Quincy Mut. Fire Ins. Co. v. Vivint Solar Developer, LLC

• Decision Date: 20 August 2018
• Docket Number: Civil Action No. 17-cv-12343-ADB
• Parties: QUINCY MUTUAL FIRE INSURANCE COMPANY a/s/o ALDA DONNELLY, Plaintiff, v. VIVINT SOLAR DEVELOPER, LLC, and PHILIP F. ZAMPITELLA, Defendants.
• Court: U.S. District Court — District of Massachusetts

QUINCY MUTUAL FIRE INSURANCE COMPANY a/s/o ALDA DONNELLY, Plaintiff, v. VIVINT SOLAR DEVELOPER, LLC,and PHILIP F. ZAMPITELLA, Defendants.

Civil Action No. 17-cv-12343-ADB

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

August 20, 2018

MEMORANDUM AND ORDER ON MOTIONS TO REMAND AND DISMISS

BURROUGHS, D.J.

Plaintiff Quincy Mutual Fire Insurance Company, on behalf of the insured, Alda Donnelly, brings this suit against Vivint Solar Developer, LLC ("Vivint") and Philip F. Zampitella for negligence, strict liability, gross negligence, negligent supervision, fraud, breach of contract, and violations of Massachusetts General Laws chapters 93A and 142A. [ECF No. 1-1 at 6-12]. Now before the Court is a Rule 12(b)(6) motion to dismiss brought by Vivint [ECF No. 8] and a Rule 21 motion to dismiss by Zampitella [ECF No. 7], as well as a motion to remand the action to state court brought by Plaintiff [ECF No. 13].

I. BACKGROUND

In evaluating a motion to dismiss, the Court "must take the complaint's well-pleaded facts as true" and draw "all reasonable inferences in the pleader's favor." Hochendoner v. Genzyme Corp., 823 F.3d 724, 730 (1st Cir. 2016); see also Carden v. Klucznik, 775 F. Supp. 2d 247, 249 (D. Mass. 2011) (applying 12(b)(6) standard to Rule 21 motion). The following facts are drawn from the complaint.

Plaintiff is a property and casualty insurance company with a principal place of business in Quincy, Massachusetts. [ECF No. 1-1 ¶ 1]. Defendant Vivint is a limited liability corporation, incorporated in Delaware, with a principal place of business in Utah. Id. ¶ 3. Defendant Zampitella is an individual who resides in Ipswitch, Massachusetts. Id. at ¶ 5.

On or about August 20, 2014, Plaintiff's subrogor, Donnelly, signed an agreement with Vivint, a company that installs residential solar panel systems, whereby Vivint would install solar panels at her home. Id. at ¶ 9. Plaintiff alleges that Howard Nell, the Vivint Solar Manager with whom she signed the agreement, failed to explain and disclose all of the terms and conditions of the proposed agreement, in violation of applicable law. Id. at ¶¶ 9, 13-15.

On or about April 29, 2015, Vivint employees installed solar panels and related equipment on the Donnelly property. Id. at ¶ 26. Zampitella, a Master electrician, was the permit holder for the installation work at the Donnelly residence. Id. at ¶ 20. As part of the installation process, the individuals installing the solar panels allegedly drove a metallic rod into the ground outside the Donnelly property in order to ground the system and connect the residence to solar panel equipment. Id. at ¶ 27. Donnelly's property was serviced by a heating system with an underground propane gas tank, and a gas line ran from the underground propane tank into the basement. Id. at ¶ 28. The underground tank had a visible gas line cover near the area where Vivint's employees drove the rod into the ground. Id. When the installers drove the rod into the ground, it struck the underground gas line and pierced the propane line, creating a gas leak. Id. at ¶ 31. The employees then removed the grounding rod, repositioned it to another location on the Donnelly property, but did not investigate the obstruction encountered or the damage caused to the gas line. Id. at ¶ 32.

When Donnelly's son returned home from work, he adjusted the property's thermostat,and an explosion and fire followed, which demolished the contents of the property and severely injured Donnelly and her son. Id. at ¶ 34. As a result, the installation of solar panels on the Donnelly home became impossible to perform. Id. at ¶ 35. At the time of the incident, Donnelly had an "all-risk" insurance policy with Quincy Mutual. Id. at ¶ 39. In accordance with the policy, Quincy Mutual issued actual cash value payments for the damaged property, and as a result is now seeking, as a subrogee, to recover its claim payments and the deductible from Defendants. Id. at ¶¶ 40-41.

Plaintiff filed a complaint [ECF No. 1-1] in the Massachusetts Superior Court for Norfolk County on September 22, 2017. On November 28, 2017, Defendants removed the case to federal court based on diversity of citizenship pursuant to 28 U.S.C. § 1332. [ECF No. 1]. On December 4, 2017, Zampitella filed a Motion to Dismiss [ECF No. 7], and on December 18, 2017, Vivint filed a Motion to Dismiss [ECF No. 8]. On December 27, 2017, Plaintiff moved to remand the action to state court [ECF No. 13].

