JOHN T. COPENHAVER, JR., District Judge.
Pending are 1) the motion of defendant Norfolk Southern Corporation to dismiss for insufficient service of process or, alternatively, to quash service, filed November 23, 2011; 2) the motion of defendant Jack Stepp (the "nondiverse defendant") to dismiss, filed November 23, 2011; 3) plaintiff's motion to remand, filed December 2, 2011; and 4) plaintiff's motion for leave to amend, filed February 17, 2012.
When, as here, a motion to remand and a motion to dismiss under Rule 12(b)(5) and 12(b)(6) are made, it is ordinarily improper to resolve the motions to dismiss before deciding the motion to remand. The question arising on the motion to remand as to whether there has been a fraudulent joinder is a jurisdictional inquiry. See Batoff v. State Farm Ins. Co., 977 F.2d 848, 852 (3rd Cir.1992); cf. Mayes v. Rapoport, 198 F.3d 457, 460 (4th Cir.1999) (observing that the propriety of removal and fraudulent joinder are jurisdictional questions).
The claims at issue in this case arise from a troubled, two decade-long relationship between plaintiff's family and defendant Norfolk Southern Railway Company ("Norfolk Railway"). Plaintiff Brenda McCoy is a resident of Sprigg, Mingo County, West Virginia. Defendant Norfolk Railway is a Virginia corporation with its principal place of business in Norfolk, Virginia. Defendant Norfolk Southern Corporation is also a Virginia corporation with its principal place of business in Norfolk, Virginia, and is the parent company of Norfolk Railway (together, the "Norfolk defendants"). Defendant Jack Stepp, who at all relevant times was employed by Norfolk Railway as a track supervisor, is a West Virginia resident. The following factual recitation is taken from the amended complaint on which the case was pending at the time of removal, the operative pleading for purposes of plaintiff's motion to remand.
Nestled in the mountains of southern West Virginia and located along the Kentucky border as drawn by the Tug Fork River lies the unincorporated community
In the early 1990s, the Tug Valley Land Company ("Tug Valley Co.") entered into discussions with plaintiff and her late husband, Robert McCoy, for the purchase of their homestead property situated in Sprigg ("original McCoy parcel"). Tug Valley Co., a subsidiary of Massey Coal Sales, Inc., desired to acquire the original McCoy parcel in order to construct a bridge across the Tug Fork River. (Amended Complaint, Material Facts ¶ 5). It was determined that time that construction of the bridge and connecting private road to Route 49 would drastically reduce the coal hauling distance from Massey's Long Fork mining operations in Pike County, Kentucky, to Massey's Rawl Sales & Processing Company's Sprouse Creek coal processing plant in Lobata, West Virginia, from 23.2 miles to 2.3 miles one way. (Id.).
In consideration for the original McCoy parcel, Tug Valley Co. offered to pay the McCoys' loan on the property in full, convey to them a new homestead parcel about a mile upstream, and pay all relocation expenses plus $10,000, for a total purchase price of $150,000. (Id. ¶ 6). The transaction was consummated and title to the new parcel was transferred to plaintiff's husband on September 11, 1992. (Id. ¶ 3). Prior to the transaction, though, several discussions were held with regard to the new parcel — the subject property underlying plaintiff's present suit.
In particular, the McCoys questioned George Farley, agent for Tug Valley Co., about access to the new parcel. He advised the McCoys that the property was served via State Route 49 by a railroad crossing. (Id. ¶ 7). Mr. Farley further arranged for the McCoys to meet with the then-Norfolk Railway track supervisor Michael Birkelbach to discuss the crossing. (Id.). Mr. Birkelbach took the McCoys to the location of an abandoned railroad crossing that had previously provided access to the new parcel from Route 49. (Id. ¶ 8). He informed them that the property had always been served by the now-defunct crossing and orally promised that it would be reinstalled to allow access to their new property. (Id.). At that time, Birkelbach pledged to complete the proper paperwork for the reinstallation of the crossing. (Id.).
