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Schwartz v. Graebel Van Lines

May 15, 2006

DIANE SCHWARTZ, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF JOHN L. PERETTI, DECEASED, PLAINTIFF,
v.
GRAEBEL VAN LINES, INC. , GRAEBEL TAMPA BAY MOVERS, INC., GRAEBEL TENNESEE MOVERS, INC., AND THE ESTATE OF TOMMY NINEDORF, DEFENDANTS.



The opinion of the court was delivered by: Honorable David H. Coar

MEMORANDUM OPINION AND ORDER

Before this Court is Defendant Graebel Van Lines, Inc.'s ("Graebel's") Motion to Dismiss Tommy Ninedorf as a Defendant. For the reasons stated below, Graebel's motion is DENIED. This case is remanded to the Circuit Court of Cook County, Illinois, Law Division.

I. FACTUAL AND PROCEDURAL BACKGROUND

On December 20, 2004, a semi-trucktraveling southbound on Interstate 75 in Florida collided with trees and a guardrail next to the roadway. John Peretti ("Peretti"), a passenger in the truck, sustained injuries resulting in his death. The truck was owned by Graebel and driven by Tommy S. Ninedorf ("Ninedorf"), who also died in the collision.*fn1

Plaintiff Diane Schwartz ("Plaintiff"), the Special Administrator of the Estate of John Peretti, has filed an eight-count amended complaint against Graebel, two of its subsidiaries-Graebel Tampa Bay Movers, Inc. and Graebel Tennessee Movers, Inc.-and the Estate of Tommy Ninedorf. As to each Defendant, Plaintiff seeks damages under the Illinois Wrongful Death Act or, in the alternative, the doctrine of res ipsa loquitor.

Plaintiff's original Complaint, filed on July 18, 2005 in Illinois state court, did not name Ninedorf as a defendant.*fn2 Graebel removed the case to federal court on August 16, 2005. Shortly thereafter, on August 31, 2005, Plaintiff amended the Complaint to include Ninedorf as a defendant.*fn3 The amendment destroys this Court's diversity jurisdiction under 28 U.S.C. § 1331, since Plaintiff is a citizen of Illinois and Ninedorf-but no other Defendant-is as well. Specifically, at the time of his death, Defendant Ninedorf resided with his family in Kane County, Illinois; he therefore is considered domiciled in Illinois. Defendant Graebel is a Wisconsin corporation with its principal place of business in Colorado. Defendants Graebel Tampa Bay Movers, Inc. and Graebel Tennessee Movers, Inc. are citizens of Florida and Tennessee, respectively.

Since naming Ninedorf as a defendant would destroy the complete diversity between the parties, Plaintiff seeks to remand the case to the Circuit Court of Cook County, Illinois. Graebel opposes remand on the grounds that Ninedorf is not a proper party to this action and therefore should not be joined with the effect of defeating diversity jurisdiction. Accordingly, Graebel has filed a motion to dismiss Ninedorf as defendant,*fn4 which, if granted, would result in this Court's continued exercise of jurisdiction over the matter.

II. STANDARD OF REVIEW

A district court has wide discretionin deciding whether to dismiss a party as a defendant in a civil action. Intercon Research Associates, Ltd. v. Dresser Industries, Inc., 696 F.2d 53, 56 (7th Cir. 1982). Rule 21 of the Federal Rules of Civil Procedure--on misjoinder and non-joinder of parties-provides that "parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just." Fed. R. Civ. P. 21 (emphases added). Further, Rule 21 grants a court the power to dismiss a dispensable, nondiverse party for the purpose of maintaining diversity jurisdiction. Hurley v. Motor Coach Industries, Inc., 222 F.3d 377, 380 (7th Cir. 2000) (citing Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989)).

Because Rule 21 does not include a standard for proper joinder, courts use the permissive joinder standards contained in Federal Rule of Civil Procedure 20(a). Hawkins v. Groot Industries, Inc., 210 F.R.D. 226, 229-30 (N.D. Ill. 2002); Bailey v. Northern Trust Co., 196 F.R.D. 513, 515 (N.D. Ill. 2000). Under Rule 20(a), joinder of defendants in one action is permitted if: (1) the plaintiff asserts against the defendants "any right to relief . . . arising out of the same transactions or occurrences;" and (2) "any question of law or fact common to all defendants will arise in the action." Fed. R. Civ. P. 20(a). Misjoinder occurs when the plaintiff fails to satisfy either requirement. Randleel v. Pizza Hut of America, Inc., 182 F.R.D. 542, 532 (N.D. Ill. 1998). A district court has wide discretion to decide whether joinder in any given situation is-or, in the instant case, was-proper.

Fraudulent joinder occurs "when there is no possibility that a plaintiff can state a cause of action against nondiverse defendants in state court." Gottlieb v. Westin Hotel, 990 F.2d 323, 327 (7th Cir. 1993). Fradulent joinder cannot destroy diversity jurisdiction. See id. See also Schwartz v. State Farm Mutual Auto Insurance Co., 174 F.3d 875, 878-79 (7th Cir. 1999) (affirming district court's decision to retain jurisdiction after fraudulent joinder); Faucett v. Ingersoll-Rand Mining & Machinery Co., 960 F.2d 653, 654-55 (7th Cir. 1992) (same).

III. ANALYSIS

Graebel argues that Ninedorf should not have been joined as a defendant because Ninedorf is Peretti's presumptive employer and therefore immune from suit by Plaintiff under the Illinois Workers' Compensation Act. See 820 Ill. Comp. Stat. 305/1 et seq. Specifically, Graebel argues that, as an employer, Ninedorf was obligated to provide workers' compensation coverage to Peretti; the Court should assume Ninedorf complied with this obligation (as Plaintiff has not alleged breach of any such obligation); therefore, Ninedorf is immune from suit since the Workers' Compensation Act provides that the Act is an employee's exclusive remedy for employment-related injuries. Plaintiff's joinder of Ninedorf, Graebel contends, is nothing more than a "meritless attempt to surreptitiously defeat" this Court's exercise of diversity jurisdiction. Graebel's Brief in Opp. at 2. In sum, Graebel has asserted not only misjoinder, but also fraudulent joinder.

Plaintiff, by contrast, argues that Peretti was not an employee, but an independent contractor. Therefore, the Workers' Compensation Act is not at issue and Peretti has been ...


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