United States District Court, S.D. West Virginia, Bluefield
MEMORANDUM OPINION AND ORDER
A. FABER, SENIOR UNITED STATES DISTRICT JUDGE.
before the court is plaintiff's Motion to Remand. (ECF
No. 5). On November 14, 2017, the court held a hearing on
plaintiff's motion. For the reasons set forth below, the
motion to remand is GRANTED.
civil action, a breach of contract dispute, was originally
filed in the Circuit Court of McDowell County, West Virginia,
on or about March 30, 2017, against defendants James C.
Justice Companies, Inc. (“JCJC”) and Chestnut
Land Holdings, LLC (“CLH”). Plaintiff
Resurrection Coal Company, Inc. (“Resurrection”)
asserts that defendants entered into a contract “to buy
coal mined by Plaintiff” and that “[d]efendants
owe Plaintiff [ ] $143, 992.93 for the said coal sold and
delivered by Plaintiff to Defendants between March 16, 2012
and March 31, 2012, and invoiced to Defendants on April 5,
2012.” Complaint ¶¶ 4 and 7. Attached to the
complaint is a handwritten invoice, dated April 5, 2012,
stating that “Resurrection Coal Co.” was due the
“total amount $143, 992.93" from “James C.
Justice Co.” ECF No. 1-1 at p. 21.
10, 2017, defendants removed the case to this court on the
basis of diversity of citizenship. Defendants contend that
CLH was fraudulently joined in this action for the sole
purpose of defeating diversity jurisdiction. See ECF
No. 1 at ¶ 10. According to defendants “the
Complaint merely lists Chestnut Land Holdings, LLC as a party
Defendant without asserting any substantive or founded claims
against it. . . .” Id. To that end, defendants
direct the court's attention to the handwritten invoice
attached to the complaint which does not mention CLH. See
id. at ¶ 11. Also attached to the Notice of Removal
are documents exchanged by the parties and their counsel
prior to the filing of the lawsuit. In support of its claim
for payment of the invoice dated April 5, 2012, counsel for
Resurrection tendered to Dustin Deane, Associate General
Counsel for JCJC, an Agreement between JCJC and Darvin Rowe,
Betty Coal Company, Inc., dated January 11, 2012.
See ECF No. 1-3. Chestnut Land Holdings was not a
party to this Agreement. See id.
Motion to Remand, plaintiff maintains that “CLH was
joined and named as a defendant in this suit because it was a
party to the agreement with plaintiff. . . .” ECF No. 5
at p. 2. Resurrection moved to remand this action and for an
award of costs and attorney fees incurred as a result of
defendants' removal. Because of the inconsistencies
between plaintiff's assertions in the complaint that CLH
was a party to the agreement and the written agreement and
invoice which did not mention CLH, the court set the motion
for a hearing. At that hearing, counsel for Resurrection
informed the court that the written agreement discussed above
was a “red herring” and that the basis for the
breach of contract action was not the written
agreement but, rather, an oral agreement between the three
parties named in the complaint.
Standard of Review
district courts may exercise diversity jurisdiction over
civil actions in which the matter in controversy exceeds the
sum or value of $75, 000.00 and is between citizens of
different states. See 28 U.S.C. § 1332(a)(1).
Title 28 United States Code Section 1441, known as the
“removal statute, ” provides that a case filed in
state court may be removed to federal court when it is shown
by the defendant that the federal court has original
jurisdiction. See Mulcahey v. Columbia Organic Chems.
Co., 29 F.3d 148, 151 (4th Cir. 1994).
removal raises federalism concerns, the court must carefully
scrutinize the facts to ensure that removal is appropriate.
Mulcahey, 29 F.3d at 151 (citing Shamrock Oil
& Gas Corp. v. Sheets, 313 U.S. 100 (1941)). The
removing defendant bears the burden of establishing that
removal is appropriate. Landmark Corp. v. Apogee Coal
Co., 945 F.Supp. 932, 935 (S.D. W.Va. 1996) (Copenhaver,
J.). “If federal jurisdiction is doubtful, a remand is
necessary.” Mulcahey, 29 F.3d at 151.
joinder is an exception to the complete diversity requirement
of Section 1332. The fraudulent joinder doctrine allows a
district court to disregard, for jurisdictional purposes, the
citizenship of a diversity-destroying defendant, assume
jurisdiction over a case, dismiss the diversity-destroying
defendant, and thereby retain jurisdiction. Mayes v.
Rapoport, 198 F.3d 457, 461 (4th Cir. 1999). A defendant
is fraudulently joined if the plaintiff commits outright
fraud in his pleadings or if there is no possibility of
stating a claim against the resident defendant.
Mayes, 198 F.3d at 464. The burden to show
fraudulent joinder is particularly heavy. Defendants must
show that plaintiff cannot establish a claim against the
non-diverse defendant even after resolving all issues of fact
and law in plaintiff's favor. Id. The standard
to be applied by the court is even more favorable to the
plaintiff than the standard for granting motions to dismiss
under Federal Rule of Civil Procedure 12(b)(6). Id.
at 464, 466 (stating that a “glimmer of hope” for
relief against the non-diverse defendant is sufficient to
defeat removal jurisdiction). In making this determination,
the court is not limited to the allegations of the pleadings,
but may consider the entire record and determine the basis of
the joinder “by any means available.”
is fundamental contract law that one cannot be liable for a
breach of contract unless one is a party to that
contract.” Electron Energy Corp. v. Short, 408
Pa. Super. 563, 597 A.2d 175, 177 (2005); cf. Desco Corp.
v. Harry W. Trushel Constr. Co., 413 S.E.2d 85, 89 (
W.Va. 1991) (“Our rule for damages as a result of a
breach of contract is that recovery may be obtained for those
damages which either arise naturally from the breach or may
reasonably have been within the contemplation of the parties
at the time they made the contract.”). CLH was not a
party to the written agreement attached to the notice of
removal and, were that the operative agreement underlying
this breach of contract action, CLH would have been
fraudulently joined and removal would be proper. However, at
the hearing on the remand motion, counsel for Resurrection
assured this court that the basis of its breach of contract
action was an oral agreement between Resurrection, JCJC, and
CHL -- not the written agreement. For this reason and on the
record before it, the court cannot conclude that Resurrection
has “no possibility” of establishing its breach
of contract claim against CLH. See Mayes, 198 F.3d
defendants have not carried the onerous burden of
demonstrating fraudulent joinder, the court concludes that it
lacks jurisdiction over this matter. Accordingly,
plaintiff's motion to remand is hereby
GRANTED to the extent it seeks remand.
Because the court concludes that the propriety of removal of
this action was subject to a fair dispute, see Landmark
Corp. v. Apogee Coal Co., 945 F.Supp. 932, 939-40 (S.D.
W.Va. 1996), the motion is DENIED to the
extent it seeks attorney fees and costs. The court