United States District Court, N.D. Indiana, Hammond Division
OPINION AND ORDER
T. MOODY JUDGE UNITED STATES DISTRICT
matter is before the court on plaintiff's motion to
remand (DE # 9) and defendants' motion to dismiss
defendant Higgins-Ballas pursuant to Federal Rule of Civil
Procedure 21. (DE # 15.) For the reasons identified below,
plaintiff's motion to remand will be granted, and
defendants' motion to dismiss will be denied.
Cathy Perry originally filed her complaint in the Lake County
Superior Court. (DE # 4.) Defendants, Wal-Mart Stores East,
LP (“Wal-Mart”), and Allison Higgins-Ballas,
removed this case to federal court based on diversity
jurisdiction,  and then filed a motion to dismiss
Higgins-Ballas (a non-diverse defendant) pursuant to Federal
Rule of Civil Procedure 21, for fraudulent joinder. (DE ## 1,
2.) Plaintiff then filed a motion to remand (DE # 9) and an
amended complaint. (DE # 14.) Defendants responded by filing
a second motion to dismiss for fraudulent joinder. (DE # 15).
amended complaint alleges that, while visiting a Wal-Mart
store in Merrillville, Indiana, plaintiff slipped and fell in
a puddle of chicken juice near the meat counter. (DE # 14 at
1.) Plaintiff claims that the injuries she sustained as a
result of her fall were caused by the negligence of
Higgins-Ballas (the manager on duty) and/or other Wal-Mart
employees. (Id.) According to plaintiff, Wal-Mart is
vicariously liable for the negligent acts of Higgins-Ballas.
(Id. at 2.) She also alleges that Wal-Mart is liable
for failing to properly train its employees, failing to have
proper safety policies in place, and failing to maintain
and/or inspect its property. (Id. at 1.)
their motion to dismiss, defendants argue that plaintiff
improperly named Higgins-Ballas in an attempt to evade
diversity jurisdiction. (DE # 15 at 1.) According to
defendants, there is no reasonable possibility that plaintiff
could prevail against Higgins-Ballas because the negligence
alleged in plaintiff's amended complaint may only be
imputed to Wal-Mart - for two reasons. (Id.) First,
plaintiff does not allege that Higgins-Ballas directly
participated in, authorized, or directed, the tort alleged in
plaintiff's complaint. Second, the omissions plaintiff
attributes to Higgins-Ballas (failure to train, failure to
implement safety policies, failure to inspect and maintain
the property, failure to clear the floor of hazardous
materials) are related to duties Higgins-Ballas owed only to
Wal-Mart, not to a third-party such as plaintiff.
(Id. at 3-6.)
may remove an action on the basis of diversity of citizenship
if there is complete diversity between all named plaintiffs
and all named defendants, and no defendant is a citizen of
the forum State.” Lincoln Prop. Co. v. Roche,
546 U.S. 81, 84 (2005). A defendant who seeks to remove an
action to federal court has the burden of establishing that
the complete diversity requirement was met. Schur v. L.A.
Weight Loss Centers, Inc., 577 F.3d 752, 758 (7th Cir.
2009); Meyerson v. Showboat Marina Casino
P'ship, 312 F.3d 318, 321 (7th Cir. 2002). 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).
See also Schur, 577 F.3d at 758.
fraudulent joinder doctrine arises out of Federal Rule of
Civil Procedure 21, which provides in relevant part:
“[o]n motion or on its own, the court may at any time,
on just terms, add or drop a party.” “When
speaking of jurisdiction, ‘fraudulent' is a term of
art. Although false allegations of jurisdictional fact may
make joinder fraudulent, in most cases fraudulent joinder
involves a claim against an in-state defendant that simply
has no chance of success, whatever the plaintiff's
motives.” Poulos v. Naas Foods, Inc., 959 F.2d
69, 73 (7th Cir. 1992) (internal citations omitted).
Seventh Circuit Court of Appeals has stated that
“[f]raudulent joinder is difficult to establish”
and a defendant attempting the feat faces a
“‘heavy burden.'” Schur, 577
F.3d at 764 (quoting Poulos, 959 F.2d at 73). A
defendant claiming fraudulent joinder “must demonstrate
that, ‘after resolving all issues of fact and law in
favor of the plaintiff, the plaintiff cannot establish a
cause of action against the in-state defendant.'”
Id. (quoting Poulos, 959 F.2d at 73).
“Framed a different way, the district court must ask
whether there is ‘any reasonable possibility' that
the plaintiff could prevail against the non-diverse
defendant.” Id. (quoting Poulos, 959
F.2d at 73.).
court must examine state law to determine whether the
plaintiff has any reasonable possibility of success.
Id. Here, the parties do not dispute that Indiana
law governs this case. In applying Indiana law, the court
must apply the law that would be applied by the Indiana
Supreme Court. Lodholtz v. York Risk Servs. Grp.,
Inc., 778 F.3d 635, 639 (7th Cir. 2015). If the Indiana
Supreme Court has not spoken on the issue, the court should
treat decisions by the Indiana courts of appeal as
authoritative, unless there is a compelling reason to believe
that the Indiana Supreme Court would decide the issue
court's analysis of the pending motions begins and ends
with the fact that neither the Indiana Supreme Court nor the
Indiana Court of Appeals has addressed the extent to which a
store manager can be held personally liable to a third-party
for injuries the third-party sustained on her employer's
premises. While defendants argue that the issue is
definitively resolved under Indiana agency principles, the
law is not nearly as clear as defendants claim.
argue that Higgins-Ballas, as an agent of Wal-Mart, owed
duties solely to Wal-Mart and therefore cannot be held
individually liable under Indiana agency law. However, this
argument fails to capture two important caveats in Indiana
agency law. Generally, an agent is not liable for actions
taken on behalf of the principal. Lodholtz v. York Risk
Servs. Grp., Inc., 778 F.3d 635, 642 (7th Cir. 2015)
(applying Indiana law). However, the Indiana Supreme Court
has adopted two exceptions to this general rule.
“‘An agent is not liable for harm to a person
other than his principal because of his failure adequately to
perform his duties to his principal, unless physical harm
results from reliance upon performance of the duties by the
agent, or unless the agent has taken control of land or other
tangible things.'” Greg Allen Const. Co. v.
Estelle, 798 N.E.2d 171, 174 (Ind. 2003) (quoting
Restatement (Second) of Agency § 352 (1958)). Therefore,
it is possible that Higgins-Ballas could be liable on the
basis that Wal-Mart relied on a promise she made to maintain
the safety of its store. Alternatively, Higgins-Ballas could
be liable on the basis that she was in control of the store
in her capacity as manager. See e.g. Marshall v. Erie
Ins. Exch., 923 N.E.2d 18, ...