City of Perth Amboy v. Safeco Insurance Co. of America

539 F. Supp. 2d 742, 2008 U.S. Dist. LEXIS 18485

• Court: District Court, D. New Jersey
• Decided: March 10, 2008
• Docket: 07-4420
• Status: Published

Opinion

OPINION

MARTINI, District Judge.

This matter comes before the Court on Plaintiff City of Perth Amboy’s Motion for Joinder and Remand. Defendant Safeco Insurance Company of America opposes the motion. Magistrate Judge Mark Falk entered a Report and Recommendation on December 27, 2007 (hereinafter “R & R”) in favor of granting Plaintiffs motion. Defendant filed objections to the R & R. There was no oral argument. Fed.R.Civ.P. 78(b). After careful consideration of the parties’ submissions and a de novo review of the R & R, the Court agrees with the findings and conclusions in the R & R. Accordingly, Plaintiffs Motion for Joinder and Remand is granted.

I. BACKGROUND

As the R & R accurately lays forth the full background and procedural history of this case, the Court recites only the following relevant facts pertaining to its de novo review. This construction contract dispute was initially brought by Plaintiff in state court on September 7, 2007. On September 13, 2007, TAK Construction, Inc. (“TAK”) filed a separate lawsuit in state court against Plaintiff for breach of contract and breach of the covenant of good faith and dealing, among others. On September 14, 2007, Defendant removed this case to federal court based upon diversity jurisdiction. Upon removal, Plaintiff sought immediate relief in the form of specific performance in an application for an order to show cause. This Court denied the application on September 20, 2007. On September 26, 2007, Defendant filed an Answer and Counterclaim for declaratory relief and monetary damages. On October 11, 2007, Plaintiff filed an Answer and Counterclaim in the state court case involving TAK. Concurrently, Plaintiff filed a Third-Party Complaint in the TAK state court case against Defendant.

On October 12, 2007, Plaintiff filed this present motion to join TAK as a non-diverse party and sought remand of this case to state court. Defendant opposed. After careful consideration of the parties’ submissions, Magistrate Judge Falk recommended the joinder of TAK and remand to state court on December 26, 2007. Defendant objected to the recommendation. Before this Court is a consideration of the parties’ full submissions and a de novo review of the disputed findings and conclusions in the R & R.

II. DISCUSSION

A. Standard of Review

A United States Magistrate Judge is vested with the authority to hear a pretrial matter dispositive of a claim and to enter a recommendation for its disposition. Fed. R.Civ.P. 72(b); see also 28 U.S.C. § 636(b)(1). A party may object to the recommended disposition of the matter by filing a written objection within ten days of being served with a magistrate judge’s report and recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); L. Civ. R. 72.1(c)(2). Thereafter, the district court “shall make a de novo determination of those positions to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the Magistrate Judge.” L. Civ. R. 72.1(c)(2).

B. Hensgens Factors

Courts may permit joinder of a non-diverse party to a removed case, even if that joinder would then require the court to remand the action back to state court. 28 U.S.C. § 1447(e). Although motions to amend are liberally granted under Rules 15(a) and Rule 20, a court must scrutinize motions to amend more carefully where a plaintiff seeks to join a non-diverse party, and as a result, deprive a federal court of subject matter jurisdiction. When assessing motions to amend under § 1447(e), courts in this district along with numerous other districts have adopted a flexible and equitable approach developed by the Fifth Circuit Court of Appeals in Hensgens v. Deere & Co. 833 F.2d 1179, 1182 (5th Cir.1987); see also Doe v. Soc’y for Creative Anachronism, Inc., No. 07-1439, 2007 WL 2155553, at *3, 2007 U.S. Dist. LEXIS 53644, at *11 (E.D.Pa. July 25, 2007)(not-ing that although the Third Circuit has not yet articulated an analytical method to 28 U.S.C. § 1447(e), district courts have adopted the Hensgens approach).

