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Miller v. Ashton

United States District Court, N.D. West Virginia

October 21, 2019

JOSHUA D. MILLER, Plaintiff,
v.
RICK L. ASHTON, TODD NEUMAN and JAMES DONALD MILLER, JR., Defendant.

          MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF'S MOTION TO REMAND AND GRANTING DEFENDANTS ASHTON AND NEUMAN'S MOTION TO DISMISS

          FREDERICK P. STAMP, JR., UNITED STATES DISTRICT JUDGE

         I. Background

         The plaintiff in this civil action, Joshua D. Miller (“Miller”), filed his complaint (ECF No. 1-1) against defendants Richard Lee Ashton (hereinafter “Ashton”), Todd Neuman (hereinafter “Neuman”), and James Donald Miller, Jr. (hereinafter “James”) in the Circuit Court of Ohio County, West Virginia. ECF No. 1-7. According to plaintiff Miller's complaint, “[t]his case stems from the wrongful, fraudulent, and false action brought against Plaintiff by Defendants[, ]” that was filed in the Court of Common Pleas, Belmont County, Ohio, and captioned as Nancy K. Miller v. Joshua D. Miller, et al., 17-CV-425 [(hereinafter “Ohio action”)].” ECF No. 1-1 at 4, 9. Plaintiff Miller asserts that the defendants “used a 78 year old woman to bring a lawsuit she did not want to bring and did not understand.” Id. Plaintiff Miller further asserts that “[o]ne defendant, a family member, forced the lawsuit under the ruse of Power of Attorney of his own mother so that he could continue to gather all of the assets of his father's estate. The two other defendants, Ohio lawyers, used the elderly woman, to bill nearly $100, 000 in legal fees for a lawsuit she did not want to bring, did not understand, did not read before filing, and clearly disavowed under testimony in open court.” Id.

         Plaintiff Miller clarifies that he and defendant James are both the biological children of James D. Miller (hereinafter “J.D.”), who is deceased, and Nancy K. Miller (hereinafter “Nancy”). Id. at 5. Plaintiff Miller states that J.D. put defendant James' name on a deed that effectively transferred half of a piece of approximately 120 acres of undeveloped real estate in Wheeling, West Virginia, and a month later, J.D. died. Id. at 6. Plaintiff Miller asserts that J.D. suffered substantial deterioration near the end of his life due to his long time medical diagnoses. Id. Plaintiff Miller states that some time between J.D.'s death and May 2015, David Croft, a lawyer who referred Nancy as a client to defendants Ashton and Neuman, drafted power of attorney paperwork, giving defendant James the power over Nancy's affairs. Id. at 5, 6. Plaintiff Miller further contends that defendant James convinced and/or tricked Nancy into signing a deed, transferring the remaining half of the 120 acres to him and his wife. Id. at 6. Plaintiff Miller alleges that Nancy has a will in effect that has been unchanged since 1988, in which she gives all of her estate equally to her three children, and that she testified in Belmont County, Ohio that she and J.D. wanted each of her children treated the same. Id. Plaintiff Miller also alleges that defendant James: (1) collects rent on Nancy's childhood home, of which she owns half, but that he does not forward any portion of rent to Nancy; (2) transferred legal title to Nancy's personal motor vehicle into his own name; (3) continues to live in the former family home, rent free; and (4) wasted hundreds of thousands of dollars of estate money. Id. at 7. Plaintiff Miller then alleges that in 2017, Nancy signed two deeds transferring about 120 acres of property in Belmont County, Ohio to the plaintiff with reservation of oil and gas rights to Nancy. Id. Plaintiff Miller states that defendant James “badgered” Nancy and convinced her to sue the plaintiff for return of the property, and that defendants Ashton and Neuman relied on facts provided to them by defendant James, and not Nancy, when initiating, and throughout, the Ohio action. Id. at 8. Plaintiff Miller states that Nancy testified in the Ohio action that she did not understand the purpose of the action, did not intend to bring it, and did not read the materials associated with the action. Id. at 9. In the complaint, plaintiff Miller alleges claims of fraud (Count One); malicious prosecution (Count Two); abuse of process (Count Three); and defamation (Count Four). Id. at 12-16.

