United States District Court, N.D. Indiana, Hammond Division
OPINION AND ORDER
T. MOODY UNITED STATES DISTRICT JUDGE
condominium owners in Munster, Indiana, originally filed this
lawsuit in Lake County Superior Court in the State of Indiana
against BP Pipelines of North America, Inc., and a variety of
other affiliated corporate entities (“the BP
defendants”), their homeowners' association
(“HOA”) and its agent, and their property
management company and its agent, claiming that the
defendants were liable for damage caused by the rupture of an
underground pipeline near their properties. (DE # 3.)
Plaintiffs are all citizens of the State of Indiana, as are
some of the defendants, specifically the HOA and property
management company and their respective agents (“the
Indiana defendants”). All of the BP defendants are
citizens of other states, except one, BP Corporation North
America Inc., which is an Indiana citizen.
defendants removed the action to this federal court pursuant
to 28 U.S.C. § 1441(a) stating that jurisdiction in this
court was appropriate given the parties' diversity of
citizenship and the amount in controversy, as provided by 28
U.S.C. § 1332(a). (DE # 1.) Plaintiff has now moved to
remand the case back to state court because this case lacks
complete diversity of citizenship; the amount in controversy
is not disputed. (DE # 28.) The motion is fully briefed and
ripe for ruling.
order for subject matter jurisdiction to be founded on
diversity of citizenship, there generally must be complete
diversity of citizenship - i.e., no plaintiff can be
a citizen of the same state as any defendant. LM Ins.
Corp. v. Spaulding Enters. Inc., 533 F.3d 542, 546 n. 1
(7th Cir. 2008) (citing Strawbridge v. Curtiss, 7
U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806)). Further, for
removal based on Section 1332(a) to be proper, diversity of
citizenship must have existed at the time of removal.
Harmon v. OKI Sys., 115 F.3d 477, 480 (7th Cir.
defendant who seeks to remove an action to federal court has
the burden of establishing that the complete diversity
requirement was met. Meridian Sec. Ins. Co. v.
Sadowski, 441 F.3d 536, 540 (7th Cir. 2006);
Meyerson v. Showboat Marina Casino P'ship, 312
F.3d 318, 321 (7th Cir. 2002). Thus, when a party opposing
federal jurisdiction challenges the allegations of
jurisdictional facts, the party seeking the federal forum
must prove those facts by a preponderance of the evidence.
Meridian, 441 F.3d at 543. District courts are to
“interpret the removal statute narrowly, ” and
any doubts regarding jurisdiction should be resolved in favor
of remand to state court. Doe v. Allied-Signal,
Inc., 985 F.2d 908, 911 (7th Cir. 1993).
argue that this case involves both plaintiffs and defendants
that are citizens of the State of Indiana, destroying
diversity of citizenship and rendering improper the BP
defendants' attempt to remove this case to federal court.
The BP defendants do not dispute that Indiana citizens were
once defendants in this case, but argue that virtually all of
the Indiana citizens (specifically, the HOA, property
management company, and their respective agents) settled with
plaintiffs during state court proceedings, leaving only
citizens of other states as defendants.
record demonstrates that plaintiffs and the Indiana
defendants entered into an “Agreement in Principle to
Settle” during mediation, which sets out a series of
terms and conditions subsequent that must occur before
settlement is reached. (DE # 30-5.) The document states:
“This is not a final settlement; the settlement will be
final after completion of all of the above.”
(Id. at 2.) Further, the record contains the
statement of the mediator in this case, who indicates that
the conditions as stated in the “Agreement in Principle
to Settle” have not been accomplished and that the
current status of the case is that it “remains
active.” (DE # 31-1 at 2.)
defendants attempt to persuade the court that the Indiana
defendants are merely nominal at this point, by citing a
number of non-binding decisions, but those cases involve the
undisputed existence of a “settlement agreement.”
See, e.g., Comer v. Schmitt, No. 2:15-CV-2599, 2015
WL 5954589, at *3 (S.D. Ohio Oct. 14, 2015) (defendants were
no longer real parties in interest due to settlement
agreement, even though agreement contained contingencies
which had not yet occurred); Midwestern Indem. Co. v.
Brooks, 779 F.3d 540, 543 (8th Cir. 2015) (defendant was
nominal for removal purposes when parties had entered into
“settlement agreement”); Pulse Eng'g,
Inc. v. Fed. Ins. Co., No. 1:06-CV-1237-LJM-VSS, 2006 WL
6557899, at *3 (S.D. Ind. Dec. 5, 2006) (same).
these cases were binding, they simply do not apply here
because the BP defendants (who have the burden of proof) have
presented insufficient evidence indicating that the parties
in this case actually entered into a settlement agreement.
Rather, in this case, the parties took a first step towards
resolution by creating an “Agreement in Principle to
Settle” - an agreement to agree later, if certain
conditions are satisfied. The BP defendants argue that
Indiana law, which presumably governs the parties'
agreements, requires only “reasonable certainty”
in a contract's terms and conditions, Conwell v. Gray
Loon Outdoor Mkting Gp., Inc., 906 N.E.2d 805, 813 (Ind.
2009), but in this case there is no reasonable certainty that
the parties intended to enter into a settlement agreement.
The document in question plainly states: “This is not a
final settlement.” (DE # 30-5 at 2.) The parties'
intent could not be clearer. The BP defendants cite no
authority supporting the argument that an agreement in
principle to settle the case later should be
construed as a settlement agreement rendering a defendant
nominal for removal purposes, and this court declines to be
the first court to do so.
the court finds that the Indiana defendants are presently
parties in this case, a fact that in and of itself destroys
diversity of citizenship, the court need not address the
parties' arguments regarding whether BP of North America
Inc. (another Indiana citizen) is a proper defendant in this
case; whether it is or not, complete diversity does not exist
and this case must be remanded.