After identifying and articulating the appropriate structure of analysis under § 1447(e), Judge Falk considered the four Hensgens factors: (1) whether the purpose of the plaintiffs motion is to defeat diversity jurisdiction; (2) whether the plaintiff was dilatory in seeking to amend his complaint; (3) whether the plaintiff will be prejudiced if the motion is not granted; and (4) any other equitable factors. See Hensgens, 833 F.2d at 1182. In balancing the “defendant’s interests in maintaining the federal forum with the competing interests of not having parallel lawsuits,” Judge Falk concluded that the Hensgens factors weighed in favor of joinder and remand. Id. Defendant objects to the R & R’s analysis of each of the Hensgens factors. After a de novo review of the R & R and Defendant’s objections, this Court finds that the R & R correctly determined that the four Hensgens factors weighed in favor of granting Plaintiffs motion to join TAK and remand this action to state court.

(i) Purpose of Amendment

The first Hensgens factor is an examination of the extent to which defeating Defendant’s choice in the federal forum was the purpose of Plaintiffs decision to add the non-diverse party, i.e. plaintiffs motive. 1 The Court’s scrutiny of motive must focus on the specific facts and circumstances in this case. 2 The parties’ ac tions during the period between the filing of the complaint and the motion to amend is an appropriate matter for consideration by the Court.

In turning to the specific facts in this case, Defendant contends that the primary motivation for Plaintiffs motion to add TAK was to defeat federal jurisdiction, because: (1) Plaintiff could have included TAK in the original complaint, but Plaintiff strategically chose not to include TAK; (2) the actions of Defendant and TAK subsequent to the filing of Plaintiffs original complaint did not require Plaintiff to add TAK to this suit; and (3) the timing of Plaintiffs motion, after this Court’s denial of the Order to Show Cause, suggests that Plaintiff is seeking an alternative forum. As discussed below, the Court finds that the facts do not evidence a primary intent to defeat this Court’s diversity jurisdiction.

Plaintiff has provided several legitimate reasons for failing to name TAK as a defendant in the initial complaint. First, Plaintiff only sought specific performance under the construction bond in the original complaint. 3 Thus, Plaintiff need not have included TAK as a defendant, and in fact, based upon the relief sought in the original complaint, TAK would not have been a proper party to a complaint seeking specific performance under the construction bond. Second, Defendant’s actions subsequent to the filing of Plaintiffs original complaint and after removal of this action logically triggered Plaintiffs response. Defendant countersued Plaintiff in this action for monetary damages arising from Plaintiffs failure to pay requisition orders by TAK and Defendant prior to a declaration of TAK’s alleged default under the construction contract. A resolution of the complaint and counterclaim would require a determination of the scope of TAK’s alleged default and TAK’s rights to payment under the construction contract. Thus, it is wholly appropriate for Plaintiff to seek the addition of TAK as a party in this suit. The R & R appropriately focused on actions that transpired after the filing of the Complaint and considered the effect of Defendant’s actions in enlarging the scope of this case.

With regards to Defendant’s third argument that Plaintiff is now seeking to avoid federal jurisdiction after having failed to obtain immediate relief in the Order to Show Cause, this Court finds that the denial of immediate relief was likely irrelevant to Plaintiffs decision to add TAK as a defendant in this case. The Court’s critical remarks regarding the emergent nature of the application did not reflect any considerations of the merits of the case. Instead, the Court’s observations reflected its considerations regarding the immediate relief requested by Plaintiff. To the extent that Plaintiff “tested the waters,” it was with respect to immediate relief. Additionally, the sequence of events supports a finding that Plaintiff was motivated primarily by Defendant’s counterclaim, not by its failure to obtain immediate relief. Plaintiff did not seek to amend the complaint after being denied the order to show cause but rather sought amendment after the filing of Defendant’s counterclaim.

These reasons undermine Defendant’s argument that the primary motive in filing the motion to join TAK as a party in this case was to defeat jurisdiction. It appears from the sequence of events that Plaintiffs primary purpose in adding TAK to this litigation was to respond to the assertions of claims against Plaintiff by Defendant and TAK as well as to promote the efficient resolution of the ongoing construction dispute. The Court cannot conclude that Plaintiffs motion to add a non-diverse defendant was predominately motivated by their attempt to defeat federal jurisdiction. Thus, the Court agrees with the R & R that the first Hensgens factor weighs in favor of Plaintiff.

