Thiele v. TravelCenters of America Inc.

[7] 8 UNITED STATES DISTRICT COURT [9] FOR THE EASTERN DISTRICT OF CALIFORNIA [10] 11 JAMES THIELE, ) Case No.: 1:20-cv-1727 JLT BAK (BAM) ) 12 Plaintiff, ) ORDER GRANTING PLAINTIFF’S MOTION ) TO REMAND CASE TO STATE COURT AND 13 v. ) DENYING PLAINTIFF’S MOTION TO AWARD ) COSTS AND ATTORNEY’S FEES, AND 14 TRAVELCENTERS OF AMERICA INC., et al. ) IMPOSE SANCTIONS ) 15 Defendants. ) (Doc. 8) ) [16] 17 James Theile asserts he slipped and fell at the TA Wheeler Ridge truck stop and seeks to hold 18 Defendants liable for his injuries. Plaintiff contends the Court lacks subject matter jurisdiction and 19 seeks a remand of the action to the state court. (Doc. 8.) Defendants oppose remand, arguing the Court 20 has diversity jurisdiction over the action. (Doc. 11.) 21 The Court finds the matter is suitable for decision without oral argument, and no hearing will be 22 held pursuant to Local Rule 230(g). For the reasons set forth below, Plaintiff’s motion to remand is 23 GRANTED IN PART AND DENIED IN PART. 24 I. Background and Procedural History 25 James Thiele filed this action in the Superior Court of California, County of Kern (No. BCV26 20-102059) on September 2, 2020, alleging negligence and premises liability claims arising from a slip 27 and fall in a shower facility located on Defendants’ business premises. (Doc. 1, Ex. 1. at 3–5.) Thiele 28 asserts Defendants maintained responsibility over the premises where his injury occurred and failed to 1 provide a safe environment. (Id. at 2–3.) As a result of this failure, Thiele alleges, he suffered injuries 2 including physical and emotional pain and suffering. (Id. at 4.) 3 Defendants removed the action to this Court under 28 U.S.C. § 1446 on December 8, 2020. 4 (Doc. 1.) Plaintiff filed this motion requesting that the Court remand the case to state court on January 5 11, 2021. (Doc. 8.) In the same motion, Plaintiff requested that the Court award Plaintiff costs and 6 attorney’s fees and impose sanctions upon Defendants’ counsel under Rule 11 of the Federal Rules of 7 Civil Procedure. (Id.) Defendant timely filed its opposition to the motion on January 25, 2021. (Doc. 8 11.) Plaintiff timely filed a reply on February 1, 2021.1 (Doc. 14.) 9 II. Diversity Jurisdiction 10 Federal district courts maintain jurisdiction over civil actions between citizens of different states 11 when the amount in controversy exceeds $75,000. 28 U.S.C. § 1332 (a)(1). Plaintiff contests the 12 existence on diversity jurisdiction on two grounds. First, Plaintiff alleges complete diversity does not 13 exist between adverse parties. (Doc. 8 at 18.) Second, Plaintiff alleges Defendants fail to establish the 14 amount in controversy exceeds $75,000. (Id. at 20.) 15 A. Diversity of Parties 16 Diversity jurisdiction arises only when complete diversity exists, meaning that no plaintiff may 17 be from the same state as any defendant. Abrego v. Dow Chem. Co., 443 F.3d 676, 679 (9th Cir. 2006). 18 A civil action filed in state court may not be removed to federal court if any of the defendants is a 19 citizen of the state in which the action is brought. 28 U.S.C. § 1441 (b)(1). When a party removes a 20 case to federal court under 28 U.S.C. § 1446 , that party bears the burden of establishing jurisdiction 21 exists. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Gaus v. Miles, Inc., 980 22 F.2d 564, 566 (9th Cir. 1992). 23 Diversity jurisdiction does not arise when a non-diverse defendant is fraudulently joined as a 24 sham defendant. See Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996); Kruso v. Int’l Tel. & Tel. 25 Corp., 872 F.2d 1416 , 1426 (9th Cir. 1989); Nasrawi v. Buck Consultants, LLC, 776 F. Supp. 2d 1166 , [27] 1 As the parties were informed on December 9, 2020, the Eastern District of California is in an ongoing state of 28 judicial emergency. (See Doc. 2-3.) The action, including the motion now pending before the Court, was assigned to the 1 1175 (E.D. Cal. 2011). Joinder is deemed fraudulent if the plaintiff fails to state a cause of action 2 against the non-diverse defendant, and “[t]hat failure is obvious according to the well-settled rules of 3 the state.” Nasrawi, 776 F. Supp. 2d at 1175 ; see also Briano v. Conseco Life Ins. Co., 126 F. Supp. 2d 4 1293, 1296 (C.D. Cal. 2000) (explaining a court must find “there is absolutely no possibility that the 5 plaintiff will be able to establish a cause of action against the non-diverse defendant in state court”). 