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Pearson v. Guideone America Insurance Co.

United States District Court, S.D. Mississippi, Northern Division

June 11, 2019




         Plaintiff Michele Renee Pearson asks the Court to remand this action to the Circuit Court of Lauderdale County, Mississippi. See Mot. to Remand [15]. Defendant GuideOne American Insurance Company (“GuideOne”) and Defendant Joey Blakeney (collectively “Defendants”) oppose the motion. For the reasons stated, the Court finds Pearson improperly joined Blakeney to defeat diversity jurisdiction; the motion to remand is denied.

         I. Background

         Pearson's suit seeks damages she allegedly suffered when GuideOne terminated her employment as an insurance agent. According to Pearson, GuideOne induced her to become an agent in 1998 by offering a program under which money vested to Pearson based on her in-force book of insurance premiums. Pearson believes GuideOne guaranteed this vested amount as a retirement benefit. But when GuideOne terminated Pearson's employment in September 2017, it gave her a choice: (1) keep the vested amount and forfeit her in-force book of business or (2) keep the in-force business and forfeit the vested money. Pearson chose the latter and forfeited the vested money.

         Aggrieved, Pearson brought claims for fraud, breach of contract, conversion, unjust enrichment, negligent infliction of emotional distress, and unconscionability against Defendants in Lauderdale County Circuit Court. Compl. [1-1]. As to Blakeney, GuideOne's sales director for Mississippi, Pearson generally says he incentivized agents by referencing the vesting program. See Id. ¶ 10. Defendants removed the case on November 9, 2018, asserting that Pearson improperly joined Blakeney to defeat federal diversity jurisdiction. Notice of Removal [1] ¶¶ 6, 7.

         II. Standard

         Under 28 U.S.C. § 1441, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant” to federal district court. 28 U.S.C. § 1441(a). Defendants premise federal jurisdiction on 28 U.S.C. § 1332, under which district courts have jurisdiction over civil actions between “citizens of different States.” 28 U.S.C. § 1332(a)(1). The diversity statute requires complete diversity between all named plaintiffs and all named defendants. See, e.g., Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005).

         The improper joinder rule “is a narrow exception to the rule that diversity jurisdiction requires complete diversity.” Smallwood v. Ill. Cent. R.R. Co., 352 F.3d 220, 222 (5th Cir. 2003). To that end, “[t]he burden is on the removing party; and the burden of demonstrating improper joinder is a heavy one.” Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011). In evaluating a claim of improper joinder, “we examine if there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved.” Smallwood, 352 F.3d at 223 (citation omitted and punctuation altered). But “[a] ‘mere theoretical possibility of recovery under local law' will not preclude a finding of improper joinder.” Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 n.9 (5th Cir. 2004) (en banc) (quoting Badon v. RJR Nabisco, Inc., 236 F.3d 282, 286 n.4 (5th Cir. 2000)).

         “Whether the case was properly removed is determined by reference to the allegations in a plaintiff's state court pleading.” Tedder v. F.M. C. Corp., 590 F.2d 115, 116 (5th Cir. 1979) (citing Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939)); see also Gardner v. Cooksey, No. 2:11-CV-255-KS-MTP, 2012 WL 968026, at *2 (S.D.Miss. Mar. 21, 2012) (“This court must refer to the allegations made in the original pleading to determine whether the plaintiff can make out a viable claim against the resident defendant.”) (citations omitted).

         A district court should ordinarily resolve an improper-joinder claim by conducting Rule 12(b)(6)-type analysis. Smallwood, 385 F.3d at 573. The Court “must then evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff.” B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). Similarly, the Court must resolve all ambiguities in controlling state law in the plaintiff's favor. Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003) (citations omitted).

         Finally, “there are cases, hopefully few in number, in which the plaintiff has stated a claim, but has misstated or omitted discrete facts that would determine the propriety of joinder.” Smallwood, 385 F.3d at 573. In such cases, the district court has the discretion to “pierce the pleadings” and conduct a summary inquiry. Id. Here, Defendants ask the Court to pierce the pleadings and consider Blakeney's affidavit. Defs.' Mem. [18] at 7. As addressed later, the outcome would be the same under either approach.

         III. Analysis

         Defendants say there is no reasonable basis to predict that state law would impose liability on Blakeney because “[t]he claims for conversion, breach of contract, unjust enrichment and unconscionability apply only to GuideOne” and the claims for negligent infliction of emotional distress and fraud fail to ...

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