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Carpenter v. Menard, Inc.

United States District Court, N.D. Indiana, Hammond Division

October 28, 2014

LISA CARPENTER and TROY CARPENTER, Plaintiffs,
v.
MENARD, INC., and STEVE HOJNACKI, Defendants.

OPINION AND ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court for ruling on "Objections to Recommendations of United States Magistrate Judge" filed by Menard, Inc., and Steve Hojnacki on July 28, 2014. (DE 36.) Plaintiffs Lisa Carpenter and Troy Carpenter declined to file a response, and so the issues presented are ripe for resolution. For the reasons discussed below, the court DENIES all of the Defendants' objections; ADOPTS the recommendations of the United States Magistrate Judge; and GRANTS the Plaintiffs' Motion to Remand this case to the Superior Court of Porter County, Indiana, under cause number 64D01-1404-CT-2775.

PROCEDURAL BACKGROUND

The Plaintiffs filed a complaint against Menard, Inc. and "Steve Doe" in the Superior Court of Porter County on April 1, 2014. In their Complaint, Plaintiff Lisa Carpenter claimed she suffered personal injuries as a result of an alleged slip and fall accident while shopping in a Menard store, and Plaintiff Troy Carpenter, Lisa's husband, alleged that he incurred damages for "loss of services, consortium and society..." as well as other consequential damages. Original Complaint, p. 6. Menard removed the case to this court under 28 U.S.C. § 1441, et seq., on April 9, 2014, on the basis that the Plaintiffs are both residents of Indiana, Menard is a citizen of Wisconsin for diversity purposes, and the citizenship of "Steve Doe" was not relevant since defendants sued under fictitious names are disregarded for purposes of determining diversity. (DE 1.) The Plaintiffs filed their First Amended Complaint in this court on April 27, 2014, in which they named Steve Hojnacki as a defendant in place of the fictitious "Steve Doe." (DE 7.) That was the only change made in the amended complaint. Hojnacki is alleged to be an Indiana resident, thereby destroying diversity jurisdiction.

Also on April 27, 2014, the Plaintiffs filed a motion to remand this case to Porter County. (DE 8.) On June 25, 2014, the Plaintiffs filed a motion for leave to file a second amended complaint. The second amended complaint seeks to add two new parties to the case, the general manager on duty at the time of the alleged fall and the employee who operated the equipment which allegedly spread the liquid causing the fall. The general manager is alleged to be a citizen of Michigan and the equipment operator is alleged to be a citizen of Indiana. (DE 26.) On that same day, this court entered an order referring the motion to remand to U.S. Magistrate Judge John E. Martin for a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). (DE 25.) Magistrate Judge Martin entered his Opinion and Order and Findings, Report and Recommendation" on July 10, 2014. (DE 31.) The Defendants raise several objections to the Magistrate Judge's Report and Recommendation, as discussed below.

STANDARD OF REVIEW

The crux of the Defendants' objections to the Report and Recommendation is that the Plaintiffs are unfairly attempting to amend their complaint to destroy diversity jurisdiction so they can litigate this case in state court. The Magistrate Judge correctly noted that while "[p]laintiff[s] may generally choose their own forum, ... they may not join a nondiverse defendant simply to destroy diversity jurisdiction.'" Report and Recommendation, p. 5 (quoting Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752, 763 (7th Cir. 2009)). Even with a viable claim, a court can still rule that a defendant was added solely to destroy diversity. Id. Magistrate Judge Martin also noted, however, that "[t]he burden of demonstrating there is no reasonable possibility' of prevailing against the non-diverse defendant is heavy.'" Id. (quoting Schur, 577 F.3d at 764). "When joinder of a nondiverse party would destroy subject matter jurisdiction, 28 U.S.C. § 1447(e) applies and provides the district court two options: (1) deny joinder, or (2) permit joinder and remand the action to state court." Id. at 759. In Schur, the Seventh Circuit explained that a district court should consider the following factors when considering a plaintiff's request for joinder: "(1) the plaintiff's motive for seeking joinder, particularly whether the purpose is to defeat federal jurisdiction; (2) the timeliness of the request to amend; (3) whether the plaintiff will be significantly injured if joinder is not allowed; and (4) any other relevant equitable considerations." Id.

DISCUSSION

A. Motive for joinder.

The Defendants object to the Magistrate Judge's finding regarding the Plaintiffs' motive for seeking to join Hojnacki as a defendant. Defendants' Objections, p. 2. They contend that the Plaintiffs named Hojnacki for the sole purpose of destroying diversity jurisdiction and forcing this case back to state court. In support of this objection, the Defendants argue that the Plaintiffs have no reasonable chance of prevailing on a claim against Hojnacki, since he was not on duty at the time of Plaintiff Lisa Carpenter's slip and fall.[1] Id. This argument was developed in the Defendants' motion to strike the Plaintiffs' first amended complaint and the accompanying sworn statement from a Menard manager stating that Hojnacki played no supervisory role with regard to the events surrounding Ms. Carpenter's incident. (DE 13 and 14.)

In support of their argument that Hojnacki was added for the sole purpose of destroying diversity jurisdiction, the Defendants point to the fact that "Steve Doe" was named in the original Complaint, and alleged to be a citizen of Indiana, even before the Plaintiffs ascertained the actual identity and residency of Hojnacki. Defendants' Objections, p. 2. However, as the Magistrate Judge stated, "[t]here is nothing necessarily improper about a plaintiff wanting to litigate in state court and pleading the necessary allegations to stay there if the plaintiff has a reasonable belief that there is, or will likely be after reasonable opportunity for further discovery, evidentiary support for those allegations." Report and Recommendation, p. 6 (citing Fed.R.Civ.P. 11(b)). The Magistrate Judge also noted that "Menard does not assert that Plaintiffs had no evidentiary support for their allegation that Steve, ' a Menard manager, is a citizen of Indiana-a fact that turned out to be true. Accordingly, while it is certainly not unreasonable to infer from the pleadings that the Plaintiffs included claims against Steve Doe' prematurely just to stay in state court, the inference is not so strong for the Court to find it weighs against permitting joinder." Id., pp. 6-7.

The Magistrate Judge also noted that "[i]n this case... Plaintiffs state that they did their own additional investigation to find out Hojnacki's identity and received discovery regarding the identities of the other two proposed defendants. Obtaining this additional information provides the Plaintiffs with legitimate reasons for the amendments they seek." Id., p. 7. Additionally, "Menard does not make the argument in its response to the motion to amend that the Plaintiffs have no reasonable chance of prevailing against the other non-diverse employee(s) the Plaintiffs seek to join." Id., p. 6.

The Magistrate Judge concluded that the Defendants failed to prove that the Plaintiffs had no plausible chance to succeed in their suit against Hojnacki, and so the Plaintiffs are assumed to have a viable claim against this non-diverse defendant. This court agrees with the findings and conclusions of the Magistrate Judge on the issue of the joinder of Hojnacki.

The Defendants also argue that the Plaintiffs made identical, generic allegations of negligence against all the non-diverse defendants, which the Defendants contend "demonstrates that the Plaintiffs' sole interest is in getting the name of non-diverse defendants in the caption without any true regard as to how those individuals were negligent." Defendants' Response to Motion to Remand, p. 4. Magistrate Judge Martin concluded that "[a]t this stage in the litigation, however, it is not unreasonable for Plaintiffs to plead their claims broadly in expectation that the claims will be more clearly defined through further discovery." Report and Recommendation, pp. 7-8. The Magistrate concluded that "this method of pleading ...


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