6 “[A]ny doubt about the right of removal requires resolution in favor of remand.” Moore-Thomas v. 7 Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (citing Gaus, 980 F.2d at 566). 8 Courts may examine potentially fraudulent joinder by engaging in a “summary inquiry” to 9 “identify the presence of discrete and undisputed facts that would preclude plaintiff’s recovery against 10 the in-state defendant . . .” Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009) (citation 11 omitted). The court can “look beyond the pleadings to determine if a defendant was fraudulently 12 joined.” Nasrawi, 776 F. Supp. 2d at 1170 . Courts maintain a general presumption that the inclusion 13 of a non-diverse defendant is not for the purposes of creating a sham defendant. See Hamilton 14 Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). Thus, “[f]raudulent joinder 15 must be proven by clear and convincing evidence.” Id. 16 1. Defendant Sierra 17 Plaintiff, a resident of California, argues that diversity jurisdiction does not exist because 18 Defendant Carlos Sierra is also a resident of California. (Doc. 8 at 19.) Plaintiff argues that Sierra 19 maintained responsibility over the subject premises at the time of Plaintiff’s injury. (Doc. 1-1 at 2.) 20 Plaintiff further points to “a photograph obtained by prior counsel which depicted Mr. Sierra’s business 21 card on the wall of a TA location.” (Doc. 8 at 17; Ex. C.) Sierra acknowledges in a declaration in 22 support of the Notice of Removal that he is a California resident, and that he is an employee of 23 Defendants Travelcenters of America Inc. and TA Operating LLC, but denies that he was employed at 24 the location where Plaintiff’s alleged injuries occurred. (Doc. 1-4 at 1–2.) 25 Defendants respond that Sierra was joined fraudulently because Plaintiff has not established the 26 basis for a cause of action against Sierra. (Doc. 11 at 8.) Plaintiff has pled a single claim of negligence 27 against Sierra, which requires a showing of “(a) a legal duty to use care; (b) a breach of such legal duty 28 [and] (c) the breach as the proximate or legal cause of the resulting injury.” Ladd v. Cty. Of San Mateo, [1] 12 Cal. 4th 913, 917 (1996). Defendants argue that Plaintiff has not adequately pled this claim because 2 Sierra owed Plaintiff no duty of care. Defendants assert: (1) Sierra has never worked at the premises in 3 question nor had responsibility for the premises; (2) Sierra was not present on the premises on the event 4 that Plaintiff’s injuries occurred; (3) Sierra had no involvement with the Plaintiff. (Doc. 11 at 9.) 5 In his complaint, Plaintiff states that Sierra “was responsible for the maintenance of the truck 6 stop and/or premises at the time of Plaintiff’s slip and fall, was responsible to verify that there was in 7 place a policy which provided for the maintenance of the truck stop and/or premises according to 8 industry standards, was responsible for the training and education of the restaurant employees who 9 were tasked with conducting the maintenance of the truck stop and/or premises, and was responsible for 10 verifying that the truck stop and/or premises be maintained according to industry standards and 11 sufficient policies and procedures.” (Doc. 1-1, at 2.) These statements in Plaintiff’s complaint, if 12 proved, would establish that Sierra owed Plaintiff a duty of care. Though Defendants contest the 13 factual circumstances surrounding Sierra’s employment and responsibilities over the premises, disputed 14 questions of fact must be resolved in favor of the party seeking remand. Onelum v. Best Buy Stores 15 L.P., 948 F. Supp. 2d 1048 , 1051–52 (C.D. Cal. 2013). Therefore, the Court finds that Defendants have 16 failed to demonstrate that Sierra cannot be held liable under any possible theory. See Verduzco v. Ford 17 Motor Co., No. 1:13–cv–01437–LJO–BAM, 2013 WL 5739094 , at *8 (E.D. Cal. Oct. 22, 2013) 18 (granting motion to remand negligence complaint where “there is any possibility that the plaintiff could 19 establish liability against the defendant”) (citation omitted), findings and recommendations adopted in 20 full, 2013 WL 6053833 (E.D. Cal. Nov. 15, 2013). The Court does not find at this time that Sierra’s 21 joinder to the lawsuit was fraudulent. Thus, his status as a resident of California extinguishes diversity 22 jurisdiction over this dispute. 