Wingate v. Kerr-Mcgee Rocky Mountain Corp., 1:04-CV-513.

• Decision Date: 26 January 2005
• Docket Number: No. 1:04-CV-513.,1:04-CV-513.
• Citation: 353 F.Supp.2d 779
• Parties: Jim R. WINGATE, Plaintiff, v. KERR-McGEE ROCKY MOUNTAIN CORPORATION, Successor to HS Resources, Inc., and Laurie McNamara, Defendants.
• Court: U.S. District Court — Eastern District of Texas

353 F.Supp.2d 779

Jim R. WINGATE, Plaintiff, v. KERR-McGEE ROCKY MOUNTAIN CORPORATION, Successor to HS Resources, Inc., and Laurie McNamara, Defendants.

No. 1:04-CV-513.

United States District Court, E.D. Texas, Beaumont Division.

January 26, 2005.

Ernest William Boyd, Mehaffy & Weber, Chris Booth, Robert Keith Wade, Law

Offices of Robert K. Wade, Beaumont, TX, for Plaintiff.

Ken Edward Kendrick, Kelly Sutter & Kendrick, Houston, TX, for Defendants.

ORDER DENYING PLAINTIFF'S MOTION TO REMAND

CLARK, District Judge.

Plaintiff asserted causes of action under Texas law in this oil and gas lease case, and Defendants removed, claiming that the only nondiverse defendant, McNamara, was fraudulently joined. There is no reasonable basis to predict that Plaintiff might be able to recover on any of his claims against McNamara in state court. While the same may be said for some of the claims against the diverse defendants, there is no common defense that would bar all claims against all of the defendants. Accordingly, Plaintiff's Motion to Remand is denied.

I. BACKGROUND

This case arises from the alleged damages suffered by Plaintiff Jim R. Wingate ("Wingate") as the result of a 1998 land lease Wingate signed with Interstate Oil Company¹. Wingate and HS Resources, Inc. ("HSR") have already litigated most of the issues in this suit in an earlier federal suit. Federal District Judge Howell Cobb upheld the validity of the lease on December 11, 2001 and the Fifth Circuit affirmed, holding that HSR did not act in bad faith when it pooled the gas output of the leased land. HS Resources, Inc. v. Wingate, 327 F.3d 432, 443 (5th Cir.2003).

The case was remanded in part, for a determination of the issues of attorneys' fees and whether HSR had waived its right to recover lease payments made under protest. The case was then transferred to this court. On December 28, 2004, after a jury trial, this court entered judgment on the verdict in favor of HSR, awarding HSR $1,479,580.00 plus attorney's fees. See C.A. 1:01-CV-221.

On July 15, 2004, Wingate filed a new suit in a Texas state court, alleging causes of action under the same lease for breach of duties of good faith pooling and good faith and fair dealing against HSR's successor in interest, Kerr-McGee Rocky Mountain Corp. ("Kerr-McGee"). Wingate also alleged negligence by Kerr-McGee and Defendant Laurie McNamara ("McNamara") and fraudulent inducement by McNamara alone.

Defendants timely removed the case to this court on the basis of diversity jurisdiction under 28 U.S.C. § 1332, claiming that McNamara (a Texas resident) had been improperly joined. In response, Wingate filed an objection to Defendants' removal, a motion to remand, and a plea to this Court's jurisdiction

II. LAW & DISCUSSION

A. Standard for Remand

A party alleging improper joinder bears a "heavy" burden of persuasion. See Hart v. Bayer Corp., 199 F.3d 239, 246 (5th Cir.2000). To prove improper joinder, defendants must show either: "(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court." Travis v. Irby, 326 F.3d 644, 647 (5th Cir.2003). All issues of material fact and ambiguities of law are resolved in favor of the nonremoving party. Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir.1999).

There is no dispute that McNamara and Wingate are both Texas residents and thus non-diverse. While Defendants claim that there is outright fraud in Wingate's pleading, their argument is a merit-based attack on the allegations asserted against McNamara, not a fraudulent pleading argument. The Court must therefore consider whether Wingate has a reasonable basis for recovery against the nondiverse Defendants. See Travis, 326 F.3d at 647-49 (5th Cir.2003). The Court must determine "whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant." Smallwood v. Ill. Ctrl. R.R. Co., 385 F.3d 568, 573 (5th Cir.2004)(en banc).

