Memorandum Opinion and Order - Page 1

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

DAVID W. WEST, §

§

Plaintiff, §

§

v. § Civil Action No. 3:04-CV-2633-L

§

GREAT-WEST LIFE & ANNUITY §

INSURANCE COMPANY and GREAT- §

WEST HEALTHCARE OF TEXAS, INC., §

§

Defendants. §

MEMORANDUM OPINION AND ORDER

Before the court is Plaintiff David W. West’s Motion for Remand, filed August 18, 2005.

The court, after careful consideration of the motion, briefs, response, appendices, reply, record and

applicable authorities, grants Plaintiff David W. West’s Motion for Remand.

I. Background

Plaintiff David W. West (“Plaintiff” or “West”) filed this action on November 8, 2004 in the

68th Judicial District Court, Dallas County, Texas against Defendants Great-West Life & Annuity

Insurance Company (“Great-West”) and Great-West Healthcare of Texas, Inc. (“GWHT”)

(collectively, “Defendants”). West asserted two causes of action against Defendants: (1) breach of

contract, and (2) promissory estoppel. See Plaintiff’s Original Petition ¶¶ 10-18. Defendants

removed this action to federal court on December 10, 2004. 

West has filed a motion to remand. West contends that he and GWHT are both citizens of

Texas and, therefore, complete diversity does not exist among the parties. Defendants, on the other

hand, contend that GWHT was improperly joined and, therefore, the citizenship of the alleged

 

 Case 3:04-cv-02633-L Document 41 Filed 10/27/05 Page 1 of 8 PageID 444
Memorandum Opinion and Order - Page 2

improperly joined Defendant, GWHT, must be ignored for diversity purposes. According to

Defendants, since GWHT was improperly joined, this court has subject matter jurisdiction over this

action.

II. Improper Joinder Standard

A party seeking to remove an action to federal court on the basis of improper joinder bears

a heavy burden. Smallwood v. Illinois Central R.R. Co., 385 F.3d 568, 574 (5th Cir. 2004) (en banc),

cert. denied, 125 S.Ct. 1825 (2005). As the parties wishing to invoke federal jurisdiction by alleging

improper joinder, Defendants must establish that GWHT was joined by Plaintiff to defeat diversity

of citizenship and therefore subject matter jurisdiction. Subject matter jurisdiction based on

diversity of citizenship exists only if each plaintiff has a different citizenship from each defendant.

Getty Oil Corp. v. Insurance Co. of North America, 841 F.2d 1254, 1258 (5th Cir. 1988). Otherwise

stated, 28 U.S.C. § 1332 requires complete diversity of citizenship; that is, a district court cannot

exercise jurisdiction if any plaintiff shares the same citizenship as any defendant. See Corfield v.

Dallas Glen Hills LP, 355 F.3d 853, 857 (5th Cir. 2003) (citing Strawbridge v. Curtiss, 7 U.S. (3

Cranch) 267 (1806)), cert. denied, 541 U.S. 1073 (2004). 

To establish improper joinder, Defendants must prove: “(1) actual fraud in the pleading of

jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the

non-diverse party in state court.” Travis v. Irby, 326 F.3d 644, 647 (5th Cir. 2003) (citing Griggs v.

State Farm Lloyds, 181 F.3d 694, 698 (5th Cir. 1999)). Since Defendants do not assert fraud by

Plaintiff, the test for improper joinder is “whether the defendant has demonstrated that there is no

possibility of recovery by the plaintiff against an in-state defendant, which stated differently means

 

 Case 3:04-cv-02633-L Document 41 Filed 10/27/05 Page 2 of 8 PageID 445
Memorandum Opinion and Order - Page 3

that there is no reasonable basis for the district court to predict that the plaintiff might be able to

recover against an in-state defendant.” Smallwood, 385 F.3d at 573 (citing Travis, 326 F.3d at 648).

In addressing this issue, the district court must determine whether a plaintiff has “any

possibility of recovery against the party whose joinder is questioned.” Travis, 326 F.3d at 648

(quoting Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th Cir.

2002)). “If there is arguably a reasonable basis for predicting that state law might impose liability

on the facts involved, then there is no [improper] joinder.” Great Plains Trust, 313 F.3d at 312

(internal quotations and citations omitted). “This possibility, however, must be reasonable, not

merely theoretical.” Id. If there is a reasonable possibility that Plaintiff can recover on any of his

claims, the case must be remanded. In making this determination regarding improper joinder, a

court does not “decide whether the plaintiff will actually or even probably prevail on the merits, but

look[s] only for a [reasonable] possibility that [the plaintiff] may do so.” Dodson v. Spiliada Mar.