23 2. Defendant DeLeon 24 Plaintiff also argues he identified “another employee believed to have been present at the 25 Subject Location on the date of the accident and [against] whom plaintiff has claims,” and that Plaintiff 26 “was in the process of preparing the documents to ‘Doe’ in this employee . . . [who] was and still is the 27 manager [of the] subject TA location.” (Doc. 8 at 17–18.) Plaintiff identifies this Defendant as Dena 28 DeLeon, a California resident. (Id. at 20.) 1 However, as Defendants note, governing statutes plainly instruct that “[i]n determining whether 2 a civil action is removable on the basis of [diversity jurisdiction], the citizenship of defendants sued 3 under fictitious names shall be disregarded.” 28 U.S.C. § 1441 (b)(1). Therefore, Plaintiff may not rely 4 on the citizenship of DeLeon to establish that complete diversity does not exist. 5 B. Amount in Controversy 6 Under 28 U.S.C. § 1332 , federal district courts maintain jurisdiction over civil actions between 7 citizens of different states, so long as the matter in controversy exceeds the sum or value of $75,000, 8 exclusive of interest and costs. To establish that the amount in controversy exceeds the $75,000 9 threshold, the removing party must present “summary-judgment-type evidence relevant to the amount 10 in controversy at the time of removal.” Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004) 11 (quotations omitted). 12 Plaintiff argues that Defendants did not meet the burden of establishing the amount in 13 controversy exceeded $75,000 because they did not present sufficient evidentiary support. (Doc. 8 at 14 20.) Plaintiff points to a “purported ‘settlement demand’” raised by Defendants, stating that “if any 15 such demand was issued by [Plaintiff’s former counsel], the existence of which is uncertain, it should 16 be disregarded as any firm that represented plaintiff at the time alleged no longer currently represents 17 Mr. Thiele in this matter and the basis upon which any such demand may have been made is 18 speculative and uncertain.” (Id. at 22.) However, given the Court’s finding that Plaintiff may be able to 19 prove a case against Sierra for negligence, it does not reach the question of whether Defendants met 20 their burden of proof regarding the amount in controversy. 21 III. Request for Fees and Costs [22] 28 U.S.C. § 1447 (c) provides that, for a case removed from state court, “[a]n order remanding 23 the case may require payment of just costs and any actual expenses, including attorney fees, incurred as 24 a result of the removal.” Plaintiff moved this Court to award costs and actual expenses, including 25 attorney’s fees, incurred as a result of the case’s removal, alleging that the Defendants lacked 26 reasonable basis to believe that removal was proper, failed to provide evidentiary support for removal, 27 and failed to disclose facts necessary to determine removability. 28 The Supreme Court has stated that, following a remand motion, fees should not be awarded 1 when there is “an objectively reasonably basis for seeking removal.” Martin v. Franklin Capital Corp., [2] 546 U.S. 132, 141 (2005). Furthermore, “removal is not objectively unreasonable solely because the 3 removing party’s arguments lack merit.” Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th 4 Cir. 2008). And “if the law in the Ninth Circuit is not so clear as to make the removing party’s 5 endeavor entirely frivolous, a court will deny the request for attorney’s fees.” SWC Inc. v. Elite Promo 6 Inc., 234 F. Supp. 3d 1018, 1026 (N.D. Cal. 2017) (citation omitted). 