Generally, the existence of diversity jurisdiction is determined from the record at the time the notice of removal is filed. Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir.1995). There must be a reasonable basis for predicting that Wingate might be able to establish McNamara's "liability on the pleaded claims in state court." Griggs, 181 F.3d at 699 (emphasis added). Improper joinder occurs where a plaintiff has failed to plead under state law "any specific actionable conduct" against the nondiverse defendant. See Id. A court has the discretion to utilize a "summary judgment-like procedure" to review improper joinder claims, Id. at 700. Here, the central question is whether Plaintiff has pled a cause of action against Defendant McNamara that has a reasonable probability of being sustained in state court under either a negligence theory or fraudulent inducement theory.

B. Wingate Fails to State Viable Cause of Action Against McNamara

1. Wingate's Negligence Claims Are Obviously Time-Barred

A cause of action for negligence accrues at the time of the injury and must be brought within two years of the injury. Tex. Civ. Prac. & Rem.Code § 16.003. On March 30, 2000, Wingate filed a state court complaint against HSR containing substantially similar facts and a generic allegation of negligence identical to the complaint now before this Court.² That suit was voluntarily dismissed on January 2, 2001, whereupon HSR filed the suit in federal court referenced earlier. Forty-one months later, Wingate filed his current suit. Wingate's pleading references no actions on any defendant's part that could give rise to a negligence cause of action separate from the claim raised in 2000. Even if the limitations period on the negligence claim was tolled during the pendency of that suit, Wingate's negligence claim against Kerr-McGee is time-barred.

It is not clear that Wingate actually intended to plead that McNamara was negligent. In fact, were it not for the use of the plural noun "Defendants," there would be no reason to think that Wingate was asserting a negligence claim against her. Additionally, even giving Wingate's pleading of the facts and claims involving McNamara a liberal and broad reading, McNamara's liability, if any, would stem only from her actions on behalf of Kerr-McGee. Since the negligence claim against Kerr-McGee is time-barred, the negligence claim against McNamara is time-barred as well. The "mere theoretical possibility" that Wingate might have some hope of recovery is not enough to preclude a finding of improper joinder. Smallwood, 385 F.3d at 573.

2. Wingate's Fraudulent Inducement Claim is Also Time-Barred

Under Texas law, a claim for fraudulent inducement must be brought within four years of the accrual of the cause of action. Tex. Civ. Prac. & Rem.Code § 16.004. Normally, a cause of action accrues when a victim is injured, but the "discovery rule" tolls the running of the statute of limitations on fraud claims until the victim is "aware of facts as would cause the ordinarily intelligent and prudent man to investigate." Bush v. Stone, 500 S.W.2d 885, 889 (Tex.Civ.App.-Corpus Christi 1973, writ ref'd n.r.e.). It is "a very limited exception to statutes of limitations." Comp. Assoc. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex.1996).

The discovery rule tolls the statute of limitations only until a plaintiff learns of a wrongful injury, or of facts that should lead to an investigation. Once a plaintiff has that knowledge, "the limitations clock is running, even if the claimant does not yet know: the specific cause of the injury; the party responsible for it; the full extent of it; or the chances of avoiding it." PPG Indus. v. JMB/Houston Ctr. Partners Ltd., 146 S.W.3d 79, 93-94 (Tex.2004) (applying the discovery rule in a UCC warranty context) (internal citations omitted). Even when the discovery rule is applied, the cause of action accrues when the fact of injury is known, not when the responsible parties are known. Mellon Serv. Co. v. Touche Ross & Co., 17 S.W.3d 432, 436 (Tex.App.-Houston [1st Dist.] 2003, no pet.) (citing Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 357 (Tex.1990)).

Wingate alleges that he was fraudulently induced into signing the 1998 lease and that he did not discover his injury until the Fifth Circuit affirmed the validity of the pooling provision in 2003. Alternatively, Wingate claims that he did not learn of his injury until Judge Cobb's summary judgment upholding the pooling provision on December 11, 2001. Id. If the Court were to believe this claim, that judgment apparently struck Wingate as a bolt from the blue, suddenly alerting him to the previously undreamt-of possibility that HSR's actions of the past two years might have been injurious.

To the contrary, Wingate had ample reason to know of any alleged injury more than four years before filing his complaint in this suit on July 15, 2004. Even if Wingate did not know the identity of the persons supposedly masterminding the alleged fraud, any injury was certainly discoverable by the time Wingate first filed suit — March 30, 2000. The lease was signed in 1998 and the pooling declaration was made in 1999. By March 30, 2000, Wingate knew enough to file a lawsuit that raised most of the same claims he raises now and sought damages from HSR. Judge Cobb's holding and the Fifth Circuit's decision merely affirmed HSR's conduct and HSR's interpretation of the lease. Neither ruling created any new rights or obligations, nor did they inflict any new injury on Wingate. Because Wingate knew enough to file suit over HSR's conduct in March of 2000, any claim that he did not know about his injuries at the time is demonstrably false. He may or may...