         A. Motion to Remand

         Defendants Neuman and Ashton removed this civil action to this Court on July 5, 2019. ECF No. 1. In the notice of removal, defendants Neuman and Ashton assert that this Court has jurisdiction over the matter pursuant to 28 U.S.C. § 1332 because the parties are of diverse citizenship and the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. ECF No. 1 at 2-3. Defendants Neuman and Ashton assert that although defendant James is a resident of West Virginia, like plaintiff Miller, he was fraudulently joined and/or mis-joined for the purpose of trying to defeat diversity jurisdiction; therefore, his consent is not required. Id. Specifically, in support of their contention that defendant James was fraudulently joined and/or mis-joined, defendants Neuman and Ashton state that: (1) this instant action is based on claims that the Ohio action was tortious, and the record is “clear” that defendant James was not a party to that action; (2) all the counts in plaintiff Miller's complaint are without merit with respect to defendant James; (3) defendant James will not be subject to the litigation privilege and thus any claim against him would involve separate and independent questions of fact and law; and (4) plaintiff Miller has made the same assertions of misconduct against defendant James in a separate action filed in the Circuit Court of Ohio County, West Virginia, captioned Joshua D. Miller, individually and as potential heir of Nancy K. Miller v. James D. Miller, Jr., individually and as Power of Attorney for Nancy K. Miller, 18-C-76. Id. at 4-14.

         On August 2, 2019, plaintiff Miller filed a motion to remand, in which he asserts that complete diversity does not exist in this case, and so the action must be remanded. ECF No. 9 at 5. Specifically, plaintiff Miller states that the fraudulent joinder argument fails since defendant James filed an answer and affirmative defenses, not a motion to dismiss, and due to Nancy's prior testimony. Id. Moreover, plaintiff Miller alleges that the case, Joshua D. Miller, individually and as potential heir of Nancy K. Miller v. James D. Miller, Jr., individually and as Power of Attorney for Nancy K. Miller, 18-C-76, is not “duplicitous” of this instant action. Id. at 5-6.

         Defendants Ashton and Neuman then filed a response in opposition to the plaintiff's motion to remand. ECF No. 11. Defendants Ashton and Neuman first assert that plaintiff Miller does not have a claim against defendant James for the following reasons: (1) plaintiff Miller's malicious prosecution, abuse of process, and defamation claims are time-barred; (2) plaintiff Miller has failed to make the required specific allegations of false statements underlying his claims; and (3) plaintiff Miller has failed to allege the required elements of his claims against defendant James and therefore has no cognizable claims against defendant James. Id. at 4-14. Moreover, Ashton and Neuman contend that defendant James' filing of an answer has no effect on whether federal jurisdiction is proper in this civil action for the following reasons: (1) a fraudulently joined defendant does not need to consent in order for other defendants to remove a civil action; (2) the propriety of removal must be analyzed on the basis of the state court complaint at the time of removal; and (3) the doctrine of fraudulent joinder allows a district court to disregard, for jurisdictional purposes, the citizenship of non-diverse defendants, assume jurisdiction over a case, and dismiss the non-diverse defendants. Id. Defendants Ashton and Neuman further note that in his answer, defendant James has asserted that plaintiff Miller has failed to state a claim against him. Id. at 15. Lastly, defendants Ashton and Neuman contend that plaintiff Miller has failed to join his claims against defendant James in a pending lawsuit against defendant James captioned as Joshua D. Miller, individually and as potential heir of Nancy K. Miller v. James D. Miller, Jr., individually and as Power of Attorney for Nancy K. Miller, 18-C-76; and therefore, he is precluded from raising such issues in this instant action. Id.

         Plaintiff Miller then filed a reply. ECF No. 14. First, plaintiff Miller states that diversity jurisdiction does not exist since defendant James was not fraudulently joined. Id. at 1. Second, plaintiff Miller asserts that any alleged motive in filing this civil action is not relevant to the jurisdictional issue. Id. Third, in addressing defendants Ashton and Neuman's contentions pertaining to the applicability of certain statutes of limitations, plaintiff Miller states that: (1) the defendants' collective actions constitute a continuous tort; (2) the statute of limitations has not run for the malicious prosecution claims because the underlying action was resolved less than one year ago; and (3) the statute of limitations for fraud is two years. Id. at 1-2. Moreover, plaintiff Miller asserts that whether a claim is barred by a statute of limitations is not relevant for deciding jurisdiction. Id. at 2. Fourth, plaintiff Miller alleges that the pending case Joshua D. Miller, individually and as potential heir of Nancy K. Miller v. James D. Miller, Jr., individually and as Power of Attorney for Nancy K. Miller, 18-C-76, involves different issues than the issues presented in this instant civil action. Id.

