Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-02018/USCOURTS-ca8-06-02018-0/pdf.json

Parties Involved:
Michelin North America
Appellee
Jacob Allen Shackelford
Appellee
Heather Wilkinson
Appellant

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-2018

___________

Heather Wilkinson, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* Western District of Missouri. 

Jacob Allen Shackelford; *

Michelin North America, Inc., *

*

Appellees. *

___________

Submitted: January 12, 2007

Filed: February 28, 2007

___________

Before LOKEN, Chief Judge, BYE and SHEPHERD, Circuit Judges.

___________

BYE, Circuit Judge.

Heather Wilkinson appeals the denial of her motion to remand her action to

Missouri state court, which the district court denied on the ground she fraudulently

joined a fellow Missouri resident, Jacob Allen Shackelford, in her tire tread failure suit

against Michelin North America, Inc. (Michelin) in order to defeat federal diversity

jurisdiction. After concluding Shackelford had been fraudulently joined, the district

court dismissed the claim against him. Wilkinson also appeals the order denying her

the right to amend her complaint against Shackelford. We reverse with instructions

to reinstate the claim against Shackelford and remand this case to state court.

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I

On March 22, 2004, Wilkinson was driving a 1990 Chevrolet truck owned by

Shackelford. The truck was equipped with a B.F. Goodrich-Tri Gard, All Terrain T/A

Baja Champion brand radial tire manufactured by Michelin (actually manufactured

by a corporate predecessor-in-interest for whose products Michelin accepted

responsibility as part of a corporate merger/acquisition). Wilkinson was driving the

truck on U.S. Highway 50 in Jackson County, Missouri, when the rear passenger side

tire failed. The truck went out of control and overturned. Wilkinson suffered severe

injuries in the rollover, including multiple pelvic fractures, multiple spinal fractures,

and a closed head injury.

Wilkinson brought suit against Shackelford and Michelin in Missouri state

court. She alleged four causes of action against Michelin which sounded in strict

liability, strict liability for failure to warn, breach of implied warranty, and negligence.

The complaint alleged in part the rear passenger side "tire was defective and

unreasonably dangerous when put to a reasonably anticipated use." App. 18. She

alleged one cause of action against Shackelford sounding in negligence. The relevant

allegations against Shackelford were:

10. Prior to March 22, 2004, Defendant Shackelford gained possession

of the tires and placed them on a motor vehicle, a 1990 Chevrolet truck

of which he was the owner. At that time, Defendant Shackelford knew

that the tires had been previously used.

. . . 

49. Defendant Shackelford knew that Plaintiff needed a safe means of

transportation for a trip beginning in Johnson County, Missouri, that

would result in travel outside of Johnson County, Missouri; and that the

route would include use of a highway, and highway speeds. He loaned

said truck to Plaintiff for the purpose of transportation of said trip,

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realizing that Plaintiff would travel in said truck at typical highway

speeds.

50. At all times material hereto, Defendant Shackelford had a duty to the

users of the truck, including Plaintiff, to exercise ordinary and reasonable

care for the user's safety. Additionally, Defendant Shackelford owed

duties to:

(a) warn Plaintiff of the characteristics and of the dangers

and risks associated with the use of the tires on the truck on

a highway;

(b) supply tires and other equipment on the truck that were

capable of and adequately suited for the purpose of

operating the truck on a highway in a safe condition

without the tire tread separating from the tire;

(c) service and supply the truck with adequate tires;

(d) take steps to learn of the condition and dangers of the

tires on the truck when permitting Plaintiff to use the truck.

. . . 

52. Defendant Shackelford breached his duties and was negligent in the

following respects:

(a) failing to warn Plaintiff of the dangers of the truck and

the tires, or of the potential danger of the tires;

(b) failing to supply the truck with adequate and safe tires;

(c) failing to warn of the danger of driving the truck with

said tires on a highway;

(d) failing to warn of the danger of driving the truck with

said tires at typical highway speeds;

(e) failing to take steps to learn of the condition and

dangers of the truck, including the tires, when permitting

Plaintiff to use the truck.

