McBurnie v. CRC Ins. Servs.

WILLIAM MCBURNIE, Plaintiff, v. CRC INSURANCE SERVICES, INC. et al., Defendants.

Civ. No. 19-20018

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

March 23, 2020

NOT FOR PUBLICATION

OPINION

THOMPSON, U.S.D.J.

INTRODUCTION

This matter comes before the Court upon the Motion to Remand and Motion for Attorneys' Fees filed by Plaintiff William McBurnie ("Plaintiff"). (ECF No. 6.) Defendants BB&T Corporation ("BB&T"), BB&T Insurance Holdings, Inc., Branch Banking and Trust Company, CRC Insurance Services, Inc. ("CRC"), John Howard, and Samuel Davison Obenauer (collectively, "Defendants") oppose. (ECF No. 9.) The Court has decided this matter based upon the written submissions of the parties and oral argument. For the reasons stated herein, Plaintiff's Motion to Remand is granted and Plaintiff's Motion for Attorneys' Fees is denied.

BACKGROUND

I. Factual Background

This case arises out of Plaintiff's claims that Defendants retaliated against him by wrongfully terminating his employment after Plaintiff notified his colleague and Defendant CRC's parent company, Defendant BB&T, of allegedly fraudulent behavior at Defendant CRC. (Compl. ¶¶ 13-51, Ex. A., ECF No. 1.) In January 2010, Plaintiff began his employment as Vice President of Crump Insurance Services, Inc., which, in April 2012, was acquired by Defendant BB&T and became part of Defendant BB&T's subsidiary, Defendant CRC. (Id. ¶¶ 11-12.) At Defendant CRC, Plaintiff's direct supervisor was Alex Kullman, Executive Vice President of Defendant CRC. (Id. ¶ 14.) In late May 2015, Plaintiff was informed by a colleague that an underwriter at Defendant CRC was willing to "write a premium . . . cheaper than the premium that Alex Kullman," the underwriter's supervisor, was instructing him to quote. (Id. ¶¶ 13-14.) On May 28, 2015, Plaintiff relayed this information to Mr. Kullman and the underwriter. (Id. ¶ 17.) In response, Mr. Kullman threatened to "write [Plaintiff] up" and "began openly criticizing [Plaintiff's] performance without justification." (Id. ¶¶ 18, 22.) On May 29, 2015, Plaintiff contacted Defendant Obenauer, Chairman and Chief Executive Officer of Defendant CRC, to notify him "of the matter and issues that were ongoing." (Id. ¶ 19.) Defendant Obenauer advised Plaintiff that he was "referring the matter to 'Corporate Investigations.'" (Id. ¶ 20.) During the relevant time period, Defendant Obenauer had "supervisory and/or managerial authority over [P]laintiff." (Id. ¶ 7.)

In July or August 2015, Plaintiff allegedly "uncovered a scheme at [Defendant CRC] whereby . . . employees were falsifying documents and altering commission figures on such documents." (Id. ¶ 23.) On August 3, 2015, Plaintiff spoke to the Corporate Investigations Department of Defendant BB&T about these allegations. (Id. ¶ 24.) On August 6, 2015, Plaintiff was removed from Mr. Kullman's team and reassigned to Defendant CRC's Long Island office. (Id. ¶ 25.) Beginning in March 2018, Plaintiff's supervisor, Kevin Hahn, announced reductions in Plaintiff's salary and gave Plaintiff a negative annual performance review, which he refused to discuss with Plaintiff. (Id. ¶ 33.) Plaintiff contends that "plans" containing targets for Plaintiff'sjob performance "were constantly shifted by [Defendant CRC] in a fashion adverse to [Plaintiff] and in a manner clearly seeking to allegedly justify his retaliatory termination." (Id. ¶ 37.)

On March 31, 2018, Plaintiff sent memoranda to senior management teams at Defendants CRC and BB&T regarding other purported fraudulent activity and legal violations at Defendant CRC. (Id. ¶ 38.) On April 30, 2018, Plaintiff sent an email to Defendant Obenauer, with follow-up e-mails in early May 2018, detailing his concerns. (Id. ¶ 41.) Plaintiff sent similar e-mails and memoranda to Defendant BB&T between June and October 2018, including one memorandum on October 1, 2018. (Id. ¶¶ 42-45.) Defendant Howard was the Chairman and Chief Executive Officer of Defendant BB&T Insurance Holdings, Inc. during the relevant time period (id. at 20-21), and "had supervisory and/or managerial authority over [P]laintiff" (id. ¶ 6).

On October 8, 2018, Plaintiff's employment was terminated on the basis that he "had not 'hit' [his] . . . June 30, 2018 [production level] target and that [Plaintiff's] employment was in 'continued decline.'" (Id. ¶ 46.) Plaintiff claims that he had met his required production levels. (Id.) Plaintiff is sixty-three years old. (Id. ¶ 47.) Plaintiff alleges that Alex Kullman pronounced that he intended to "go young" in hiring and "would not hire anyone over the age of 50." (Id. ¶ 48.)

