Villalobos v. Hudson Ins. Co.
| Decision Date | 29 September 2022 |
| Docket Number | PE:22-CV-00010-DC-DF |
| Parties | ANTONIO PRECIADO VILLALOBOS, Plaintiff, v. HUDSON INSURANCE COMPANY, and AIM TRUCKING AND OILFIELD SERVICE, LLC, Defendants. |
| Court | U.S. District Court — Western District of Texas |
REPORT AND RECOMMENDATION OF THE U.S. MAGISTRATE JUDGE
BEFORE THE COURT is Plaintiff Antonio Preciado Villalobos's (“Villalobos”) Opposed Motion to Remand (hereafter, “Motion to Remand”) (Doc. 6). This case is before the undersigned United States Magistrate Judge through a standing order of referral pursuant to 28 U.S.C § 636, and Appendix C of the Local Court Rules for the Assignment of Duties to United States Magistrate Judges. After due consideration, the undersigned RECOMMENDS that Villalobos's Motion to Remand be GRANTED. (Doc. 6).
This case's genesis is a truck wreck involving Villalobos. On or about April 4, 2019, an individual named Jorge Ricardo Machado (“Machado”) was driving a tractor-trailer along SH-302 in Reeves County, Texas. (Doc. 1-4 at 9). Around this time, Valentin Bautista Gonzalez (“Gonzalez”) was stopped in traffic along the same roadway. (Id.). Machado, in his tractor-trailer, approached the stopped vehicles but failed to bring the semi-truck to a halt, striking Gonzalez's vehicle; several secondary collisions ensued. (Id.). Among those impacted by Machado's still-moving tractor-trailer was Villalobos, who was traveling on SH-302 from the opposite direction. (Id.). Villalobos's vehicle was struck and rolled over. (Id.). At the time of the wreck, Machado was operating a tractor-trailer purportedly “owned, leased, and/or controlled” in part by Defendant Aim Trucking and Oilfield Service, LLC (“Aim”). (Id. at 9-10). Machado was also allegedly employed by Aim and acting in the course and scope of his employment. (Id. at 10).
On April 1, 2021, several plaintiffs (“Original Plaintiffs”) filed an amended petition in state district court under Cause No. 19-04-22918-CVR, Maria Elena Bautista et al. v. Aim Trucking & Oilfield Services, LLC, et al., in the 143rd Judicial District of Reeves County, Texas (hereafter, “State Court Action”). Maria Elena Bautista v. Aim Trucking & Oilfield Services, LLC (Federal Action I), No. 4:21-CV-00022-DC (W.D. Tex. Apr. 14, 2021) (ECF No. 1-28). The Original Plaintiffs asserted claims for vicarious liability, negligence, negligent undertaking, and negligence per se. (See id.). Villalobos filed his live Fourth Amended Petition in Intervention (hereafter, “Intervenor Petition”) on April 5, 2021. (Doc. 1-4). In it, Villalobos asserts the following claims against Aim: negligence (vicarious liability and respondeat superior), negligence (direct), negligent entrustment, negligent undertaking, various theories of gross negligence, and fraudulent inducement. (Id. at 14-28).
Villalobos claims that he, Aim, and the Original Plaintiffs in the State Court Action attended a mediation on September 28, 2020. (Doc. 1-4 at 10-11). At this mediation, Defendant Hudson Insurance Company's (“Hudson”) was also present, as it is undisputedly “Aim's insurer” under a $5,000,000 policy (hereafter, “Insurance Policy”). (Id.; see also Docs. 6 at 3; 9 at 8; 9-1 at 6). Hudson purportedly “promised to tender its policy limits of $5,000,000 to the [Original Plaintiffs]” as well as Villalobos, among other parties. (Doc. 1-4 at 10-11). The attending parties allegedly entered into a “written Rule 11 Agreement” purporting to settle the case (hereafter, “Purported Settlement”), under which Aim and Hudson “represented that they would tender the policy limits of the Insurance Policy, $5,000,000 [], and place the funds into the [state c]ourt's registry.” (Id.).
Villalobos claims the Purported Settlement induced upon him a reliance so sufficient as to halt his prosecution of some of the state court claims, and that this reliance and subsequent conduct “was reasonable in light of Hudson's promise to tender” the proceeds for future allocation. (Id. at 10- 11). Aim and Hudson allegedly failed to make the $5,000,000 deposit, and instead, “secretly negotiated and executed a separate settlement” with the Original Plaintiffs in January 2021. (Id. at 11). After confronting them, Aim and Hudson purportedly “claimed that the [Purported] Settlement [] was invalid.” (Id.). According to Villalobos, “only $550,000 of the $5,000,000” in proceeds remain to be allocated, an amount insufficient to cover Villalobos's $2,300,000 of claimed damages. (Id. at 12). Thus, Villalobos argues that the “material and false representations” by Aim and Hudson “cost [him] precious time and drastically reduced the settlement funds available to satisfy his claims” and “forced [him] to prosecute additional causes of action due exclusively to Aim and Hudson's nefarious conduct.” (Id. at 12-13).
