Combs v. ICG Hazard, LLC

934 F.Supp.2d 915

Jack COMBS and Rosemary Combs, Plaintiffs

v.ICG HAZARD, LLC, et al., Defendants.

Civil Action No. 12–230–DLB–HAI.

United States District Court,

E.D. Kentucky,

Southern Division,

At London.

March 21, 2013.

Randall Ancil Campbell, Randy A. Campbell Law Office, Hindman, KY, Nicholas C.A. Vaughn, Law Office of Nick Vaughn, Somerset, KY, for Plaintiffs.

Mindy G. Barfield, Patrick Drake Schach, Dinsmore & Shohl LLP, Lexington, KY, for Defendants.

ORDER ADOPTING REPORT & RECOMMENDATION

DAVID L. BUNNING, District Judge.

This matter is before the Court upon the Report and Recommendation (“R & R”) of the United States Magistrate Judge wherein he recommends that Plaintiffs' Motion to Remand be granted and Plaintiffs' Motion for an Award of Attorney's Fees and Costs be denied (Doc. # 23). No objections to the Magistrate Judge's R & R have been filed, and the time do so has now expired. Thus, the R & R is ripe for this Court's consideration.

Plaintiffs Jack and Rosemary Combs, citizens of Kentucky, originally filed this action in Perry Circuit Court on October 17, 2012 against ICG Hazard, LLC, Arch Coal, Inc., and Fred Fields. Defendants subsequently removed this suit to this Court on November 20, 2012 pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. In their notice of removal, Defendants contend that this Court has diversity jurisdiction over the controversy pursuant to 28 U.S.C. § 1332 because the properly joined Defendants are diverse from Plaintiffs, and the amount in controversy exceeds $75,000.00. According to Defendants, ICG Hazard, LLC and Arch Coal are properly joined parties, and each are residents of Delaware and Missouri. Defendants acknowledge that Jack Fields is a resident of Kentucky; however they assert that he was fraudulently joined and his citizenship should, therefore, be disregarded for diversity jurisdiction purposes. Finally, Defendants contend the jurisdictional amount is satisfied when the Court considers the sum of the compensatory and punitive damages sought, along with the costs Defendants would sustain if injunctive relief were granted.

On December 17, 2012, Plaintiffs filed a Motion to Remand to Perry Circuit Court, along with a Motion for Attorney's Fees and Costs to compensate Plaintiffs for the “wrongful removal of this case.” (Doc. # 8). Plaintiffs assert that Jack Fields is properly joined as a defendant in this matter, and that his Kentucky citizenship destroys diversity. According to Plaintiffs, they have pled viable state-law claims for assault, battery, trespass, strict liability, negligence, and vicarious liability against Fields. Additionally, Plaintiffs argue that Defendants failed to establish the amount in controversy requirement by a preponderance of the evidence.

On February 11, 2013, this Court referred Plaintiffs' Motion to Remand and Motion for Attorney's Fees and Costs to Magistrate Judge Hanly A. Ingram pursuant to 28 U.S.C. § 636(b)(1)(A) for review and preparation of an R & R. After careful consideration of the parties' respective arguments, the Magistrate Judge issued his R & R on March 1, 2013, concluding that Fields was not fraudulently joined because the Plaintiffs pled colorable claims of assault, battery, trespass and strict liability against Fields. Additionally, the Magistrate Judge found that Defendants have failed to establish the jurisdictional amount-in-controversy requirement by a preponderance of the evidence. As a result, the Magistrate Judge recommends that this Court remand this matter to Perry Circuit Court. However, the Magistrate Judge also recommends that Plaintiffs' Motion for Attorney's Fees be denied as he could not say that Defendants' removal of this matter lacked an objectively reasonable basis.

Having reviewed the Magistrate Judge's thorough and well-reasoned R & R, the Court concurs in the recommended disposition of Plaintiffs' motions. Plaintiffs have pled colorable claims of assault, battery, trespass and strict liability against Defendant Fields under Rule 8.01, Kentucky Rules of Civil Procedure. As a result, Defendant Fields was not fraudulently joined, and his citizenship must therefore be considered for purposes of determining whether the Court has diversity jurisdiction. Because Plaintiffs and Defendant Fields are each citizens of Kentucky, there is not complete diversity between the parties. Additionally, as the Magistrate Judge concluded, Defendants have failed to establish the amount-in-controversy requirement by a preponderance of the evidence. Therefore, the Court cannot exercise subject-matter jurisdiction over this case under 28 U.S.C. § 1332. Finally, although the Court concludes that this case was improperly removed, the Court agrees that Defendants removed the case in good faith and with an objectively reasonable basis. Under these circumstances, Defendants are not responsible for Plaintiffs' attorneys fees and costs. Accordingly,

IT IS ORDERED as follows:

(1) The Magistrate Judge's Report and Recommendation (Doc. # 23) is hereby ADOPTED as the Opinion of the Court;

(2) Plaintiffs' Motion to Remand and for an Award of Attorney's Fees and Costs (Doc.# 8) is hereby GRANTED IN PART and DENIED IN PART. Plaintiffs' Motion to Remand is hereby GRANTED, and Plaintiffs' Motion for an Award of Attorney's Fees and Costs is hereby DENIED; and

(3) This matter is hereby REMANDED to the Perry Circuit Court and STRICKEN from the Court's active docket.