The location of the derelict crossing was visually apparent when the McCoys acquired the new parcel, and it remains so. (Id. ¶ 11). In fact, when the McCoys had a fence installed along the front of their new property, the entrance gate was placed in-line with the location of the abandoned crossing. (Id. ¶ 12). An access road adjoining the crossing and an entrance point to Route 49 were also visually apparent when the McCoys took possession of the property and remain so. (Id. ¶ 13).
Until the crossing could be reinstalled, the McCoys were directed to use defendant Norfolk Railway's gravel service road to access their new property. No other access routes were available for the new parcel inasmuch as it was wholly bound by railway property on one side and the Tug Fork River on the other. At all pertinent times, the service road was a gravel road that ran directly alongside the railroad. It began at the closest functioning railroad crossing, near the entrance to Route 49 in Sprigg, and followed directly alongside the railroad tracks in an upstream direction, away from Sprigg proper for approximately one mile, to the new parcel. The
Following the transaction, Birkelbach informed the McCoys that adjacent property owners, Joseph and Irene Cooper, objected to the reinstallation of the railroad crossing. (Id. ¶ 14). Mr. Birkelbach advised the McCoys that Norfolk Railway would require documentation supporting an easement from the Coopers before it could reinstall the crossing. The McCoys continued to use the service road to access their property until the easement matter was resolved. (Id.). Soon after, a right-of-way easement was obtained from the Coopers and notice of the same was forwarded to Norfolk Railway track supervisor Birkelbach and Norfolk Southern Corporation's superintendent, D.M. Kimbrough, on June 5, 1993. (Id. ¶ 15).
Subsequently, however, Birkelbach informed the McCoys that Norfolk Southern Corporation had decided it would be too dangerous to reinstall the crossing due to "limited sight distance." (Id.).
Out of continued concerns for the potential hazardous conditions and the ability to secure emergency services presented by the newly proposed permanent route of access, plaintiff contacted Congressman Nick Joe Rahall, member of the United States House of Representatives, on February 2, 1994, requesting a congressional inquiry. By letter dated February 9, 1994, Kimbrough reiterated to Representative Rahall "that it would be extremely dangerous for the vehicles transversing the requested crossing" and "that there is now access to Mr. McCoy's house from another crossing a very short distance away." (Id. ¶ 17).
Eventually, plaintiff
In the late fall of 2008, travel on the service road became difficult due to a lack of maintenance. Plaintiff phoned Norfolk Railway's Williamson, West Virginia office, and was advised that she would need to address maintenance concerns with the current track supervisor, defendant Jack Stepp. (Id. ¶ 20). Ms. McCoy subsequently met with Stepp, and he dispatched a backhoe to improve the condition of the service road. (Id. ¶ 21). However, while the former track supervisor routinely performed maintenance, including the removal of gravel, debris, and weeds from the road, which provided a visually clear and safe roadway, under Stepp's direction, the operator only leveled the gravel on the road. According to plaintiff, this created a deep and shifting gravel surface with overgrown vegetation and concealed the edge of the roadway. (Id.). On one occasion, as a result of the minimal maintenance, plaintiff's minor daughter, while walking to the bus stop at Sprigg, lost traction in the deep gravel near the edge of the service road — which was concealed by weeds — and slid over the embankment. (Id. ¶ 22).
Mingo County Commissioner Greg K. Smith suggested that plaintiff speak with Ray Messer, Superintendent of the Mingo County Division of the Department of Highways, to determine if he might be able to assist in widening the road by disposing of refuse removed along Route 49 into the areas of concern. (Id. ¶ 26). Plaintiff contacted Stepp and discussed Commissioner Smith's recommendation and followed up by letter dated November 6, 2008. (Id. ¶ 27). Plaintiff then met with Messer who agreed to dump fill material along the service road if Stepp would permit the Department of Highways to backfill the areas of concern. (Id. ¶ 28).
