PURINTUN v. SOUTHERN UNION GAS COMPANY INC., (W.D.Tex. 2000)

HONORABLE DAVID BRIONES, United States District Judge.

On this day, the Court considered Plaintiffs' Motion to Remand, filed in the above-captioned cause on November 19, 1999. Defendants filed a Response in Opposition to Plaintiffs' Motion to Remand on December 13, 1999. On December 14, 1999, Plaintiffs filed a Reply to Defendant's Response.

After due consideration, the Court is of the opinion that Plaintiffs' Motion to Remand should be denied for the reasons that follow.

BACKGROUND

Plaintiffs commenced this lawsuit on September 24, 1999, in the 346th Judicial District Court of El Paso County, Texas (the "state court"), seeking damages for personal injuries arising out of a pedestrian-motor vehicle traffic accident in El Paso on or about July 2, 1999. Plaintiffs' Original Petition filed in the state court alleges that Travis Purintun was stricken by a truck driven by Defendant Claudio Alvarado ("Alvarado"), allegedly an employee of Defendant Southern Union Gas Company, Inc. ("SUGC, Inc."). Specifically Plaintiffs allege negligence against Alvarado and, alternatively, negligent entrustment against SUGC, Inc.

Defendants removed on November 10, 1999, asserting removal jurisdiction on the basis of diversity. The instant Motion for Remand followed.

DISCUSSION

The general requirements for removal jurisdiction based on diversity are well-established. "[A]ny civil action brought in a State court of which the district courts have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the place where such action is pending." 28 U.S.C. § 1441(a). Diversity jurisdiction under 28 U.S.C. § 1332 requires that the action be between citizens of different states and that the amount in controversy exceed $75,000. See 28 U.S.C. § 1332. Finally, when removal is based on diversity, "none of the parties in interest properly joined and served as defendants [may be] a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b); see also Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1258 (5th Cir. 1988).

Through the instant Motion, Plaintiffs contend that, because SUGC, Inc. is a Texas Corporation, thereby making it a citizen of Texas, Defendants are precluded under 28 U.S.C. § 1441(b) from removing based on diversity of citizenship. In response, Defendants do not contend that SUGC, Inc. is not a citizen of Texas. Rather, Defendants argue that SUGC, Inc., although an existing Texas corporation, had no involvement in the incidents alleged in Plaintiffs' Original Petition, having neither assets, employees nor operations in El Paso and that Southern Union Gas Company ("SUGC") a division of Southern Union Company ("SUC") is the appropriate defendant in this cause. The Court agrees with Defendants.

On December 27, 1999, Plaintiffs filed an Amended Petition, asserting the same cause of action for negligent entrustment against SUC and SUGC. However, for purposes of the instant Motion, the Court examines the jurisdictional facts as they stood at the time of removal. See generally 14B CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE PROCEDURE, § 3723 (3d ed. 1998). Thus, SUC and SUGC's citizenship is not relevant here.

Essentially, Defendants ask the Court to apply the fraudulent joinder doctrine. In order to prove fraudulent joinder, Defendants "must demonstrate either `outright fraud in the plaintiff's recitation of jurisdictional facts,' or that `there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant in state court." Rodriguez v. Sabatino, 120 F.3d 589, 591 (5th Cir. 1997) (citation omitted) (quoting Burden v. General Dynamics Corp. 60 F.3d 213, 217 (5th Cir. 1995); Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 259 (5th Cir. 1995)). "The question, then, is simply whether the defendant can show that no possibility exists that the plaintiffs have stated a claim against [the non-diverse defendant]." Id. In so doing, a court must examine the plaintiff's factual contentions in a light most favorable to the plaintiff and resolve all factual disputes in the plaintiff's favor. See id.

Notwithstanding its moniker, the fraudulent joinder doctrine applies to the mistaken joinder as well as to the truly fraudulent. See Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir. 1992) ("When speaking of jurisdiction, `fraudulent' is a term of art. Although false allegations of jurisdictional fact may make joinder fraudulent, in most cases fraudulent joinder involves a claim against an in-state defendant that simply has no chance of success, whatever the plaintiff's motives.").

Here, Defendants do not contend that Plaintiffs engaged in any jurisdictional chicanery. Rather, Defendants argue that "Southern Union Gas Company, a Division of Southern Union Company, a Delaware corporation, is the entity . . . whose driver and Co-Defendant[,] Claudio Alvarado, was operating the motor vehicle involved in the accident forming the basis of the Plaintiffs' suit." Consequently, Defendants contend, Plaintiffs cannot establish a claim for negligent entrustment against SUGC, Inc.

The Court must examine Texas law to determine whether Plaintiffs can establish a cause of action against SUGC, Inc., See Burden, 60 F.3d at 217. Under Texas law,

[t]o establish negligent entrustment of an automobile, a plaintiff must prove the following elements: (1) the owner entrusted the automobile (2) to a person who was an incompetent or reckless driver, (3) who the owner knew or should have known was incompetent or reckless, (4) the driver was negligent, and (5) and the driver's negligence proximately caused the accident and the plaintiff's injuries.

Prather v. Brandt, 981 S.W.2d 801, 806 (Tex.App.-Houston [1st Dist.] 1998, writ denied).

Here, Defendants attach an affidavit of James C. Wells, Vice President of SUC, who avers that SUGC, Inc. "has no assets [and] no employees," and that SUGC, not SUGC, Inc., employed Alvarado. Naturally, an entity which has no assets or operations cannot be an "owner" of a vehicle. Further, SUGC, Inc.'s discovery responses, attached to Defendants' Response to the instant Motion, indicate that it SUGC has no documents regarding Alvarado, any vehicles, any operations or any accident, lending further support. Consequently, the Court finds that Plaintiffs could not meet the first element of a cause of action for negligent entrustment because here, SUGC, Inc. is not the truck's owner. Also, Plaintiffs present no facts — either in their Original Petition or through the instant Motion — to suggest that SUGC, Inc. may be liable in addition to SUGC and/or SUC. Cf. Sid Richardson Carbon Gasoline Co. v. Interenergy Resources, Ltd., 99 F.3d 746, 752 (5th Cir. 1996).

Having found that Plaintiffs cannot establish a claim for negligent entrustment against SUGC, Inc., the Court further finds that SUGC, Inc. was fraudulently joined. Accordingly, SUGC, Inc.'s citizenship is ignored for diversity purposes, see Burden, 60 F.3d at 217-18, leaving complete diversity between Plaintiffs, Arizona citizens and Alvarado, a New Mexico citizen. More importantly, in compliance with 28 U.S.C. § 1441(b), no Defendant herein is a citizen of the state in which the suit was brought.

Because Plaintiffs do not contest that the other diversity requirement — that the amount in controversy be greater than $75,000, see 28 U.S.C. § 1331 — is met, the Court finds that it has removal jurisdiction under 28 U.S.C. § 1441 and, consequently, Plaintiffs' Motion for Remand should be denied.

Accordingly, IT IS HEREBY ORDERED that Plaintiffs' Motion for Remand is DENIED.