McDaniel v. Loya, No. CIV 14-0511 JB/SCY

CourtUnited States District Courts. 10th Circuit. District of New Mexico
PartiesTERRY MCDANIEL and VANESSA COWAN, Plaintiffs, v. FRANCISCO JAVIER MENDEZ LOYA d/b/a TRANSLOGISTICA MENLO; ARMANDO GAYTAN SAUCEDO; RED ROCK RISK RETENTION GROUP, INC. and TERRY MCDANIEL, Defendants.
Docket NumberNo. CIV 14-0511 JB/SCY
Decision Date29 January 2015

TERRY MCDANIEL and VANESSA COWAN, Plaintiffs,
v.
FRANCISCO JAVIER MENDEZ LOYA d/b/a TRANSLOGISTICA MENLO; ARMANDO GAYTAN SAUCEDO;
RED ROCK RISK RETENTION GROUP, INC. and TERRY MCDANIEL, Defendants.

No. CIV 14-0511 JB/SCY

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

January 29, 2015


MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court on the Motion to Remand to State Court, filed August 15, 2014 (Doc. 20)("Motion to Remand"). The Court held a hearing on November 18, 2014. The primary issues are: (i) whether Defendant Armando Gaytan Saucedo is a New Mexico citizen, thus destroying diversity and necessitating remand; (ii) whether Plaintiff Vanessa Cowan has alleged any cross-claims against Plaintiff-Defendant Terry McDaniel; and (iii) whether these cross-claims would destroy the Court's diversity jurisdiction, given that McDaniel and Cowan are both New Mexico citizens. The Court concludes that: (i) Saucedo is a Mexican citizen and not a New Mexico citizen; (ii) Cowan has not, in the Complaint for Declaratory Judgment and Damages, filed in state court November 8, 2013, filed in federal court May 28, 2014 (Doc. 1-1)("Complaint"), alleged any claims against McDaniel; and (iii) even if Cowan had asserted claims against McDaniel, these claims would be cross-claims, and nondiverse cross-claims do not destroy federal diversity jurisdiction. The Court thus concludes

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that it has diversity jurisdiction over this case and denies the Motion to Remand without prejudice to renew it at a later date.

FACTUAL BACKGROUND

The Court takes its facts from the Complaint, as it must at the motion-to-dismiss stage. Around midnight on November 9, 2010, McDaniel was driving a tractor trailer in the southbound lane of Interstate 25 in New Mexico. See Complaint ¶ 11-13, at 2.1 Cowan was with McDaniel in the cab of McDaniel's tractor trailer. Saucedo was also driving a tractor trailer southbound on Interstate 25, and the two tractor trailers collided, causing serious injuries to Cowan and McDaniel. See Complaint ¶¶ 11-13, at 2; id. ¶¶ 20-21, at 3. The investigating police officer that examined the collision found McDaniel's "driver inattention" at fault for the accident, but the Complaint alleges that Saucedo "negligen[tly,] . . . reckless[ly,] . . . intentional[ly], willful[ly], wanton[ly, and] malicious[ly]" caused the wreck. Complaint ¶¶ 19, 22, at 3. Saucedo is personally uninsured and operates his tractor trailer as an employee of Defendant Francisco Javier Mendez Loya. See Complaint ¶ 9, at 2; id. ¶¶ 14-16, at 2-3. Defendant Red Rock Risk Retention Group, Inc. ("Red Rock") insured the truck that Saucedo was driving at the time of the accident; the policy limit is $1,000,000.00. Complaint ¶ 17, at 3.

PROCEDURAL BACKGROUND

The Plaintiffs filed their suit in state court, and the Defendants removed on diversity grounds. See Complaint at 1; Notice of Removal of Action Under 28 U.S.C. § 1441(b) (Diversity), filed May 28, 2014 (Doc. 1)("Notice of Removal"). After setting forth the facts, the

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Complaint alleges three claims: (i) a "personal injury" claim, which appears to be intended to encompass both negligence and intentional torts -- this claim is brought by the "Plaintiffs" against Saucedo and Loya; (ii) a "declaratory judgment" claim, in which the Plaintiffs ask the Court to declare that Saucedo is an uninsured motorist under New Mexico law; and (iii) a claim for uninsured motorist benefits, which the Plaintiffs assert against Red Rock. Complaint ¶¶ 28-42, at 4-5. Although the Complaint does not allege any claims against McDaniel in the claims section, it lists his name as both a plaintiff and a defendant in the caption, and contains the following statements at the end of the factual section and before the claims section:

23. Plaintiff Cowan alleges no specific claims against Defendant McDaniel, because Plaintiff Cowan does not believe Defendant McDaniel was negligent.

24. Nevertheless, the investigating police officer attributed fault to Defendant McDaniel in a notation attributing "driver inattention" to Defendant McDaniel.

25. In addition, Defendant Saucedo attributed fault to Defendant McDaniel in his statement to the investigating police officer.

26. Based on the notation and statement described in the police report, Plaintiff Cowan may ultimately have colorable claims for negligence against Defendant McDaniel.

27. Because Plaintiff Cowan may have colorable claims for negligence against Defendant McDaniel, Defendant McDaniel is a properly named defendant in this action.