Despite multiple attempts by plaintiff to contact Stepp to discuss Messer's willingness to assist, he never responded. Instead, plaintiff was ultimately referred to Chris Carney, division engineer and real estate specialist for the Norfolk defendants, who met with her and inspected the service road. Mr. Carney later informed plaintiff that Stepp reported that he could navigate the service road with larger service trucks without incident, and therefore
On December 16, 2008, plaintiff again contacted Representative Rahall, requesting a second inquiry. On January 23, 2009, an agent of a Norfolk defendant
According to plaintiff, defendants have since stopped performing maintenance on the railway service road, which is greatly increasing the hazardous narrow conditions of the roadway due to an excessive amount of gravel that has created an uneven and unstable surface. Plaintiff claims that such a condition places anyone driving along the service road in danger of sliding into on-coming trains or over the near-vertical embankment along the Tug Fork River. (Id. ¶ 31). In addition, severe flooding in late May 2009 and a pattern of heavy rain thereafter contributed to the continued erosion and slippage along the service road. (Id. ¶ 32).
Plaintiff also contends that defendants' refusal to maintain the service road has damaged her personal vehicles, and that spikes, metal plates, and clamps (railroad materials) are often found in the roadway. Plaintiff also complains that all-terrain vehicle ("ATV") traffic has lately increased on the service road such that it creates uneven and hazardous conditions. (Id. ¶ 34-35).
Finally, plaintiff alleges that the obscure nature of the service road recently impeded emergency service personnel who responded to a sudden illness she experienced, and it more recently delayed law enforcement officers responding to an attempted forced entry of her home. (Id. ¶ 36). In a similar vein, defendants allegedly refused to allow public telephone utility Frontier Communications access to the service road, in an effort to make necessary repairs to her service, and that as a result, she was without public telephone service for approximately six weeks. (Id. ¶ 37).
Plaintiff filed her initial complaint in the Circuit Court of Mingo County, West Virginia, on October 20, 2011. She filed an amended complaint on October 25, 2011. The amended complaint sets forth seven counts. Counts I and II seek declaratory and injunctive relief with respect to an alleged easement by implication and an easement by necessity, respectively. Count III alleges breach of contract. Count IV, styled "nonfeasance, misfeasance, and malfeasance," appears to allege the violation a public duty. Count V alleges "Estoppel by Negligence" and Count VI alleges "Hazardous Negligence." Finally, Count VII alleges intentional infliction of mental and emotional distress. On November 18, defendants removed, invoking the court's diversity jurisdiction. Plaintiff moved to remand on December 23, 2011, and defendants Norfolk Southern Corporation and Stepp each seek dismissal on several grounds set forth below. Plaintiff also moved for leave to amend on February 17, 2012.
"A defendant may remove any action from a state court to a federal court if the case could have originally been brought in federal court." Yarnevic v. Brink's, Inc.,
The doctrine of fraudulent joinder permits a district court to "disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants, assume jurisdiction over a case, dismiss the nondiverse defendants, and thereby retain jurisdiction." Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir.1999). Our court of appeals lays a "heavy burden" upon a defendant claiming fraudulent joinder:
Id. at 464 (emphasis in original) (quoting Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir.1993)). The applicable standard "is even more favorable to the plaintiff than the standard for ruling on a motion to dismiss." Hartley v. CSX Transp., Inc., 187 F.3d 422, 424 (4th Cir. 1999). Indeed, "`the defendant must show that the plaintiff cannot establish a claim against the nondiverse defendant even after resolving all issues of fact and law in the plaintiff's favor.'" Mayes, 198 F.3d at 464 (quoting Marshall, 6 F.3d at 232-33).
As Hartley illustrates, fraudulent joinder claims are subject to a rather black-and-white analysis in this circuit. Any shades of gray are resolved in favor of remand. See Hartley, 187 F.3d at 425. At bottom, a plaintiff need only demonstrate a "glimmer of hope" in order to have his claims remanded:
Id. at 425-26 (citations omitted). In determining "whether an attempted joinder is fraudulent, the court is not bound by the allegations of the pleadings, but may instead consider the entire record, and determine the basis of joinder by any means available." Mayes, 198 F.3d at 464 (internal quotations omitted).
