Fletcher v. Advo Systems, Inc.

• Decision Date: 06 September 1985
• Docket Number: No. 85-CV-70599-DT.,85-CV-70599-DT.
• Citation: 616 F. Supp. 1511
• Parties: James C. FLETCHER, Plaintiff, v. ADVO SYSTEMS, INC., a foreign corporation, Scott Murray, and Peter Carrao, jointly and severally, Defendants.
• Court: U.S. District Court — Western District of Michigan

616 F. Supp. 1511

James C. FLETCHER, Plaintiff, v. ADVO SYSTEMS, INC., a foreign corporation, Scott Murray, and Peter Carrao, jointly and severally, Defendants.

No. 85-CV-70599-DT.

United States District Court, E.D. Michigan, S.D.

September 6, 1985.

Thomas R. Paxton, Detroit, Mich., for plaintiff.

Ronald G. Acho, Livonia, Mich., for defendants.

OPINION AND ORDER DENYING PLAINTIFF'S MOTION TO REMAND

La PLATA, District Judge.

On December 27, 1984, Plaintiff, James C. Fletcher, filed a four-count Complaint in the Wayne County Circuit Court against a corporate Defendant and two individual Defendants.¹ Therein, he essentially alleged that he was discharged, without just cause, from his position as a senior accounting executive at Advo Systems, Inc., in violation of a verbal employment contract.² Pursuant to 28 U.S.C. § 1441, Defendants removed the action to this Court on February 7, 1985, claiming that one of the Defendants, Scott Murray, a Michigan resident, was included as a party to the lawsuit solely to defeat diversity of citizenship.

On April 29, 1985, Plaintiff filed a Motion to Remand to the state court, under 28 U.S.C. § 1447(c), contending that the case was improvidently removed. Plaintiff argues that Murray, as Plaintiff's supervisor, is jointly liable for his wrongful discharge from Advo Systems, Inc.

According to his Complaint, Plaintiff was hired by Defendant Advo, which is incorporated in the State of Delaware, as a salesman on April 9, 1984. Sometime prior to her termination on October 5, 1984, Plaintiff was promoted to the position of a senior accounting executive. Plaintiff averred that his contract was not terminable at will:

2. That in April of 1984, when the Plaintiff was hired, he was promised that he would have a good future with the Defendant company and that as long as he did his job, he would not be discharged. Further, based upon his employers expressed and/or implicit representations to the Plaintiff, the Plaintiff formed a reasonable reliance that he would not be discharged except for just cause.³

In addition to naming his employer as a Defendant, Plaintiff included the firm's vice-president, Peter Carrao, a resident of Hartford, Connecticut, and Scott Murray, his immediate supervisor, in the lawsuit. In regard to Defendant Murray, Plaintiff did not specifically allege that his former supervisor committed a breach of the purported employment contract, but, in a general and conclusory fashion, stated the three Defendants jointly terminated him from his employment without just cause.

In the instant Motion, Plaintiff maintains that since both Defendant Murray and he are residents of Michigan, the case was improperly removed to federal court.⁴ Plaintiff argues that each of the Defendants was an "employer" of his, and, thus, each is individually liable for breaching the alleged contract of employment. In his Motion and supporting brief, Plaintiff emphatically denied that Defendant Murray was included in the lawsuit solely to defeat complete diversity of citizenship.

Opposing the Motion to Remand, Defendants, reasserting that Murray was named as a party defendant in order to thwart a removal from state court, attached the affidavits of Murray and Carrao to demonstrate that Murray neither was involved in nor knew of Plaintiff's termination:

AFFIANT CARRAO:

2. That I, in my capacity, as Vice President of Sales for the Eastern Division, personally conducted the investigation and made the decision to terminate former employee James Fletcher from his position with ADVO SYSTEMS, INC. on or about October 5, 1984.

3. That Mr. Scott Murray, as Regional Director of Sales, did not participate in, nor was he involved in the decision to terminate Mr. Fletcher in any way whatsoever.

4. That, to the best of my knowledge and belief, Mr. Scott Murray had no prior knowledge of the pending termination of Mr. Fletcher.

AFFIANT MURRAY:

2. That I was not involved in any way, directly or indirectly, either personally or in my capacity as Regional Sales Manager, in the decision to terminate James Fletcher from his former position with ADVO SYSTEMS, INC.

3. That, to the best of my knowledge and belief, the termination of Mr. James Fletcher and the investigation relating to the termination were handled entirely by the Corporate Headquarters of ADVO SYSTEMS, INC., under the direction of Mr. Peter Carrao, Vice President of Sales, who conducted interviews separately and privately with each sales employee of the Detroit Branch Office of ADVO SYSTEMS, INC., on or about October 4 and 5, 1984.

4. That I had no knowledge of the investigation or pending termination of Mr. James Fletcher until after the decision to terminate had been made and announced by Vice President Carrao on October 5, 1984.

While recognizing that a federal court is required to remand a case to state court where complete diversity of citizenship is lacking, Defendants argue that the improper joinder of a party defendant who does not have a real connection with the controversy permits a federal court to disregard the joinder and retain jurisdiction. Based on the affidavits of Carrao and Murray, Defendants assert that the Court may make a summary determination that, under state law, Defendant Murray was not involved in Plaintiff's termination and, hence, he was included in the action solely to defeat diversity of citizenship.

Where there are either plural plaintiffs or plural defendants, a federal court is devoid of diversity jurisdiction unless there is a diversity of citizenship between all plaintiffs and all defendants.⁵ Despite this precept, if a litigant is not a real party in interest, or is purely a nominal or formal party, his presence in the action may be disregarded in ascertaining jurisdiction.⁶

Fed.R.Civ.P. 21 empowers a trial court to drop a litigant from the lawsuit on its own initiative if that party was misjoined.⁷ In Covington v. Indemnity Insurance Company of America,⁸ an employee sued a nonresident compensation insurance company in a state court for worker's compensation benefits. As a party defendant, he named his employer, B.W. Iley, on the basis that he did not carry compensation insurance. The insurance company removed the case to Federal Court, maintaining that the employer was misjoined. The District Court dismissed Iley from the action and denied the Plaintiff's Motion to Remand. On appeal, the Fifth Circuit Court of Appeals held that the joinder of the employer as a defendant was improper:

If we could agree with appellant's premise that `In the case at bar plaintiff has one cause of action either against the insurance company or against B.W. Iley. He is not sure as to what the courts will ultimately rule with reference to which of the defendants is liable on his one cause of action', we would certainly agree with his conclusion that the cause was not removable and the action of the court in dismissing Iley and thereafter proceeding to judgment in it was error. We think it clear, however, that the premise is false and finds no support in the record or in law.

On the contrary, while we agree with plaintiff that he had only one cause of action, we think it clear that the original petition, which did not make Iley a party, and the first amended original petition, which did, taken together inescapably show that that one cause of action was exclusively for compensation and that his attempted joinder of Iley in the amended petition was on its face `a fraudulent joinder for the purpose of defeating the jurisdiction of the federal

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