Wilson v. Bruks-Klockner, Inc.

• Decision Date: 25 March 2010
• Docket Number: No. 08-30914.,08-30914.
• Citation: 602 F.3d 363
• Parties: Kevin WILSON, Individually and on behalf of Ashunti Fobb, Individually and on behalf of Ashily Wilson; Peggy Renae Wilson, Plaintiffs-Appellants, v. BRUKS-KLOCKNER, INC.; Brunette Industries, Inc.; KH2A Engineering, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

602 F.3d 363

Kevin WILSON, Individually and on behalf of Ashunti Fobb, Individually and on behalf of Ashily Wilson; Peggy Renae Wilson, Plaintiffs-Appellants, v. BRUKS-KLOCKNER, INC.; Brunette Industries, Inc.; KH2A Engineering, Inc., Defendants-Appellees.

No. 08-30914.

United States Court of Appeals, Fifth Circuit.

March 25, 2010.

COPYRIGHT MATERIAL OMITTED

Thomas More Flanagan (argued), Jamie Dodds Cangelosi, Flanagan Partners, L.L.P., Gilbert V. Andry, IV (argued), Andry Law Firm, New Orleans, LA, for Plaintiffs-Appellants.

Larry A. Stewart, Andrew Parker Texada (argued), Stafford, Stewart & Potter, Alexandria, LA, for Bruks-Klockner, Inc.

Charles James Foret, Briney & Foret, L.L.P., Lafayette, LA, for Brunette Industries, Inc.

Milton Caldwell Roberts, Jr. (argued), Mayer, Smith & Roberts, L.L.P., Shreveport, LA, for KH2A Engineering, Inc.

Before REAVLEY, WIENER, and SOUTHWICK, Circuit Judges.

WIENER, Circuit Judge:

Plaintiffs-Appellants (1) Kevin Wilson, individually and on behalf of his children, and (2) Kevin Wilson's wife, Peggy Renae Wilson, (collectively "Plaintiffs"), all Louisiana residents, appeal the district court's order denying their motion for leave to amend their complaint that had been filed first in a state court of Louisiana against non-resident defendants and was then removed by the defendants to federal court on the basis of diversity of citizenship. Plaintiffs' motion to amend sought to add a non-diverse defendant, Reynolds Industrial Contractors, Inc. ("Reynolds"), in place of a voluntarily dismissed diverse defendant, Pierce Construction Company ("Pierce"). If allowed, that amendment would have destroyed federal diversity jurisdiction. After permitting limited discovery, the district court denied Plaintiffs' motion to amend, holding, on the basis of a Louisiana statute of peremption,¹ that Plaintiffs could assert no colorable claim against Reynolds and thus should be denied leave to implead it at the cost of destroying subject matter jurisdiction. After the court designated its order as a final judgment, Plaintiffs appealed. We affirm.

I. FACTS AND PROCEEDINGS

Late in May 2006, Plaintiff-Appellant Kevin Wilson, an employee of Martco Limited Partnership ("Martco"), was working inside a sheet metal building at Martco's Chopin, Louisiana plywood mill. His injury occurred when he caught his foot in a ten-ton wood chipping machine (the "wood chipper") that had been installed during the course of constructing that building, which Martco first occupied on February 15, 1996.

In May 2007, Plaintiffs brought the instant action in state court against Martco (subsequently dismissed under Louisiana's Workers Compensation exclusivity provision) and four construction-trade defendants that Plaintiffs alleged had participated in the 1996 construction of the building in which the wood chipper was installed, namely, Bruks-Klockner, Inc. and V.K. Brunette, Inc. as manufacturers of the wood chipper, KH2A as designer of the wood chipper, and Pierce as installer of the wood chipper. As all four remaining defendants were non-residents of Louisiana, the case was removed to federal court.

When, during discovery following removal, Plaintiffs learned that Pierce had not installed the wood chipper and that Reynolds had, Plaintiffs voluntarily dismissed Pierce and filed their motion to implead the non-diverse Reynolds. Attached to that motion was a proposed "PLAINTIFF'S (sic) FIRST AMENDED COMPLAINT," which contained allegations that Reynolds's negligent acts which contributed to the cause of Wilson's injury included "(1) failure to properly install the chipper and any associated equipment; (2) failure to safely install the chipper and any associated equipment; (3) failure to warn about the dangers inherent in the use of the chipper and any associated equipment; (4) failure to pass on warnings about the chipper or any associated equipment; (5) any and all other acts of negligence which may be proved at the trial on the merits." These were essentially identical to the allegations that Plaintiffs had originally made against Pierce.²

The remaining defendants opposed that motion as constituting an improper joinder because the addition of Reynolds as a defendant would destroy diversity jurisdiction and lead to remand to state court. The diverse defendants contended that Plaintiffs could assert no colorable claim against Reynolds because its 1996 installation of the wood chipper during the course of construction of Martco's building had been completed more than ten years before the 2007 filing of the instant action. Therefore, asserted the defendants, Plaintiffs' action against Reynolds is barred by peremption under 9:2772 because it was not brought until well after the tenth anniversary of Martco's 1996 occupancy.