(ii) Dilatory Conduct

With regards to the second Hens-gens factor, the R & R correctly determined that Plaintiff was not dilatory in seeking to amend its complaint. Dilatory conduct under this factor takes into consideration the length of time as well as the nature of the delay. See Doe, 2007 WL 2155553, at *3, 2007 U.S. Dist. LEXIS 53644, at *16-17. In considering the nature of the delay, a plaintiffs conduct may be found dilatory when the purpose of the delay was to unnecessarily prolong litigation. See Kahhan v. Mass. Cas. Ins. Co., No. 01-1128, 2001 WL 1454063, at *3, 2001 U.S. Dist. LEXIS 18561, at *7 (E.D.Pa. Nov. 14, 2001).

In this case, Plaintiffs delay in seeking to amend cannot fairly be characterized as dilatory. There has been no significant passage of time between the filing of the Answer and Counterclaim and the Motion to Join and Remand. In ascertaining the nature of the delay, the sequence of events and the actions of the parties are again relevant to the Court’s inquiry. The Complaint originally sought specific performance from Defendant under the performance bond. Although Plaintiff was clearly aware of TAK’s involvement in the facts of this action, TAK did not become relevant as a party to the Complaint prior to Defendant’s Answer and Counterclaim. See, e.g., Kahhan, 2001 WL 1454063, at *3, 2001 U.S. Dist. LEXIS 18561, at *7 (finding a lack of dilatory conduct when plaintiff sought to include a non-diverse defendant after insurance company defendant’s answer raised the issue of the non-diverse defendant’s liability). Defendant’s counterclaim alleged monetary damages arising from Plaintiffs breach of its contract with TAK. Thus, Plaintiffs motion to amend the Complaint to include TAK as a defendant ten days after TAK became a relevant party to this action and before any discovery has been conducted in this case was not dilatory and weighs in favor of joinder and remand.

(iii) Prejudice to Plaintiff

The third Hensgens factor-preju- dice to the plaintiff-also weighs in favor also weighs in favor of Plaintiff. As the R & R correctly notes, there will be both economic and legal prejudice to Plaintiff if the motion to amend is not granted. With regards to economic prejudice, Plaintiff will clearly bear an economic burden in maintaining two separate actions. Although Defendant has proposed coordination of discovery between the two cases in order to minimize the potential economic prejudice, Plaintiff will nevertheless be required to litigate two cases involving essentially the same set of facts, documents, and issues in two different forums. See, e.g., Kahhan, 2001 WL 1454063, at *2, 2001 U.S. Dist. LEXIS 18561, at *6.

With regards to legal prejudice to Plaintiff, the Court recognizes that although Plaintiff could bring a separate suit against TAK in state court, as TAK and Defendant are jointly and severally liable to Plaintiff, there is a genuine risk of conflicting findings and rulings. The state court must interpret the terms of the construction contract, determine the breaching party, and ascertain the proper damages for any breach of contract. Similar determinations will be required from this Court in order to assess whether Defendant’s claims for monetary damages from Plaintiff are proper.

Defendant’s attempts to minimize the risk of inconsistent rulings is unfounded. Defendant argues that the “comity doctrine” will ensure that the state court’s action will be stayed pending the resolution of the federal court action. Defendant, however, cannot guarantee that the state court action will be stayed pending this Court’s review, and this Court cannot dismiss the risk of inconsistent rulings based upon Defendant’s speculation regarding the potential actions of a state court. Furthermore, even if the state court were to stay its proceedings, the risk of conflicting ruling remains since the comity doctrine merely stays, not eliminates, the state court proceeding. Thus, there is some prejudice to Plaintiff, in the form of increased costs and potential for inconsistent rulings, that results if the amendment is not allowed.

(iv) Other Equitable Factors

The R & R also appropriately considered judicial efficiency and economy as a factor in the Court’s decision to allow join-der. See Kahhan, 2001 WL 1454063 at, *3, 2001 U.S. Dist. LEXIS 18561, at *7. As Defendant has recognized by arguing that the comity doctrine is applicable, both the state and federal cases “involve the same parties, claims and issues.” (Def.’s Objections to R & R 13.) It would be a waste of judicial resources to allow two separate proceedings. As the issues in this case involve application of state law, Defendant would not be prejudiced by a remand to a state court. See Kahhan, 2001 WL 1454063, at *3, 2001 U.S. Dist. LEXIS 18561, at *9 (where state law issues predominate, federal courts prefer to have state courts interpret their own laws) (citations omitted).

