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Premier Community Services, Inc. v. Goldesberry-Vanmeter

United States District Court, N.D. Oklahoma

May 25, 2017

PREMIER COMMUNITY SERVICES, INC., Plaintiff,
v.
(1) STEPHANIE GOLDESBERRY-VANMETER, (2) BONNIE WHITE, (3) SHERRI BRUNER, (4) SARA PUTMAN, (5) DONNA LOWE, (6) LAURA VANDENBORN, (7) PHILADELPHIA INDEMNITY INSURANCE COMPANY, and (8) MURRAY WAMBLE & ASSOCIATES, INC., Defendants.

          OPINION AND ORDER

          TERENCE C. KERN UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff Premier Community Service, Inc.'s (“Premier”) Motion to Remand (Doc. 21). For the reasons explained below, Plaintiff's motion is granted and the case is remanded to District Court for Tulsa County, Oklahoma.[1]

         I. Background

         Premier is an Oklahoma corporation providing assisted living residential programs and care services. In March 2016, Premier became aware of reports of fraud and embezzlement by certain employees. On April 27, 2016, Premier filed a petition in Tulsa County District Court against four employees it had identified through its initial investigation into the allegations of fraud and embezzlement (the “State Court Action”) and Diamond Quality Care, Inc., an Oklahoma entity allegedly created to further the embezzlement scheme. On May 6, 2016, Premier amended its petition to add an additional employee defendant, Stephanie Goldesberry-VanMeter (“Goldesberry-VanMeter”). In August 2016, Premier reached settlements with all of the defendants except Goldesberry-VanMeter.

         Premier maintained an insurance policy (“the Policy”) with Philadelphia Indemnity that included coverage for employee theft for the period from April 6, 2015 to April 6, 2016, with a coverage limit of $25, 000 per occurrence, less a $500 deductible. On October 20, 2016, Premier filed a claim listing losses the amount of $470, 020.59 based on what it contends are 31 separate occurrences of employee theft. On December 2, 2016, Philadelphia Indemnity advised Premier that it considered the loss to constitute a single occurrence under the terms of the Policy. Philadelphia Indemnity issued a check to Premier for $25, 000 pursuant to its determination.

         On January 5, 2017, Premier filed a Second Amended Petition (“SAP”) in the State Court Action, asserting claims against Goldesberry-VanMeter and several additional employees that it had identified through its investigation (the “Defendant Employees”), who are all Oklahoma residents; claims of breach of contract and bad faith against Philadelphia Indemnity; and a claim of negligence against Murray Wamble & Associates, Inc. (“Murray Wamble”), an Oklahoma company that allegedly procured the Policy for Premier. On February 10, 2017, Philadelphia Indemnity removed the State Court Action to this Court.

         II. Analysis

         A. Jurisdiction

         In its notice of removal (Doc. 2), Philadelphia Indemnity states that this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). It is undisputed that the Court lacks diversity jurisdiction over Premier's claims against Murray Wamble and the Defendant Employees. However, Philadelphia Indemnity contends this Court has diversity jurisdiction over the claims asserted against it because (1) Premier's claim against Murray Wamble was fraudulently joined and (2) Premier's claims against the Defendant Employees were fraudulently misjoined. Philadelphia Indemnity asks the Court to sever and remand the claims against the Defendant Employees and Murray Wamble while permitting the claims against Philadelphia Indemnity to proceed in federal court.

         Federal courts are courts of limited jurisdiction, and the party seeking to invoke federal jurisdiction bears the burden of proving the exercise of such jurisdiction is proper. Southway v. Cent. Bank of Nigeria, 328 F.3d 1267, 1274 (10th Cir. 2003). Diversity jurisdiction requires the party to show that there is both complete diversity and a sufficient amount in controversy. 28 U.S.C. § 1332(a); Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). The amount in controversy must exceed $75, 000. Id. § 1332(a). Complete diversity exists where the parties are citizens of different states. 28 U.S.C. § 1332(a)(1).

         Pursuant to 28 U.S.C. § 1447(c), “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” “This rule is inflexible and without exception, requiring a court to deny jurisdiction in all cases where it does not affirmatively appear in the record.” Geter v. St. Joseph Healthcare Sys., Inc., 575 F.Supp.2d 1244, 1248 (D.N.M. 2008) (internal quotations and citations omitted). The party seeking to invoke the jurisdiction of a federal court bears the burden of establishing jurisdiction, but “since the courts of the United States are courts of limited jurisdiction, there is a presumption against its existence.” Id. (citing Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974)).

         B. Motion to Remand

         In order to proceed in this Court Philadelphia Indemnity must show both that Murray Wamble was fraudulently joined and that the Defendant Employees are fraudulently misjoined. See Dutcher v. Matheson, 733 F.3d 980, 988 (10th Cir. 2013). For the reasons explained below, Philadelphia Indemnity has failed to meet its burden as to either fraudulent joinder or fraudulent misjoinder. Accordingly, on either ground, the Court lacks subject matter jurisdiction and the case must be remanded.

         1. Fraudulent ...


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