

5857 PARK VISTA, LLC, Plaintiff,
v.
UNITED STATES LIABILITY INSURANCE COMPANY, ET AL., Defendants.

          MEMORANDUM OPINION AND ORDER

          JOHN MCBRYDE UNITED STATES DISTRICT JUDGE

         Came on for consideration the motion to remand filed by plaintiff, 5857 Park Vista, LLC, in the above-captioned action. Having considered such motion, the response of defendants, United States Liability Insurance Company and Joel Dahlvig ("Dahlvig"), the record, and applicable legal authorities, the court concludes that such motion should be denied and that plaintiff's claims against Dahlvig should be dismissed.

         I.

         Background

         Plaintiff initiated this action on August 28, 2017, by the filing of an original petition in the District Court of Tarrant County, Texas, 348th Judicial District. The action arises from a dispute as to the appropriate amount of insurance coverage for storm damage to plaintiff's commercial property that was insured by United States Liability Insurance Company and adjusted by Dahlvig. On October 11, 2017, defendants filed their notice of removal with the Fort Worth Division of the United States District Court for the Northern District of Texas, asserting subject matter jurisdiction based on diversity of citizenship and alleging that plaintiff improperly joined Dahlvig to avoid federal diversity jurisdiction. On November 15, 2017, plaintiff filed the instant motion to remand, urging that Dahlvig was properly joined as a defendant in the action, that Dahlvig and plaintiff are citizen of the same state such that Dahlvig's presence in the action deprives this court of subject matter jurisdiction, and that remand is therefore required.

         II.

         Applicable Legal Principles

         A. General Principles for Removal

         Under 28 U.S.C. § 1441(a), a defendant may remove to federal court any state court action of which the federal district court would have original jurisdiction.[1] "The removing party bears the burden of showing, that federal subject matter jurisdiction exists and that removal was proper." Manquno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (citations omitted). "Moreover, because the effect of removal is to deprive the state court of an action properly before it, removal raises significant federalism concerns . . . which mandate strict construction of the removal statute." Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362/ 365-66-(5th Cir. 1995). Any doubts about whether removal jurisdiction is proper must therefore be resolved against the exercise of federal jurisdiction. Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000) .

         B. Fraudulent or Improper Joinder

         To determine whether a party was fraudulently or improperly joined to prevent removal, "the court must analyze whether (1) there is actual fraud in pleading jurisdictional facts or (2) the plaintiff is unable to establish a cause of action against the nondiverse defendant." Campbell v. Stone Ins., Inc., 509 F.3d 665, 669 (5th Cir. 2007). Because defendants have not alleged actual fraud in the pleadings, the applicable test for improper joinder is:

whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant.

Smallwood v. I11. Cent. R.R., 385 F.3d 568, 573 (5th Cir. 2004). To answer this question, the court may either: (1) conduct a Rule 12(b)(6)-type analysis or (2) in rare cases, make a summary inquiry "to identify the presence of discrete and undisputed facts that would preclude plaintiff's recovery against the instate defendant.". Id., at 573-74. A Rule 12(b) (6}-type analysis of plaintiff's claims appears to be the proper method here to determine whether there exists a reasonable basis for a conclusion that plaintiff might be able to recover against Dahlvig.

         C. The Pleading Standard to be Used in the Rule ...


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