Inasmuch as defendant does not allege any fraud in the pleading of jurisdictional facts, the only question for fraudulent joinder purposes is whether plaintiff has any possibility of recovery in state court against the nondiverse defendant. Plaintiff asserts each count against "defendants" or "Norfolk defendants" generally, and does not specifically aim one or more counts at the nondiverse defendant. Even so, the court will examine in turn plaintiff's possibility of a right to relief against the nondiverse defendant as to each count.
In Counts I and II, plaintiff seeks declaratory and injunctive relief with respect to an easement by implication and easement by necessity, respectively, which allegedly exist across the derelict railroad crossing. It is undisputed that Stepp, employed as a track supervisor for defendant Norfolk Railway, has no interest in the disputed properties. In the absence of such an interest, plaintiff has no possibility of a right to relief against the nondiverse defendant with respect to Counts I and II.
In the Count III breach of contract claim, plaintiff alleges that the McCoys entered into a three-party contract with Massey Coal Sales, Inc., through Tug Valley Co., and defendant Norfolk Railway, with respect to the property transaction that resulted in the McCoys taking ownership of the new parcel. Inasmuch as plaintiff does not contend that Stepp was a party to this alleged agreement, plaintiff has no right of relief from the nondiverse defendant with respect to its purported breach.
Count IV, titled "nonfeasance, misfeasance, and malfeasance," appears to allege that as "quasi-public" entities, the Norfolk defendants failed in their duty to protect the public's interest, particularly with regard to their refusal to recognize an easement across railway property. Once again, plaintiff does not direct this claim against the nondiverse defendant, and it is unclear how such a claim would lie against him as an employee of defendant Norfolk Railway.
Next, plaintiff alleges "estoppel by negligence" and "hazardous negligence" against undesignated "Norfolk Defendants" in Counts V and VI, respectively. Once again, plaintiff asserts the claim against "Norfolk Defendants" generally without reference to the nondiverse defendant. Based on the allegations set forth, the court cannot discern what duty, if any, the nondiverse defendant owed to plaintiff so as to render him potentially liable under a negligence theory. Without the existence of a duty owed, negligence cannot lie against the nondiverse defendant.
Finally, Count VII alleges intentional infliction of emotional distress against the "Norfolk Defendants" and "Defendants" generally. McCoy contends that the "actions of Norfolk Defendants induced the Plaintiff into establishing her residence at its current location by knowingly and purposefully withholding the intimate knowledge that the road was affected by a public interest and were instrumental in the establishing of her residence and ongoing investments." (Amended Complaint, Count VII ¶ 1). Plaintiff alleges no specific act in this count that could serve as a basis for the intentional infliction of emotional distress claim against the nondiverse defendant.
It is noted that West Virginia law allows recovery "for emotional distress arising out of extreme and outrageous conduct intentionally or recklessly caused by the defendant...." Harless v. First Nat'l Bank in Fairmont, 169 W.Va. 673, 289 S.E.2d 692 (1982). Liability is imposed only when conduct is "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized community."
Simply put, plaintiff does not allege that Stepp committed any acts that could support a claim of intentional infliction of emotional distress. The only act alleged as the basis for this claim — that defendants induced plaintiff into establishing her residence on the new parcel — occurred years before Stepp began interacting with plaintiff as a track supervisor for defendant Norfolk Railway. On these allegations, plaintiff has no possibility of a right to relief from the nondiverse defendant in Count VII.
In sum, having found that plaintiff has no possibility of relief from the nondiverse defendant, the court finds that Stepp was fraudulently joined.
Plaintiff also contends that the action should be remanded inasmuch as her claims do not meet the jurisdictional amount in controversy requirement.
In a case that is filed initially in federal court, a district court has original jurisdiction if the requisite diversity of citizenship exists unless it "appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938). A different analysis applies "in removal situations ... in which the plaintiff has made an unspecified demand for damages in state court." Landmark Corp. v. Apogee Coal Co., 945 F.Supp. 932, 935 (S.D.W.Va.1996).
