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Vestal v. First Recovery Group, LLC

United States District Court, M.D. Florida, Orlando Division

February 12, 2018




         This cause comes before the Court without oral argument on the following:

1. Plaintiff's Motion for Remand and Memorandum of Law (Doc. 8), filed September 26, 2017;
2. Defendant First Recovery Group, LLC's Response to Plaintiff's Motion for Remand (Doc. 14), filed October 10, 2017;
3. Defendant First Recovery Group, LLC's Motion to Dismiss (Doc. 3), filed September 5, 2017;
4. Plaintiff's Response to Defendant's Motion to Dismiss (Doc. 27), filed November 6, 2017; and
5. Defendant's Reply in Support of Its Motion to Dismiss (Doc. 35), filed November 27, 2017.

         The parties have completed their briefing and the Court is otherwise fully advised on the premises. For the following reasons, Plaintiff's Motion for Remand is due to be denied, and Defendant's Motion to Dismiss is due to be granted in part.

         I. BACKGROUND

         The present lawsuit relates to an earlier medical malpractice action brought by VEV (“Plaintiff”), a minor, by and through Victoria Vestal and Emmanel Vestal, VEV's parents. On February 22, 2013, VEV was injured in an automobile accident. (Doc. 2, ¶ 8). The complaint alleges that VEV's healthcare providers were negligent, resulting in severe injuries. (Id. ¶ 9). Plaintiff then filed a medical malpractice suit. (Id. ¶ 12). Defendant, Armando Payas (“Payas”), was appointed guardian ad litem to VEV and was a named defendant in the malpractice case. (Id. ¶ 7). Plaintiff alleges Payas is an attorney licensed in Florida, and maintains a regular office in Florida. (Id. ¶¶ 5-6).

         On February 7, 2017, Defendant First Recovery Group, LLC (“FRG”)[1] advised Plaintiff it was asserting a $14, 089.79 subrogation lien in connection with the suit. (Id. ¶ 11). In reliance of FRG's representation, Plaintiff settled the medical malpractice lawsuit; the settlement was approved by a court on May 12, 2017. (Id. ¶¶ 12, 14). Subsequently, on July 18, 2017, FRG advised Plaintiff that it was actually asserting a $144, 861.95 subrogation lien. (Id. ¶ 15).

         This suit followed. On July 26, 2017, Plaintiff filed a state court complaint seeking a declaratory judgment that FRG is only entitled to recover $14, 089.79 for Medicaid claims paid on VEV's behalf. (Id. ¶ 19). On August 29, 2017, FRG removed to this Court on the basis of diversity jurisdiction. (Doc. 1). In the Notice of Removal, FRG asserted that Payas is not a proper defendant, and that the parties are completely diverse if Payas is properly disregarded. (Id. ¶ 11).


         A. Plaintiff's Motion for Remand

         Plaintiff now moves to remand to state court, arguing that removal was improper for two reasons: (1) the parties are not completely diverse, and (2) Plaintiff failed to obtain consent from all Defendants to remove. (Id. ¶¶ 18, 37). Plaintiff contends that Payas is a proper defendant in this suit, thus complete diversity of citizenship is absent. (Id. ¶¶ 20, 22, 32, 35). Moreover, because Payas was a proper defendant, FRG was required to obtain Payas' consent as a pre-requisite to removal. (Id. ¶¶ 37-39).

         Defendant counters that Plaintiff fraudulently joined Payas to defeat diversity jurisdiction. (Doc. 14, ¶ 6). Defendant avers that no “bona fide controversy” exists between VEV and Payas, VEV's guardian ad litem, thus barring Payas from being joined as a defendant. (Id.).

         1. Fraudulent Joinder

         Title 28 U.S.C. § 1441(a) authorizes a defendant to remove a civil action from state court to federal court where the controversy lies within the federal court's original jurisdiction. When a case is removed from state court, the removing party bears the burden of establishing federal subject matter jurisdiction by a preponderance of the evidence. McCormick v. Aderholt, 293 F.3d 1254, 1257 (11th Cir. 2002) (per curiam).

         Because removal from state court constitutes an infringement upon state sovereignty, the procedural requirements for removal must be strictly construed, and all doubts about the propriety of removal must be resolved in favor of remand. Russell Corp. v. Am. Home Assurance Co., 264 F.3d 1040, 1049-50 (11th Cir. 2001).

         FRG invokes this Court's diversity jurisdiction pursuant to 28 U.S.C. § 1332. Section 1332 confers jurisdiction to the district courts over “all civil actions where the matter in controversy exceeds the sum or value of $75, 000 . . . and is between citizens of different States.” 28 U.S.C. § 1332(a)(1). Diversity jurisdiction requires that all plaintiffs be diverse from all defendants. U. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 412 (11th Cir. 1999).

         Under the fraudulent joinder doctrine, a facially non-diverse action “may nevertheless be removable if the joinder of the non-diverse party . . . were fraudulent.” Triggs v. John Crump Toyota, Inc., 154 F.3d, 1284, 1287 (11th Cir. 1998). “In a removal case alleging fraudulent joinder, the removing party has the burden of proving that either: (1) there is no possibility the plaintiff can establish a cause of action against the resident defendant; or (2) the plaintiff has fraudulently pled jurisdictional facts to bring the resident defendant into state court.” Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1380 (11th Cir. 1998). Fraudulent joinder determinations depend upon the plaintiff's pleadings. Id. District courts must view factual allegations in the light most favorable to the plaintiff and uncertainties are to be resolved in the plaintiff's favor. Id.

         FRG argues there is no possibility that Plaintiff can establish a cause of action against the non-diverse defendant, Payas, therefore his joinder was fraudulent. A “plaintiff need not have a winning case against the allegedly fraudulent defendant; he need only have a possibility of stating a valid cause of action in order for the joinder to be legitimate.” Triggs, 154 F.3d at 1287. A review of the Complaint fails to disclose any facially colorable claims against Payas. (Doc. 2). The paragraphs mentioning Payas set forth his background information (see Doc. 2, ¶¶ 5-7, 13) and indicate that his and Plaintiff's interests are aligned.[2] There is no indication that Plaintiff is pursuing any claims, or a judgment, against Payas. The Court is therefore satisfied that “there is no possibility” of Plaintiff establishing a cause of action against Payas, rendering his joinder fraudulent. See Pacheco de Perez, 139 F.3d 1380.

         Generally, all defendants must consent to remove an action to federal court. However, “[a] fraudulently joined defendant need not consent to removal.” Restivo v. Bank of Am. Corp., 618 F. App'x 537, 540 n.5 (11th Cir. 2015). Such a requirement would be nonsensical. Accordingly, Defendant's removal was proper, and Plaintiff's Motion to Remand is denied.

         B. Defendant's Motion to Dismiss

         1. Subject Matter Jurisdiction-Statutory ...

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