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Jacobs v. Hanging Rock LTC, LLC

United States District Court, W.D. Kentucky, Louisville Division

February 14, 2019



          Greg N. Stivers, Chief Judge.

         This matter is before the Court on Plaintiff's Motion to Remand to State Court (DN 8); Plaintiff's Motion for Leave to Revive and File First Amended Complaint (DN 22); and Plaintiff's Second Motion to Remand (DN 23). The motions are ripe for adjudication. For the reasons provided below, Plaintiff's Motion for Leave to Revive and File First Amended Complaint (DN 22) and Plaintiff's Second Motion to Remand (DN 23) are GRANTED. Plaintiff's Motion to Remand (DN 8) is DISMISSED AS MOOT.

         I. BACKGROUND

         On May 22, 2018, Plaintiff filed an action in Jefferson Circuit Court against Defendant, Hanging Rock LTC, LLC (“Hanging Rock”) and an unnamed “Jane Doe” defendant. (Compl., DN 1-2). In her Complaint, Plaintiff asserted claims of negligence and breach of contract for conduct occurring at Essex Nursing and Rehabilitation Center (“Essex”)-a facility which is owned, operated, or managed by Hanging Rock. (Compl. ¶ 3, DN 1-2). Pursuant to 28 U.S.C. §§ 1441 and 1446, Hanging Rock removed the action to federal court based on diversity jurisdiction because Plaintiff is a citizen of Kentucky, Hanging Rock is a North Carolina corporation, and the damages in this case will likely exceed $75, 000 if relief is granted. (Notice Removal 2-4, DN 1).

         On June 18, 2018, Plaintiff moved to remand her claim to state court for two reasons: first, the original Plaintiff died after filing suit but before removal, and as a result, Hanging Rock could not give proper notice of removal until the action was revived in state court; and second, there was no complete diversity because an unknown “Jane Doe” Defendant administrator of the nursing home resided in Kentucky. (Pl.'s Mot. Remand 1-2, DN 8). Defendant responded that it was not notified of the original Plaintiff's death until after it filed for removal and argued complete diversity should exist despite the unknown Defendant. (Def.'s Resp. Pl's Mot. First Mot. Remand 3-4, DN 10).

         On September 18, 2018, Plaintiff's moved to withdraw, and on October 11, 2018, a motion to substitute counsel was filed. (Pl.'s Mot. Withdraw, DN 16; Pl.'s Mot. Substitute, DN 18). The motions were granted by Magistrate Judge Lindsay on October 23, 2018. (Order, DN 20). On November 17, 2018, Plaintiff moved for leave to revive and file her first amended complaint (DN 22) and moved again to remand her claim to state court. (DN 23). In these motions, Plaintiff seeks to add Robert Flatt as a codefendant because he was the administrator of the Essex facility during Plaintiff's decedent's residency. (Am. Compl. ¶ 4, DN 22-3; Pl.'s Second Mot. Remand 2-3, DN 23).

         Defendant responds by urging the Court to use its discretion to thwart Plaintiff's attempt to remand her action to state court as a fraudulent joinder because she improperly added a nondiverse party for the purpose of destroying diversity jurisdiction. (Def.'s Resp. Pl.'s Second Mot. Remand 4, DN 24 [hereinafter Def.'s Second Resp.]). Defendant also argues Plaintiff has failed to plead Defendant Flatt's citizenship, but instead merely pleads his residency. (Def.'s Second Resp. 14). In her Reply, Plaintiff argues that she has alleged claims against Defendant Flatt in his individual capacity and that the Court should not deny her motion to remand based on a semantic error when Defendant does not otherwise dispute putative Defendant Flatt's Kentucky citizenship. (Pl.'s Reply Def.'s Resp. Second Mot. Remand 4-6, DN 28 [hereinafter Pl.'s Reply]).


         Kentucky and Federal Rules of Civil Procedure require that the caption of a complaint include the names of all parties to the action. Ky. R. Civ. P. 10.01; Fed.R.Civ.P. 10(a). Because she did not name Flatt in the original complaint, Plaintiff now moves to amend the complaint to name him as a defendant to comply with these requirements. (Am. Compl. ¶ 4).

         Leave to amend a complaint is freely given when justice so requires. Fed.R.Civ.P. 15(a). “If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, [she] ought to be afforded an opportunity to test [her] claim on the merits.” Foman v. Davis, 371 U.S. 178, 182 (1962). It is within the court's discretion whether to allow a plaintiff to join a defendant who would destroy subject matter jurisdiction, but if the court does allow it, then the court must remand the action to state court. 28 U.S.C. § 1447(e).

         Hanging Rock contends Plaintiff's purpose in amending the complaint is to destroy diversity jurisdiction and urges the court to use its discretion to deny the amendment and preserve subject matter jurisdiction. (Def.'s Resp. 4). The Court will permit Plaintiff to amend her complaint unless Flatt has been fraudulently joined as a defendant. See Green v. G2 Secure Staff, LLC, No. 07-409-C, 2008 WL 782612, at *2 (W.D. Ky. Mar. 21, 2008).

         “Fraudulent joinder occurs when the non-removing party joins a party against whom there is no colorable cause of action.” Saginaw Hous. Comm'n v. Bannum, Inc., 576 F.3d 620, 624 (6th Cir. 2009) (citation omitted). “To prove fraudulent joinder, the removing party must present sufficient evidence that a plaintiff could not have established a cause of action against non-diverse defendants under state law.” Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999) (citation omitted). “The non-moving party's motive for joining the non-diverse party to the lawsuit is ‘immaterial to our determination regarding fraudulent joinder.'” Walker v. Philip Morris USA, Inc., 443 Fed.Appx. 946, 952 (6th Cir. 2011) (citation omitted). “[T]he question is whether there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved.” Probus v. Charter Commc'ns, LLC, 234 Fed.Appx. 404, 407 (6th Cir. 2007) (citation omitted). In determining whether Plaintiff has a colorable cause of action against Flatt, the Court must resolve factual disputes in Plaintiff's favor. See Coyne, 183 F.3d at 493.

         In her Amended Complaint, Plaintiff asserts negligence claims against Flatt arising from his professional and statutory duties as a nursing home administrator. (Am. Compl. ¶¶ 42-49). A negligence action requires: “(1) a duty on the part of the defendant; (2) a breach of that duty; and (3) consequent injury.” Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245, 247 (Ky. 1992) (citation omitted). “An employee whose negligent act created the liability may be joined as a defendant.” Cua v. Pilot Travel Ctrs., LLC, No. 11-76-C, 2011 WL 1832152, at *2 (W.D. Ky. May 12, 2011) (citations omitted).

         Plaintiff alleges Flatt breached duties by violating regulations from Kentucky's Cabinet for Health and Family Services and the United States Department of Health and Human Services which require nursing home administrators to maintain minimum standards and staffing at the Essex facility. (Am. Compl. ¶ 46(a)-(b)). Plaintiff also alleges Flatt failed to ensure compliance with regulations promulgated under Kentucky's Nursing Home Administrators Licensure Act of 1970. (Am. Compl. ¶ 46(c)). Plaintiff further asserts Flatt breached his duty under these laws and regulations by, inter alia, failing to increase the No. of personnel at Essex; failing to ensure proper supervision, treatment, assessment and monitoring; and failing to maintain records in accordance with accepted standards and practices. (Am. Compl. ¶¶ 44-46). Plaintiff contends the decedent was a member of the class intended to be protected by these laws and regulations and that her physical injuries were foreseeable consequences of breaching these statutory duties. (Am. Compl. ¶¶ 47-48). The inquiry here is not whether Plaintiff will ultimately ...

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