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Johnson v. Western & Southern Life Insurance Co.

United States District Court, S.D. Indiana, Indianapolis Division

July 28, 2015

CYNTHIA JOHNSON, Plaintiff,
v.
WESTERN & SOUTHERN LIFE INSURANCE COMPANY, STEVEN BIBI, JASON STUM, Defendants.

ENTRY ON MOTION TO DISMISS, MOTION TO AMEND COMPLAINT, AND MOTION TO REMAND

RICHARD L. YOUNG, Chief District Judge.

Plaintiff, Cynthia Johnson, a former employee of Western & Southern Life Insurance Company ("W&S"), brought suit against Defendants, W&S, Steven Bibi, and Jason Stum, employees of W&S. Plaintiff sets forth the following four causes of action: (1) violation of a non-compete and non-solicitation agreement, (2) libel and slander, (3) negligence resulting in physical and emotional injury, and (4) constructive fraud and conspiracy. Defendants move to dismiss the lawsuit and enforce the arbitration agreement. Plaintiff opposes that motion and moved to amend her complaint and remand the action to state court. For the reasons set forth below, the court GRANTS Plaintiff's motion to amend her complaint and treats her Proposed Amended Complaint as the amended complaint for purposes of the motion to dismiss and motion to remand. The court DENIES Plaintiff's motion to remand, and GRANTS Defendants' motion to dismiss.

I. Background

Plaintiff has a tumultuous history with Defendants.[1] As an employee of W&S, Plaintiff held positions as both a sales representative and sales manager. She claims to have suffered discrimination and pressure to participate in illegal business practices throughout her employment. After her employment with W&S, she claims Defendants interfered with her professional reputation. (Filing Number 8-1, Am. Compl. ¶¶ 4.1-5.5).

This is the third lawsuit, excluding a class action, filed by the Plaintiff against the Defendants stemming from the same core set of alleged facts. Plaintiff's first lawsuit, filed in this court in 2013, contained a series of allegations including negligence, contract claims, and gender and race discrimination claims. In that case, the court granted Defendants' motion to dismiss with prejudice on the grounds Plaintiff's claims were precluded by an arbitration agreement signed with her former employer and barred by time limitations.[2] Johnson v. W. & S. Life Ins. Co., No. 1:13-cv-1659, 2014 WL 4370772 (S.D. Ind. Sept. 3, 2014) (hereinafter " Johnson I "). The Seventh Circuit affirmed in part, agreeing that the claims are subject to arbitration and modifying the district court's ruling to be a dismissal without prejudice. Johnson v. W. & S. Life Ins. Co., 598 F.Appx. 454, 455-56 (7th Cir. 2015) (also " Johnson I "). In 2014, Plaintiff filed another suit in state court. That lawsuit was based on similar factual and legal allegations and contained additional causes of action, including violations of the Indiana Consumer Fraud Act, HIPAA violations, and deceptive trade practices. Johnson v. W. & S. Life Ins. Co., No. 49D02-1407-ct-022367 (Marion Cnty. Super. Ct. Jan. 22, 2015) (hereinafter " Johnson II "). The Marion Superior Court dismissed Plaintiff's suit, finding the claims subject to arbitration. Id.

Plaintiff filed the present lawsuit in Marion Superior Court; Defendants removed the action to this court. (Filing No. 1-1, Compl. and Jury Demand at 1 (hereinafter "Compl."); (Filing No. 1, Joint Notice Removal (hereinafter "Removal")). Defendants now move to dismiss the action and enforce arbitration. In support, Defendants rely on the same arbitration agreement that warranted dismissal in Johnson I and Johnson II. Plaintiff moves to amend her complaint and remand to state court.

II. Discussion

A. Motion to Amend Complaint

A plaintiff may generally amend her complaint once as a matter of right. Fed.R.Civ.P. 15(a)(1). Under Rule 15(a)(1)(B), a party may, of right, amend a complaint until twenty-one days from the service of the earlier of a responsive pleading or a 12(b), (e), or (f) motion. See also Rainey v. Lipari Foods, Inc., 546 F.Appx. 583, 585 (7th Cir. 2013) (holding a plaintiff has a right to amendment within the window even if dismissal has already been granted). Here, Plaintiff moved to amend only eight days after Defendants filed their Motion to Dismiss. Therefore, Plaintiff may amend her complaint pursuant to Rule 15(a)(1)(B), and her Motion to Amend is GRANTED. The court treats Plaintiff's Proposed Amended Complaint (Filing No. 8-1) as Plaintiff's Amended Complaint for purposes of the motion to remand and motion to dismiss.

B. Motion to Remand

Plaintiff moves to remand the case to the Marion Superior Court on three grounds. First, Plaintiff relies on 28 U.S.C. § 1441(b) to show that removal was improper. Section 1441(b) prohibits removal "if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b)(2). Plaintiff argues that because Defendant Jason Stum's proof of summons and service of process was not filed, he could not have consented to removal as the Defendants claim.[3] Defendants respond that removal here was not based on diversity jurisdiction; rather, they removed pursuant to Section 1441(a) because the court has federal question jurisdiction. (Removal ¶ 2). The court finds that removal under Section 1441(a) was appropriate given Plaintiff's express statement of federal jurisdiction and stated intent to raise federal claims. (Compl. ¶¶ 3.1-3.3, 5.2).

Second, Plaintiff argues that the action must be remanded, because she includes a claim under the Violence Against Women Act of 1994 ("VAWA") in her amended complaint. While Plaintiff correctly points out that removal of a Section 40302 civil action is precluded under 28 U.S.C. § 1445(d), Plaintiff fails to recognize that the Supreme Court found that Congress did not have the power to enact Section 40302, thus barring civil actions under this provision. United States v. Morrison. 529 U.S. 598, 627 (2000). Plaintiff's VAWA claim is one upon which relief cannot be granted. As such, that claim is not a proper reason to remand.

Third, Plaintiff argues that her Amended Complaint does not contain federal allegations and thus, must be remanded. Defendants respond that remand is inappropriate, because Plaintiff has disingenuously dropped the federal claims from her complaint. After a plaintiff amends her complaint of right, the amended complaint ordinarily controls even if it contradicts the first complaint. Ticketreserve, Inc. v. viagogo, Inc., 656 F.Supp.2d 775, 778 (N.D. Ill. 2009) (citing Moriarty v. Larry G. Lewis Funeral Dirs. Ltd., 150 F.3d 773, 777 (7th Cir. 1998)). However, "removal is not defeated by the fact that, after the case is removed, the plaintiff files a new complaint, deleting the federal claim." Hammond v. Terminal R.R. Ass'n, 848 F.2d 95, 97 (7th Cir. 1998). In comparing the two versions of the complaint, the court finds that Plaintiff's claims are nearly identical except that Plaintiff removed some explicit reference to federal jurisdiction and claims. ( See Filing No. 8-1, First Am. Compl. and Jury Demand ¶ 3.2 (hereinafter "Am. Compl.")). Nevertheless, she retains much of the same language suggesting federal claims. ( Id. at ¶¶ 3.1, 3.2, 5.2). Thus, the court finds that it still has jurisdiction over the allegations in the complaint.

After considering Plaintiff's three reasons for remand, the court is not persuaded. Therefore, ...


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