Defendant argues that the R & R failed to consider alleged improper contacts between the City of Perth Amboy’s mayor and a state court judge in weighing the Hensgens factors. Defendant asserts that the mere fact that the mayor made a comment that he had visited the construction site with a state court judge and informed the judge of TAK’s problems weighs against allowing the addition of a non-diverse defendant. Defendant, however, fails to substantiate their allegation and expressly disclaims any knowledge of whether these statements were accurate. Although the Court is sensitive to the role of diversity jurisdiction in protecting non-citizen defendants from any potential local prejudice in state court, this sensitivity is inherent in the Court’s balancing of the defendant’s interest in remaining in the federal forum with the competing interest in eschewing parallel cases. Furthermore, even assuming that improper conduct by one state court judge was an appropriate equitable factor for consideration, Defendant’s mere speculation of impropriety is not sufficient to factor into the Court’s equitable analysis. Thus, the Court finds that the R & R appropriately refused consideration of the alleged improper contacts.

In short, based upon a consideration of the competing interests of the parties, the Court finds that the Hensgens factors weigh in favor of granting Plaintiffs motion to join TAK and remand this action to state court.

C. Judicial Estoppel

The doctrine of judicial estoppel allows courts to dismiss a litigant’s argument or complaint without consideration of the underlying merits where “a plaintiff, who has obtained relief from an adversary by asserting and offering proof to support one position” in court attempts to “establish against the same adversary a second claim inconsistent with his earlier contention,” and “such dismissal is necessary to prevent a litigant from ‘playing fast and loose with the courts.’ ” Krystal Cadillac-Oldsmobile CMC Truck, Inc. v. Gen. Motors Corp., 337 F.3d 314, 319 (3d Cir.2003)(citing Scarano v. Cent. R. Co. of N.J., 203 F.2d 510, 513 (3d Cir.1953)). Estoppel may be properly asserted when: (1) a party has taken two irreconcilably inconsistent positions; (2) a party has changed its litigating position in bad faith; and (3) no lesser sanction would be adequate to remedy the damage. See id. Courts have cautioned that this doctrine is to be applied only “to avoid a miscarriage of justice.” See id.

The R & R found that this extraordinary remedy was not applicable in this case. Defendant objects and argues that: (1) Plaintiffs certification in its original Complaint that no other parties should be joined must now preclude Plaintiffs attempt to join TAK by amendment; and (2) Plaintiff has “litigated too far in Federal Court.” (Def.’s Objection to R & R 18-19.) Putting aside the issue of whether this Court even has the jurisdiction to decide this issue once it has determined that a review of the Hensgens factors requires remand, it is sufficient to state that judicial estoppel would be inappropriate in this case. First, Plaintiffs certification is not irreconcilably inconsistent with Plaintiffs later position that TAK should now be joined. The enlarged scope of this action justifies the Plaintiffs changed position with respect to the appropriate parties to be joined in this case. The Court will not deem such conduct as espousing an irreconcilably inconsistent position.

Additionally, the Court does not find that Plaintiff has availed itself of the federal forum such that Plaintiff cannot now argue that remand is proper. Discovery has not been undertaken in this case, and the parties have not invested substantial efforts in this forum. Although Plaintiff has made an application for an order to show cause, Plaintiff first filed an order to show cause in state court and merely renewed its application before the Court upon removal of this action by Defendant. Second, as discussed above, the Court does not find that Plaintiff acted in bad faith. Third, without evaluating whether lesser sanctions would have been appropriate, the Court finds that allowing the addition of TAK to this litigation would not be a miscarriage of justice. All parties will have their day in court, and their claims evaluated on the merits, albeit in a different forum.

D. Failure to Attach Proposed Pleadings

As discussed in the R & R, proposed pleadings in this case were not necessary as Plaintiff represented that its claims against TAK were similar to the claims being asserted in state court. Thus, the exercise of discretion in allowing amendment to the pleadings without submission of proposed pleadings was appropriate.

III. CONCLUSION

For the foregoing reasons, the Report and Recommendation by Magistrate Judge Falk is adopted by this Court, and Plaintiffs Motion for Joinder and Remand is granted. An appropriate Order accompanies this Opinion.