Id. at 16, 24-25.

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Michelin removed the action to federal district court claiming complete

diversity existed between itself and Wilkinson and Shackelford had been fraudulently

joined to destroy jurisdiction. Wilkinson moved to remand the case to state court,

arguing the allegations in her complaint were sufficient to state a claim against

Shackelford in that he was negligent in failing to adequately inspect the tires on the

truck, in failing to warn her about the danger of using the tires at highway speeds, and

in providing the truck to her for use on the highway with inadequate and defective

tires. She cited a number of Missouri cases which supported the existence of a cause

of action against Shackelford for furnishing a vehicle with defective tires. See Slagle

v. Singer, 419 S.W.2d 9, 12 (Mo. 1967); see also Gifford v. Bogey Hills Golf &

Country Club, Inc., 426 S.W.2d 98, 101 (Mo. 1968) (involving defective brakes);

Standard Oil Co. of Ind. v. Leaverton, 192 S.W.2d 681, 682 (Mo. Ct. App. 1946)

(same).

Michelin opposed the motion to remand, arguing the allegations against

Shackelford were a failed attempt to allege a "Supplying a Dangerous Instrumentality"

claim under Missouri law. Michelin argued the missing part of the Wilkinson's

complaint was an allegation Shackelford "knows or has reason to know that the chattel

is or is likely to be dangerous for the use for which it is supplied." App. 50.

Shackelford also opposed the motion, contending the only allegation against him was

that he "placed the tires on his vehicle and that he 'knew the tires were used.'" Id. at

61-62 (misquoting ¶ 10 of Wilkinson's complaint). Shackelford argued the complaint

failed to allege any facts showing he had actual or constructive knowledge the tread

would separate from the tire. Shackelford asked that he be dismissed from the suit

based on the complaint's failure to state a claim against him.

The district court denied Wilkinson's motion to remand, stating she "alleges

only that defendant Shackelford placed the tires on the vehicle and 'knew the tires

were used.'" Wilkinson v. Michelin N. Am., Inc., No. 05-0968-CV-W-FJG, 2005 WL

3132327, at *1 (W.D. Mo. Nov. 22, 2005) (quoting Shackelford's Memorandum

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opposing the motion to remand). The district court concluded this allegation was

insufficient to show Shackelford "knew or somehow should have known of the

allegedly defective condition of the tires." Id. Concluding Shackelford had been

fraudulently joined to destroy diversity jurisdiction, the district court dismissed the

claim against Shackelford.

A week later, Wilkinson filed a motion to amend the complaint under Rule

15(a) of the Federal Rules of Civil Procedure seeking to join (or rejoin) Shackelford

as a defendant. The amended complaint contained the following supplemental

allegations against Shackelford:

10. Prior to March 22, 2004, Defendant Shackelford gained possession

of the tires and placed them on a motor vehicle, a 1990 Chevrolet truck

of which he was the owner. At that time, Defendant Shackelford knew

that the tires had been previously used, and he had knowledge from the

open and obvious condition of the tires that they were worn and in such

poor condition that they were unsafe for use on the truck on public

highways at typical highway speeds.

. . . 

49. Defendant Shackelford knew that Plaintiff needed a safe means of

transportation for a trip beginning in Johnson County, Missouri, that

would result in travel outside of Johnson County, Missouri; and that the

route would include use of a highway, and highway speeds. He loaned

said truck to Plaintiff for the purpose of transportation on said trip,

realizing that Plaintiff would travel in said truck at typical highway

speeds and realizing that the tires on his truck were so worn, and in such

poor condition, that they were unsafe for use on the truck on public

highways at typical highway speeds.

App. 115, 123.

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Wilkinson contended her original complaint was sufficient to state a cause of

action against Shackelford, but because she had not "persuasively communicated her

position" to the district court, she was moving to amend the complaint to fix the

deficiencies the defendants claimed existed. Two days later, she filed an alternative

motion to amend or alter the order denying her motion to remand. Simultaneously

with this motion, she lodged the amended complaint containing the supplemental

allegations against Shackelford. Wilkinson argued she should be allowed to amend

her complaint without leave of court because Michelin had not yet filed a responsive

pleading to her original complaint. She further contended, assuming she had the right

to amend without leave of court, the order denying the motion to remand would have

to be altered to allow remand because her cause of action against Shackelford

destroyed diversity jurisdiction.

