Mergist v. Wal-Mart Stores, Inc.

REBECCA MERGIST v. WAL-MART STORES, INC. and JOHN DOE

CIVIL ACTION NO. 16-00138-JWD-EWD

UNTIED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

June 9, 2016

NOTICE

Please take notice that the attached Magistrate Judge's Report has been filed with the Clerk of the U. S. District Court.

In accordance with 28 U.S.C. § 636(b)(1), you have 14 days after being served with the attached report to file written objections to the proposed findings of fact, conclusions of law, and recommendations set forth therein. Failure to file written objections to the proposed findings, conclusions and recommendations within 14 days after being served will bar you, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Court.

ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.

Signed in Baton Rouge, Louisiana, on June 9, 2016.

/s/_________

ERIN WILDER-DOOMES

UNITED STATES MAGISTRATE JUDGE

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

Before the Court is a Motion for Leave to File Amended Complaint and for Remand, filed by plaintiff Rebecca Mergist. (R. Doc. 6). Defendant Wal-Mart Stores, Inc. ("Wal-Mart"), opposes the Motion. (R. Doc. 13). Plaintiff has filed a Reply. (R. Doc. 9). For the following reasons, the undersigned recommends that the Motion be GRANTED, allowing amendment and remanding the matter to state court for lack of subject matter jurisdiction.

Factual and Procedural Background

On or about January 10, 2015, Rebecca Mergist obtained car repairs at the Tire, Lube and Express Department of a Wal-Mart store in Abbeville, Louisiana. (R. Doc. 1-1 at 1). Mergist claims that when a Wal-Mart employee assured her that the tire repairs were complete, she took possession of her vehicle and began driving away. While still on Wal-Mart's premises, Mergist alleges her left rear wheel suddenly fell off and she was violently jolted inside the vehicle and struck the inside of her door. (R. Doc. 1-1 at 1-2). On July 8, 2015, her counsel sent a letter to Wal-Mart demanding Wal-Mart to produce all reports regarding the incident, including the identities of the Wal-Mart employees responsible for the incident. (See R. Doc. 6-7). In December 2015, Mergist's counsel sent two follow-up emails to Wal-Mart asking Wal-Mart to respond to counsel's July 8, 2015 letter. (See R. Doc. 6-8).

When the foregoing correspondence went unanswered, Mergist filed a Petition for Damages in the 19^th Judicial District Court for the Parish of East Baton Rouge, Louisiana on December 15, 2015, alleging that she was injured as a result of negligent repairs performed on her vehicle by a Wal-Mart employee. (R. Doc. 1-1). Mergist filed suit against Wal-Mart and John Doe, a Wal-Mart employee who performed the repairs. In the Petition, Mergist claims Wal-Mart refused to identify the employee by name despite repeated requests. (R. Doc. 1-1 at 1 n.1). Mergist alleges that the employee's negligent repairs and negligent supervision and training of other Wal-Mart employees proximately caused the incident and that Wal-Mart is liable for the actions of its employee under the theory of respondeat superior. (R. Doc. 1-1 at 2). Mergist asserts Wal-Mart and its employee are jointly and solidarily liable for her injuries, which allegedly include injuries to her "lumbar spine, thoracic spine, left shoulder, left elbow, including lateral epicondylitis and right sided protrusion type herniation at T12-L1 requiring surgical intervention, including right interlaminar epidural steroid," together with general and special damages. (Id.). In the Petition, Mergist asserts her damages do not exceed the jurisdictional limit for federal court. (R. Doc. 1-1 at 3).

On February 12, 2016, Mergist propounded discovery requests upon Wal-Mart requesting the names of the employees involved in the incident. (R. Doc. 6-10). Mergist asserts Wal-Mart never responded to the discovery requests. Instead, on March 2, 2016, Wal-Mart removed the action on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. (R. Doc. 1). In the Notice of Removal, Wal-Mart asserts that on February 19, 2016, it received discovery responses and medical records from Mergist that indicate the amount in controversy exceeds $75,000. Wal-Mart argues the Notice of Removal was timely filed on March 2, 2016, because it was filed within 30 days of Wal-Mart receiving Mergist's February 19, 2016, discovery responses and medicalrecords that set forth a claim of relief exceeding $75,000.¹ Wal-Mart also asserts complete diversity exists because it is a Delaware corporation with its principal place of business in Arkansas and Mergist is domiciled in Louisiana.

