United States District Court, S.D. Texas, Corpus Christi Division
ORDER REMANDING CASE
GONZALES RAMOS, UNITED STATES DISTRICT JUDGE.
Kel Lee Properties, Inc. (KLP) filed this action against
Defendants Essex Insurance Company (Essex) and its adjuster,
Michael Cox (Cox) in the 36th Judicial District Court of Bee
County, Texas. D.E. 1-5. At issue is an insurance claim for
hail damage to a commercial real estate property, which Essex
denied. KLP alleges state law claims of breach of contract,
violations of the Texas Insurance Code, breach of the duty of
good faith and fair dealing, unfair insurance practices, and
violations of the Texas Deceptive Trade Practices Act.
September 12, 2017, Evanston Insurance Company (Evanston), as
successor by merger to Essex, removed the case to this Court
pursuant to 28 U.S.C. § 1332 diversity jurisdiction.
D.E. 1. In so doing, Evanston asserts that Cox, the only
non-diverse Defendant, is improperly joined. Before the Court
is KLP's Motion to Remand (D.E. 5), timely filed October
3, 2017, and Evanston's response (D.E. 7). It is
undisputed that the amount in controversy requirement of
§ 1332 is satisfied. See D.E. 5-1, para. II.
motion is instead based upon KLP's assertion that it has
viable claims against Cox 1 / 12 and that he was properly
joined, thus defeating diversity jurisdiction. For the
reasons set out below, the Court GRANTS the motion.
Standard of Review
motion to remand, “[t]he removing party bears the
burden of showing that federal jurisdiction exists and that
removal was proper.” Manguno v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
“Any ambiguities are construed against removal because
the removal statute should be strictly construed in favor of
remand.” Id. The strict construction rule
arises because of “significant federalism
concerns.” See generally, Shamrock Oil & Gas
Corp. v. Sheets, 313 U.S. 100, 108-09 (1941).
party seeking removal bears a heavy burden of proving that
the joinder of the in-state party was improper.”
Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568,
574 (5th Cir. 2004) (en banc). The removing party proves
improper joinder by demonstrating: (1) actual fraud in the
pleading of jurisdictional facts; or (2) the inability of the
plaintiff to establish a cause of action against the
non-diverse defendant in state court. See Crockett v.
R.J. Reynolds Tobacco Co., 436 F.3d 529, 532 (5th Cir.
2006) (citing Travis v. Irby, 326 F.3d 644, 646-47
(5th Cir. 2003)); see also Boone v. Citigroup,
Inc., 416 F.3d 382, 388 (5th Cir. 2005). Only the
second method is at issue here.
the motion to remand must be granted unless “there is
absolutely no possibility that the plaintiff will be able to
establish a cause of action against the non-diverse defendant
in state court.” Griggs v. State Farm Lloyds,
181 F.3d 694, 699 (5th Cir. 1999). In other words, “the
existence of even a single valid cause of action against 2 /
12 the in-state defendants (despite the pleading of several
unavailing claims) requires remand of the entire case to
state court.” Grey v. Beverly
Enterprises-Mississippi, Inc., 390 F.3d 400, 412 &
n. 11 (5th Cir. 2004) (and cases cited therein). To determine
whether a plaintiff has a “reasonable basis for
recovery under state law, the court may “conduct a Rule
12(b)(6)-type analysis.” Smallwood, 385 F.3d
at 573; Anderson v. Georgia Gulf Lake Charles, 342
Fed.Appx. 911, 915 (5th Cir. 2009).
test of pleadings under Rule 12(b)(6) is devised to balance a
party's right to redress against the interests of all
parties and the court in minimizing expenditure of time,
money, and resources devoted to meritless claims. Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 558 (2007).
Federal Rule of Civil Procedure 8(a)(2) requires only
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Furthermore,
“Pleadings must be construed so as to do
justice.” Rule 8(e). The requirement that the pleader
show that he is entitled to relief requires “more than
labels and conclusions[;] a formulaic recitation of the
elements of a cause of action will not do.”
Twombly, 550 U.S. at 555 (citing Papasan v.
Allain, 478 U.S. 265, 286 (1986)).
allegations are required, sufficient to raise the entitlement
to relief above the level of mere speculation.
Twombly, 550 U.S. at 555. Those factual allegations
must then be taken as true, even if doubtful. Id. In
other words, the pleader must make allegations that take the
claim from conclusory to factual and beyond possible to
plausible. Id., 550 U.S. at 557. The
Twombly court stated, “[W]e do not require
heightened fact pleading of specifics, but only enough facts
to state a claim to relief that is plausible on its
face.” 550 U.S. at 570.
Supreme Court, elaborating on Twombly, stated,
“The plausibility standard is not akin to a
‘probability requirement, ' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice.” Id. In dismissing the claim in
Iqbal, the Court stated, “It is the conclusory
nature of respondent's allegations, rather than their
extravagantly fanciful nature, that disentitles them to the
presumption of truth.” 556 U.S. at 681.
Claim Against Cox
KLP Has Asserted a ...