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Gygi v. United Rentals (North America), Inc.

United States District Court, D. Utah

November 28, 2018

GARY GYGI, SUSAN GYGI, CLAUDIA DIEDRICH, THE ESTATE OF WILFORD DIEDRICH, HOWARD DIEDRICH, KEN DIEDRICH, MARK DIEDRICH, and BRIAN DIEDRICH, Plaintiffs,
v.
UNITED RENTALS (NORTH AMERICA), INC., UNITED RENTALS, INC., DAVID ANDERSON, DOMINIC MORTENSEN, MARKSMAN MANUFACTURING CORPORATION, INC., and DEMCO TRANSPORTATION, INC, Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING PLAINTIFFS' MOTION TO REMAND

          JILL N. PARRISH DISTRICT JUDGE

         Before the court is plaintiffs' Motion to Remand. [Docket 6]. The court GRANTS the motion and orders that this action be remanded to the Third District Court for the State of Utah.

         BACKGROUND

         This is a wrongful death action stemming from an automobile accident near Bear Lake. Plaintiff Gary Gygi rented a trailer from defendant United Rentals, Inc. Defendants David Anderson and Dominic Mortensen (collectively, “United employees”) were employed by United Rentals and assisted Gygi in renting and hitching the trailer to his truck. Gygi loaded the trailer with mulch and drove with plaintiff Wilfred Deidrich toward Bear Lake. While descending a hill, Gygi lost control of the truck resulting in a roll-over accident that severely injured Gygi and killed Deidrich.

         Gygi, Diedrich's estate, and several other plaintiffs sued United Rentals, Anderson, Mortensen, and other defendants in state court. Defendants United Rentals (North America), Inc., United Rentals, Anderson, Mortensen, and Marksman Manufacturing Corporation, Inc.[1](collectively, “defendants”) removed the action to this court pursuant to 28 U.S.C. § 1441(a). The removal was premised on diversity jurisdiction under 28 U.S.C. § 1332(a), despite the apparent lack of complete diversity among the parties. Defendants argued in their Notice of Removal that the only nondiverse parties, the United employees, were fraudulently joined to frustrate federal jurisdiction and their citizenship should therefore be ignored when evaluating the court's diversity jurisdiction. In response, plaintiffs filed the instant Motion to Remand, arguing that the United employees were not fraudulently joined.

         ANALYSIS

         “A case originally filed in state court may be removed to [this] court if, but only if, ‘federal subject-matter jurisdiction would exist over the claim.'” Firstenberg v. City of Santa Fe, 696 F.3d 1018, 1023 (10th Cir. 2012) (citation omitted); see also 28 U.S.C. § 1441(a) (allowing removal of an action if “the district courts of the United States have original jurisdiction” over the action). When they removed the case from Utah state court, defendants asserted that this court may validly exercise diversity jurisdiction under 28 U.S.C. § 1332(a) because the United employees-the only nondiverse parties-were joined for the sole purpose of destroying diversity and preventing removal to federal court. Plaintiffs' motion to remand challenges this court's subject-matter jurisdiction. Plaintiffs urge that removal to this court was improper because diversity jurisdiction is lacking and, accordingly, requests that the court remand the case to state court. See 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district court lacks subject matter jurisdiction [over an action removed from state court], the case shall be remanded.”). This court may not presume the existence of subject-matter jurisdiction “absent an adequate showing by the party invoking federal jurisdiction.” Dutcher v. Matheson, 733 F.3d 980, 985 (10th Cir. 2013) (citation omitted). Thus, defendants bear the burden of demonstrating that the basis for federal jurisdiction alleged in their Notice of Removal is sound. See id.

         I. FRAUDULENT JOINDER STANDARD

         The joinder of a nondiverse party is “fraudulent” when it serves no purpose other than “to frustrate federal jurisdiction.”[2] Dodd v. Fawcett Publ'ns, Inc., 329 F.2d 82, 85 (10th Cir. 1964). The citizenship of fraudulently joined defendants “should be ignored for the purposes of assessing complete diversity.” Dutcher v. Matheson, 733 F.3d 980, 987-88 (10th Cir. 2013). “The doctrine ‘effectively permits a district court to disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants, assume jurisdiction over a case, dismiss the nondiverse defendants, and thereby retain jurisdiction.'” Purdy v. Starko, Inc., No. 1:10-cv-00042-DAK, 2010 WL 3069850, at *2 (D. Utah Aug. 4, 2010) (unpublished) (quoting Mayes v. Rapoport, 198 F.3d 457, 461-62 (4th Cir. 1999)).

         The removing party “bears a heavy burden of proving fraudulent joinder, and all factual and legal issues must be resolved in favor of the plaintiff.” Dutcher, 733 F.3d at 988 (citation omitted). The party defending removal may carry this “heavy burden” by demonstrating “either: (1) actual fraud in the pleading of jurisdictional facts, or (2) [the] inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” Id. (citation omitted). Because fraudulent joinder analysis is ultimately “a jurisdictional inquiry, ” Albert v. Smith's Food & Drug Centers, Inc., 356 F.3d 1242, 1247 (10th Cir. 2004), this court may “pierce the pleadings, consider the entire record, and determine the basis of joinder by any means available, ” Dodd, 329 F.2d at 85 (citations omitted); accord, McDaniel v. Loya, 304 F.R.D. 617, 627 (D.N.M. 2015).

         Defendants do not allege actual fraud in the pleading of jurisdictional facts. Instead, they assert that plaintiffs cannot establish a cause of action in state court against the United employees. In evaluating this assertion, the court is mindful that “[a] claim which can be dismissed only after an intricate analysis of state law is not so wholly insubstantial and frivolous that it may be disregarded for purposes of diversity jurisdiction.” Batoff v. State Farm Ins. Co., 977 F.2d 848, 853 (3d Cir. 1992). Ultimately, as the party asserting fraudulent joinder, defendants must establish that plaintiffs have “no cause of action” against the United employees. See Dodd, 329 F.2d at 85; Brazell v. White, 525 Fed.Appx. 878, 881 (10th Cir. 2013). Stated differently, defendants must firmly establish that “there is no possibility that [plaintiffs] will recover against” the United employees in state court. McDaniel, 304 F.R.D. at 630.

         II. DEFENDANTS' CLAIM OF FRAUDULENT JOINDER

         Defendants argue that the United employees' citizenship should be ignored when assessing the court's diversity jurisdiction because plaintiffs have no viable cause of action against the them under Utah law. Specifically, defendants argue that plaintiffs' claims cannot be sustained for three reasons: First, the United employees owed no duty to plaintiffs; second, even if a duty were owed, the duty was discharged when Gygi signed the Rental Agreement; and third, the United employees are unnecessary because plaintiffs have pled a claim for respondeat superior against their employer and it is undisputed that the United employees were acting within the course and scope of their employment. The court disagrees.

         A. Duty of Care

         Plaintiffs are suing the United employees for negligence and gross negligence. To succeed on their claims, plaintiffs must establish that the United employees owed plaintiffs a duty of care. See Mower v. Baird, 422 P.3d 837, 843 (Utah 2018). “[W]hether a duty exists is a question of law.” Id. at 842. Under Utah law, duty is analyzed under the five-factor test set forth ...


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