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Fraudulent Joinder in Southern District of Florida Explained

In DE VARONA v. DISCOUNT AUTO PARTS, LLC,  23 Fla. L. Weekly Fed. D253a (S.D. Fla. May 6, 2012), the plaintiff moved to remand a federal court case to state court on the grounds that the defendant's store manager was properly joined as resident defendant and that amount in controversy was less than $75,000. Judge Ungaro hearing the motion denied the motion for remand finding that there was no reasonable basis for the claim against the store manager, and where the removing defendant has proven that jurisdictional amount has been satisfied. This case is a win for defendants that remove cases to federal court based on diversity jurisdiction and are faced with plaintiffs that join improper, non-diverse parties for the sole purpose of defeating diversity. 

The facts are as follows--the Plaintiff, a Florida citizen, initiated her action in state court, naming a Virginia corporation as the sole defendant. Later, the Plaintiff amended her complaint, adding the company's store manager and a Florida resident as a defendant. In the operative complaint, the Plaintiff brought separate negligence counts against the two defendants for the injuries that she allegedly sustained from falling in the parking lot at the company's store. The company removed the action to federal court, alleging that complete diversity of citizenship existed and that the amount in controversy exceeded the requisite amount by law. To overcome the fact that both the Plaintiff and the store manager were Florida citizens, which would normally defeat diversity, the company argued that the store manager's citizenship should be disregarded because he was fraudulently joined solely to avoid federal jurisdiction. The Plaintiff then moved to remand the case to state court, insisting that the store manager was properly joined and that amount in controversy is less than seventy-five thousand dollars.  

In finding fraudulent joinder, the court first pointed out that Florida courts have held that a corporate officer may be held individually liable for personal injuries caused to third parties provided several factors are present. The necessary elements are: (1) the corporation owes a duty of care to the third party, the breach of which has caused the damage for which recovery is sought; (2) the duty is delegated by the principal or employer to the defendant officer; (3) the defendant officer has breached this duty through personal -- as opposed to technical or vicarious -- fault; and (4) with regard to the personal fault, personal liability cannot be imposed upon the officer simply because of his or her general administrative responsibility for performance of some function of his or her employment. The corporate officer must have a personal duty towards the injured third party, breach of which specifically has caused the party's damages. However, the court found that the Plaintiff had not rebutted the store manager's denial that he personally breached any duty owed to the Plaintiff -- the third element required.

The court also evaluated the amount in controversy requirement in federal court and noted that where the jurisdictional amount is not apparent from the complaint, the court should look to the notice of removal and may require evidence relevant to the amount in controversy at the time the case was removed. The court evaluated the evidence and found that the defendant had established that the jurisdictional minimum has been met. Therefore, the court found, the proponent's estimate of the claim's value must be accepted unless there is a “legal certainty” that the claim is actually for less than the jurisdictional amount. Because the Plaintiff presented no evidence or argument that such a certainty exists, her assertion that she may not recover the full jurisdictional amount was found "unavailing".

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