Michelin opposed both the motion to amend the complaint and the motion to

alter or amend the order denying the motion to remand. Michelin argued Wilkinson

should not be allowed a "do-over" simply by inserting into the complaint what the

district court initially found missing. With respect to her right to file an amended

complaint without leave of court, Michelin noted Shackelford – the party against

whom the pleadings were sought to be amended – had already filed a responsive

pleading while the action was still in Missouri state court, and thus she should not be

allowed to amend without leave of court.

The district court denied both the motion to amend the complaint and the

motion to alter/amend the order denying the motion to remand. With respect to

Wilkinson's right to file an amended complaint without leave of court, the district

court said:

[T]he Court finds that the proposed amendment, reasserting claims

against a Missouri defendant who has already been dismissed by order

of the Court, is not the type of amendment that can be made as of right.

As noted by defendant Michelin, the conflict between Rule 15(a) and 28

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1

28 U.S.C. § 1447(e) provides: "If after removal the plaintiff seeks to join

additional defendants whose joinder would destroy subject matter jurisdiction, the

court may deny joinder, or permit joinder and remand the action to the State court."

-7-

U.S.C. § 1447(e)1

 is generally resolved by Courts "concluding that they

have authority to deny joinder under Rule 15(a) notwithstanding the

plaintiff's right under that rule."

Wilkinson v. Michelin, No. 05-0968-CV-W-FJG, 2006 WL 743169, at *1 (W.D. Mo.

March 20, 2006) (quoting Brcka v. St. Paul Travelers Cos., Inc., 366 F. Supp. 2d 850,

853 (S.D. Iowa 2005)).

With respect to Wilkinson's motion for leave to file an amended complaint, the

district court said:

Furthermore, plaintiff's motion for leave to amend . . . should be

DENIED. Although leave to amend "shall be freely given when justice

so requires," Fed. R. Civ. P. 15(a), the Court finds that justice does not

require granting leave to amend to add a previously dismissed party

whose presence would destroy diversity jurisdiction.

Id. at *2.

The same day the district court denied her motions, Wilkinson voluntarily

dismissed her remaining claims against Michelin without prejudice pursuant to

Federal Rule of Civil Procedure 41(a). She then filed a timely notice of appeal

challenging the district court's denial of her motion to remand and dismissal of

Shackelford and, in the alternative, challenging the district court's refusal to allow her

to amend her complaint against Shackelford or accept the amended pleading without

requiring leave of court. 

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II

Before discussing the issues raised by Wilkinson, we address Michelin's

jurisdictional challenge. The district court's dismissal of the claim against Shackelford

only resolved part of the case and did not result in a final judgment. Michelin argues

she could not "manipulate" the dismissal of the claim against Shackelford into a final

appealable order by voluntarily dismissing the claim against Michelin under Rule

41(a), contending she could only get appellate review by seeking and obtaining

certification under Federal Rule of Civil Procedure 54(b).

Michelin's position is inconsistent with the law in the Eighth Circuit. See State

of Mo. ex rel. Nixon v. Coeur D'Alene Tribe, 164 F.3d 1102, 1105-06 (8th Cir. 1999)

(concluding, in a multiple defendant case, a voluntary dismissal of a remaining

defendant without prejudice under Rule 41(a) renders immediately appealable a

previous order dismissing other defendants); Johnston v. Cartwright, 344 F.2d 773,

774 (8th Cir. 1965) (concluding, in a multiple defendant case, a Rule 54(b)

certification was not necessary to render final and appealable an order dismissing one

defendant after the appellant sought and obtained leave to dismiss the case against two

other defendants without prejudice). 