Corp., 951 F.2d 40, 42 (5th Cir. 1992) (citations omitted).

In deciding the question of improper joinder, the court may either (1) “conduct a Rule

12(b)(6)-type analysis, looking initially at the allegations of the complaint to determine whether [it]

states a claim under state law against the in-state defendant”; or (2) in limited circumstances,

conduct a summary inquiry “to identify the presence of discrete and undisputed facts that would

preclude plaintiff’s recovery against the in-state defendant.” Smallwood, 385 F.3d at 573-74.

“When a defendant seeks to remove a case, the question of whether jurisdiction exists is resolved

by looking at the complaint at the time the petition for removal is filed.” Brown v. Southwestern

Bell Tel. Co., 901 F.2d 1250, 1254 (5th Cir. 1990). The court now examines Plaintiff’s initial

petition to determine whether it sets forth a claim under state law against GWHT.

 

 Case 3:04-cv-02633-L Document 41 Filed 10/27/05 Page 3 of 8 PageID 446
1

West does not specify which Defendant engaged in particular acts; he pleads against Defendants

collectively or jointly. By doing so, West clearly seeks to hold both Defendants liable for their alleged

conduct.

Memorandum Opinion and Order - Page 4

III. Analysis

As previously stated, Plaintiff West alleges two causes of action against Defendants1: breach

of contract and promissory estoppel. Specifically, Plaintiff alleges the following against Defendants:

First Cause of Action Against Defendants:

Breach of Contract

10. Pursuant to Texas State law, Plaintiff pleads a cause of action

against Defendants for breach of contract. The allegations contained

in all of the paragraphs of this Petition are hereby reaverred and

realleged, for all purposes, and incorporated herein with the same

force and effect as [if] set forth verbatim herein.

11. Plaintiff alleges that Plaintiff entered into a valid contract

with Defendants for the payment of bonuses and commissions.

12. Plaintiff gave Defendants valuable consideration and fully

performed all duties required of Plaintiff under the contract and

performed all conditions precedent under the contract. Defendants

breached said contract by refusing to follow the implied terms of said

contract. In particular, Defendants breached this contract by

negligently performing their duties under the contract. As a direct

and proximate consequence of said breach, Plaintiff suffered damages

in an amount in excess of the minimum jurisdictional limits of this

court.

13. Because of the above-described breach of contract, Plaintiff

had to retain attorneys to prosecute this action and agreed to pay the

retained attorneys a reasonable fee. Pursuant to Texas Civil Practice

& Remedies Code 38.000-38.006 et seq., Plaintiff gave Defendants

proper notice of this claim for attorneys’ fees.

Second Cause of Action Against Defendants:

Promissory Estoppel

14. Plaintiff pleads, in the alternative if necessary, a cause of

action against Defendants for promissory estoppel. The allegations

contained in all of the paragraphs of this Petition are hereby reaverred

 

 Case 3:04-cv-02633-L Document 41 Filed 10/27/05 Page 4 of 8 PageID 447
Memorandum Opinion and Order - Page 5

and realleged, for all purposes, and incorporated herein with the same

force and effect as if set forth verbatim herein.

15. Defendants and/or their agents made promises to Plaintiff that

include, but are not limited to, the following:

a. representing to Plaintiff that it would pay him

commissions; and

b. representing to Plaintiff that it would pay him

bonuses.

16. Defendants and/or their agents made these promises in order

to induce Plaintiff to take and/or forego certain actions. The

promises made by Defendants and/or their representatives were

reasonably calculated to induce Plaintiff to take and/or forego certain

actions. Plaintiff’s reliance upon Defendants’ promises was

reasonably foreseeable to Defendants.

17. Plaintiff, in fact, relied on each and every one of Defendants’

promises and has taken definite and substantial action in reliance on

Defendants’ promises to his detriment.

18. Defendants’ promises were the proximate cause of significant

damages to Plaintiff, which are in excess of the minimum

jurisdictional limit of this Court. In order for injustice to be avoided,

the Court must enforce the promises made to Plaintiff by Defendants

and/or their agents.

Plaintiff’s Original Petition ¶¶ 10-18. 

