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Sargent v. Cassens Corp.

June 7, 2007

MICHAEL D. SARGENT AND JACQUELINE SARGENT, PLAINTIFFS,
v.
CASSENS CORPORATION, CASSENS & SONS, INC., COTTRELL, INC., DAIMLER-CHRYSLER CORP. F/K/A CHRYSLER CORP., JO ANN SHASHEK TRUST, ALBERT CASSENS FLP, ALBERT CASSENS AND KAY CASSENS, DEFENDANTS.



The opinion of the court was delivered by: Reagan, District Judge

MEMORANDUM and ORDER

I. INTRODUCTION

Plaintiffs, Michael D. Sargent and Jacqueline Sargent, bring this action in connection with an accident that occurred on December 30, 2004, in which Sargent, a car hauler employed by Cassens Transport Company, injured his low back and related areas while attempting to climb onto a rig manufactured by Defendant Cottrell, Inc. Plaintiffs assert claims for relief based upon strict liability, negligence, breach of implied warranty, alter ego, negligence - direct liability, breach of contract, consumer fraud and deceptive business practices, and loss of consortium.

Cottrell removed this case from the Circuit Court of the Twentieth Judicial Circuit, St. Clair County, Illinois, to this Court under federal diversity jurisdiction. Cottrell asserts that its co-Defendants, Cassens Corporation, Cassens & Sons, Inc., Jo Ann Shashek Trust and Albert Cassens FLP, have been fraudulently joined to defeat diversity jurisdiction.*fn1 Plaintiffs move to remand this case to state court on the basis of procedural defects in removal and on the basis that Cottrell failed to satisfy its burden, through competent proof, of the amount in controversy. The motion for remand has been fully briefed and is ready for disposition.

II. DISCUSSION

A. Legal Standard

Removal based on diversity requires that the parties be of diverse state citizenship, that is, no plaintiff may be a citizen of the same state as any defendant, and that the amount in controversy exceed $75,000, exclusive of interest and costs. See 28 U.S.C. §§ 1332, 1441. See also Rubel v. Pfizer Inc., 361 F.3d 1016, 1017 (7th Cir. 2004). The party seeking removal has the burden of establishing federal jurisdiction. Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993). This Court's exercise of subject matter jurisdiction is constrained by the well-established rule that federal district courts must interpret the removal statute narrowly and "presume that the plaintiff may choose his or her forum." Doe, 985 F.2d at 911.Any doubts regarding jurisdiction should be resolved in favor of remand to state court. Id. (citing Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir. 1976));see also Krueger v. Cartwright, 966 F.2d 928, 930 (7th Cir. 1993) (Federal district courts "are obliged to police the constitutional and statutory limitations on their jurisdiction.").

B. Defects in Removal Procedure

1. Forum Defendant Rule

Plaintiffs' first ground for remand is the "forum defendant" rule which holds that a case may not be removed on the basis of diversity jurisdiction where one or more defendants is a citizen of the state in which the action is pending. See 28 U.S.C. § 1441(b) (providing that a case in which the asserted basis for federal subject matter jurisdiction is diversity "shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought."); LaMotte v. Roundy's, Inc., 27 F.3d 314, 315 (7th Cir. 1994) (quoting 28 U.S.C. § 1441(b)) ("[C]ases not involving federal questions are 'removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.'").

Under the rationale of the forum defendant rule, Cottrell's removal is improper if one or more of the Defendants, properly joined, is a citizen of Illinois. It is undisputed that Cassens Corporation, Cassens & Sons, Jo Ann Shashek Trust and Albert Cassens FLP are Illinois citizens. However, Cottrell's right of removal ". . . cannot be defeated by a fraudulent joinder of a resident defendant having no connection with the controversy."Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921). Only uncontroverted evidence showing unmistakably that a diversity-defeating defendant has absolutely no connection with the events giving rise to a case will establish fraudulent joinder. See, e. g., Faucett v. Ingersoll-Rand Mining & Mach. Co., 960 F.2d 653, 654-55 (7th Cir. 1992) (In a products liability action, fraudulent joinder was established by a diversity-defeating defendant's uncontradicted affidavit stating that he had nothing to do with the machine at issue). Accordingly, the Court must determine if Defendants, Cassens Corporation, Cassens & Sons, Jo Ann Shashek Trust and Albert Cassens FLP, have no connection with the controversy and, thus, were fraudulently joined. The Court will first consider whether Defendant Cassens & Sons is properly joined, because that determination governs one aspect of whether Cassens Corporation is properly joined.

Cassens & Sons, Inc.

Plaintiffs allege that Cassens & Sons sold and/or distributed the trailer at issue, or profited from the sale of the rig, and placed the rig in the stream of commerce. They contend that Cassens Corporation, through the direction of its corporate director Albert Cassens, directly controlled the actions of Cassens & Sons, forcing Cassens & Sons to handle the sales of rigs without profit in order to benefit Cassens Corporation. The counts pleaded against Cassens & Sons sound in negligence and strict liability based on the purported ground that Cassens & Sons was a distributor of the product at issue. The sole evidence Plaintiffs provide for their allegations is the statement of Kay Cassens that she buys Cottrell rigs through Cassens & Sons. Doc. 22, Exhibit D, Kay Cassens Dep., 25:12-23.

Whether "rigs," in general, were purchased through Cassens & Sons is not relevant to the instant action if the specific rig at issue here was not bought or sold through Cassens & Sons. Cottrell has submitted uncontroverted evidence that Cassens & Sons was not in the chain of title for the rig that is the subject of this lawsuit. The rig was owned by Albert Cassens FLP. Doc. 18, Exhibit C, Certificate of Title of a Vehicle; Exhibit D, Cottrell Invoice. Cassens & Sons had no " . . . involvement whatsoever regarding the sale, lease, delivery or distribution of the trailer/rig described in Plaintiff's Complaint, known as Unit No. 5492 and identified by VIN# 1C9VX10441G-148402 ." Exhibit E, Clarence Brown Aff. Only one injury is alleged, and only one rig is at issue. The evidence is that Defendant Cassens & Sons did not buy, sell, lease deliver or distribute that unit.

Accordingly, the Court finds that there is no reasonable possibility that Plaintiffs can maintain their cause of action against Cassens & Sons, Inc., and that Cassens & Sons has been fraudulently joined. Consequently, the Court will disregard the citizenship of Cassens & Sons, Inc., in determining jurisdiction and DISMISSES with prejudice Defendant Cassens & Sons, Inc., from this cause of action.

Cassens Corporation

Plaintiffs allege that Cassens Corporation, directly and through its individual owners/Cassens family members, was a participant in the distribution of the rig in question and served as commercial lessor of the rig. The counts pleaded against Cassens Corporation sound in strict liability, alter ego, negligence - direct liability, breach of contract, consumer fraud and deceptive business practices, equitable estoppel and fraud.

The only specific evidence offered by Plaintiffs that Cassens Corporation was involved in the design or manufacture of the rig at issue or participated in the transactions at issue is both suspect and misleading. Plaintiffs cite to the deposition of Raymond Abert, who worked for Cassens and Sons in an unspecified position for forty-five years, as evidence that Cassens Corporation directly controlled the actions of Cassens & Sons by forcing it to handle the sales of rigs without profit because "the stock of the dealership was owned by [Cassens Corporation]." See Doc. 22, Exhibit B-1. The transcript of this section of Mr. Abert's deposition is as follows:

Q: There was no intercompany profit. Does that mean that if you provided a product or a service to one of the Cassens companies, you had to do it at cost?

A. Yes.

Q: All right. And that was because the overall group of companies would ...


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