Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-3_07-cv-00954/USCOURTS-almd-3_07-cv-00954-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNTIED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

EASTERN DIVISION

DAVID LOWERY, )

 )

PLAINTIFF, ) 

 )

v. ) CASE NO. 3:07-cv-954-MEF

 )

STATE FARM FIRE & CASUALTY ) (WO-Not Recommended for Publication)

COMPANY, et al., )

 )

DEFENDANTS. )

MEMORANDUM OPINION AND ORDER

This cause is before the Court on the Motion to Remand (Doc. # 7) filed by Plaintiff

on November 6, 2007. This lawsuit was originally filed in the Circuit Court of Chambers

County, Alabama. Arguing that Plaintiff had fraudulently joined Defendant Donny Holley,

(hereinafter “Holley”), Defendant State Farm Fire and Casualty Company (“State Farm”)

removed the action from state to federal court. Plaintiff seeks remand of this action

contending that Holley was not fraudulently joined. For the reasons set forth in this

Memorandum Opinion and Order, the Court finds that the Motion to Remand is due to be

GRANTED because Holley was not fraudulently joined. 

Federal courts are courts of limited jurisdiction. See, e.g., Kokkonen v. Guardian Life

Ins. Co. of Am., 511 U.S. 375, 377 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095

(11th Cir. 1994); Wymbs v. Republican State Executive Comm., 719 F.2d 1072, 1076 (11th

Cir. 1983). As such, federal courts only have the power to hear cases that they have been

authorized to hear by the Constitution or the Congress of the United States. See Kokkonen,

Case 3:07-cv-00954-MEF-CSC Document 22 Filed 12/05/07 Page 1 of 5
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511 U.S. at 377. Because federal court jurisdiction is limited, the Eleventh Circuit favors

remand of removed cases when federal jurisdiction is not absolutely clear. See Burns, 31

F.3d at 1095.

Removal of a case from state to federal court is proper if the case could have been

brought originally in federal court. See 28 U.S.C. § 1441(a). The removing defendant has

the burden of establishing that this a court has subject matter jurisdiction over an action. See

Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996) (stating that the party seeking removal

to federal court has the burden of establishing federal jurisdiction). 

State Farm argues that removal was proper because the Court has jurisdiction over this

case due to diversity of citizenship. The diversity statute confers jurisdiction on the federal

courts in civil actions between citizens of different states, in which the jurisdictional amount

of greater than $75,000, exclusive of interest and costs, is met. See 28 U.S.C. § 1332(a)(1).

According to the rule of “complete diversity,” no plaintiff may share the same state

citizenship with any defendant. See Riley v. Merrill Lynch, Pierce, Fenner & Smith Inc., 292

F.3d 1334, 1337 (11th Cir.2002). 

From the Complaint it appears that there is not complete diversity of citizenship in this

case because Holley and Plaintiff are both residents of Alabama. State Farm argues that, due

to the fraudulent joinder, the Court should disregard the citizenship of Holley for purposes

of diversity jurisdiction and conclude that complete diversity between the parties exists. See,

e.g., Owens v. Life Ins. Co. of Ga., 289 F. Supp. 2d 1319, 1325 (M.D. Ala. 2003); Bullock

Case 3:07-cv-00954-MEF-CSC Document 22 Filed 12/05/07 Page 2 of 5
 “The plaintiff need not have a winning case against the allegedly fraudulent 1

defendant; he [or she] need only have a possibility of stating a valid cause of action in order

for the joinder to be legitimate.” Triggs v. John Crump Toyota, 154 F.3d 1284, 1287 (11th

Cir. 1998) (emphasis in original). 

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v. United Benefit Ins. Co., 165 F. Supp. 2d 1255, 1247 (M.D. Ala. 2001) (“When a defendant

has been fraudulently joined, the court should disregard his or her citizenship for purposes

of determining whether a case is removable based upon diversity of citizenship.”). Thus, in

order to determine whether complete diversity exists in this case, the Court must address the

issue of fraudulent joinder.

As the United States Supreme Court has long recognized, a defendant’s “right to

removal cannot be defeated by a fraudulent joinder of a residential defendant having no real

connection to the controversy.” Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921).

The Eleventh Circuit has articulated that joinder may be deemed fraudulent in three

situations:

The first is when there is no possibility that the plaintiff can

prove a cause of action against the resident (non-diverse)

defendant . . . The second is when there is outright fraud in the 1

plaintiff’s pleading of jurisdictional facts . . . [A third situation

arises] where a diverse defendant is joined with a nondiverse

defendant as to whom there is no joint, several or alternative

liability and where the claims against the diverse defendant has

no real connection to the claim against the nondiverse

defendant.

Triggs, 154 F.3d at 1287. A removing defendant bears the burden of proving fraudulent

joinder. See Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997) (citation omitted).

Case 3:07-cv-00954-MEF-CSC Document 22 Filed 12/05/07 Page 3 of 5
It is important to note that the Court should determine its jurisdiction over the case 2

“based upon the plaintiff’s pleadings at the time of removal,” Coker, 709 F.2d 1433, 1440

(11th Cir. 1983), supplemented by any affidavits or deposition transcripts filed by the parties.

“While ‘the proceeding appropriate for resolving a claim of fraudulent joinder is similar to

that used for ruling on a motion for summary judgment under Fed. R. Civ. P. 56(b),’ the

jurisdictional inquiry ‘must not subsume substantive determination’. . . When considering

a motion for remand, federal courts are not to weigh the merits of a plaintiff’s claim beyond

determining whether it is an arguable one under state law.” Crowe v. Coleman, 113 F.3d

1536, 1538 (11th Cir. 1997) (citations omitted).

 Because of the Court’s conclusion that the diversity of citizenship requirement has 3

not been met, it need not and will not address the parties contentions about whether the

amount in controversy requirement is satisfied.

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This burden on the defendant is a heavy one. It requires the court to evaluate the parties’

factual allegations in the light most favorable to the plaintiff and resolve all uncertainties

about state substantive law in favor of the plaintiff. See id. If there is a possibility that a

state court would find that the complaint states a cause of action against any one of the

resident defendants, the federal court must find that the joinder is proper and remand the case

to the state court. See Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th Cir. 1983). In 2

other words, a motion to remand should be denied only if the court is convinced that there

is “no possibility that the plaintiff can establish any cause of action against the resident

defendant.” See Cabalceta v. Standard Fruit Co., 883 F.2d 1553,1561 (11th Cir. 1989). 

The Court has carefully reviewed the claims against the resident defendant and the

arguments of the parties, and it must conclude that Holley has not been fraudulently joined.3

Accordingly, this Court must remand the case to the Circuit Court of Chambers County,

Alabama.

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It is hereby ORDERED as follows:

(1) Plaintiff’s Motion to Remand (Doc. # 7) is GRANTED.

(2) This case is REMANDED to the Circuit Court of Chambers County, Alabama.

(3) The Clerk is DIRECTED to take appropriate steps to effect the remand.

(4) Any pending motions other than the motion to remand are left for resolution

by the Circuit Court of Chambers County, Alabama.

DONE this the 5 day of December, 2007. th

 /s/ Mark E. Fuller 

CHIEF UNITED STATES DISTRICT JUDGE

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