II. Procedural History

Plaintiff filed this lawsuit in the Superior Court of New Jersey, Monmouth County, Law Division on October 1, 2019. (Notice of Removal ¶ 1, ECF No. 1.) The Complaint alleges five counts: (1) violations of the New Jersey Conscientious Employee Protection Act ("CEPA"), N.J.S.A. § 34:19-1 et seq. (Compl. ¶¶ 52-54); (2) violations of New Jersey common law prohibiting retaliatory termination of employment (Compl. ¶¶ 55-57); (3) violations of the New Jersey Law against Discrimination ("NJLAD"), N.J.S.A. § 10:5-1 et seq., for age discrimination(Compl. ¶¶ 58-62); (4) violations of the NJLAD for unlawful retaliation (Compl. ¶¶ 63-66); and (5) aiding and abetting discrimination, harassment, and/or retaliation (Compl. ¶¶ 67-70). Plaintiff does not allege any violations of federal laws or violations of rights under the federal Constitution.

Defendants timely removed this case on November 8, 2019 on the asserted basis that Defendants Howard and Obenauer—both citizens of New Jersey—were fraudulently joined in the lawsuit to defeat diversity jurisdiction. (Notice of Removal ¶ 13.) Plaintiff is a citizen of New Jersey. (Id. ¶ 9.) The other corporate defendants in the Complaint are not citizens of New Jersey for purposes of diversity jurisdiction. (Id. ¶ 10.) On November 21, 2019, Defendants Howard and Obenauer filed a Motion to Dismiss. (ECF No. 5.) On November 22, 2019, Plaintiff filed a Motion to Remand and a Motion for Attorneys' Fees. (ECF No. 6.) On November 29, 2019, Defendants BB&T, BB&T Insurance Holdings, Inc. Branch Banking and Trust Company, and CRC filed an Answer to the Complaint. (ECF No. 8.) On March 6, 2020, the Court held oral argument on the Motion to Remand and the Motion for Attorneys' Fees. The Motion to Remand and the Motion for Attorneys' Fees are presently before the Court.

LEGAL STANDARD

A defendant may remove a civil action filed in state court to the federal court where the action might originally have been brought. 28 U.S.C. § 1441(a). However, the federal court to which the action is removed must have subject-matter jurisdiction. Id. Federal district courts have subject-matter jurisdiction on the basis of diversity when the action arises between citizens of different states and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1). To establish complete diversity of citizenship between the parties, each plaintiff must be a citizen of a different state from each defendant. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373(1978). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded" to state court. 28 U.S.C. § 1447(c).

If a court determines that non-diverse defendants have been "fraudulently joined" for the purpose of defeating diversity jurisdiction, their citizenship may be disregarded and the action may be removed. In re Briscoe, 448 F.3d 201, 216 (3d Cir. 2006); Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992). Joinder is fraudulent "where there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendants or seek a joint judgment." Batoff, 977 F.2d at 851 (quoting Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990)). However, "[i]f there is even a possibility that a state court would find that the complaint states a cause of action against any one of the resident defendants, the federal court must find that joinder was proper and remand the case to state court." Id. at 851 (quoting Boyer, 913 F.2d at 111). To conduct this jurisdictional analysis, courts in the Third Circuit assess whether a claim against a non-diverse defendant is "wholly insubstantial and frivolous." Id. at 852; see also Glass Molders v. Wickes Cos., Inc., 707 F. Supp. 174, 181 (D.N.J. 1989) (citing Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir. 1983) ("The removing party must prove 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.")). "[T]he inquiry into the validity of a complaint triggered by a motion to dismiss under Rule 12(b)(6) is more searching than that permissible when a party makes a claim of fraudulent joinder. Therefore, it is possible that a party is not fraudulently joined, but that the claim against that party ultimately is dismissed for failure to state a claim upon which relief may be granted." Batoff, 977 F.2d at 852. "A claim which can be dismissed only after anintricate analysis of state law is not so wholly insubstantial and frivolous that it may be disregarded for purposes of diversity jurisdiction." Id. at 853.

DISCUSSION

I. Motion to Remand

Defendants removed this case because they believe that Plaintiff fraudulently joined Defendants Obenauer and Howard. (Notice of Removal ¶¶ 26-34.) The parties disagree about the ways in which Defendants can demonstrate that Plaintiff fraudulently joined Defendants Obenauer and Howard. Defendants contend that they can demonstrate fraudulent joinder in this case by showing that Plaintiff lacks an adequate factual basis for his NJLAD, CEPA, or New Jersey common law claims. (See id. ¶¶ 27, 30-31.) Plaintiff argues that he has pleaded sufficient facts in the Complaint to...