Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-01921/USCOURTS-caed-2_06-cv-01921-1/pdf.json

Parties Involved:
Kristine Blas
Defendant
Broadspire Services, Inc.
Defendant
Darlene Gomes
Plaintiff
Michaels Stores, Inc.
Defendant

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Plaintiff alleges several claims, including, among other 1

things, wrongful termination in violation of public policy,

invasion of privacy, fraud, and intentional infliction of emotional

distress.

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

DARLENE GOMES,

NO. CIV. S-06-1921 LKK/KJM

Plaintiff,

v. O R D E R

MICHAELS STORES, INC.;

BROADSPIRE SERVICES, INC.;

KRISTINE BLAS AND DOES 1-100,

Defendants.

 /

I. Background

Pending before the court is an action brought by an

employee against her employer, the worker’s compensation

insurance carrier, and the carrier’s claims representative.1

The claims representative, Kristine Blas, is a non-diverse party

whose presence deprives the court of diversity jurisdiction. 

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Defendants allege in their removal notice that Blas was

fraudulently joined and that diversity jurisdiction is therefore

proper. Def.’s Notice of Removal ¶ 5. Plaintiff did not file a

motion for remand. However, the court has an independent duty

to ensure that subject matter jurisdiction exists. See 28

U.S.C. § 1447.

II. Standard

“Fraudulent joinder is a term of art. If the plaintiff

fails to state a cause of action against a resident defendant,

and the failure is obvious according to the settled rules of the

state, the joinder of the resident defendant is fraudulent.” 

Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998),

(internal quotations omitted); see also McCabe v. General Foods

Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). Where a non-diverse

defendant has been fraudulently joined to an otherwise

completely diverse case, that defendant is disregarded for

purposes of diversity jurisdiction. See, e.g., Calero v. Unisys

Corp., 271 F. Supp. 2d 1172, 1176 (N.D. Cal. 2003). 

If, however, there is a non-fanciful possibility that

plaintiff can state a claim under state law against the nondiverse defendants, the court must remand. Macey v. Allstate

Property and Cas. Ins. Co., 220 F. Supp. 2d 1116, 1117 (N.D.

Cal. 2002) (“When there are real ambiguities among the relevant

state law authorities, federal courts that are considering

motions to remand should avoid purporting to decide how state

courts would construe those authorities”). The removing

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defendant faces a strong presumption against removal and bears

the burden of establishing that removal was proper. Sanchez

Monumental Life Ins. Co., 102 F.3d 398 (9th Cir. 1996). Federal

jurisdiction must be rejected if there is “any doubt” as to

whether removal is proper. Gaus v. Miles, Inc., 980 F.2d 564,

567 (9th Cir. 1992).

III. Analysis

First, it is clear that if defendant Blas was acting within

the scope of her employment, she cannot be held personally

liable. California courts have held that liability to the

insured "for acts or contracts of an insurance agent within the

scope of his agency, with a full disclosure of the principal,

rests on the company." Lippert v. Bailey, 241 Cal. App. 2d 376,

382 (4th Dist. 1966). Furthermore, "it is settled law that an

insurance agent acting within the course and scope of his

employment cannot be held liable for damages resulting from a

negligent failure to insure." Gasnik v. State Farm Ins. Co.,

825 F. Supp. 245, 249 (E.D. Cal. 1992). 

The rule is the same even if a tort, rather than mere

negligence, is alleged. Although agents may at times be held

liable for torts committed within the scope of their employment,

this does not hold true in the insurance context. Good v.

Prudential Ins. Co. of America, 5 F. Supp. 2d 804, 808 (N.D.

Cal. 1998) (finding that an insurance agent fraudulently joined

even where torts were alleged). Similarly, even if defendant

Blas aided and abetted defendant Michaels in disability

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 The court presumes that plaintiff cites to this incident as 2

one example, rather than as the only example, of conduct allegedly

outside the scope of Blas’ employment.

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discrimination, liability for this action would only flow to

Blas’ employer, Broadspire, if she acted within the scope of her

employment. Reno v. Baird, 18 Cal. 4th 640, 656 (1998).

The more difficult question presented by this case is

whether plaintiff has sufficiently alleged that defendant Blas

acted outside the scope of her employment. The complaint states

that all defendants’ acts were “were performed partly within and

partly outside the course and scope of their authority and

employment.” Compl. ¶ 7. Defendant argues that plaintiff has

not made any factual allegations to support this claim. In

response, plaintiff points to an incident, detailed in the

complaint, in which Blas is alleged to have intentionally sent

an incorrect job description to a doctor in order to induce him

to make a particular recommendation. Compl. ¶ 44. Plaintiff 2

reasons that this act must be outside the scope of Blas’

employment, because presumably her employer would not authorize

its employees to make fraudulent representations.

Under well-settled California law, this factual allegation

would not support a colorable claim. The scope of one’s

employment extends beyond that which one is authorized to do. 

See Mary M. v. City of Los Angeles, 54 Cal. 3d 202, 208 (1991)

(holding that tortious conduct that violates an employer’s

express orders and that is not in the employer’s interests may

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still be within the scope of employment); see also Lisa M. V.

Henry Mayo Newhall Memorial Hospital, 12 Cal. 4th 291, 296

(1995) (“Equally well established, if somewhat surprising on

first encounter, is the principle that an employee's willful,

malicious and even criminal torts may fall within the scope of

his or her employment . . . even though the employer has not

authorized [them].”). 

Accordingly, the court must address the issue of whether a

bare assertion that a defendant acted outside the scope of her

authority, without any specific factual allegations, is

sufficient to state a claim under California law. The court

holds that it is not. See Blank v. Kirwan, 39 Cal. 311, 318

(1985) (holding that the standard for a failure to state a claim

is whether “the complaint states facts sufficient to constitute

a cause of action”); see also Addison v. Allstate Ins. Co., 58

F. Supp. 2d 779, 734 (S.D. Miss. 1999) (noting that a plaintiff

“must plead specific facts, not mere conclusory allegations” to

defeat charge of fraudulent joinder) (internal quotation marks

omitted); Badon v. RJR Nabisco, Inc., 224 F.3d 382 (5th Cir.

2000) (finding fraudulent joinder where complaint alleging

conspiracy failed to detail “any particular or specific

activity, agreement, or statement of mind” on the part of sham

defendants). Moreover, Blas has also provided her sworn

declaration that she was acting in the scope of her employment. 

Blas Decl. ¶ 2. See Morris v. Princess Cruises, Inc., 236 F.3d

1061, 1068 (9th Cir. 2001) (“[F]raudulent joinder claims may be

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resolved by ‘piercing the pleadings' and considering summary

judgment-type evidence such as affidavits and deposition

testimony.”) (internal quotation marks omitted); see also

McCabe, 811 F.2d at 1339 (finding fraudulent joinder where

defendants submitted sworn statements that they were acting

within the scope of their employment).

Accordingly, Blas is an improperly joined defendant and is

hereby DISMISSED pursuant to Rule 21. Fed. R. Civ. P. 21. As

there is complete diversity between the remaining parties in the

case, subject matter jurisdiction is proper.

IT IS SO ORDERED.

DATED: October 26, 2006.

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