United States District Court, W.D. Texas, Austin Division
REPORT AND RECOMMENDATION OF THE UNITED STATES
HIGHTOWER, UNITED STATES MAGISTRATE JUDGE.
HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE
this Court are Plaintiff's Motion to Remand, filed on May
3, 2019 (Dkt. No. 7); Beynon Sports Surfaces, Inc.'s
Response, filed on May 10, 2019 (Dkt No. 9); and
Plaintiff's Reply, filed on May 17, 2019 (Dkt. No. 12).
On July 18, 2019, the District Court referred the above
motion and related filings to the undersigned Magistrate
Judge for Report and Recommendation pursuant to 28 U.S.C.
§ 636(b)(1), Federal Rule of Civil Procedure 72, and
Rule 1 of Appendix C of the Local Rules of the United States
District Court for the Western District of Texas
Hellas Construction, Inc. (“Hellas”), a Texas
corporation based in Austin, Texas, specializes in the design
and installation of sports surfaces and athletic facilities.
Defendant Beynon Sports Services, Inc.
(“Beynon”), a Maryland corporation, is in the
same business as Hellas and is thus a competitor of Hellas.
Defendant Jeffrey Dixon (“Dixon”), a Texas
resident, entered into an employment agreement with Beynon
(the “Beynon Agreement”) in January 2016. Dkt.
No. 2-4 at ¶ 7. Dixon worked for Beynon for three years
and was responsible for “management oversight for all
phases of the construction project . . . in connection with
track surfacing in the states of Texas, Oklahoma, Kansas,
Louisiana, Alabama, Mississippi, Florida, Georgia, Nebraska,
Arkansas and Missouri (the ‘Restricted
Territory').” Id. at ¶ 11.
February 21, 2019, Dixon resigned his employment with Beynon
and signed an employment contract with Hellas (the
“Hellas Agreement”). Id. at ¶ 9.
Hellas alleges that Beynon has sent notices to Dixon that
“put into question whether Dixon is (or will be) in
violation of the Beynon Agreement due to his employment with
Hellas.” Id. at ¶ 10.
February 25, 2019, Hellas filed this lawsuit in state court
against Beynon and Dixon. See Hellas v. Beynon,
D-1-GN-19-000999 (261st Dist. Ct., Travis County,
Tex. Feb. 25, 2019). Hellas' lawsuit seeks a declaratory
judgment under Chapter 37.004 of the Uniform Declaratory
Judgment Act “as to whether Dixon may comply with the
Hellas Agreement without violating the terms of the Beynon
Agreement, and whether Dixon may perform any services
requested by Hellas in states that are not within the
Restricted Territory.” Dkt. No. 2-4 at ¶ 15.
Hellas contends that “[i]f Dixon's duties with
Hellas are in violation of the Beynon Agreement, Dixon will
be unable to fulfill his duties and comply with the Hellas
Agreement, and will be in breach of the Hellas
Agreement.” Id. at ¶ 12. Hellas seeks
attorneys' fees and costs.
April 3, 2019, Beynon removed this lawsuit to federal court
on the basis of diversity jurisdiction under 28 U.S.C. §
1332. Beynon argues that Hellas has improperly joined Dixon
as a defendant in this case for the purpose of destroying
diversity jurisdiction. In response, Hellas filed the instant
Motion to Remand.
28 U.S.C. § 1441(a), any state court civil action over
which the federal courts would have original jurisdiction may
be removed from state to federal court.” Gasch v.
Hartford Accident & Indem. Co., 491 F.3d 278, 281
(5th Cir. 2007). A case may be removed pursuant to 28 U.S.C.
§ 1332 if there is complete diversity of citizenship and
the amount in controversy is greater than $75, 000 exclusive
of interests and costs. “If at any time before final
judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded.” 28
U.S.C. § 1447(c). If a party is improperly joined, a
court may disregard the party's citizenship for purposes
of determining subject matter jurisdiction. Smallwood v.
Ill. Cent. R.R. Co., 385 F.3d 568, 572-73 (5th Cir.
2004) (en banc)).
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. To determine whether jurisdiction
is present for removal, courts consider the claims in the
state court petition as they existed at the time of removal.
Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d
256, 264 (5th Cir. 1995).
argues that this case should be remanded to state court
because (1) there is not complete diversity of citizenship,
and (2) Beynon has not established that the amount in
controversy exceeds $75, 000. Beynon argues that Hellas has
improperly joined Dixon as a defendant in this case for the
sole purpose of destroying diversity jurisdiction.
Accordingly, Beynon argues that the Court should ignore
Dixon's citizenship in this case and dismiss him from
this lawsuit, or in the alternative to realign him as a
plaintiff in the case. Beynon also argues that it has
established the required minimum amount in controversy in
Diversity Jurisdiction ...