United States District Court, W.D. Oklahoma
MEMORANDUM OPINION AND ORDER
J. CAUTHRON UNITED STATES DISTRICT JUDGE.
Jeremy Rowan and Melinda Rowan, husband and wife, are
citizens of Oklahoma. Defendant State Farm is a citizen of
Illinois and Defendant ServPro of Edmond is a citizen of
Oklahoma. Plaintiffs filed a Petition in the District Court
of Oklahoma County alleging breach of contract and bad faith
claims against Defendant State Farm and breach of contract
and fraud and deceit against Defendant ServPro. Defendant
State Farm subsequently filed a Notice of Removal to this
Court asserting that Plaintiffs engaged in fraudulent
misjoinder in an effort to defeat diversity jurisdiction.
Plaintiffs then filed a Motion to Remand.
contracted with Defendant State Farm Fire & Casualty
Company to provide insurance coverage for Plaintiffs'
house and property, and subsequently a storm damaged
Plaintiffs' house and property. Plaintiffs submitted an
insurance claim to Defendant State Farm, who denied coverage.
Plaintiffs hired an independent structural engineer to
inspect the damage and the structural engineer determined
damage to the house and property. Defendant State Farm
disagrees with the findings of the independent structural
engineer and disputes structural damage exists to the roof
trusses. Plaintiffs hired Defendant ServPro to clean property
that was covered in fiberglass insulation and contends that
ServPro did not properly clean the property. Plaintiffs
allege there was a relationship between Defendant State Farm
and Defendant ServPro but Defendant State Farm disputes this
of this case is based on diversity jurisdiction. “If a
civil action filed in state court satisfies the requirements
for original federal jurisdiction-meaning, most commonly,
federal-question or diversity jurisdiction-the defendant may
invoke 28 U.S.C. § 1441(a).” McDaniel v.
Loya, 304 F.R.D. 617, 623 (D.N.M. 2015). “Federal
courts are courts of limited jurisdiction; thus, there is a
presumption against removal jurisdiction, which the defendant
seeking removal must overcome.” Id. at 625.
“In a case with multiple defendants, there must be
unanimous consent to removal; any one defendant may spoil
removal and keep the case in state court.” Id.
at 623-24. For a party to remove a case based on diversity
jurisdiction, 28 U.S.C. § 1332 requires completely
diversity-each plaintiff must be a citizen of a state
different from every defendant. See Grynberg v. Kinder
Morgan Energy Partners, L.P., 805 F.3d 901, 905 (10th
Cir. 2015), cert. Denied, ___ U.S. ___, 136 S.Ct.
1314 (2016). Under § 1332 district courts “have
diversity jurisdiction over ‘all civil actions where
the matter in controversy exceeds the sum or value of $75,
000 . . . and is between . . . citizens of different
States.'” Id. (quoting 28 U.S.C.
§ 1332). Additionally, “for purposes of
determining the existence of diversity jurisdiction, the
citizenship of the parties is to be determined with reference
to the facts as they existed at the time of filing.”
Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S.
567, 569-70 (2004).
State Farm argues that Plaintiffs were attempting to avoid
this Court's jurisdiction by fraudulent misjoinder of a
local party and, therefore, the Court should sever and remand
Defendant ServPro for purposes of determining proper subject
matter jurisdiction. (Def.'s Resp., Dkt. No. 12, p. 1.)
Rule 20 provides the procedural basis for the doctrine of
fraudulent misjoinder. See Fed.R.Civ.P. 20.
Fraudulent misjoinder, also referred to as procedural
“occurs when a plaintiff sues a diverse defendant in
state court and joins a non-diverse or in-state defendant
even though the plaintiff has no reasonable procedural basis
to join such defendants in one action. . . . Thus, in a case
where the joined claims are totally unrelated, a federal
district court may find removal jurisdiction pursuant to the
fraudulent misjoinder doctrine even though the plaintiff has
a reasonable substantive basis for the claim against the
McDaniel, 304 F.R.D. at 630-31 (quoting E.
Farish Percy, Defining the Contours of the
Emerging Fraudulent Misjoinder Doctrine, 29 Harv.
J.L. & Pub. Pol'y 569, 572 (2006). Defendant State
Farm argues that Plaintiffs' claim is “wholly
distinct” from Plaintiffs' claim against Defendant
ServPro. (Def.'s Notice of Removal, Dkt. No. 1, p. 3.)
Defendant State Farm relies heavily upon Bunnell v.
Oklahoma MH Properties, LP, No. CIV-12-372-R, 2012 WL
12863916 (W.D. Okla. May 11, 2012), but this Court draws a
distinction between the reasoning in Bunnell and the
issues present in this case. In Bunnell, the
district court reasoned that “[w]hile both sets of
claims arise out of the same occurrence in the sense that but
for the tornado, neither set of claims would have arisen,
there are no questions of law or fact common to all
Defendants that will arise in the action.” Id
(citing Fed. R. Civ. P. 20(a)(2)(B); 12 Okla. Stat.
§ 2020(A)(2)(b)). Plaintiffs rebut Defendant State
Farm's allegation that the claim is totally unrelated by
alleging a relationship between Defendant State Farm and
Defendant ServPro. (Pet., Dkt. 1, p. 6.) Plaintiffs argue
that “ServPro . . . concealed the fact that it had an
existing business relationship with State Farm whereby it
gets paid to ‘clean' textiles, which saves State
Farm money as it does not have to pay out money to replace
the personal property.” (Pls.' Reply, Dkt. 13, p.
4.) This Court finds that there are questions of law or fact
common to all Defendants and the application of the
procedural misjoinder doctrine is inappropriate. As a result,
this Court turns its attention to the proper application of
diversity jurisdiction and finds the Court lacks subject
matter jurisdiction in the absence of complete diversity.
Plaintiffs' Motion to Remand ...