ORDER AND REMAND

This matter arises from Plaintiffs motion to join TAK Construction, Inc. as a defendant in this case and to remand this case to state court; and Magistrate Judge Mark Falk having entered a Report and Recommendation in favor of Plaintiffs motion; and Defendant having objected to the Report and Recommendation; and the Court having considered the submissions of the parties and reviewed the Report and Recommendation de novo; and for the reasons stated in the Court’s Opinion of the same date; and for good cause shown,

IT IS on this 10th day of March, 2008, hereby,

ORDERED that Magistrate Judge Mark Falk’s Report and Recommendation dated December 26, 2007 is hereby adopted by this Court; and it is

FURTHER ORDERED that Plaintiffs motion to join TAK Construction, Inc. as a defendant in this case and amend the Complaint is granted; and it is

FURTHER ORDERED that this case be remanded to the Superior Court of New Jersey, Middlesex County.

REPORT AND RECOMMENDATION

MARK FALK, United States Magistrate Judge.

INTRODUCTION

Before the Court is Plaintiff the City of Perth Amboy’s Motion for Joinder and Remand (Docket Entry No. 18.) The motion is decided on the papers. Fed. R.Civ.P. 78. For the reasons set forth below, it is respectfully recommended that Plaintiffs motion be granted.

BACKGROUND

This removed diversity action arises out of the construction of a Public Safety Complex in Perth Amboy, New Jersey. Plaintiff the City of Perth Amboy (“Plaintiff’ or “the City”) is a municipal corporation of the State of New Jersey. (Compl. p. 1.) Defendant Safeco Insurance Company of America (“Defendant” or “Safeco”) is a Washington corporation with its principal place of business in the State of Washington. (Notice of Removal ¶ 4b.)

In November of 2004, Plaintiff entered into a contract with putative defendant TAK Construction, Inc. (“TAK”) to construct a public safety complex in Perth Amboy. (Comply 1.) TAK is a New Jersey corporation with its principal place of business in New Jersey. (Certification of Andrew Samson, Esq. (“Samson Cert.”), Ex. C at ¶ 1.) In accordance with the City’s bidding process, TAK submitted a performance and payment bond issued by Safeco for $19,774,000. (Compl. ¶¶ 3-4.) Although the precise date is unclear, at some point in 2005 or 2006 the City became dissatisfied with TAK’s performance. (Id. ¶ 10.) According to Plaintiff, TAK continued to perform inadequately, and was terminated on or about May 23, 2007. (Id. ¶ 13.) Thereafter, Plaintiff claims that Safeco failed to complete the project and remedy TAK’s defective work. (Id. ¶ 15.) As a result, Plaintiff filed a complaint in the New Jersey Superior Court on September 7, 2007, demanding that Defendant perform its obligations under the performance bond and contract. On September 14, 2007, Defendant removed the case to this Court based on diversity. (Notice of Removal ¶ 5.)

Upon removal to this Court, Plaintiff filed an application for an order to show cause why defendant should not be required to complete the project. (An order to show cause hearing had apparently been set before the state court prior to removal of the case.) On September 20, 2007, District Judge Martini denied Plaintiffs application. On September 26, 2007, Defendant filed an answer and counterclaims, for, among other things, declaratory relief and monetary damages. On October 12, 2007, Plaintiff filed the present motion to join TAK as a non-diverse party and remand the case to state court.

The same dispute involving the same parties is also pending in state court. On September 13, 2007 (at about the same time this case was removed), TAK commenced a separate action in New Jersey state court (the “state court action”) against the City seeking damages for, among other things, breach of contract and breach of the covenant of good faith and fair dealing. (Samson Cert. ¶ 4, Ex. C.) In response, the City filed a counterclaim and third-party complaint against Safeco. (Id. ¶ 8, Ex. G.)

DISCUSSION

The federal removal statute provides that “[ejxcept as otherwise provided by Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). Generally, federal diversity jurisdiction is determined at the time of removal. See New Rock Asset Partners, LP v. Preferred Entity Advancements, Inc., 101 F.3d 1492, 1503 (3d Cir.1996). Despite this rule, 28 U.S.C. § 1447(e) provides that “[i]f after removal the plaintiff seeks to join additional parties whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand to state court.” This section thus provides a district court with the authority to permit joinder even if it would destroy subject matter jurisdiction. See Kabakjian v. United States, 267 F.3d 208, 212 (3d Cir.2001).