         B. Defendants Ashton and Neuman's Motion to Dismiss

         Prior to plaintiff Miller's filing of a motion to remand (ECF No. 8), defendants Ashton and Neuman filed a motion to dismiss the plaintiff's complaint (ECF No. 4) and a memorandum in support of the motion (ECF No. 5). In support of the motion to dismiss, defendants Ashton and Neuman first assert that the Court of Common Pleas rejected the same arguments that are raised by plaintiff Miller in this instant complaint. ECF No. 5 at 6. Specifically, defendants Ashton and Neuman state that a jury found in favor of Nancy and against plaintiff, on claims based on violations of West Virginia and Ohio law related to theft and financial exploitation of an elderly person, and that Nancy was awarded damages, including attorneys' fees and costs. Id. Second, defendants Ashton and Neuman contend that they are immune from plaintiff Miller's claims due to the absolute litigation privilege. Id. at 7-10. Third, defendants Ashton and Neuman assert that there can be no finding of fraud in the prosecution of the Ohio action since the allegations in that action have been found legally sufficient as a matter of law by a court of competent jurisdiction, and a jury rendered verdicts against plaintiff Miller, finding him liable to Nancy for conversion, breach of fiduciary duty, violating West Virginia Code § 61-2-29b, violating Ohio Revised Code § 2913.21, acting in bad faith in violating Ohio Revised Code § 2913.21; and unjust enrichment. Id. at 11-12. Moreover, defendants Ashton and Neuman contend that plaintiff Miller fails to plead a fraud claim with the required particularity. Id. at 12. Fourth, defendants Ashton and Neuman state that plaintiff Miller has failed to state a claim for malicious prosecution due to his failure to allege any of the three elements required for such a claim. Id. at 14. Fifth, defendants Ashton and Neuman assert that plaintiff Miller has failed to state a claim for abuse of process because he does not allege an “improper use” of the Ohio court's process. Id. at 15. Sixth, defendants Ashton and Neuman contend that plaintiff Miller has failed to state a claim for defamation since the Court of Common Pleas and a jury of that court concluded that the claims asserted in the Ohio action were meritorious. Id. at 16. Seventh, defendants Ashton and Neuman state that they are entitled to dismissal based on lack of personal jurisdiction since plaintiff cannot establish specific jurisdiction. Id. at 16-23.

         Plaintiff Miller filed a response in opposition to defendants Ashton and Neuman's motion to dismiss. ECF No. 7. First, plaintiff states that defendants Ashton and Neuman are not entitled to the absolute litigation privilege due to the fraud exception, which also applies to allegations of malicious prosecution. Id. at 2-3. Second, plaintiff contends that he has sufficiently pled a claim for fraud, which is based on the allegation that defendants Ashton and Neuman relied on defendant James' representation of facts pertaining to the Ohio action and in light of Nancy's alleged testimony that she did not know about the lawsuit or participate in selecting defendants Ashton and Neuman in representing her. Id. at 3-4. Third, plaintiff Miller asserts that dismissal of his claims based on abuse of process and defamation is not warranted because “[t]he malice of Defendants here is their desire to pursue a claim to harm Miller while being definitely disproven by the open testimony of the alleged ‘victim' of Miller.” Id. at 5. Moreover, plaintiff Miller states “malice can also be found in the defamation claim in Count Four of the Complaint[, ]” stating that defendants Ashton and Neuman continued to pursue their claims in the Ohio action despite Nancy's statements, and “other additional facts.” Id. at 5-6. Fourth, plaintiff Miller contends that this Court has personal jurisdiction over defendants Ashton and Neuman since: (1) the defendants transact business in West Virginia; (2) Nancy signed pertinent documents in West Virginia; and (3) the defendants took a deposition in West Virginia. Id. at 7-8. Therefore, plaintiff concludes, defendants Ashton and Neuman “purposefully availed themselves to the state of West Virginia for the purpose of profiting from their legal business. This deliberate conduct combined with the actions taken in West Virginia in continuing their lawsuit created a substantial connection with the forum state of West Virginia and therefore personal jurisdiction over Defendants is warranted.” Id. at 8.

         Defendants Ashton and Neuman filed a reply to plaintiff Miller's response in opposition to the defendants' motion to dismiss. ECF No. 10. First, defendants Ashton and Neuman assert that plaintiff Miller has failed to meet the required pleading standard since most of the complaint contains “nothing more than family history and conclusory allegations.” Id. at 2-4. Second, defendants Ashton and Neuman state that plaintiff Miller has failed to state a claim for fraud since he fails to plead fraud with specificity, does not meet all the elements required for such a claim, and does not explain why the absolute litigation privilege would not apply. Id. at 4-6. Third, defendants Ashton and Neuman assert that plaintiff Miller has failed to state a claim for malicious prosecution, noting that Nancy testified in support of the claims asserted in the Ohio action, and that the jury in the Ohio action rendered verdicts against the plaintiff. Id. at 6-8. Fourth, defendants Ashton and Neuman contend that plaintiff Miller has failed to state a claim for abuse of process, because he does not make an allegation of provable fact as to how they improperly used the process issued by the Court of Common Pleas of Belmont County, Ohio. Id. at 8-9. Fifth, defendants Ashton and Neuman state that plaintiff Miller has failed to state a claim for defamation since he has failed to allege the essential elements of the claim, and because the defendants are protected by the absolute litigation privilege. Id. at 9-10. Sixth, with respect to personal jurisdiction, defendants Ashton and Neuman maintain that even if plaintiff Miller's allegations are true, the plaintiff has not provided authority to counter their point that such activity is insufficient to assert specific personal jurisdiction. Id. at 11-12.

