Opinion
CIVIL ACTION NO: 02-2907, SECTION: "R"(4)
November 15, 2002
ORDER AND REASONS
Before the Court is plaintiff's motion to remand. Because the Court finds that William Marquette, an employee of Stewart Stevenson Services, Inc., was fraudulently joined, the Court denies plaintiff's motion.
I. Background
Plaintiff, Jade Marine, Inc., desired to purchase engines to power a vessel under construction. Plaintiff contacted Stewart Stevenson Services, Inc. ("SS"), whose salesman, William Marquette, recommended that plaintiff purchase four diesel engines manufactured by Detroit Diesel Corporation. Plaintiff followed Marquette's recommendation and purchased the four engines for its vessel, which was subsequently named the "M/V GENESIS." Plaintiff later determined that the engines were wearing out faster than Marquette had indicated that they would, causing plaintiff to sustain damages when the vessel could not be used because the engines needed repair.
Plaintiff filed suit in state court against Detroit Diesel, the manufacturer of the engines, SS, the company that completed the sale, and William Marquette, the salesman at SS with whom plaintiff communicated. Plaintiff is a Louisiana company. Detroit Diesel is a Delaware corporation and SS is a Texas corporation. William Marquette is a citizen of Louisiana. Defendants removed the lawsuit to this Court asserting that Marquette was fraudulently joined to defeat diversity. Plaintiff now moves to remand.
II. Discussion
A. Legal Standard
Defendants' assertion of this Court's diversity jurisdiction hinges on their contention that William Marquette, a citizen of Louisiana, was fraudulently joined. Defendants bear the heavy burden of showing that there is no arguably reasonable basis for predicting that plaintiff could establish a cause of action against Marquette, or that there has been outright fraud in plaintiffs' recitation of the jurisdictional facts. Badon v. R J R Nabisco, Inc., 224 F.3d 381 (5th Cir.)( Badon I), op. after certified question declined, 236 F.3d 282, 286 (5th Cir. 2000) ( Badon II); see also Burden v. General Dynamics Corp., 60 F.3d 213, 217 (5th Cir. 1995); B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). In evaluating defendants' assertion of fraudulent joinder, the Court must consider all of the factual allegations in the light most favorable to plaintiff and resolve all of the contested issues of fact in favor of plaintiff. See Burden, 60 F.3d at 217. The Court may pierce the pleadings to determine fraudulent joinder, and, even though the petition may state a claim against the instate defendant, the case may be removed if the defendants show by evidence outside the pleadings that there is no reasonable basis to predict that plaintiff could establish a claim against the in-state defendant. Badon, Inc., 224 F.3d at 389; see also B., Inc., 663 F.2d at 549. Furthermore, the Court must resolve any uncertainties as to the current state of controlling substantive law in favor of plaintiff. B., Inc., 663 F.2d at 549. Thus, defendants must show, as a matter of law, that "there is no reasonable basis for predicting that the plaintiff might establish liability on [its] claim against [Marquette]." Badon I, 224 F.3d at 390. See also Burden, 60 F.3d at 216 (District courts "do not determine whether the plaintiff will actually or even probably prevail on the merits of the claim, but look only for a possibility that the plaintiff might do so").
B. Analysis
In making a determination of fraudulent joinder, the Court may pierce the pleadings to determine the viability of claims asserted in the complaint, but the Court need not consider the viability of causes of action not alleged in the state court complaint. Cavallini v. State Farm Mutual Auto Insurance, 44 F.3d 256, 264 (5th Cir. 1995). The Court will therefore analyze the state court complaint to determine whether plaintiff states a cause of action against Marquette. In the Petition for Damages, plaintiff asserts a number of causes of action sounding in contract, among them claims for redhibition, sale of thing unfit for its intended use, thing not of a kind specified in the contract, detrimental reliance, and rescission for vice of consent. (Petition for Damages.) In the section pertaining to rescission for vice of consent, plaintiff asserts that the defendants, including Marquette, made "material misstatements" upon which plaintiff relied. ( Id. ¶ 28-34.) In the same section, plaintiff further alleges that the defendants "acted knowingly, purposefully and in bad faith in misrepresenting the quality" of the engines and that the plaintiff's decision to purchase the engines was "induced by the defendants! fraud." ( Id.) Based on these allegations, plaintiff seeks the return of the purchase price in addition to damages occasioned by the purchase and use of the engines.