Section 9:2772 is entitled "Peremptive period for actions involving deficiencies in surveying, design, supervision, or construction of immovables or improvements thereon." The ten-year, 1996 version of 9:2772 that the district court applied states, in pertinent part:

(A) No action, whether ex contractu, ex delicto, or otherwise, including, but not limited to an action for failure to warn, to recover on a contract or to recover damages shall be brought against any person ... performing or furnishing the design ... or the construction of an improvement to immovable property³

The district court determined that additional evidentiary submissions on peremption were required before it could rule on the motion, so it authorized further discovery. As the court had indicated that the issue of peremption, and thus Plaintiffs' motion to amend, turned on whether, under Louisiana law, the wood chipper itself was either (1) an immovable or (2) an improvement to immovable property, the parties filed, inter alia, competing expert opinions. The experts focused on the court's former alternative, i.e., whether the wood chipper was itself an immovable. The defendants' witness noted that the wood chipper was "permanently attached" to Martco's sheet metal building by virtue of being hardwired to electrical power and bolted to structural elements of that building and could not "be removed without substantial damage to itself or to the immovable to which it is attached,"⁴ thereby constituting a "component part" of the building (which, under Louisiana law, is an immovable, i.e., immovable property) and is itself therefore an immovable. The witnesses did not address whether the wood chipper was an "improvement to immovable property" pursuant to 9:2772.

When the district court ruled on the motion, it first noted that Reynolds, the party sought to be impleaded, is subject only to permissive joinder under Federal Rule of Civil Procedure 20 and that allowing joinder would destroy diversity. Consequently, acknowledged the court, its exercise of discretion to permit or deny joinder required it to conduct a balancing test pursuant to Hensgens v. Deere & Co.,⁵ which instructs that in such cases, trial courts should consider

a number of factors to balance the defendant's interests in maintaining the federal forum with the competing interests of not having parallel lawsuits. For example, the court should consider 1 the extent to which the purpose of the amendment is to defeat federal jurisdiction, 2 whether the plaintiff has been dilatory in asking for amendment, 3 whether plaintiff will be significantly injured if amendment is not allowed, and 4 any other factors bearing on the equities. The district court, with input from the defendant, should then balance the equities and decide whether amendment would be permitted. If it permits the amendment of the non-diverse defendant, it must remand to the state court. If the amendment is not allowed, the federal court maintains jurisdiction.⁶

When the district court addressed the Hensgens factors, it concluded that (1) the remaining diverse defendants have a significant interest in remaining in federal court, (2) Plaintiffs were not dilatory in seeking to add Reynolds as a defendant, having only learned of Reynolds's role in installing the wood chipper through discovery conducted after removal, and (3) being unable to determine the extent, if any, to which Plaintiffs' primary purpose was to defeat federal jurisdiction, the court would give Plaintiffs "the benefit of the doubt" that defeating such jurisdiction was not their sole purpose in adding Reynolds as a defendant. Therefore, deduced the district court, the determinative Hensgens factor in the instant balancing exercise was whether Plaintiffs would be significantly injured if they were not allowed to amend their complaint to add Reynolds as a defendant. The court observed that if Plaintiffs had no reasonable likelihood of success against Reynolds, they could not be significantly injured by the denial of their motion to amend. Thus, concluded the court, Plaintiffs' likelihood of success turned on whether their claims against Reynolds are time-barred; specifically, whether their claims are perempted under 9:2772. In that regard, the court stated that "the most important remaining issue in this case is whether or not the chipper is, in fact, 1 an immovable or 2 an improvement to an immovable under Section 2772."

In resolving that issue, however, the court effectively addressed only the first of its proclaimed alternatives, i.e., whether the wood chipper was itself an immovable—here, by virtue of its component-part status as a permanent attachment to the building (itself immovable property) in which it is installed. The court essentially ignored the alternative possibility, i.e., that Reynolds's acts in installing the wood chipper inside Martco's building constituted "performing or furnishing ... the construction of an improvement to immovable property" per 9:2772.

Ultimately, the court held that (1) pursuant to LCC art. 466, the wood chipper is a component part of the subject factory building; (2) the entire factory...