United States District Court, W.D. Missouri, Western Division
ORDER AND OPINION (1) GRANTING PLAINTIFF'S MOTION
TO REMAND, AND (2) REMANDING THE MATTER TO STATE
D. SMITH, SENIOR JUDGE
is Plaintiff's Motion to Remand. Doc. #10. For the
following reasons, Plaintiff's motion is granted, and
this matter is remanded to state court for all further
August 2016, Plaintiff, a citizen of Missouri, filed his
Petition against Venus Holding Company (“Venus”);
Top of the Arc, LLC (“TOTA”); Brad Likens
(“Brad”), and Greg Likens (“Greg”) in
the Circuit Court of Jackson County, Missouri. Doc. #11-1.
Defendants timely removed the matter to this Court because
they contend TOTA, a citizen of Missouri and Kansas, was
fraudulently joined. Doc. #1. Plaintiff moves for remand,
arguing this Court lacks removal jurisdiction because TOTA
was not fraudulently joined, and as such, there is no
diversity of citizenship jurisdiction.
Eighth Circuit has articulated the fraudulent joinder
standard. “Where applicable state precedent precludes
the existence of a cause of action against a defendant,
joinder is fraudulent.” Filla v. Norfolk S. Ry.
Co., 336 F.3d 806, 810 (8th Cir. 2003). If it is clear
under the governing state's law that the petition
“does not state a cause of action against the
non-diverse defendant, the joinder is fraudulent and federal
jurisdiction of the case should be retained.”
Id. (quoting Iowa Pub. Serv. Co. v. Med. Bow
Coal Co., 556 F.2d 400, 406 (8th Cir. 1977)). A[J]oinder
is fraudulent when there exists no reasonable basis in fact
and law supporting a claim against the resident
defendants.” Wiles v. Capitol Indem. Corp.,
280 F.3d 868, 871 (8th Cir. 2002). But if there is a
reasonable basis in fact and law that supports the claim,
joinder is not fraudulent. Filla, 336 F.3d at 810.
conducting this inquiry, the Court must “resolve all
facts and ambiguities in the current controlling substantive
law in the plaintiff's favor, ” but the Court has
“no responsibility to definitively settle the
ambiguous question of state law.” Id. at 811
(citations omitted) (emphasis in original). “Instead,
the court must simply determine whether there is a reasonable
basis for predicting that the state's law might
impose liability against the defendant.” Id.
(emphasis added). Where the sufficiency of the petition
against the non-diverse defendant is questionable, “the
better practice is for the federal court not to decide the
doubtful question in connection with a motion to remand but
simply to remand the case and leave the question for the
state courts to decide.” Id. (quoting Iowa
Pub. Serv. Co., 556 F.2d at 406). Finally, the party
seeking removal and opposing remand has the burden of
establishing federal jurisdiction exists. In re Bus.
Men's Assurance Co. of Am., 992 F.2d 181, 183 (8th
Cir. 1995) (per curiam) (citation omitted).
Count I, Plaintiff alleges a “Breach of Operating
Agreement action against TOTA.” Doc. #1-2, at 3.
Plaintiff asserts Defendants, including TOTA, violated the
Operating Agreement, including TOTA “failed to provide
notice of the meetings of the Management Committee, ”
“operated its business with less than 75% approval of
the members of the Management Committee, ” “had
undertaken actions which are restricted, ” and
“caused the removal or replacement of Plaintiff from
the Management Committee.” Doc. #1-2, ¶ 18(b),
(c), (e), and (f). He is bringing Count I pursuant to section
347.069.1 of the Missouri Revised Statutes, which states the
A member, manager, employee, or agent of a limited liability
company is not a proper party to proceedings by or against a
limited liability company, except where the object is to
enforce such person's right against or duty or liability
to the limited liability company. Notwithstanding any
provision of sections 347.010 to 347.187 to the contrary, any
person, including a member, manager, employee or agent of a
limited liability company, against whom a claim exists may be
joined as a proper party to proceedings by or against a
limited liability company to the extent the claim arises out
of the transaction or occurrence that is the subject matter
of the claim against the limited liability company.
Mo. Rev. Stat. § 347.069.1(1).
Operating Agreement was referenced throughout and purportedly
attached to the Petition; it was also filed with
Defendant's Removal. See Doc. #1-2; Doc. #1-7.
The relevant portion of the Operating Agreement states a
member, which is defined to include Plaintiff, “shall
be entitled to maintain…any action or proceeding
against…the Company (including, any action for
damages, specific performance, or declaratory relief) for or
by reason of breach by such party of this
Agreement….” Doc. #1-7, at 4, 28, 31.
“Company” is defined as TOTA. Doc. #1-7, at 3-4.
argue Plaintiff's motion to remand should be denied
because (1) Plaintiff did not state a breach of contract
claim against TOTA, and (2) Plaintiff has no cause of action
against TOTA as a matter of Missouri law because he failed to
allege what relief he seeks against TOTA and TOTA was not a
party to the Operating Agreement. Doc. #19, at 5-8.
Defendants' first argument is based solely upon the fact
that Plaintiff failed to include a request for relief in
Count I of his Petition. Id., at 5-8. While this is
an accurate representation, this argument goes to the
sufficiency of the petition, not whether Plaintiff's
claim against TOTA is precluded by state precedent. The
Eighth Circuit has stated the “better practice”
is for this Court to remand the matter if the sufficiency of
the petition against the non-diverse defendant is
questionable. Filla, 336 F.3d at 811. Additionally,
this Court must resolve all facts and ambiguities in
Plaintiff's favor. Id. Based upon the standard
this Court must apply, the Court finds Defendants have not
met their burden of establishing federal jurisdiction exists
with regard to their first argument.
second argument - to wit, Missouri law does not permit
Plaintiff's claim against TOTA because Plaintiff failed
to seek specific relief against TOTA and TOTA was not a party
to the Operating Agreement - also fails. The Missouri statute
cited by Plaintiff in Count I alludes to lawsuits being
brought by or against limited liability companies. Mo. Rev.
Stat. § 347.069.1(1). Doc. #1-7, at 4, 28, 31. Again,
Plaintiff's failure to include his requested relief
against TOTA goes to the sufficiency of the petition, and the
Court must remand the matter if the sufficiency of the
petition against the non-diverse defendant is questionable.
Filla, 336 F.3d at 811. Furthermore, the Operating
Agreement expressly permits a member to bring a lawsuit
against TOTA, which contradicts Defendants' argument ...