Michelin relies primarily on decisions from other circuits which are not binding

on this court, but cites four Eighth Circuit decisions which merit further discussion:

Madsen v. Audrain Health Care, Inc., 297 F.3d 694, 697-98 (8th Cir. 2002);

Minnesota Pet Breeders, Inc. v. Schell & Kampeter, Inc., 41 F.3d 1242, 1245 (8th Cir.

1994); DuBose v. State of Minnesota, 893 F.2d 169, 171 (8th Cir. 1990); and Tietz

v. Local 10 of the International Ass'n of Bridge Workers, 525 F.2d 688, 689 (8th Cir.

1975). These cases all involved plaintiffs with multiple claims against a single

defendant who attempted to dismiss some claims to appeal the dismissal of other

claims. 

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2

Michelin claims we lack jurisdiction over this issue because Wilkinson did not

refer to the order denying the motion to remand in her notice of appeal. We disagree.

Wilkinson's Appeal Information Form A, filed the same day as the notice of appeal,

specifically identified the first issue on appeal as whether the district court erred in

dismissing the claim against Shackelford on the ground of fraudulent joinder. App.

226. In determining the scope of the appeal, we "can rely both on the notice of appeal

and appeal information form." Burgess v. Suzuki Motor Co., Ltd., 71 F.3d 304, 307

(8th Cir. 1995); see also ELCA Enters. v. Sisco Equip.Rental & Sales, 53 F.3d 186,

189 (8th Cir. 1995) ("If Form A is filed within the thirty days permitted for the notice

of appeal, however, we find that it can adequately supplement or amend the notice of

appeal so as to vest this court with jurisdiction to address a particular order.").

-9-

This is not a single defendant/multiple claim case of the type involved in

Madsen, Minnesota Pet Breeders, DuBose, and Tietz. This is a multiple defendant

case where Wilkinson dismissed without prejudice her claims against one defendant

in order to appeal the dismissal of the claim against the other defendant. This case is

therefore governed by Coeur D'Alene. As we explained there, the multipleclaim/single-defendant cases "further the well-entrenched policy which bars a plaintiff

from splitting its claims against a defendant. But this policy does not extend to

requiring a plaintiff to join multiple defendants in a single lawsuit, so the policy is not

violated when a plaintiff 'unjoins' multiple defendants through a voluntary dismissal

without prejudice." 164 F.3d at 1106. Thus, we have jurisdiction over this appeal.

III

Wilkinson first challenges the denial of her motion to remand the case to

Missouri state court, which the district court denied on the ground Shackelford had

been fraudulently joined to destroy diversity jurisdiction.2

 Whether a plaintiff has

fraudulently joined a party to defeat diversity jurisdiction is a question of subject

matter jurisdiction we review de novo. Menz v. New Holland N. Am., Inc., 440 F.3d

1002, 1004 (8th Cir. 2006). We review a fraudulent joinder challenge to determine

"whether there is arguably a reasonable basis for predicting that the state law might

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impose liability based upon the facts involved." Filla v. Norfolk S. Ry., 336 F.3d 806,

811 (8th Cir. 2003). The district court was "required to resolve all doubts about

federal jurisdiction in favor of remand." Transit Cas. Co. v. Certain Underwriters at

Lloyd's of London, 119 F.3d 619, 625 (8th Cir. 1996).

In this case, we have no difficulty predicting Missouri might impose liability

based upon the facts involved. As Wilkinson aptly contends, Missouri recognizes a

cause of action for furnishing a vehicle with defective tires to another. See Slagle, 419

S.W.2d at 12 ("[T]he owner of the automobile, is subject to the rule that he is . . .

bound to use reasonable care to see that the tires are in proper condition for operation

on the highway, and may be held liable for a collision or accident resulting from his

failure to have his vehicle equipped with tires in reasonably safe and proper

condition." (citation omitted)). Wilkinson's original complaint alleges Shackelford

was the owner of the truck, placed the tires on the truck, and knew the tires were

used. It further alleges the tire which failed was defective and unreasonably

dangerous when put to a reasonably anticipated use, and Shackelford was negligent

by "failing to take steps to learn of the condition and dangers of the truck, including

the tires, when permitting Plaintiff to use the truck." App. at 26. These allegations

are sufficient to state a cause of action of the type recognized in Slagle. 