7 This Court declines to grant Plaintiff’s request for fees and costs because Defendants’ removal 8 demand was not frivolous. See, e.g., California Crane Sch., Inc. v. Nat’l Comm’n for Certification of 9 Crane Operators, No. 2:08–cv–00816–MCE–EFB, 2008 WL 3863426 , at *5 (granting remand motion 10 and rejecting fraudulent joinder objection, but declining to grant attorney’s fees because “the facts as 11 pled along with the declarations create uncertainty as to the liability of [a defendant] and consequently 12 there was reasonable basis for seeking removal”). Material questions of fact exist as to whether 13 Defendant Sierra owed Plaintiff the requisite duty of care to establish a negligence claim, and 14 Defendants provided concrete factual bases for the contention that Sierra was joined fraudulently. 15 IV. Requests for Rule 11 Sanctions 16 Rule 11 states that “[b]y presenting to the court a pleading, written motion, or other paper . . . an 17 attorney . . . certifies that to the best of the person's knowledge, information, and belief, formed after an 18 inquiry reasonable under the circumstances . . . the factual contentions have evidentiary support or, if 19 specifically so identified, will likely have evidentiary support after a reasonable opportunity for further 20 investigation or discovery . . . .” Fed. R. Civ. Proc. R. 11(b)(3). The imposition of Rule 11 sanctions is 21 “an extraordinary remedy, one to be exercised with extreme caution,” and is an appropriate response to 22 the filing of “frivolous” filings that are both “baseless and made without a reasonable and competent 23 inquiry.” Lee v. POW! Ent., Inc., 468 F. Supp. 3d 1220 , 1230–32 (C.D. Cal. 2020). 24 Plaintiff moved this Court to impose sanctions against counsel for Defendants under Rule 11 of 25 the Federal Rules of Civil Procedure, alleging the notice of removal was not well grounded in fact and 26 was interposed for the purpose of causing unnecessary delay and to needlessly increase the cost of 27 litigation. (Doc. 8.) Plaintiff argues Defendants “failed to provide adequate evidence to support [their] 28 contentions of diversity jurisdiction and amount in controversy” because “[t]here was no admissible 1 || evidence to support the contentions and no supportive evidence regarding the amount in controversy 2 || accompanied the notice of removal.” (Ud. at 26.) Plaintiff further states, “Defendants’ notice of 3 || removal was clearly in bad faith.” Ud.) As described above, this Court does not consider the remova 4 || demand to be frivolous, and so declines to impose Rule 11 sanctions against Defendants’ counsel. 5 In response, Defendants stated that Plaintiff's counsel’s failure to “conduct a reasonable and 6 || good faith investigation before making unfounded and speculative allegations” violated Rule 11. (De 7 || 11, at9.) Specifically, Defendants assert that Plaintiff's reliance upon “a photo [that] was included 8 || with [Plaintiffs] confidential client file from his former firm that depicts what appears to be a TA 9 || location which Carlos Sierra’s business cards are visible” falls short of counsel’s “affirmative duty to 10 || investigate the facts surrounding the photo in question to demonstrate it is a good faith and reasonabl 11 || basis to name Sierra.” (/d. at 10.) Because the Court grants Plaintiffs motion for remand, it declines 12 || to impose Rule 11 sanctions against Plaintiff's counsel. 13 || V. Conclusion and Order 14 For the reasons set forth above, the Court ORDERS: 15 1. Plaintiff's motion to remand the case to Superior Court of California, County of Kern 16 GRANTED. 17 2. Plaintiff's motion to award costs and attorney’s fees is DENIED. 18 3. Plaintiffs request for Rule 11 sanctions against Defendant’s counsel is DENIED. 19 4. Defendants’ request for Rule 11 sanctions against Plaintiff's counsel is DENIED. 20 5. The action is DISMISSED without prejudice for lack of jurisdiction; and 21 6. The Clerk of Court is directed to close this action. [22] 23 || IT IS SO ORDERED. Dated: _February 9, 2022 Charis [Tourn 25 TED STATES DISTRICT JUDGE