         II. Applicable Law

         A. Motion to Remand

         A defendant may remove a case from state court to federal court in instances where the federal court is able to exercise original jurisdiction over the matter. 28 U.S.C. § 1441. Federal courts have original jurisdiction over primarily two types of cases: (1) those involving federal questions under 28 U.S.C. § 1331; and (2) those involving citizens of different states where the amount in controversy exceeds $75, 000.00, exclusive of interest and costs pursuant to 28 U.S.C. § 1332(a). However, if federal jurisdiction arises only by virtue of the parties' diverse citizenship, such an action “shall be removable only if none of the . . . defendants is a citizen of the State in which such action is brought.” Tomlin v. Office of Law Enforcement Tech. Commercialization, Inc., 5:07CV42, 2007 WL 1376030, at *1 (N.D. W.Va. May 7, 2007). The party seeking removal bears the burden of establishing federal jurisdiction. See In re Blackwater Security Consulting, LLC, 460 F.3d 576, 583 (4th Cir. 2006); Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994). Removal jurisdiction is strictly construed, and if federal jurisdiction is doubtful, the federal court must remand. Hartley v. CSX Transp., Inc., 187 F.3d 422 (4th Cir. 1999); Mulcahey, 29 F.3d at 151.

         Further, the court is limited to a consideration of facts on the record at the time of removal. See Lowrey v. Alabama Power Co., 483 F.3d 1184, 1213-15 (11th Cir. 2007) (“In assessing whether removal was proper . . . the district court has before it only the limited universe of evidence available when the motion to remand is filed.”); O'Brien v. Quicken Loans, Inc., 5:10CV110, 2011 WL 2551163 (N.D. W.Va. June 27, 2011); Marshall v. Kimble, 5:10CV127, 2011 WL 43034, at *3 (N.D. W.Va. Jan. 6, 2011) (“The defendant's removal cannot be based on speculation; rather, it must be based on facts as they exist at the time of removal.”).

         B. Defendants Ashton and Neuman's Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) for Lack of Personal Jurisdiction

         When a court's power to exercise personal jurisdiction over a nonresident defendant is challenged by a motion under Rule 12(b)(2) of the Federal Rules of Civil Procedure, the plaintiff bears the burden of proving the existence of the grounds for jurisdiction by a preponderance of the evidence. Owens-Illinois, Inc. v. Rapid Am. Corp., (In re The Celotex Corp.), 124 F.3d 619, 628 (4th Cir. 1997) (citing Combs v. Bakkar, 886 F.2d 673, 676 (4th Cir. 1989)).

         Under a “long-arm” statute, such as West Virginia Code § 56-3-33, a state may enable its courts to exercise personal jurisdiction over nonresidents that commit certain acts within the state, or certain acts outside of the state, that have caused injury within the state. See Lozinski v. Lozinski, 408 S.E.2d 310, 315 ( W.Va. 1991) (“The intent and benefit of any long-arm statute is to permit the secretary of state to accept process on behalf of a nonresident and to view such substituted acceptance as conferring personal jurisdiction over the nonresident.”). Because the West Virginia long-arm statute is coextensive with the full reach of the Due Process Clause of the United States Constitution, it is unnecessary to go through the normal two-step formula for determining the existence of personal jurisdiction. In re Celotex Corp., 124 F.3d 619, 627-28 (4th Cir. 1997). Instead, the “statutory inquiry merges with the Constitutional inquiry, ” and this Court must determine whether exercising personal jurisdiction is consistent with the Due Process Clause. Id. at 628; see WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980).

         Due process requires that a defendant receive adequate notice of the suit and be subject to the personal jurisdiction of the court. Id. (citations omitted). The exercise of personal jurisdiction over a nonresident defendant is proper only so long as “minimum contacts” exist between the defendant and the forum state, “such that maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).

         If the defendant's contacts within the forum state provide the basis for the suit, those conducts may establish “specific jurisdiction.” Carefirst of Md., Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390, 397 (4th Cir. 2003). To determine whether specific jurisdiction exists, this Court considers: “(1) the extent to which the defendant has purposefully availed itself of the privilege of conducting activities in the state; (2) whether the plaintiffs' claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally ‘reasonable.'” Id. (quoting ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711-12 (4th Cir. 2002)).

         If the defendant's contacts with the state are not the basis for the suit, however, then jurisdiction “must arise from the defendant's general, more persistent, but unrelated contacts with the state.” Id. A plaintiff establishes general jurisdiction by showing that the defendant's activities in the state have been “continuous and systematic.” Id. (citing Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 & n.9 (1984)).

         C. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure ...


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