Michelin contends the fatal flaw in Wilkinson's original complaint is its failure

to allege "Shackelford knew or had reason to know that the tire was dangerous, which

is a necessary prerequisite under Missouri law for holding a bailor of an allegedly

dangerous product liable." Michelin's Br. at 20. In support of this claim, Michelin

contends the claim against Shackelford is one that must arise under the Restatement

(Second) of Torts § 388, which consists of three elements, one of which is "the

supplier . . . knows or has reason to know that the chattel is or is likely to be

dangerous for the use for which it is supplied."

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3

Indeed, Shackelford's insurance carrier, American Standard Insurance

Company of Wisconsin, appears to have recognized the viability of Wilkinson's claim

against its insured. Two days before the district court denied Wilkinson's motion to

amend her complaint, Wilkinson entered into a settlement agreement with

-11-

Even assuming Wilkinson's claim should be pigeonholed as one which must

arise under the Restatement (Second) of Torts § 388, her original complaint pleaded

sufficient facts to establish the disputed element of a § 388 claim. Specifically, the

original complaint alleged Shackelford was negligent by "failing to take steps to learn

of the condition and dangers of the truck, including the tires, when permitting Plaintiff

to use the truck." App. 26. We see no material difference between alleging an owner

of a vehicle failed to take steps to learn of the condition of tires which are allegedly

defective and unreasonably dangerous, and alleging an owner of a vehicle should have

reason to know the chattel is or is likely to be dangerous for the use for which it is

supplied. In other words, an owner who fails to inspect or take steps to learn of the

condition of a defective chattel should know of the dangerous (or likely dangerous)

condition of the chattel.

We find it significant Michelin never argues Wilkinson could not state a claim

against Shackelford under the facts present in this case, only that she did not do so in

her original complaint. The relevant inquiry in analyzing fraudulent joinder, however,

focuses only on whether a plaintiff "might" have a "colorable" claim under state law

against a fellow resident, Menz, 440 F.3d at 1005, not on the artfulness of the

pleadings. A joinder is fraudulent only "when there exists no reasonable basis in fact

and law supporting a claim against the resident defendants." Id. at 1004 (citations

omitted); see also Greenshields v. Warren Petroleum Corp., 248 F.2d 61, 65 (10th Cir.

1957) ("[A]ll doubts arising from defective, ambiguous and inartful pleadings [in a

removed case] should be resolved in favor of the retention of state court

jurisdiction."). The facts as alleged in Wilkinson's original complaint indicate there

is a reasonable basis for believing Missouri might impose liability against

Shackelford, which is all that is required to defeat a fraudulent joinder challenge.3

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Shackelford, funded by American Standard. Under the settlement agreement,

Wilkinson immediately received $25,000 from the insurer in exchange for waiving the

right to enforce any judgment ultimately obtained against Shackelford that might

exceed $50,000, the limit of Shackelford's liability coverage. App. 176-82.

4

Wilkinson could have requested an interlocutory appeal immediately following

the denial of her motion to remand, but did not. After Shackelford was dismissed,

diversity jurisdiction existed with respect to the remaining claims against Michelin,

meaning the judgment dismissing those claims without prejudice was properly

entered. See St. Jude Med., Inc. v. Lifecare Int'l, Inc., 250 F.3d 587, 594 (8th Cir.

2000) (citing Caterpillar Inc. v. Lewis, 519 U.S. 61, 76-78 (1996)). As a consequence,

our instructions to remand pertain only to what is left of the case – the issue whether

Michelin can be brought back into this case is a matter for the state court to resolve.

-12-

Because we conclude the district court erred in determining Shackelford was

fraudulently joined, we do not address whether the district court abused its discretion

in denying Wilkinson's motion to amend her complaint or the claim she had to file an

amended complaint without leave of court.

IV

We reverse the district court's order dismissing the claim against Shackelford

and return this case to the district court with instructions to remand it to state court.4

______________________________

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