Chandler v. Kohl's Dep't Stores

LAWRENCE CHANDLER, Plaintiff, v. KOHL'S DEPARTMENT STORES, INC. d/b/a KOHL'S,and GERALD SMITH, Defendant.

CIVIL NO. 1:20CV85

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA FORT WAYNE DIVISION

May 6, 2020

OPINION AND ORDER

This matter is before the court on a motion to remand, filed by the Plaintiff, Lawrence Chandler ("Chandler") on March 19, 2020. Defendants, Kohl's Department Stores, Inc. d/b/a Kohl's ("Kohl's") and Gerald Smith ("Smith"), filed their response on April 16, 2020, to which Chandler replied on April 23, 2020.

For the following reasons, the motion to remand will be granted.

Discussion

Chandler filed his Complaint against Kohl's and Smith on January 8, 2020 in the Allen County Superior Court. Complaint for Damages [ECF No. 1-2]. Chandler alleged that he was on the premises of Kohl's store #0679, located at 10310 Maysville Road, Fort Wayne, Indiana, on February 4, 2018 when he slipped and fell on the wet floor. Id. at Count I, ¶ 1. In his Complaint, Chandler alleges that the negligence of Kohl's caused the subject slip and fall, and he seeks various items of personal injury damages as a result thereof. Id. at Count I, ¶¶2, 5-6. Plaintiff also claims that Kohl's and Store Manager Smith were negligent in "failing to properly inspect, maintain, and keep its property in a safe condition and warn of the danger." Id. at Count I, ¶ 2. Plaintiff further claims that Smith is liable for "negligently hiring and failing to properly train and oversee employees" in his capacity as the Kohl's' Store Manager. Id. at Count I, ¶ 3.

On February 21, 2020, Kohl's and Smith petitioned to remove this action to the United States District Court for the Northern District of Indiana, Fort Wayne Division, on the basis of diversity of citizenship pursuant to 28 U.S.C. § 1332 [ECF No. 1]. In their Petition, Kohl's and Smith asserted that Kohl's is incorporated under the laws of the State of Delaware, and has its principal place of business in the State of Wisconsin. Id. at ¶ 3. Defendants further asserted that while Smith was a non-diverse defendant, his residency status was not an impediment to removal of this action under the doctrine of fraudulent joinder, citing Conk v. Richards & O'Neil, LLP, 77 F.Supp.2d 956 (S.D. Ind. 1999). Specifically, Defendants argue that Smith was not even working at the time of the incident, such that his actions could not have created or prevented the subject slip-and-fall, and any claims to the contrary were made merely in an effort to destroy diversity of citizenship and prevent removal under 28 U.S.C. § 1332.

The defendant bears a "heavy burden" to establish a claim of fraudulent joinder. Gross v. FCA US LLC, 2017 WL 6065234, at *5 (N.D. Ill. Dec. 7, 2017). "Under the doctrine of fraudulent joinder, an out-of-state defendant's right of removal premised on diversity jurisdiction cannot be defeated by joinder of a nondiverse defendant against whom the plaintiff's claim has no chance of success." Land v. Int'l Bus. Machines Corp., 108 F. Supp. 3d 632, 636 (S.D. Ind. 2015). "Fraudulent joinder occurs either when there is no possibility that a plaintiff can state a cause of action against nondiverse defendants in state court, or where there has been outright fraud in plaintiff's pleading of jurisdictional facts." Gottlieb v. Westin Hotel Co., 990 F.2d 323,327 (7th Cir. 1993).

"To establish fraudulent joinder, a removing defendant "must show that, after resolving all issues of fact and law in favor of the plaintiff, the plaintiff cannot establish a cause of action against the in-state defendant." Morris v. Nuzzo, 718 F.3d 660, 666 (7th Cir. 2013); see also Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir. 1992). The defendant bears the burden of showing that the plaintiff cannot establish a cause of action that would defeat diversity. Id. The ultimate question before the court is whether there is any reasonable possibility that a state court would rule against the non-diverse defendant. Regency Commercial Associates LLC v. Action 49 Junction I, LLC, 2017 WL 5287168, at *3 (S.D. Ind. Nov. 13, 2017). Any questions or uncertainties regarding the controlling substantive law must be resolved in favor of the plaintiff. See, Antonio v. Wal-Mart, 2007 WL 2884371, at *7 (S.D. Ind. Sept. 27, 2007); see also Batoff v. State Farm Ins. Co., 977 F.2d 848, 851-52 (3d Cir. 1992); Guevara v. Wal-Mart Stores, Inc., 2007 WL 397490, at *3 (S.D. Tex. Feb. 1, 2007).