Complaint ¶¶ 23-27, at 3 (citations omitted). The Complaint also alleges that McDaniel and Cowan are New Mexico citizens, that Loya and Saucedo are Mexico citizens, and that Red Rock is an "out-of-state insurer." Complaint ¶¶ 1-2, at 1; id. ¶¶ 6-8, at 2.

The Plaintiffs filed their Motion to Remand, along with a supporting memorandum brief, on August 15, 2014, slightly less than three months after removal. See Memorandum Brief in Support of Plaintiff Cowan's Motion to Remand to State Court, filed August 15, 2014

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(Doc. 21)("Remand Memo."). The Plaintiffs argue for remand on two grounds. First, they contend that this action is not diverse, because Saucedo is a New Mexico citizen. See Remand Memo. at 5-6. This contention differs from the one in the Complaint. See Complaint ¶ 6, at 2 ("Upon information and belief, Defendant Saucedo is a resident of Juarez, Mexico."). Their sole evidence for this contention is that Loya served a third-party complaint on Saucedo at a home -- at which Saucedo apparently resides or at least stays -- in Anthony, New Mexico. See Remand Memo. at 6.

Second, the Plaintiffs argue that, even if Saucedo is not a New Mexico citizen, McDaniel is a New Mexico citizen, and he is both a Plaintiff and a Defendant. See Remand Memo. at 5. They preemptively address the Defendants' counterargument, which is that the Workers' Compensation Act, N.M. Stat. Ann. § 52-1-1 to -70, would preclude recovery by Cowan against McDaniel, because McDaniel and Cowan are co-workers, and Cowan was injured on the job. See Remand Memo. at 5. They argue that, for the Court to conclude that diversity fails on this ground would require "the Court to enter a factual finding that Plaintiff Cowan was a 'co-employee' of Defendant McDaniel at the time of her injury, even though she was off the clock, and indeed she was sound asleep at the time of the crash." Remand Memo. at 5 (emphasis in original). The Plaintiffs contend that the standard for concluding that McDaniel was fraudulently joined as a Defendant is higher than even the standard for dismissal under rule 12(b)(6) of the Federal Rules of Civil Procedure. See Remand Memo. at 2-4.

Red Rock responded to the Motion to Remand. See Red Rock Risk Retention Group Inc.'s Response to Plaintiff Cowan's Motion to Remand to State Court, filed September 2, 2014 (Doc. 22)("Response"). It first counters the Plaintiffs' contention that Saucedo is a New Mexico citizen, asserting that (i) the accident report from the wreck, which the Plaintiffs attached to the

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Complaint, lists an address in Juarez, Mexico for Saucedo; (ii) the report states that Saucedo has a Mexican driver's license, and the space for his United States social security number is left blank; (iii) Red Rock inquired with the Dona Ana County Assessor's Office and determined that Saucedo does not own the Anthony address at which he was served; and (iv) a search of the New Mexico Secretary of State reveals that he is not registered to vote in New Mexico. See Response at 2. Red Rock attaches exhibits attesting to (iii) and (iv). See Assessor's Office Search and Secretary of State Search, filed September 2, 2014 (Doc. 22-1). Red Rock asserts that it asked the United States Citizenship and Immigration Services about Saucedo's citizenship status, but that the agency refused to give Red Rock that information without authorization from Saucedo. See Response at 2.

Red Rock also contends that McDaniel was fraudulently joined as a defendant, because the Plaintiffs have no chance of going forward with the claim as it currently exists in the Complaint. See Response at 3. It argues that the "Plaintiff[s] do[] not deny that [the] Complaint fails to make a claim against McDaniel," and contends that this fact, "in and of itself, establishes fraudulent joinder." Response at 3 (citing Roe v. Gen. Am. Life Ins. Co., 712 F.2d 450 (10th Cir. 1983)). Red Rock contends that the Complaint cannot possibly pass rule 11 scrutiny, given the Complaint's admission that neither Cowan nor McDaniel subjectively believes that McDaniel was negligent or at fault in any way. See Response at 4.

The Court held a hearing on November 18, 2014. See Transcript of Hearing (taken November 18, 2014)("Tr.").2 The Plaintiffs largely reiterated the arguments in their briefing, and called the Court's attention to Rodriguez v. Marchman, No. CIV 06-0228 JH/LFG (D.N.M.

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Aug. 24, 2006)(Doc. 17)(Herrera, J.),3 a case in which a family was in an auto accident, and each member of the family, including the driver, sued the other car's driver, and all family members except the driver sued the driver for negligence. See Tr. at 3:7-4:2 (Thompson). In that case, the Honorable Judith C. Herrera, United States District Judge for the District of New Mexico, ruled that the driver was both a plaintiff and a defendant, and that his citizenship -- which was the same as the other members of his family, but diverse from the other defendants -- sufficed to defeat diversity. See Tr. at 3:7-4:2 (Thompson).

The Court asked the Plaintiffs why this case was different from an ordinary comparative negligence case. See Tr. at 4:3-13 (Court). The Court noted that any negligence by McDaniel would decrease Cowan's recovery from Saucedo, Loya, and Red Rock, but that this situation does not necessarily entail a claim by Cowan against McDaniel. See Tr. at 5:5-12 (Court). The Plaintiffs responded that the situation is...

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