Lopez v. Trujillo

• Decision Date: 20 July 2012
• Docket Number: Civil Action No. 3:12–CV–01093–L.
• Citation: 475 B.R. 550
• Parties: Marciela LOPEZ, Individually and as Next Friend of Victor L. Reyes, Jr. Destiny B. Reyes, Praxedes A. Reyes, and Vincent Reyes, Minors, Plaintiffs, v. Linda TRUJILLO, Intervenor, Arch Aluminum & Glass Co., Inc., and Pro–Crate & Assembly, LLC, Defendants.
• Court: U.S. District Court — Northern District of Texas

475 B.R. 550

Marciela LOPEZ, Individually and as Next Friend of Victor L. Reyes, Jr. Destiny B. Reyes, Praxedes A. Reyes, and Vincent Reyes, Minors, Plaintiffs,

v. Linda TRUJILLO, Intervenor,Arch Aluminum & Glass Co., Inc., and Pro–Crate & Assembly, LLC, Defendants.

Civil Action No. 3:12–CV–01093–L.

United States District Court,

N.D. Texas,

Dallas Division.

July 20, 2012.

William Kenneth C. Dippel, Law Offices of William Kenneth C. Dippel, Dallas, TX, for Plaintiffs/Intervenor.

David D. Davis, Law Offices of David D. Davis, Grand Prairie, TX, for Plaintiffs.

D. Bowen Berry, Stephani Railsback Johnson, The Berry Firm PLLC, Staci Pirnar, Bellinger & Dewolf, Dallas, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

SAM A. LINDSAY, District Judge.

Before the court is Plaintiffs' and Intervenor's Motion to Remand, filed May 4, 2012. After carefully reviewing the motion, briefs, record, and applicable law, the court grants Plaintiffs' and Intervenor's Motion to Remand.

I. Background

This case is a legal and procedural morass. The death of Victor Luis Reyes (“Reyes”) in a work-related accident gave rise to this case and the removal of two related state court actions. Plaintiffs brought the first of the two actions, Case No. DC–10–00010, against TEPCO Contract Glazing, Inc. (“TEPCO”) on January 4, 2010, in the 101st Judicial District Court, Dallas County, Texas. According to a January 8, 2010 letter from Plaintiffs to the state court, the suit was originally brought based on a personal injury claim under the Texas Workers Compensation Act against Reyes's employer. The letter further notes that this claim was settled presuit, and the case was filed solely for the purpose of seeking an order from the court placing all of the minor Plaintiffs' settlement funds in an annuity or similar tax deferred structure. It is not clear from this letter or Plaintiffs' state court pleadings, but it appears that TEPCO was Reyes's employer. After a final agreed judgment as to TEPCO was entered by the state court on January 26, 2010, Plaintiffs filed an amended pleading on February 23, 2010, adding Arch Aluminum & Glass Co., Inc. (“Arch Aluminum”) and Pro–Crate & Assembly, LLC (“Pro–Crate”) as defendants (collectively, “Defendants”), and alleging claims for product liability and negligence. Arch Aluminum filed an Original Answer with a general denial and jury demand on March 22, 2010, and a First Amended Answer on March 23, 2010, in which it asserted affirmative defenses and special exceptions.

Plaintiffs brought the second action, Case No. DC–10–04225, against Defendants on April 9, 2010, and the case was assigned to the 162nd Judicial District Court, Dallas County, Texas. Pursuant to Dallas County Local Rule 1.06, the 162nd Judicial District Court transferred the action sua sponte to the 101st Judicial District Court. Although Plaintiffs' pleadings in both cases are virtually identical, there is no indication in the record that the two actions were ever consolidated.¹ Additionally, although the actions were not consolidated, the record reflects that the parties have blurred the distinction between the two cases and treated them, albeit inconsistently, as one and the same.²

After Arch Aluminum filed its Original Answer on April 30, 2010, in Case No. DC–10–04225 to Plaintiff's Original Petition, the parties filed an agreed motion in Case No. DC–10–04225 on May 3, 2010, requesting the court to retain the case rather than transferring it to the 101st Judicial District Court. In the agreed motion, the parties explained that Plaintiffs filed the second action because they were contacted by the court and advised that they would need to file a new petition since their amended pleading in the first action was filed more than 30 days after entry of the final judgment. ³ The agreed motion was, nevertheless, denied because an order transferring the case had already been entered.

On May 13, 2010, Linda Trujillo (“Intervenor”) ⁴, Reyes's mother, filed an Original Petition in Intervention in Case No. DC–10–04225, to which Arch Aluminum answered with a general denial and request for a jury trial. Several months later, on October 27, 2010, Arch Aluminum filed a Notice of Suggestion of Bankruptcy in Case No. DC–10–04225, in which it stated that it had filed a Chapter 11 bankruptcy petition on November 25, 2009, in the United States District Court for the Southern District of Florida. Thereafter, on November 10, 2010, the state court entered an order staying Case No. DC–10–04225, in light of the bankruptcy proceeding, and cancelled the jury trial set for August 1, 2011. After Case No. DC–10–04225 was stayed, no further activity occurred in the case aside from the lawyers filing vacation letters with the court.

