United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
C. HAMILTON UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiff's Motion to
Remand, filed April 16, 2018. (ECF No. 28). The motion is
fully briefed and ready for disposition.
about January 11, 2018, Plaintiff filed a cause of action in
the Circuit Court of St. Louis County, Missouri, against
Defendants Unum Life Insurance Company of America
(“Unum Life”) and The Cornerstone Insurance
Group, LLC (“Cornerstone”). In Count I of his
State court cause of action, Plaintiff asserted a claim for
“Action On The Policy-Non-ERISA Plan” against
Unum Life. (See Petition, ECF No. 6, ¶¶
7-11). In Count II, Plaintiff asserted a claim for negligence
against Cornerstone, claiming Cornerstone “took it upon
itself to prepare the appeals of [Unum Life's] denial of
benefits on behalf of Plaintiff”, but “was
negligent in preparing [those] appeals by failing to include
necessary information.” (Id., ¶¶ 13,
March 9, 2018, Cornerstone (with the consent of Unum Life)
removed Plaintiff's cause of action to the United States
District Court for the Eastern District of Missouri on the
basis of diversity jurisdiction, 28 U.S.C. § 1332.
(Notice of Removal, ECF No. 1). The Notice of Removal stated
that complete diversity existed between Plaintiff and Unum
Life, and that Cornerstone's citizenship
must be disregarded as it was fraudulently joined in this
action. (Id., ¶¶ 5-33).
Specifically, Cornerstone asserted Plaintiff's negligence
claim against it was unsustainable, because Plaintiff failed
to allege that Cornerstone had a duty to him relative to his
appeal of Unum Life's denial of benefits under the
policy, and because any alleged breach of Cornerstone's
duty was not the proximate cause of any damages sustained by
March 12, 2018, Cornerstone filed a Motion to Dismiss Count
II of Plaintiff's Complaint, in which it raised the same
arguments in support of the alleged fraudulent joinder of
Cornerstone that it made in its Notice of Removal. (ECF No.
8). Plaintiff responded to the motion on March 16, 2018, and
further filed a Motion to Remand on March 30, 2018. (ECF Nos.
April 11, 2018, while both motions were still pending,
Plaintiff filed a Motion to File First Amended Complaint (ECF
No. 22), which the Court granted on April 16, 2018 (ECF No.
25). With respect to Cornerstone, Plaintiff expanded upon his
claim of negligence in his First Amended Complaint, as
follows: “After the denial of the claim, Cornerstone
took it upon itself to prepare the appeals of the denial of
benefits on behalf of Plaintiff, with Cornerstone acting as
the agent of Plaintiff. Alternatively, Plaintiff and
Defendant Cornerstone had an agreement whereby Defendant
Cornerstone served as the agent for Plaintiff in representing
Plaintiff in the appeal. Plaintiff relied on Defendant
Cornerstone to his detriment that Defendant Cornerstone would
prepare his appeal.” (First Amended Complaint, ECF No.
26, ¶ 13). Plaintiff further added a claim for breach of
fiduciary duty against Cornerstone. (Id.,
April 16, 2018, Plaintiff filed the instant Motion to Remand.
(ECF No. 28). In support of the Motion to Remand, Plaintiff
argues that because he has stated a cause of action against
Cornerstone there was no fraudulent joinder, and therefore
the Court lacks diversity jurisdiction over this
statutes are strictly construed, and any doubts about the
propriety of removal are resolved in favor of state court
jurisdiction and remand.” Manning v. Wal-Mart
Stores East, Inc., 304 F.Supp.2d 1146, 1148 (E.D. Mo.
2004) (citing Transit Cas. Co. v. Certain Underwriters at
Lloyd's of London, 119 F.3d 619, 625 (8th
Cir. 1997), cert. denied, 522 U.S. 1075, 118 S.Ct.
852, 139 L.Ed.2d 753 (1998)). The party invoking federal
jurisdiction and seeking removal has the burden of
establishing jurisdiction by a preponderance of the evidence.
Central Iowa Power Co-op. v. Midwest Indep. Transmission
Sys. Operator, Inc., 561 F.3d 904, 912 (8th
Cir. 2009); see also Nicely v. Wyeth, Inc., 2011 WL
2462060 at *2 (E.D. Mo. Jun. 17, 2011).
action brought in state court may be removed to the proper
district court if the district court has original
jurisdiction of the action. 28 U.S.C. § 1441(a).
“Federal district courts have original jurisdiction in
all civil actions between citizens of different states if the
amount in controversy exceeds $75, 000.00, exclusive of
interest and costs.” Manning, 304 F.Supp.2d at 1148
(citing 28 U.S.C. § 1332(a)(1)). Actions where
jurisdiction is predicated solely on diversity “may not
be removed if any of the parties in interest properly joined
and served as defendants is a citizen of the State in which
such action is brought.” 28 U.S.C. § 1441(b)(2).
stated above, Cornerstone asserts that diversity jurisdiction
exists because Cornerstone, the only non-diverse party, was
fraudulently joined. “When a court is assessing whether
diversity jurisdiction exists over a particular case, it may
ignore the citizenship of parties fraudulently joined.”
Moss v. Defender Servs. Inc., 2009 WL 90136 at *2
(E.D. Mo. Jan. 14, 2009) (citing Anderson v. Home Ins.
Co., 724 F.2d 82, 84 (8th Cir. 1983); 28
U.S.C. § 1441(b)). Joinder is fraudulent and removal is
proper “when a plaintiff files a frivolous or
illegitimate claim against a non-diverse defendant solely to
prevent removal.” Junk v. Terminix Intern.
Co., 628 F.3d 439, 445 (8th Cir. 2010)
(internal quotations and citation omitted), cert.
denied, 132 S.Ct. 94 (2011). However, “joinder is
fraudulent only when there exists no reasonable basis in fact
and law supporting a claim against the resident
defendant.” Wilkinson v. Shackelford, 478
F.3d 957, 964 (8th Cir. 2007) (internal quotations
and citations omitted) (emphasizing that the fraudulent
joinder inquiry does not focus on the “artfulness of
the pleadings”, but rather on the ability of the
plaintiff to state a colorable claim). The Eighth Circuit has
described the fraudulent joinder standard as follows:
[A] proper review should give paramount consideration to the
reasonableness of the basis underlying the state claim. Where
applicable state precedent precludes the existence of a cause
of action against a defendant, joinder is fraudulent.
“[I]t is well established that if it is clear
under governing state law that the complaint 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.” However, if there is a
“colorable” cause of action-that is, if the state
law might impose liability on the resident defendant
under the facts alleged-then there is no fraudulent joinder.
Filla v. Norfolk Southern Railway Co., 336 F.3d 806,
810 (8th Cir. 2003) (internal citations and
footnote omitted; emphasis in original). This reasonableness
standard requires “the defendant to do more than merely
prove that the plaintiff's claim should be dismissed
pursuant to a Rule 12(b)(6) motion.” Knudson,
634 F.3d at 980 (citing Junk, 628 F.3d at 445
(noting that the Rule 12(b)(6) standard is “more
demanding” than the Filla standard)).
Furthermore, in making a prediction as to whether state law
might impose liability based on the facts alleged, “the
district court should resolve all facts and ambiguities in
the current controlling substantive law in the
plaintiff's favor, ” and ...