REPORT AND RECOMMENDATION AS TO PLAINTIFFS' MOTION TO REMAND AND FOR AN AWARD OF ATTORNEY'S FEES AND COSTS PURSUANT TO 28 U.S.C. § 1447(c) [D.E. 8]

HANLY A. INGRAM, United States Magistrate Judge.

On December 17, 2012, Plaintiffs filed a Motion to Remand and for an Award of Attorney's Fees and Costs Pursuant to 28 U.S.C. § 1447(c). D.E. 8. Defendants responded in opposition to the Motion (D.E. 11), Plaintiffs have replied (D.E. 18), and therefore the matter is ripe for decision. The presiding District Judge referred the Motion to the undersigned for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). D.E. 21. For the reasons set forth herein, the Court RECOMMENDS that the Motion (D.E. 8) be GRANTED, in part, and DENIED, in part.

I. BACKGROUND

On October 17, 2012, Plaintiffs Jack and Rosemary Combs filed a civil complaint in Perry Circuit Court (Action No. 12–CI–504) against Defendants ICG Hazard, LLC, Arch Coal, Inc., and Fred Fields. See D.E. 1–1 (“Complaint”). Defendants ICG and Arch Coal are alleged to be companies engaged in the business of leasing and mining coal. Id. at 2–3. Plaintiffs further allege that Fred Fields was engaged as a blaster for ICG at its mine site near Plaintiffs' home “[a]t all relevant times herein.” Id. at ¶ 4. Plaintiffs allege that, “within the past year,” Defendants have conducted blasting activities near Plaintiffs' residence in Perry County, Kentucky. Id. at ¶¶ 7–9.

Plaintiffs further allege that, in conducting such blasting activities, Defendants exploded large quantities of explosives in close proximity to Plaintiffs' property and dwelling. Id. at ¶ 9. According to Plaintiffs, these explosives produced “violent concussions and vibrations of the earth” which shook Plaintiffs' land and residence and caused “severe and substantial damage” to their property. Id. at ¶¶ 10, 12. Plaintiffs also allege they provided notice to Defendants of the threat to Plaintiffs' property caused by Defendants' blasting activities, but that Defendants “failed to undertake reasonable methods to control the effects of [their] operations.” Id. at ¶ 11.

Plaintiffs also allege that “Defendants have allowed dirt, dust, debris and other flyable materials to escape their permitted boundaries and enter upon the Plaintiffs' home, property and contact the Plaintiffs' person,” despite the fact that “Defendants have a duty to prevent dirt, dust, debris or other flyable materials from escaping their permitted boundaries and entering upon the Plaintiffs' property and contacting the Plaintiffs' person.” Id. at ¶¶ 17–18. Plaintiffs claim that Defendants' conduct is an intentional trespass and/or a reckless trespass upon Plaintiffs' person and property and an assault and battery upon Plaintiffs' person. Id. at ¶¶ 20–21. Plaintiffs also claim that Defendants are strictly liable to Plaintiffs for the property damage resulting from the blasting activities. Id. at ¶ 13. Plaintiffs state that the damages to their property and health are well in excess of $4,000.00, the jurisdictional amount of the Perry Circuit Court. Id. at ¶ 25. Plaintiffs seek compensatory and punitive damages, a permanent injunction, and costs, including attorney's fees. Id. at ¶ 27.

On November 20, 2012, Defendants removed the action to this Court pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. D.E. 1. Defendants claim that the most recent tax-assessed value of the relevant property and Plaintiffs' characterization of the damage to that property as “severe” and “substantial,” when considered with the various damages sought, make it more likely than not that the amount-in-controversy exceeds $75,000.00 as required by 28 U.S.C. § 1332(a). See id. at 8–13. Defendants also assert that complete diversity exists between the relevant parties to the lawsuit, again required by § 1332(a). Id. at 2–8. Defendants acknowledge that both Plaintiffs and Defendant Fields are citizens of Kentucky, a factor that would ordinarily defeat diversity jurisdiction. Id. at 3. However, Defendants claim that Fields's citizenship should be disregarded because he was fraudulently joined in an effort to defeat federal jurisdiction. Id. at 3–4.

On December 17, 2012, Plaintiffs filed the instant Motion to Remand pursuant to 28 U.S.C. § 1447(c). D.E. 8. Plaintiffs claim that Defendants have failed to establish that Fields was fraudulently joined or that the amount in controversy requirement was satisfied at the time of removal. Id.

II. FRAUDULENT JOINDER

Defendants bear the burden of demonstrating that removal of this...