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Cortez-Contreras v. Government Employees Insurance Co.

United States District Court, D. Kansas

December 10, 2019

MARIBEL CORTEZ-CONTRERAS, et al., Plaintiffs,
v.
GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant,

          MEMORANDUM AND ORDER

          Angel D. Mitchell U.S. Magistrate Judge.

         Plaintiffs Maribel Cortez-Contreras, Maria Cortez, and John Kirwan allege they were injured in an automobile accident caused by Ervante Triplett's negligence. Plaintiffs did not file this lawsuit against Ms. Triplett, who was allegedly uninsured. Instead, Plaintiffs brought suit against defendant Government Employees Insurance Company (“GEICO”) seeking to recover uninsured motorist benefits under Ms. Cortez-Contreras' insurance policy with GEICO. Ms. Cortez-Contreras was driving the vehicle with all three Plaintiffs in it at the time of the accident. Plaintiffs originally filed suit in state court, and GEICO removed this action to federal court based on diversity jurisdiction.

         This matter comes before the court on Plaintiffs' Motion for Leave to File an Amended Petition for Damages. (ECF NO. 7.) Plaintiffs now seek to join Ms. Triplett, the allegedly uninsured motorist who caused the accident. This would destroy diversity jurisdiction and force remand to state court. Because of this, GEICO argues the court should deny leave to amend. For the reasons set forth below, the undersigned agrees with GEICO and denies the motion to amend.

         I. BACKGROUND

         Plaintiffs' complaint alleges that Ms. Cortez-Contreras was driving her vehicle on an interstate highway, in which Ms. Cortez and Mr. Kirwan were riding as passengers, when a vehicle driven by Ms. Triplett made a high-speed lane change across four lanes of traffic and crashed into the back of Ms. Cortez-Contreras' vehicle. (ECF No. 1-1 ¶¶ 6-7.) The impact caused Ms. Cortez-Contreras' vehicle to spin around, crash into a concrete barrier, and sustain a second impact by Ms. Triplett's vehicle. (Id. ¶ 8.) Ms. Cortez-Contreras and the other passengers suffered injuries resulting from Ms. Triplett's negligence, but Ms. Triplett was an uninsured motorist in violation of Kansas law. (Id. ¶¶ 11-13.) Plaintiffs made claims against GEICO under the uninsured motorist provisions of Ms. Cortez-Contreras' policy, which GEICO denied. On May 29, 2019, the three filed suit against GIECO-but not Ms. Triplett-in the District Court of Wyandotte County, Kansas. The complaint seeks damages for each plaintiff “in an amount less than Seventy Four Thousand Nine hundred Dollars ($74, 900).” (Id. at 4, 5, and 6.)

         On August 28, GEICO served Plaintiffs with a Kansas Supreme Court Rule 118 request, seeking the amount of monetary damages sought by each plaintiff. The responses revealed that Ms. Cortez-Contreras and Mr. Kirwin each seek damages in excess of $75, 000. On September 30, GEICO removed this case to federal court based on diversity jurisdiction. (See ECF No. 1-2.) The Notice of Removal alleges that Ms. Cortez-Contreras and Ms. Cortez are both Kansas citizens, Mr. Kirwin is a Missouri citizen, and GEICO is domiciled and has its principal place of business in Maryland. (ECF No. 1, at 2.) After GEICO removed this case to federal court, Plaintiffs filed Amended Rule 118 Responses in state court, reducing their claimed damages to amounts less than $75, 000. (ECF No. 10-1.)

         On October 15, Plaintiffs moved to amend to join Ms. Triplett as a party defendant. According to the proposed amended complaint, Ms. Triplett is a Kansas citizen. (ECF No. 7-1, at 4.) Therefore, joining her as a defendant will destroy diversity jurisdiction. GEICO opposes the motion, arguing that Ms. Cortez-Contreras seeks to amend to frustrate federal jurisdiction and because Ms. Triplett is not a necessary or indispensable party.

         II. ANALYSIS

         Fed. R. Civ. P. 15(a)(2) governs motions to amend the pleadings. Generally, under Rule 15, the court may refuse leave to amend “only [upon] a showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment.” Wilkerson v. Shinseki, 606 F.3d 1256, 1267 (10th Cir. 2010); see also Foman v. Davis, 371 U.S. 178, 182 (1962) (same). GEICO does not oppose the amendment on any of these grounds. Rather, GEICO opposes the amendment because it will divest the court of subject-matter jurisdiction.