On March 29, 2016, Mergist filed the instant Motion, seeking to amend her Petition under Federal Rule of Civil Procedure 15 to name three Wal-Mart employees, Chris Fontenot, Gabriel DeJean, and Charles Corley, as necessary party defendants. (R. Doc. 6). Mergist claims that despite repeated requests, she did not discover the names of the Wal-Mart employees until Wal-Mart provided its Rule 26(a)(1) Disclosures on March 17, 2016, nearly two weeks after removal. (R. Doc. 6-1). In the proposed Amended Complaint, Mergist asserts her vehicle was negligently repaired by Fontenot, DeJean, and Corley, who are all residents of and domiciled in Louisiana. (R. Doc. 6-3 at 1). Mergist also asserts that Fontenot was immediately notified of the incident, prepared a customer incident report, entered a claim into Wal-Mart's incident reporting system, and prepared and submitted a Summary Information form to Wal-Mart's home office, which included the identities of the Wal-Mart employees involved. (R. Docs. 6-4, 6-5, and 6-6). Mergist claims she was not provided copies of these documents until Wal-Mart filed its Rule 26(a)(1) Disclosures.

Mergist asserts that she should be allowed to amend her Petition to name non-diverse defendants because the purpose of the amendment is to name the correct parties, rather than to defeat diversity. (R. Doc. 6-3 at 4). Mergist claims she always intended to name these non-diverse employees in her Petition and that they were given fictitious names only because Wal-Mart intentionally withheld their known identities from her. Mergist maintains that she has diligently sought the identities of the Wal-Mart employees and timely amended her Petition less than twoweeks after Wal-Mart disclosed their names in its Rule 26(a)(1) Disclosures. Mergist argues that she will be prejudiced if the amendment is denied because she will be forced to sue the Wal-Mart employees in state court. Mergist also asserts that equitable factors weigh in favor of allowing the amendment because she specifically requested the identities of the Wal-Mart employees pre-suit and the allegations in her Petition gave Wal-Mart a definitive clue as to the identities and existence of the non-diverse defendants.

Mergist asserts that if she is allowed to amend her Petition to name the Wal-Mart employees as defendants, the Court must remand the matter to state court pursuant to 28 U.S.C. § 1447 because joinder of the non-diverse defendants destroys federal diversity jurisdiction. If the Court denies the amendment, Mergist asserts that remand is still required because her claim does not exceed $75,000. Mergist argues that Wal-Mart's assertion that her damages exceed $75,000 is based on mere conclusory allegations since Wal-Mart did not attach affidavits or evidence attesting to the amount in controversy to the Notice of Removal. Mergist asserts the case should be remanded because Wal-Mart has failed to show by a preponderance of the evidence that the requisite jurisdictional amount is satisfied in this case.

Mergist also seeks an award of $1,000 in costs and expenses because Wal-Mart lacked an objectively reasonable basis for seeking removal. Mergist asserts Wal-Mart intentionally withheld the identities of its employees involved in the incident after Mergist filed suit so that it could remove the case to federal court based on diversity jurisdiction. Mergist asserts Wal-Mart was put on notice of the non-diverse defendants when the Petition was filed because she made specific allegations of fault against the fictitious defendant, who was identified as the Wal-Mart employee who performed her car repairs.

In Opposition, Wal-Mart asserts that despite the allegation in the Petition that Mergist's damages do not exceed $75,000, her discovery responses and attached medical records show that her claimed damages, if proven, exceed $75,000. (R. Doc. 13). When asked in an interrogatory whether her claim exceeded $75,000, Mergist responded that the request was "Premature at this time" and reserved her right to provide a supplemental response in the future. (R. Doc. 13-2 at 4-5). Wal-Mart argues this interrogatory answer constitutes an "other paper" that affirmatively shows that the jurisdictional amount may be satisfied, permitting removal of this matter. (R. Doc. 13-2 at 3).

Wal-Mart further asserts that Mergist's medical records list her special damages total as $23,773.96, and show that she has undergone two epidural steroid injections with a recommendation for a third and has undergone a surgical procedure to her right elbow. (See R. Doc. 13-2). Wal-Mart claims that awards from Louisiana courts for herniated discs requiring injections range from $40,000 to $85,000. (R. Doc. 13-2 at 7). Wal-Mart also claims that when it filed the Opposition, fifteen months after the accident, Mergist was still being prescribed medication and was looking for a new pain management doctor. Thus, Wal-Mart contends the amount in controversy clearly exceeds $75,000.

Wal-Mart also argues that its Notice of Removal is procedurally proper without affidavits or other evidence attached because 28 U.S.C. § 1446(a) only requires that the notice of removal provide "a short and plain statement of the...