On April 14, 2021, Hudson removed the entirety of the State Court Action to this Court, invoking the Court's diversity jurisdiction under 28 U.S.C. §§ 1441 and 1446. Federal Action I, No. 4:21-CV-00022-DC (W.D. Tex. Apr. 14, 2021) (ECF No. 1). Hudson maintained in Federal Action I that the Court possessed diversity subject matter jurisdiction based upon Hudson and Villalobos's undisputed diversity. (Id. at 4). In its original Notice of Removal (hereafter, “Original Notice”), Hudson anticipated a challenge to diversity jurisdiction premised upon Aim's conceded “in-state defendant” status in the State Court Action. (Id.). Hudson asserted that the Court held diversity jurisdiction notwithstanding Aim's undisputedly non-diverse status due to Villalobos's then-alleged improper joinder of Aim, purportedly done for the purpose of “depriv[ing] Hudson from having [] Villalobos's claims against it adjudicated in federal court.” (Id. at 5). Hudson claimed that Aim's citizenship should be disregarded under the improper joinder doctrine because Villalobos “fail[ed] to allege any facts that [would have] establish[ed] a valid cause of action” for either fraudulent inducement or declaratory judgment against Aim. (Id. at 5-6). Specifically, Hudson asserted that Villalobos's claims against Aim failed to establish a valid corresponding cause of action since Villalobos could not demonstrate that Aim “owe[d] any duties to [] Villalobos” with regards to Aim's purportedly false representations to Villalobos, or to Aim's ability to make payment decisions regarding the Insurance Policy. (Id. at 6-7). Although the State Court Action was initially instigated on April 1, 2021, by the filing of the Original Plaintiff's amended petition, far in advance of the 30-day timeline mandated by the diversity statute, Hudson insisted that Villalobos's Intervenor Petition in the State Court Action constituted an “other paper,” only after which the 30-day counter began to run. Federal Action I, No. 4:21-CV-00022-DC (W.D. Tex. Apr. 14, 2021) (ECF Nos. 1 at 8; 28).
On April 29, 2021, several of the Original Plaintiffs in the State Court Action filed a Motion to Remand, which this Court granted on November 18, 2021. (ECF Nos. 14, 52). In its order remanding Federal Action I (hereafter, “Remanding Order”), the Court did not substantively address Hudson's arguments pertaining to any supposed improper joinder of Aim. (ECF No. 52). The Court instead held that because many of the Original Plaintiffs were undisputedly Texas citizens, thereby destroying diversity, Federal Action I could not remain in this Court. (Id. at 5-7). Further, the Court expressly declined to examine the “propriety of Villalobos's direct action against . . . Aim,” suggesting that Hudson seek to raise the issue of impossibility of suit against Aim in state court. (Id. at 7).
Following remand to state court, on February 10, 2022, the presiding judge in the State Court Action ordered Villalobos's “cause of action for fraudulent inducement and claim for declaratory judgment” against Aim and Hudson be “severed into a separate and independent lawsuit from the [State Court Action].” (Doc. 1-14 at 2-3). On March 14, 2022, Hudson filed a Notice of Removal, invoking again this Court's diversity jurisdiction under 28 U.S.C. § 1446 and commencing the instant case. (Doc. 1). Hudson, as it attempted to do in Federal Action I, asserts complete diversity jurisdiction based on Villalobos's alleged improper joinder of Aim. (See generally id.).
Villalobos filed the instant Motion to Remand on April 13, 2022. (Doc. 6). Hudson filed its Response on April 27, 2022, followed by Villalobos's Reply on May 4, 2022. (Docs. 9, 10). Accordingly, this case is now ripe for disposition.
Federal courts are of limited jurisdiction, possessing “only that power authorized by [the] Constitution and statute.” Gunn v. Minton, 133 S.Ct. 1059, 1064 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). “It is to be presumed that a cause lies outside this limited jurisdiction and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Energy Mgmt. Servs., LLC v. City of Alexandria, 739 F.3d 255, 258-59 (5th Cir. 2014) (quoting Kokkonen, 511 U.S. at 377). A defendant may remove a state-court civil action to a federal district court if the latter has original jurisdiction. See 28 U.S.C. § 1441(a). “A federal district court may exercise original jurisdiction over any civil action that either satisfies diversity requirements or that arises under the federal constitution, statutes, or treaties-commonly referred to as ‘federal question' jurisdiction.” Energy Mgmt., 739 F.3d at 258-59. “Thus, under § 1441, removal is proper only when the court has original jurisdiction over at least one asserted claim under...
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