Plaintiff's remedy for "rescission for vice of consent," however, lies against the seller, but not against the seller's employee. Indeed, Louisiana law expressly provides that "a mandatary who contracts in the name of the principal within the limits of his authority does not bind himself personally for the performance of the contract." LA. Civ. CODE ANN. art. 3016 (formerly art. 3013); see also Orleans Parish School Board v. Gegg, 708 So.2d 425, 430 (La.Ct.App. 1998); Grimaldi Constr., Inc. v. Robinson, 1997 WL 191494, *2 (E.D.La. 1997). Plaintiff does not assert in the Petition for Damages that Marquette was acting outside of his authority. To the contrary, plaintiff states that Marquette "at all times material hereto was an agent and employee of [SS]." (Petition for Damages ¶ 3.) Plaintiff never indicates that the representations made by Marquette differed from those made by SS. ( Id. ¶ 9.) Accordingly, plaintiff may not establish liability against Marquette under the state court complaint on a cause of action based on rescission for vice of consent. His other contract claims are defective for the same reason.
The Petition for Damages does not state a claim for tort fraud against Marquette. The Petition does, however, allege that Marquette engaged in negligent misrepresentation. Specifically, plaintiff alleges that Marquette "negligently recommended" the engines "for an improper application." (Petition for Damages ¶ 18.) Plaintiff cannot prevail on this claim because under Louisiana law, officers, employees and agents "'owe no duties to third parties for their negligent acts and omissions in a commercial context.'" Grimaldi, 1997 WL 191494, at *1 (quoting Cameron Equipment v. Stewart and Stevenson Services, Inc., et al., 685 So.2d 696, 700 (La.Ct.App. 1994)). See also Unimobil 84, Inc. v. Spurney, 797 F.2d 214 (5th Cir. 1986); Goodwin v. Agrilite, Inc., 643 So.2d 249, 253 (La.Ct.App. 1994); Korson v. Independence Mall I, Ltd., 595 So.2d 1174 (La.Ct.App. 1992); and Fine Iron Works v. Louisiana World Exposition, Inc., 472 So.2d 201, 203 (La.Ct.App. 1985). But cf. Canter v. Koehring Co., 283 So.2d 716, 721-22 (La. 1973) (recognizing that corporate officers maybe liable for tortious acts resulting in physical injury). The Louisiana Supreme Court's decision in Barrie v. V.P. Exterminators, Inc., 625 So.2d 1007, 1014 (La. 1993), is no obstacle to this conclusion. The Barrie court held that under certain circumstances the purchasers of a home may sue a third-party termite inspection company and its owner for negligent misrepresentations made in the course of rendering an inspection report to the seller of the home. As the court in Grimaldi recognized, Barrie did not address, let alone overrule, Louisiana precedent limiting when a company's employees can be liable to third parties in the commercial context. Grimaldi, 1997 WL 191494, at *2. Furthermore, it was unclear in Barrie whether the court let the action proceed against the individual in his capacity as an owner, as an employee, or as a licensed professional under LA. REV. STAT. ANN. § 3:3361.
Again, the Court notes that a determination of removal is made "on the basis of claims in the state court complaint as it exists at the time of removal." Cavallini, 44 F.3d at 264. The complaint does not state a claim for tort fraud against Marquette. Nor does the complaint state a viable claim against Marquette for breach of contract or negligent misrepresentation. The Court therefore finds that Marquette was fraudulently joined. The Court orders him dismissed from the case and denies plaintiff's motion to remand.
Because the Court finds that Marquette was fraudulently joined, it has diversity jurisdiction over this lawsuit. The Court need not consider whether jurisdiction under admiralty also exists.
At oral argument, plaintiff raised the possibility of attempting to amend the complaint to raise claims against Marquette. The Court cannot rule on such a motion to amend without seeing the proposed amendment. This is because the Court's decision to permit an amendment seeking to add a non-diverse, non-indispensable party will turn on such factors as "whether the purpose of the amendment is to defeat federal jurisdiction, whether plaintiff has been dilatory in asking for amendment, whether plaintiff will be significantly injured if amendment is not allowed, and any other factors bearing on the equities." Hensgens v. Deere Company, 833 F.2d 1179, 1182 (5th Cir. 1987); see also Doleac v. Michalson, 264 F.3d 470, 474 (5th Cir. 2001) and Cobb v. Delta Exports, Incorporated, 186 F.3d 675, 677 (5th Cir. 1999). Accordingly, the Court will consider a motion for leave to amend when, and if, such a motion is filed with the Court.
III. Conclusion
For the foregoing reasons, the Court denies plaintiff's motion to remand.