This Court previously examined a claim of fraudulent joinder by the naming of a store manager in Perry v. Higgins-Ballas, et al., 2018 WL 3158510 (N.D. Ind. June 27, 2018). In that case, this Court found that the naming of the manager did not meet the standard for fraudulent joinder and specifically noted that "the district courts in this Circuit that have considered whether a store manager may be held individually liable have all found Indiana law too unsettled to grant a defendant's motion to dismiss the manager for fraudulent joinder—and have remanded the cases back to state court." Id. at *3, citing Springer v. Wal-Mart Corp. Office, 2010 WL 3275521, at *1 (N.D. Ind. Aug. 17, 2010); Butler v. Kohl's Dep't Stores, Inc., 2008 WL 1836684, at *3 (S.D. Ind. Apr. 23, 2008); Antonio v. Wal-Mart, 2007 WL 2884371, at *7 (S.D. Ind. Sept.27, 2007). Likewise, in Pickering v. Menard, the court examined the previous district court decisions on fraudulent joinder of a manager and again found:

On the basis of the persuasive, on-point authority identified by the Pickerings, and in light of Defendants' failure to identify any authority suggesting that Indiana law would not entertain the Pickerings' claims against Mr. Streetman, the Court concludes that Defendants have failed to meet their "heavy burden" of demonstrating there is no reasonable possibility that the Pickerings could prevail.

Pickering v. Menard, Inc., 2018 WL 3126020, at *4 (S.D. Ind. June 26, 2018).

As noted in Perry and Pickering, prior cases in the Seventh Circuit dealing with this same issue have established that the naming of a manager does not constitute fraudulent joinder. For example, in Antonio v. Wal-Mart, 2007 WL 2884371 (S.D. Ind. Sept. 27, 2007), Wal-Mart argued, as the Defendants do in this case, that its manager was fraudulently joined to the action; however, the Court in Antonio found that Wal-Mart's manager was not fraudulently joined and remanded the case to Indiana state court. See also Butler v. Kohl's Dep't Stores, Inc., 2008 WL 1836684, at *2 (S.D. Ind. Apr. 23, 2008) (adopting the reasoning of Antonio); Springer v. Wal-Mart Corp. Office, 2010 WL 3275521, at *1 (N.D. Ind. Aug. 17, 2010) (remanding to Indiana state court because Indiana law was inconclusive on the issue of a store manager's liability); and Knebel v. Wal-Mart Stores, Inc., 2009 WL 3124769, at *3 (S.D. Ill. Sept. 24, 2009) (noting Illinois law, like Indiana law, was unsettled on the issue and remand was appropriate).

As noted above, any questions or uncertainties regarding the controlling substantive law must be resolved in favor of the plaintiff. Chandler argues that whether a manager may be held personally liable for negligence in the performance of his or her job duties is an unsettled area of law in Indiana. See Antonio, 2007 WL 2884371 at *4. Indiana law has long established that an employer's liability does not absolve a negligent employee from personal liability; instead, aclaim may be brought individually against either the employee or the employer or jointly against both. Biel, Inc. v. Kirsch, 153 N.E.2d 140, 143 (Ind. Ct. App. 1958). Previous holdings by the Indiana Supreme Court show that a corporate officer may be personally liable for torts in which he or she has participated, authorized, or directed. State, Civil Rights Comm'n v. Cty. Line Park, Inc., 738 N.E.2d 1044, 1050(Ind. 2000). However, as noted in Antonio, "the question of what constitutes participation in, authorization of, or direction of a tort is still subject to some interpretation." Antonio v. Wal-Mart, 2007 WL 2884371 at *4.

The Court in Antonio concluded that the Wal-Mart store manager may be held liable, and thus was not fraudulently joined, based upon this uncertainty in Indiana law:

For the purposes of deciding if removal was proper, it is enough to note that Indiana law is unsettled regarding the extent that a plaintiff may bring a claim in negligence against a store manager, based on a delegation of the premise owner's duties toward invitees. It is not clear that the Antonios' claim cannot succeed. For this reason, removal under the doctrine of fraudulent joinder was improper and remand is appropriate.

Antonio v. Wal-Mart, 2007 WL 2884371, at *7 (S.D. Ind. Sept. 27, 2007). Other jurisdictions have examined this issue and noted similar uncertainties existed in those jurisdictions that mandated remand. See, e.g., Guevara v. Wal-Mart Stores, Inc., 2007 WL 397490, at *3 (S.D. Tex. Feb. 1, 2007) ("the plaintiff had a reasonable possibility of recovering against the store manager and remand was required."); Cook v. Lowe's Home Centers, Inc., 2006 WL 3098773, at *4 (D.S.C. Oct. 30, 2006) ("the fact that a store manager by virtue of his position has a high level of control over the store, that the store manager in the case at bar is not a sham defendant").

Chandler contends that each of the allegations in his Complaint is a recognized, actionable theory of negligence that alleges breach of a recognized duty, causation, and damagesresulting therefrom. Chandler notes that even if an Indiana court may ultimately determine that Smith did not owe or breach a duty to the Plaintiff, such an inquiry is immaterial for purposes of the fraudulent joinder inquiry; instead, the issue is whether there is a possibility that an Indiana court could recognize such a duty and find a breach. Chandler concludes that Indiana law does not prohibit his claims against Smith, which alone is sufficient to warrant remand so that an Indiana state court may...