In analyzing questions of joinder under 28 U.S.C. § 1447(e), district courts in this Circuit regularly apply the factors set forth by the United States Court of Appeals for the Fifth Circuit in Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir.1987), cert. denied, 493 U.S. 851, 110 S.Ct. 150, 107 L.Ed.2d 108 (1989). See, e.g., Doe No. 4 v. Society for Creative Anachronism, Inc., Nos. 07-1739, 07-1440, 2007 WL 2155553, at *3 (E.D.Pa. July 25, 2007); Bretan v. Knowledge Learning Corporation, No. 06-1456, 2006 WL 2376743, at *2 (D.N.J. August 16, 2006); Mersmann v. Continental Airlines, 335 F.Supp.2d 544, 547 (D.N.J.2004), Gilberg v. Stepan Co., 24 F.Supp.2d 355, 357 (D.N.J.1998); Carter v. Dover Corp., 753 F.Supp. 577, 579 (E.D.Pa.1991). 1 The Hensgens factors are: (1) the extent to which the purpose of the amendment is to defeat federal jurisdiction; (2) whether plaintiff has been dilatory in asking for amendment; (3) whether plaintiff will be significantly injured if amendment is not allowed; and (4) any other factors bearing on the equities. See 833 F.2d at 1182. Against this backdrop, the Court considers the factors.

The Hensgens factors

TAK is a New Jersey corporation with its principal place of business in New Jersey. Thus, if joined, diversity would be destroyed and the case remanded to state court. See 28 U.S.C. § 1447(e). Defendant argues that the Hensgens factors weigh against the City’s request to assert claims against TAK. Specifically, Defendant claims: (1) the purpose behind the motion is to destroy diversity; (2) Plaintiff has delayed in seeking to amend its complaint; and (3) Plaintiff will not be prejudiced by litigating in two fora. None of these arguments is persuasive.

Defendant first argues that Plaintiff knew of TAK’s existence when the complaint was filed. Defendant also argues that because Plaintiffs order to show cause was denied, it no longer wishes to proceed in this Court.

Plaintiff explains that TAK was not initially named as a party in this case because its complaint sought only specific performance of the contract. According to Plaintiff, TAK was terminated, and, therefore, not in a position to complete the project. Plaintiff contends that TAK’s presence in this litigation is required by Defendant’s counterclaim, which seeks monetary damages arising out of the completion of the project.

The motive behind joinder of a non-diverse defendant is a fact specific inquiry. There is no doubt that Plaintiff was aware that TAK existed at the time it filed its complaint. However, this knowledge does not necessarily equate with improper motive. According to Plaintiff, Defendant’s counterclaims expanded this case from one seeking specific performance to one involving an allocation of monetary damages arising out of the agreement, which would necessarily include TAK. A review of the complaint in this case supports Plaintiffs position. The complaint focuses on completion of the project and the City’s ability to “govern and protect its citizens.” (Pl.’s Reply Br. 3-5.) Monetary damages are not demanded. Whether Plaintiff could actually succeed in compelling the performance of a construction contract is not pertinent. The simple fact is that the original complaint seeks only specific performance and costs of suit. While one may argue with the wisdom and efficiency of separate complaints for equitable and legal relief, it demonstrates a plausible explanation for not naming TAK initially.

The Court also does not agree that denial of the relief sought in the order to show cause impacts the analysis. Plaintiff did not seek to join TAK when the order to show cause was denied; rather, it sought to add TAK only after Defendant filed its answer and counterclaims, which included demands for monetary damages arising out of the agreement. Plaintiffs actions comport with its argument. If the motion was truly in response to Judge Martini’s ruling, TAK could have been joined as party in the six days between the decision and the filing of Defendant’s answer. This assumption is especially reasonable given that Plaintiff would not have been required to draft and file a motion to amend its complaint. See Fed.R.Civ.P. 15(a) (“[A] party may amend its pleadings once as a matter of course at any time before a responsive pleading is filed .... ”); see also Conover v. United Parcel Service, No. 06-1079, 2006 WL 3534157, at *2 n. 3 (D.N.J. December 7, 2006). 2

The Court will not ascribe a improper purpose to Plaintiffs motion without more specific evidence. The fact is Plaintiff seeks to assert viable claims against a related party arising out of the same dispute. Generally, if a proposed claim is viable, and there is genuine intent to prosecute the claim in good faith, the primary purpose of joinder is not to defeat federal jurisdiction. See Mersmann, 335 F.Supp.2d 544, 547-48 (D.N.J.2004); Guldner v. Brush Wellman, Inc., No. 01176, 2001 WL 856699, at *2-3 (E.D.Pa. July 25, 2001). This factor weighs in favor of joinder.