A defendant who removes a case from state court in which the damages sought are unspecified, asserting the existence of diversity jurisdiction, must prove by a preponderance of the evidence that the matter in controversy exceeds the jurisdictional amount of $75,000. Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1357 (11th Cir.1996); De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir.1993) and De Aguilar v. Boeing Co., 47 F.3d 1404 (5th Cir. 1995); Gafford v. Gen. Elec. Co., 997 F.2d 150, 158 (6th Cir.1993); Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir.1992); Sayre v. Potts, 32 F.Supp.2d 881, 885 (S.D.W.Va.1999); Landmark Corp., 945 F.Supp. at 935.
A court often considers the entire record and makes an independent evaluation of whether the amount in controversy has been satisfied. Weddington v. Ford Motor Credit Co., 59 F.Supp.2d 578, 584 (S.D.W.Va.1999); Mullins v. Harry's Mobile Homes, Inc., 861 F.Supp. 22, 23 (S.D.W.Va.1994). It has been stated as follows:
Watterson v. GMRI, Inc., 14 F.Supp.2d 844, 850 (S.D.W.Va.1997). Relevant to this case, it is well-established that "[i]n a suit for injunctive relief, `the amount in controversy is measured by the value of the object of the litigation.'" Macken v. Jensen, 333 F.3d 797, 799 (7th Cir.2003) (citing Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977)). Ultimately, the court "`is not required to leave its common sense behind'" in determining the jurisdictional amount. Sayre, 32 F.Supp.2d at 886-87 (quoting Mullins, 861 F.Supp. at 24).
Plaintiff contends that defendants' assertion that her alleged damages exceed the jurisdictional threshold "is highly speculative." (Pl.'s Mem. 10). As set forth in the amended complaint, plaintiff seeks both injunctive relief and compensatory damages. In addition to unspecified damages for mental and emotional distress, plaintiff requests the following:
(Amended Complaint, WHEREFORE clause).
Defendants offer the affidavit of Chris Carney, employed by defendant Norfolk Railway as the division engineer for the Pocahontas Division in Bluefield, West Virginia. As part of his position with Norfolk Railway, Carney is responsible for overseeing the installation of crossings for the division in which the McCoy's new parcel is located. (Carney Aff. ¶ 4). Carney avers that the cost of reinstalling the crossing is approximately $6,100, and that the cost of setting up required "active warning devices" at the crossing will likely exceed $100,000. (Id. ¶¶ 5-7). He further avers that the multi-year maintenance schedule for the new crossing would be approximately $9,000 per eight-year cycle. (Id. ¶¶ 9-10). Finally the costs of additional maintenance to the service road, including the widening of the roadway and installation of guard rails, would amount to approximately $5,000 per year. (Id. ¶¶ 11-14). Plaintiff does not respond to defendants' cost approximations.
Examining each of plaintiff's requests for injunctive relief and compensatory damages, defendants have met their burden. In the absence of facts indicating the contrary, the court is satisfied that the reestablishment of the derelict railroad crossing and the corresponding installation of necessary safety apparatuses, combined with the regular maintenance arising therefrom, exceed the $75,000 jurisdictional threshold.
In sum, having found that plaintiffs have no possibility of relief against the nondiverse defendant, and that plaintiff's claims exceed the amount in controversy requirement, the court finds diversity jurisdiction lies. Plaintiff's motion to remand is thus denied.
Having found that plaintiff has failed to state a claim against nondiverse defendant Stepp, his motion to dismiss is granted, and he is accordingly dismissed. See Hartley, 187 F.3d at 424.
Federal Rule of Civil Procedure 15(a) permits amendment of a complaint after a responsive pleading has been filed "only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires."
Plaintiff moves to amend on two grounds. First, she seeks to do so in order to "perfect service on the Defendant Norfolk Southern Corporation." (Motion to Amend at 2). She goes on to state that "service on Defendant Norfolk Southern Corporation will be perfected by serving the secretary of Norfolk Southern Corporation at its principal office in Norfolk, Virginia...." (Id.). Plaintiff, though, does not explain how an amendment will aid in the accomplishment of this goal.
Finding that plaintiff's proposed amendment would be futile, the court concludes that plaintiff's motion for leave to amend must be denied.