         A proposed amendment seeking to add a nondiverse party that would destroy the court's subject-matter jurisdiction is governed by 28 U.S.C. § 1447(e). See Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir. 1999) (“When a plaintiff seeks to join a nondiverse defendant after the case has been removed, the district court's analysis begins with 28 U.S.C. § 1447(e).”); see also Broadnax v. GGNSC Edwardsville III LLC, No. 13-2640-SAC, 2014 WL 1308908, at *3 (D. Kan. Mar. 28, 2014) (suggesting that § 1447(e) must be applied in conjunction with the applicable Federal Rules). That statute provides that “[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.” § 1447(e).

         A. Ms. Triplett is Not a Necessary or Required Party

         The standard governing leave to amend under § 1447(e) is not a model of clarity in the Tenth Circuit. The Tenth Circuit last discussed this statute in McPhail v. Deere & Co., 529 F.3d 947 (10th Cir. 2008). There, the court stated that under Federal Rule of Civil Procedure 19, the court must determine whether the party sought to be joined is indispensable and, if so, the court must either remand under § 1447(e) or deny joinder and dismiss the case under Rule 19(b). Id. at 951-52. If the defendant is not indispensable, then Rule 20 permits joinder at the court's discretion. Id. Although this analysis may seem straightforward, the problem is that Rule 19(a) would never require joinder of a non-diverse defendant who would destroy subject matter jurisdiction because that rule's plain language only requires joinder of a party “whose joinder will not deprive the court of subject matter jurisdiction.” Fed.R.Civ.P. 19(a). Furthermore, Rule 19(b) is inapposite because, although it applies “when a person who is required to be joined if feasible cannot be joined, ” it requires the court to determine “whether the action should proceed among the exiting parties or should be dismissed.” Fed.R.Civ.P. 19(a). This is contrary to the statute that governs the more specific issue of post-removal joinder, which requires the court to either “deny joinder, or permit joinder and remand the action to the State court.” § 1447(e). Thus, the Tenth Circuit's reasoning in McPhail effectively leads straight to a Rule 20 permissive joinder analysis.

         This discussion by the Tenth Circuit in McPhail may be best understood as dicta. In that case, the plaintiff argued on appeal that the district court lacked subject matter jurisdiction because the citizenship of unidentified (“John Doe”) defendants destroyed diversity. McPhail, 529 F.3d at 950-51. After discussing the joinder analysis under § 1447(e) and Rules 19 and 20, the court recognized that it had “no occasion here to apply these principles to the district court's decision, because Mrs. McPhail never attempted to amend her complaint” to substitute any named defendants. Id. In other words, the plaintiff in McPhail never attempted to amend her complaint in a way that triggered § 1447(e). Some district courts have therefore declined to follow this aspect of McPhail for largely the same reasons: the statements are dicta and would create incongruity between § 1447(e) and Rules 19 and 20. See, e.g., Hernandez v. Chevron USA, Inc., 347 F.Supp.3d 921, 969-71 (D.N.M. 2018) (recognizing a circuit split as to whether the court must first look to Rule 19 in evaluating whether to permit joinder under § 1447(e) and determining that the Fourth and Seventh Circuits are correct-that the district court need not consider whether a party is indispensable before granting or denying joinder under the statute); see also, e.g., Culver v. Lithia Motors, Inc., Civ. No. 15-669 MCA/SCY, 2016 WL 7426587, at *5 (D.N.M. May 12, 2016) (Yarbrough, J.) (declining to apply McPhail because its pronouncement is dicta).

         The court need not decide the extent to which it is required to follow the McPhail joinder analysis in this case because it is clear that Ms. Triplett does not need to be joined as a defendant. Joinder is required where: (1) in the absence of the party to be joined, the court cannot accord complete relief among existing parties; or (2) where a person claims an interest relating to the subject of the action, and disposing of the case in the person's absence would impair the person's ability to protect the interest or leave an existing party subject to a substantial risk of multiple liability or inconsistent obligations. Fed.R.Civ.P. 19(a); see N. Arapaho Tribe v. Harnsberger, 697 F.3d 1272, 1278-79 (10th Cir. 2012) (outlining the ...


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