II. MOTION TO REMAND

A. Standard of Review

When assessing a claim of fraudulent joinder, "the court is not bound by the allegations in the complaint and may consider affidavits and other materials that bear on the question of whether there is a reasonable basis for joinder of the defendant." In re Fresenius Granuflo/Naturalyte Dialysate Prods. Liab. Litig., 76 F. Supp. 3d 321, 333 (D. Mass. 2015) (citing Mills v. Allegiance Healthcare Corp., 178 F. Supp. 2d 1, 6 (D. Mass. 2001)); see Surabian Realty Co. v. CUNA Mut. Grp., 245 F. Supp. 3d 297, 299 (D. Mass. 2017) (same); Antony v. Duty Free Ams., Inc., 705 F. Supp. 2d 112, 115 (D. Mass. 2010) ("[T]he fraudulent joinder doctrine provides an exception to the general rule [on a motion to dismiss] prohibiting courtsfrom considering evidence extrinsic to the facts in the complaint."); see also Badon v. RJR Nabisco Inc., 236 F.3d 282, 285 n.3 (5th Cir. 2000) ("Badon") (considering "undisputed summary judgment type evidence" when determining whether any reasonable possibility of recovery under state law existed).

B. Discussion

Plaintiff moves to remand this case to state court, arguing that Defendants have not met their burden of demonstrating the existence of diversity jurisdiction in light of the fact that the parties are not, in fact, completely diverse. Defendants argue that removal was proper and that there is complete diversity because Zampitella was fraudulently joined. In the absence of Zampitella, there would be complete diversity and this Court would have subject matter jurisdiction over Plaintiff's claim under 28 U.S.C. § 1332.

"[U]nder the doctrine of fraudulent joinder, removal is not defeated by the joinder of a non-diverse defendant where there is no reasonable possibility that the state's highest court would find that the complaint states a cause of action upon which relief may be granted against the non-diverse defendant." Universal Truck & Equip. Co. v. Southworth-Milton, Inc., 765 F.3d 103, 108 (1st Cir. 2014). The removing party bears the burden of demonstrating by clear and convincing evidence either that "there was outright fraud committed in the plaintiff's pleadings, or that there is no possibility, based on the pleadings, that the plaintiff can state a cause of action against the non-diverse defendant in state court." Surabian Realty, 245 F. Supp. 3d at 299 (quoting Mills, 178 F. Supp. at 5) (noting that the court has adopted this test from the Second Circuit). In deciding whether there is a "reasonable basis in law and fact" for the claim, the Court must "resolve all disputed questions of fact and any ambiguities in the current controlling substantive law in plaintiffs' favor." Phillips v. Medtronic, Inc., 754 F. Supp. 2d 211, 215 (D.Mass. 2010) (quoting Badon, 236 F.3d at 286); see Badon v. RJR Nabisco Inc., 224 F.3d 382, 393 (5th Cir. 2000) ("RJR Nabisco") (explaining that court resolves factual controversies in favor of non-moving party, but only when there is actual controversy, that is, when both parties have submitted evidence of contradictory facts); see also In re Fresenius, 76 F. Supp. 2d at 333 (applying Badon, inter alia).

Here, Defendants have not suggested there was outright fraud committed in the complaint, so the only question is whether there is a reasonable possibility that Plaintiff has a claim against Zampitella. Defendants argue that because Zampitella was an employee of Vivint, and that Vivint is therefore liable for his actions under the principle of respondeat superior, Plaintiff cannot state a claim against him.¹ Plaintiff concedes that if Zampitella was an employee of Vivint, then there is no viable claim against him, but also alleges that Zampitella was an independent contractor, and therefore potentially liable for the misuse of his Master's License and for any negligence of the journeymen working under it under the principle of respondeat superior.² In effect, the parties agree that the question of whether Plaintiff can legitimately asserta claim against Zampitella turns on whether he was an employee of Vivint or an independent contractor.

To support the assertion that Zampitella was an employee of Vivint, Defendants proffered Zampitella's 2015 W-2 [ECF No. 16-1 at 3], his I-9 Employment Eligibility Verification [ECF No. 16-1 at 2], an affidavit in which Zampitella states he "was working for Vivint at the time of the alleged incident" [ECF No. 7-3 at 2], and a License Holder Agreement between Zampitella and Vivint [ECF No. 16-2]. Defendants assert that Zampitella was not at the Donnelly residence on the date of the alleged incident, did not perform work at the site, and merely holds the Master's License, which under Massachusetts regulations allows Vivint to employ multiple journeymen electricians at one time.

To support the assertion that Zampitella was not an employee, Plaintiff submitted permits indicating Zampitella may have performed work as an independent contractor for individual, non-Vivint clients from 2014-2016³ [ECF No. 9-2], Massachusetts Secretary of State Corporation Records indicating that Zampitella was the Director of "All Service Electric, Inc.," a Massachusetts electrical contracting corporation [ECF No. 9-3], a Massachusetts Office of Consumer Affairs and Business Regulations 2017 meeting agenda noting that Zampitella's Master's License, which was previously in use by Vivint, was removed by the Commonwealth of Massachusetts Board of State Examiners of Electricians and the Board of Appeals after his "contra...