United States District Court, S.D. West Virginia, Charleston Division
MEMORANDUM OPINION AND ORDER
R. GOODWIN, UNITED STATES DISTRICT JUDGE.
action was removed from state court by Defendant Window
World, Inc. on May 11, 2018, solely on the basis of diversity
jurisdiction. Not. Removal [ECF No. 1] 1. For jurisdictional
purposes, Defendant Window World, Inc. is a citizen of North
Carolina, and the plaintiff is a citizen of West Virginia.
Id. at 2.
August 1, 2018, the court granted the plaintiff's
unopposed Motion to Amend Complaint [ECF No. 26] to add
Hanshaw Enterprises, Inc. (a West Virginia corporation) and
John Doe, unknown contractor, as defendants. The Amended
Complaint states that this court retains jurisdiction over
the subject matter of this case “pursuant to diversity
jurisdiction.” Am. Compl. [ECF No. 36] ¶ 5.
However, the joinder of Hanshaw Enterprises, Inc.
(“Hanshaw Enterprises”) as a defendant destroys
complete diversity of citizenship because “diversity
jurisdiction does not exist unless each defendant is
a citizen of a different State from each
plaintiff.” Owen Equip. & Erection Co. v.
Kroger, 437 U.S. 365, 373 (1978). For this reason, the
court reconsiders the decision permitting amendment and
REMANDS this case to the Circuit Court of
Lincoln County, West Virginia.
a trial court grants a plaintiff leave to amend the complaint
by naming additional defendants, and the plaintiff fails to
inform the court that one or more of those defendants will
destroy diversity, the trial court may reconsider its earlier
decision.” Bailey v. Bayer CropScience L.P.,
563 F.3d 302, 307 (8th Cir. 2009); see also Schur v. L.A.
Weight Loss Ctrs., Inc., 577 F.3d 752, 761 (7th Cir.
2009) (“when a district court is unaware that joinder
will destroy diversity, it may reconsider its prior decision
permitting leave to amend a complaint”) (citing
Mayes v. Rapoport, 198 F.3d 457, 462 n.11 (4th Cir.
1999)). In this case, the plaintiff is a citizen of West
Virginia, and the Amended Complaint states that Defendant
Hanshaw Enterprises “is a West Virginia
corporation.” Am. Compl. ¶ 2. The parties failed
to inform the court that the joinder of Hanshaw Enterprises
would destroy diversity jurisdiction. Thus, the court
revisits the Order [ECF No. 35] granting the plaintiff's
Motion to Amend to join Hanshaw Enterprises as a defendant in
plaintiff seeks to join a nondiverse defendant after removal,
“the district court's analysis begins with 28
U.S.C. § 1447(e).” Mayes, 198 F.3d at
461. Section 1447(e) “provides the district court with
two options: ‘If after removal the plaintiff seeks to
join additional defendants whose joinder would destroy
subject matter jurisdiction, the court may deny joinder, or
permit joinder and remand the action to the State
court.'” Id. at 461-62. These are the only
options “for a district court faced with a post-removal
attempt to join a nondiverse defendant; the statute does not
allow a district court to retain jurisdiction once it permits
a nondiverse defendant to be joined in the case.”
Id. at 462. Here, the plaintiff seeks to join
Hanshaw Enterprises, a nondiverse defendant, after removal,
which would destroy complete diversity of citizenship.
decision on whether to permit joinder of a defendant under
these circumstances “is committed to the sound
discretion of the district court.” Id. The
Fourth Circuit has held that the district court is entitled
to consider all relevant factors, including: “the
extent to which the purpose of the amendment is to defeat
federal jurisdiction, whether the plaintiff has been dilatory
in asking for amendment, whether the plaintiff will be
significantly injured if amendment is not allowed, and any
other factors bearing on the equities.” Id.
court finds that the joinder of Hanshaw Enterprises was
proper. When the plaintiff filed his Complaint, he believed
that he purchased the windows at issue in this case from a
franchise owned by Window World, Inc. After removal, the
plaintiff learned that Hanshaw Enterprises sold him the
windows and allegedly retained an inappropriate contractor to
install the windows. The plaintiff then sought to add Hanshaw
Enterprises as a defendant.
court finds that there is no indication that the plaintiff
sought leave to amend his Complaint to defeat federal
jurisdiction. To the contrary, the plaintiff moved to amend
to join Hanshaw Enterprises based upon information that
became known to the plaintiff after removal regarding the
identity of the seller of the windows at issue. The plaintiff
did not discover that Hanshaw Enterprises sold him the
windows or hired a purportedly inappropriate contractor to
install the windows until the filing of Window World
Inc.'s Third-Party Complaint [ECF No. 5]. The court also
notes that the plaintiff did not move to remand the action,
indicating that the plaintiff did not seek amendment for the
purpose of defeating diversity jurisdiction.
the plaintiff dilatory in seeking amendment. The
plaintiff's Motion to Amend was filed before the deadline
for amended pleadings and joinder of parties set forth in the
Scheduling Order [ECF No. 20]. It was also filed within a
reasonable time after the filing of Window World, Inc.'s
Third-Party Complaint against Hanshaw Enterprises. Moreover,
Defendant Window World, Inc. failed to respond to the
plaintiff's Motion to Amend and has therefore provided no
indication that the plaintiff improperly sought leave to
amend or was dilatory in doing so.
plaintiff would also be injured if amendment is not allowed:
Hanshaw Enterprises was the entity that sold the allegedly
defective windows to the plaintiff, not Window World, Inc.
The plaintiff seeks to assert, among other claims, a breach
of contract claim against Hanshaw Enterprises regarding the
purchase and installation of the windows at issue. Am. Compl.
¶ 22. The plaintiff contends that this breach of
contract damaged his personal property and his health.
Id. The plaintiff also seeks to assert a negligent
retention claim against Hanshaw Enterprises based on its
allegedly inappropriate hiring of John Doe, unknown
contractor, to install the plaintiff's windows, which the
plaintiff claims caused mold damage to his home in addition
to permanent health problems. Id. ¶ 24-26. The
court finds the plaintiff would be injured if amendment is
not allowed, and Defendant Window World, Inc., by failing to
respond to the Motion to Amend, has provided no evidence to
reconsidered the joinder of Hanshaw Enterprises as a
defendant in this matter, the court finds that granting the
plaintiff's Motion to Amend Complaint [ECF No. 26] was
proper. This court is therefore bound by § 1447(e) and
REMANDS this case to the Circuit Court of
Lincoln County, West Virginia. Because the court lacks
subject matter ...