Second, the City has not delayed in seeking to amend its complaint. This is a new case and there has been no discovery. Moreover, the Third Circuit Court of Appeals has noted that the mere passage of time, unaccompanied by resulting prejudice to the movant’s adversary or the Court, is insufficient to constitute undue delay. See Adams v. Gould, Inc., 739 F.2d 858, 868 (3d Cir.1984). There is no basis to conclude that Plaintiff has unduly delayed in bringing its motion. The motion was filed approximately one month after the complaint was first filed in state court, and sixteen days after Defendant filed its answer and counterclaims. Similarly, Defendant will not suffer any prejudice from litigating state law claims in a state forum. Indeed, regardless of the outcome of this motion, Defendant will be litigating the same dispute in state court. This factor weighs heavily in favor of granting Plaintiffs motion.

The remaining factors also clearly weigh in favor of joinder. The parties would have to bear increased costs caused by litigating in two forums over the same issues and claims. See Kahhan v. Massachusetts Cas. Ins. Co., No. 01-1128, 2001 WL 1454063, at *2 (E.D.Pa. November 14, 2001) (finding increased litigation costs prejudicial). In addition, both parties to this litigation, as well as TAK, are parties to the state court action. The presence of a closely related state court proceeding with all of the necessary parties is an especially compelling reason to permit joinder and remand. Gilberg, 24 F.Supp.2d at 358-59; Kahhan, 2001 WL 1454063, at *3. Apart from the possibility of conflicting rulings, this Court of limited jurisdiction should not stand idle while the parties litigate related state law issues simultaneously in two separate courts. To do so would stand judicial economy on its head. There is no question that “[t]he most logical, economical and equitable approach is to determine the respective rights and liabilities of all relevant parties inter se in one proceeding.” Carter, 753 F.Supp. at 580. In this case, that is clearly the state court.

Finally, Defendant offers two secondary arguments. First, Defendant argues that because Plaintiff certified in its state court complaint that no additional parties should be joined, judicial estoppel now bars the City from joining TAK as a party. 3 Judicial estoppel is a doctrine primarily concerned with preventing litigants from “playing fast and loose with the courts.” Ryan Operations, G.P. v. Santiam-Mid-west Lumber Co., 81 F.3d 355, 358 (3d Cir.1996); see also New Hampshire v. Maine, 532 U.S. 742, 750, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001). However, the doctrine is an extraordinary remedy that “should only be applied to avoid a miscarriage of justice.” Krystal Cadillac-Oldsmobile CMC Truck, Inc. v. General Motors Corp., 337 F.3d 314, 319 (3d Cir.2003). Suffice it to say that the doctrine does not apply here.

Second, Defendant complains that Plaintiff did not include a copy of a proposed pleading with its motion as required. See L. Civ. R. 7.1(f); Lake v. Arnold, 232 F.3d 360, 374 (3d Cir.2000). However, this Court has the discretion to consider a motion absent a proposed pleading. See In re Donald J. Trump Securities Litigation, 793 F.Supp. 543, 566 n. 12 (D.N.J.1992), aff'd, 7 F.3d 357 (3d Cir.1993), cert. denied, 510 U.S. 1178, 114 S.Ct. 1219, 127 L.Ed.2d 565 (1994); see also Lite, N.J. Federal Practice Rules, Comment 4 to L. Civ. R. 7.1 at 53 (GANN 2008). This case warrants an exercise of that discretion. Plaintiff has represented that its claims against TAK are the same claims contained in its state court pleading, which is attached to the Samson Certification at Exhibit G. These claims are for monetary damages arising out of the agreement. More important, because Defendant has not argued that the claims to be asserted are clearly futile, the primary issue is the presence of TAK in the case at all. TAK’s mere presence destroys diversity and compels remand.

In sum, the Hensgens factors weigh heavily in favor of joinder. There has been no undue delay or prejudice and the Court is satisfied that the primary purpose of the amendment is not to defeat federal jurisdiction. Finally, judicial economy strongly favors joinder and remand. Plaintiffs motion to join TAK should be granted, and the case should be remanded pursuant to 28 U.S.C. § 1447(e).