Defendant Norfolk Southern Corporation moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(5) for insufficient service of process, or alternatively, to quash plaintiff's service of process.
On October 21, 2011, prior to removal, plaintiff attempted to serve defendant Norfolk Southern Corporation by serving Fred Adkins, the registered agent for service of process for defendant Norfolk Railway, a subsidiary of Norfolk Southern Corporation. (Exhibit C, Def.'s Mem.; Notice of Removal ¶ 10). It is undisputed that Norfolk Southern Corporation is not authorized to conduct business in the state of West Virginia. Plaintiff baldly asserts that service on the subsidiary is sufficient to bind the parent simply "because of the parent-subsidiary relationship between Norfolk Southern Railway Company and Norfolk Southern Corporation." (Amended Complaint, Parties ¶ 3). Defendants contend that service of process on a subsidiary's registered agent is not effective service of the parent corporation when the parent is unauthorized to transact business within West Virginia.
A defendant may move for dismissal of a plaintiff's claims for "insufficient service of process" pursuant to Federal Rule of Civil Procedure 12(b)(5). Plaintiff bears the burden of establishing the validity of service once that service is contested. See Homer v. Jones-Bey, 415 F.3d 748, 754 (7th Cir.2005) ("it is the plaintiff who ordinarily bears the burden of demonstrating that the district court had personal jurisdiction over the parties, including valid service of process"); Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 488 (3d Cir. 1993) ("the party asserting the validity of service bears the burden of proof on that issue"). State law governs whether service of process is properly effected if attempted prior to removal. See, e.g., Brazell v. Green, 67 F.3d 293,
Pursuant to West Virginia Rule of Civil Procedure 4(d)(8), service upon a foreign corporation not qualified to do business in the state maybe be effected
W. Va. R. Civ. P. 4(d)(8).
With respect to plaintiff's claim that her service on the agent of the subsidiary is deemed to be service on the parent, the West Virginia Supreme Court of Appeals has held that "the mere existence of a parent-subsidiary relationship, without a more definite showing of the parent's control of the subsidiary, will not suffice to permit service of the subsidiary through the parent corporation." Bowers v. Wurzburg, 205 W.Va. 450, 519 S.E.2d 148, 164 (1999) (citing Norfolk S. Ry. Co. v. Maynard, 190 W.Va. 113, 437 S.E.2d 277, 283 (1993)); see also Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634 (1925). The Norfolk court explained that
Syl. pt. 3, in part, Norfolk, 437 S.E.2d at 278. "Essentially, the question of when one corporation is another corporation's agent for service of process is one of agency law with particular emphasis on the nature of the relationship and the degree of control exercised." Id. at 283.
Plaintiff has not set forth any facts demonstrating that the parent company, Norfolk Southern Corporation, exercises a degree of control over its subsidiary such that service on the subsidiary is effective against its parent. In the absence of such facts, plaintiff's service on Fred Adkins, the registered agent for service of process for the subsidiary, Norfolk Railway, is ineffective as to the parent Norfolk Southern Corporation.
Accordingly, the court concludes that plaintiff has failed to show that Norfolk Southern Corporation has been properly served in this case. Although Norfolk Southern Corporation urges the court to dismiss it from this action, the court finds the appropriate remedy under the circumstances to be to quash the service of process upon Norfolk Southern Corporation. See Vorhees v. Fischer & Krecke, 697 F.2d 574, 576 (4th Cir.1983) (quoting Bailey v. Boilermakers Local 667 of Int'l Bhd. of Boilermakers, 480 F.Supp. 274, 278 (N.D.W.Va.1979) ("If the first service of process is ineffective, a motion to dismiss should not be granted, but rather the Court should treat the motion in the alternative, as one to quash the service of process....")).
For the foregoing reasons, the court ORDERS as follows:
The Clerk is directed to forward copies of this written opinion and order to all counsel of record and any unrepresented parties.
Syl. pt. 3, in part, Travis v. Alcon Labs., Inc., 202 W.Va. 369, 504 S.E.2d 419, 421 (1998).