The record does not indicate that Case No. DC–10–00010 was ever stayed; however, there was no activity in this case after Defendants filed their respective answers to Plaintiffs' amended pleading in May 2010, until the parties filed a joint motion to reinstate the case on February 7, 2012, which was granted by the court on February 14, 2012. The parties' motion to reinstate Case No. DC10–00010 and the court's corresponding order were based on the bankruptcy court's order partially lifting the automatic stay in Case No. DC–10–04225 on February 1, 2012, to allow Plaintiffs to pursue their negligence claim as to insurance proceeds.

On March 16, 2012, Plaintiffs nonsuited their claims against Pro–Crate in Case No. DC–10–00010, and Arch Aluminum filed a Notice of Removal on April 6, 2012, based on diversity jurisdiction, with regard to both state court actions. According to the state court pleadings, Plaintiffs reside in Dallas County, Texas; Intervenor is domiciled in Texas; Pro–Crate is a Texas corporation with its headquarters and principal place of business in Texas; and Arch Aluminum was, at the time the lawsuits were commenced, a Florida corporation. Arch Aluminum asserts in its Notice of Removal that it is a citizen of Florida but does not state where its principal place of business or headquarters is located. Arch Aluminum further asserts that although Plaintiffs' pleadings do not specify the amount of damages sought, it is facially apparent that the damages sought exceed $75,000, because Plaintiffs are seeking damages for wrongful death, punitive damages, and attorney's fees. On May 4, 2012, Plaintiffs and Intervenor moved to remand the cases on the grounds that removal was not accomplished within one year and therefore was untimely under section 1446 of the removal statute, and that equity should not be applied to toll Arch Aluminum's deadline for removal.

II. Standard for Subject Matter Jurisdiction and Removal

A federal court has subject matter jurisdiction over civil cases “arising under the Constitution, laws, or treaties of the United States,” or over civil cases in which the amount in controversy exceeds $75,000, exclusive of interest and costs, and in which diversity of citizenship exists between the parties. 28 U.S.C. §§ 1331, 1332. Federal courts are courts of limited jurisdiction and must have statutory or constitutional power to adjudicate a claim. See Home Builders Ass'n, Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir.1998). Absent jurisdiction conferred by statute or the Constitution, they lack the power to adjudicate claims and must dismiss an action if subject matter jurisdiction is lacking. Id.;Stockman v. Federal Election Comm'n, 138 F.3d 144, 151 (5th Cir.1998) (citing Veldhoen v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir.1994)). A federal court has an independent duty, at any level of the proceedings, to determine whether it properly has subject matter jurisdiction over a case. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999) (“[S]ubject-matter delineations must be policed by the courts on their own initiative even at the highest level.”); McDonal v. Abbott Labs., 408 F.3d 177, 182 n. 5 (5th Cir.2005) (“federal court may raise subject matter jurisdiction sua sponte” ).

Diversity of citizenship exists between the parties only if each plaintiff has a different citizenship from each defendant. Getty Oil Corp. v. Insurance Co. of North America, 841 F.2d 1254, 1258 (5th Cir.1988). Otherwise stated, 28 U.S.C. § 1332 requires complete diversity of citizenship; that is, a district court cannot exercise jurisdiction if any plaintiff shares the same citizenship as any defendant. See Corfield v. Dallas Glen Hills LP, 355 F.3d 853, 857 (5th Cir.2003) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806)), cert. denied,541 U.S. 1073, 124 S.Ct. 2421, 158 L.Ed.2d 983 (2004). “[T]he basis on which jurisdiction depends must be alleged affirmatively and distinctly and cannot be established argumentatively or by mere inference.” Getty, 841 F.2d at 1259 (citing Illinois Cent. Gulf R.R. Co. v. Pargas, Inc., 706 F.2d 633, 636 n. 2 (5th Cir.1983)). Failure to allege adequately the basis of diversity “mandates remand or dismissal of the action.” Stafford v. Mobil Oil Corp., 945 F.2d 803, 805 (5th Cir.1991). A notice of removal “must allege diversity both at the time of the filing of the suit in state court and at the time of removal.” In re Allstate Ins. Co., 8 F.3d 219, 221 (5th Cir.1993) (quotation marks and citations omitted). Such failure, however, is a procedural defect and may be cured by filing an amended notice. Id. n. 4.

A natural person is considered a citizen of the state where that person is domiciled, that is, where the person has a fixed residence with the intent to remain there indefinitely. See Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 555–56 (5th Cir.1985). A partnership or unincorporated association's citizenship is determined by the citizenship of each of its partners. Carden v. Arkoma Assocs., 494 U.S. 185, 195–96, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990). A corporation is a “citizen of any State by which it has been...