CONCLUSION

For the foregoing reasons, it is respectfully recommended that Plaintiffs motion be granted, and the case remanded to state court.

Dec. 26, 2007.

1 . In its objections to the R & R, Defendant focuses a significant portion of its brief on certain language used in the R & R and asserts that Judge Falk’s review of the first Hensgens factor was based upon the wrong standard of fraudulent joinder. Although Defendant is correct in concluding that the "fraudulent joinder” standard is inappropriate in this case, Defendant misconstrues the standard employed in the R & R. The R & R expressly rejected the fraudulent joinder standard and focused its analysis on the purpose of the joinder motion. To the extent that the R & R borrowed concepts from the fraudulent joinder standard to assist in discerning Plaintiffs primary motive, the Court finds no error. In any event, the Court's de novo review confirms that the first Hensgens factor was given appropriate weight.

2 . Defendant cites to Irigoyen v. State Farm Lloyds, No. CA-C-03-324-H, 2004 WL 398553, at *3, 2003 U.S. Dist. LEXIS 27353, at *10 (S.D.Tex.2004) to support their position that "the relevant fact [in post -Hensgens cases] was that the plaintiff knew of the non-diverse party when plaintiff chose to commence suit in State Court without naming the nondiverse party, and then, after defendant removes the action to Federal Court, plaintiff seeks to add the nondiverse party.” (Def.’s Objections 7-8.) Defendant, however, misconstrues the relevant quote in Irigoyen which cites In re Norplant Contraceptive Products Liability Litigation, 898 F.Supp. 433, 435 (E.D.Tex.1995). In re Norplant Contraceptive Products Liability Litigation held that one important fact in discerning the plaintiff’s motive was the timing of plaintiff's discovery of the non-diverse party's liability-inducing activities. Id. Thus, this Court cannot conclude, as Defendant urges, that mere awareness of a non-diverse party prior to the filing of the Complaint combined with a failure to include that party in the original complaint demonstrates a per se intent to defeat diversity.

3 . Defendant argues that the R & R fails to appreciate that Plaintiff’s original complaint was in fact a suit for monetary damages since specific performance was not a remedy available to Plaintiff. Without commenting on the appropriateness of such a remedy in this case, the Court merely notes that Defendant’s citation to Lester’s Home Furnishers v. Modern Furniture Co., 1 N.J.Super. 365, 368, 61 A.2d 743 (Ch.Div.1948) is overly broad and does not support the contention that specific performance is never available as a remedy in construction contracts. Rather, Lester’s Home Furnishers stands for the proposition that in New Jersey, specific performance in construction contracts is generally denied with some exceptions. Id. The Court declines to comment on the relative merits of Plaintiff’s claim at this time. Additionally, the Court’s comments at the Order to Show Cause hearing should be confined to the issue before the Court — whether emergency relief was warranted at that time.

1 . The parties agree that the Court’s analysis should be guided by Hensgens and do not argue that Federal Rules of Civil Procedure 19 and 20 apply. (See Def.'s Br. 2; Pl's Reply Br. 2.) The reason is clear: “Virtually every court to address the joinder question since the enactment of § 1447(e) views the statute as ... providing for a flexible, broad discretionary approach of the type prescribed in [Hensgens ].” Gilberg, 24 F.Supp.2d at 357 (citing Carter, 753 F.Supp. at 579); see also Righetti v. Shell Oil Co., 711 F.Supp. 531, 535 (N.D.Cal.1989) ("This court finds that neither the language of section 1447(e) nor its accompanying policy statements suggest that Rules 19 and 20 control the court’s decision to deny joinder, or to permit joinder and remand. As is clear from the permissive language of section 1447(e), Congress gave the courts broad discretion to allow joinder even though remand may result. Such discretion is inconsistent with the more restrictive approach under Rule 19. Congress could have referred to that type of approach, for it was clear from the legislative history that Congress was cognizant of Rule 19 at the time section 1447(e) was added. It chose not to do so.”).

2 . Had Plaintiff simply filed an amended pleading including claims against TAK, the appropriate analysis would be one of fraudulent joinder, which places a heavy burden of persuasion on the opposing party. See Conover, 2006 WL 3534157, at *1 n. 2.

3 . Plaintiff’s state court complaint contains a certification that no other actions are pending or contemplated, and no other parties should be joined, as required by N.J. Ct. R. 4:5-1(b)(2).