Under Texas law, “[t]he elements in a suit for breach of contract are: (1) a valid contract; (2)

the plaintiff performed or tendered performance; (3) the defendant breached the contract; and (4)

the plaintiff was damaged as a result of that breach.” Godwin Gruber, P.C. v. Deuschle, 261

F.Supp.2d 682, 690 (N.D. Tex.), affirmed, 87 Fed. Appx. 338 (5th Cir. 2003) (quoting Aquila

Southwest Pipeline, Inc. v. Harmony Exploration, Inc., 48 S.W.3d 225, 235 (Tex. App. – San

Antonio 2001, pet. denied)). The elements of a promissory estoppel claim are “(1) a promise, (2)

foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the promisee to

 

 Case 3:04-cv-02633-L Document 41 Filed 10/27/05 Page 5 of 8 PageID 448
2

The court finds it unnecessary to conduct a summary inquiry in light of the 12(b)(6) analysis it made;

however, if the court were to conduct such inquiry, it concludes that the state of the record and discovery

responses, at most, raise a disputed fact issue regarding the employment relationship between West and

GWHT. Accordingly, Defendants fail to identify the presence of discrete and undisputed facts that would

preclude West’s recovery against GWHT. Moreover, the court is not aware of any rule of law requiring the

existence of an employment relationship as a precondition for one to assert a claim for breach of contract or

promissory estoppel.

Memorandum Opinion and Order - Page 6

his detriment.” English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983). In addition to these basic

requirements for promissory estoppel, “Texas courts have also established a fourth requirement of

a definite finding that injustice can be avoided only by the enforcement of the promise.” Clardy

Mfg. Co. v. Marine Midland Bus. Loans, Inc., 88 F.3d 347, 360 (5th Cir. 1996), cert. denied, 519 U.S.

1078 (1997) (internal quotation marks and citation omitted).

Under the 12(b)(6) analysis, a review of Plaintiff’s Original Petition establishes that West

has set forth allegations against both Defendants that could establish all of the elements of a breach

of contract claim and the alternative claim of promissory estoppel. If the allegations are proved,

Plaintiff could be entitled to recover against both Defendants. At this stage, the court only

determines whether there is a reasonable possibility of recovery, not whether Plaintiff will prevail

on the merits. The court is convinced that Plaintiff has adequately set forth facts that could establish

the elements of breach of contract and promissory estoppel claims against GWHT. Defendants have

thus failed to show that West does not have a reasonable possibility of recovery against GWHT.

Since West and GWHT are both citizens of Texas, complete diversity does not exist, and this court

therefore lacks subject matter jurisdiction over this action. As Defendants have not met their burden,

the court must remand this action to state court.2

As a final matter, the court notes that Defendants devoted a fair amount of time in their

response addressing Plaintiff’s First Amended Complaint, filed February 15, 2005. In Plaintiff’s

 

 Case 3:04-cv-02633-L Document 41 Filed 10/27/05 Page 6 of 8 PageID 449
Memorandum Opinion and Order - Page 7

First Amended Complaint, West adds three additional claims to his breach of contract and

promissory estoppel claims: age discrimination pursuant to Chapter 21 of the Texas Labor Code,

common law debt for wages earned, and negligent misrepresentation. In particular, Defendants

contend that GWHT was not West’s employer and, therefore, GWHT could not be liable and no

possibility exists wherein West could recover against GWHT regarding the age discrimination claim.

Plaintiff’s First Amended Complaint is really of no moment, as the court must look to the complaint

or petition at the time of removal. The live pleading at the time of removal was Plaintiff’s Original

Petition, and it is the document upon which the court based its analysis. Moreover, even if the court

relied on the allegations of Plaintiff’s First Amended Complaint, the result would be the same, as

West retained the breach of contract and promissory estoppel claims in his amended complaint.

IV. Conclusion

For the reasons previously stated, Defendants have failed to establish that GWHT was

improperly joined as a defendant. Since West and GWHT are both citizens of Texas, complete

diversity does not exist among the parties, and this court therefore lacks subject matter jurisdiction.

Accordingly, the court grants Plaintiff David W. West’s Motion for Remand, and this action is 

 

 Case 3:04-cv-02633-L Document 41 Filed 10/27/05 Page 7 of 8 PageID 450
Memorandum Opinion and Order - Page 8

hereby remanded to the 68th Judicial District Court, Dallas County, Texas. The clerk of the court

shall effect the remand in accordance with the usual procedure.

It is so ordered this 27th day of October, 2005.

_________________________________

Sam A. Lindsay

United States District Judge

 

 Case 3:04-cv-02633-L Document 41 Filed 10/27/05 Page 8 of 8 PageID 451