Filed: Jan. 27, 2012
Latest Update: Jan. 27, 2012
Summary: ORDER JOE HEATON, District Judge. Plaintiffs originally filed this action in state court and the defendants removed it to this court. Pending before the court is plaintiffs' motion to remand [Doc. #18] and defendant Blackmon Mooring of Oklahoma City, Inc.'s ("Blackmon") motion to compel arbitration [Doc. #22]. The court concludes it does not have subject matter jurisdiction over the action because the plaintiffs and defendants are not completely diverse. The case must therefore be remanded, l
Summary: ORDER JOE HEATON, District Judge. Plaintiffs originally filed this action in state court and the defendants removed it to this court. Pending before the court is plaintiffs' motion to remand [Doc. #18] and defendant Blackmon Mooring of Oklahoma City, Inc.'s ("Blackmon") motion to compel arbitration [Doc. #22]. The court concludes it does not have subject matter jurisdiction over the action because the plaintiffs and defendants are not completely diverse. The case must therefore be remanded, le..
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ORDER
JOE HEATON, District Judge.
Plaintiffs originally filed this action in state court and the defendants removed it to this court. Pending before the court is plaintiffs' motion to remand [Doc. #18] and defendant Blackmon Mooring of Oklahoma City, Inc.'s ("Blackmon") motion to compel arbitration [Doc. #22]. The court concludes it does not have subject matter jurisdiction over the action because the plaintiffs and defendants are not completely diverse. The case must therefore be remanded, leaving the motion to compel arbitration for resolution by the state court.
It is undisputed that plaintiffs and defendant Blackmon are citizens of Oklahoma. Thus, Blackmon's presence in the suit would ordinarily bar defendants from removing the action to federal court. See 28 U.S.C. § 1441(b)(2) (prohibiting removal when there is a forum-state defendant); McPhail v. Deere & Co., 529 F.3d 947,951 (lOth Cir. 2008) (noting the complete diversity requirement). Nevertheless, Allstate Indemnity Company ("Allstate")—an Illinois domiciliary—asks the court to sever plaintiffs' claims against Blackmon and remand them to state court while retaining jurisdiction over the claims against it. Allstate contends the court has discretion to do this under Fed. R. Civ. P. 21 or, alternatively, the "procedural misjoinder" doctrine.
Fed. R. Civ. P. 21 vests the court with broad discretion to "sever any claim against any party" in the interest of justice. Allstate argues the court should exercise this discretion because ofthe arbitration agreement between plaintiffs and Blackmon. However, neither of the cases cited by Allstate support the proposition that the existence ofan alleged agreement to arbitrate, applicable to one ofmUltiple defendants, is a basis for ignoring diversity which would otherwise exist or for creating that diversity by severing claims. The court declines to so apply Rule 21 on the present showing.
Alternatively, Allstate urges the court to adopt the doctrine ofprocedural misjoinder, also referred to as fraudulent misjoinder, and dismiss plaintiffs' claims against defendant Blackmon on that basis.1 Generally speaking, procedural misjoinder occurs when a state court plaintiffasserts claims against a diverse defendant and joins an unrelated claim against a non-diverse or forum-state defendant, thus precluding removal. See generally Lafailier v. State Farm Fire & Cas. Co., 391 Fed. Appx. 732, 739 (10th Cir. 2010) (unpublished order andjudgment).2 The Eleventh Circuit has recognized this, at least where the misjoinder is "egregious," as a type of fraudulent joinder. It affirmed the district court's order severing the claims against the non-diverse defendants from the claims against the diverse defendants and remanding the former while exercising jurisdiction over the latter. See Tapscott v. MS Dealer Servo Corp., 77 F.3d 1353, 1360 (11th Cir. 1996) (abrogated on other grounds by Cohen v. Office Depot. Inc., 204 F.3d 1069, 1072 (11th Cir. 2000». The Tenth Circuit, per Lafailier, supra, has discussed but not adopted the doctrine. The ultimate resolution of questions as to its validity and application will necessarily require determination ofa variety of difficult issues of statutory construction, policy concerns, and otherwise.3 The court concludes it need not undertake that task here, however, as the doctrine would not save jurisdiction in this case even if it applied.
Parties may be joined as defendants ifthe claims against them arise out ofthe same transaction or occurrence and share a common question oflaw or fact. See Fed. R. Civ. P. 20(a)(2); 12 Okla. Stat. §2020(A)(2).4 Plaintiffs' claims in this lawsuit arise out ofa fire that allegedly occurred on October 4, 2009. Petition [Doc. #1-1]. According to the petition, the plaintiffs' house was damaged in a fire while they were out oftown. After learning ofthis, plaintiffs contacted their insurer, Allstate, and reported the fire. Allstate allegedly recommended that plaintiffs hire Blackmon to retrieve some of plaintiffs, personal property from the house and store or restore it. Id. ¶ 12. Thereafter, plaintiffs allege Blackmon's employees either lost or stole personal property they retrieved. See generally id. ¶¶ 32-35. Additionally, the petition alleges that Allstate was not diligent in investigating the claim, that it unreasonably delayed payment of the claim, and that it was negligent in recommending Blackmon to the plaintiffs. See generally id. ¶¶ 17-22.
At least some ofplaintiffs' claims against Allstate and Blackmon arise out ofthe same transaction. In order to hold Allstate liable for recommending Blackmon, plaintiffs will have to prove that it suffered injury as a result of the recommendation. This will necessarily involve proof ofplaintiffs' claims against Blackmon. Other common factual disputes, such as whether particular property even existed, may be present as well.5
As plaintiffs claims do not appear to have been improperly joined, Blackmon is a proper party and diversity is lacking. Plaintiffs' motion to remand [Doc. #18] is therefore GRANTED. The case is remanded to the District Court of Oklahoma County, Oklahoma. Defendant Blackmon's motion to compel arbitration [Doc. #22] remains for adjudication in that court.
IT IS SO ORDERED.