Greenspan v. Brothers Property Corp.

103 F. Supp. 3d 734, 2015 U.S. Dist. LEXIS 57826, 2015 WL 1958468
CourtDistrict Court, D. South Carolina
DecidedApril 30, 2015
DocketNo. 2:14-cv-3875-RMG
StatusPublished
Cited by432 cases

This text of 103 F. Supp. 3d 734 (Greenspan v. Brothers Property Corp.) is published on Counsel Stack Legal Research, covering District Court, D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greenspan v. Brothers Property Corp., 103 F. Supp. 3d 734, 2015 U.S. Dist. LEXIS 57826, 2015 WL 1958468 (D.S.C. 2015).

Opinion

ORDER

RICHARD MARK GERGEL, District Judge.

This matter is before the Court on the Magistrate Judge’s Report and Recommendation (“R & R”), Dkt. No. 32, recommending that this Court deny Defendants’ Motion to Strike (Dkt. No. 24) and grant Plaintiffs Motion to Remand (Dkt. No. 21). For the reason stated below, the Court ADOPTS the R & R, DENIES the motion to strike and GRANTS the motion to remand.

I. Background1

Plaintiff filed this action in state court against his former employers Brothers Property Corporation and Brothers Property Management Corporation (collectively “the Brothers Defendants” or “Defendants”), raising a number of state law causes of action. Brothers Property Management Corporation does business as Charleston Harbor Resort and Marina (“the Resort”) and is a wholly owned subsidiary of Defendant Brothers Property Corporation. {See Dkt. No. 34 at 3). Plaintiff was hired as an Accounting Manager for the Resort in 2009 and later promoted to Controller for the Resort in 2010. (Dkt. No. 14 at ¶¶ 14-15). In June of 2012, Plaintiff was terminated ostensibly for tardiness and absences at work. {Id. at ¶¶ 117-118). Plaintiff claims his termination was for unlawful reasons. {See generally Dkt. No. 14).

The Brothers Defendants properly removed this action to federal court based on diversity jurisdiction. (Dkt. No. 1). After removal, but before the defendants answered, Plaintiff filed a First Amended Complaint as a matter of course under Rule 15(a).2 (Dkt. No. 14). This First [737]*737Amended Complaint names three additional individual defendants: Oliver Rooskens, Victor Fuller, and Ana Reina. Rooskens is the General Manager of the Resort, Fuller is the President of the parent company Brothers Property Corporation, and Reina is the Chief Financial Officer of the parent company Brothers Property Corporation. (Dkt. No. 14 at ¶¶ 7-10). Plaintiff alleges that as Controller, he reported directly to CFO Reina. (Id. at ¶ 15). However, documents attached to the Complaint show that Plaintiff reported to both Rooskens, as General Manager of the Resort, and to the corporate CFO Reina. (Dkt. No. 1-1 at 58-60). Plaintiff alleges that Fuller and Reina are residents of Florida, and Roosk-ens is a resident of South Carolina. (Id.).

The addition of Defendant Rooskens defeats diversity jurisdiction, and Plaintiff filed a motion to remand on this basis. (Dkt. No. 21). The Brothers Defendants responded with a Motion to Strike the First Amended Complaint (Dkt. No. 24), claiming Plaintiffs addition of Defendant Rooskens is a “procedural trick[ ] to defeat diversity jurisdiction.” (Dkt. No. 34 at 19). The Magistrate Judge recommended denying Defendants’ motion to strike and granting Plaintiffs motion to remand. (Dkt. No. 32). The Brothers Defendants filed timely objections. (Dkt. No. 34).

II. Legal Standard

A. Report and Recommendation

The Magistrate Judge makes only a recommendation to this Court. The recommendation has no presumptive weight, and the responsibility to make a final determination remains with the Court. Mathews v. Weber, 423 U.S. 261, 270-71, 96 S.Ct. 549, 46 L.Ed.2d 483 (1976). This Court is charged with making a de novo determination of those portions of the R & R or specified proposed findings or recommendations to which objection is made. Diamond v. Colonial Life & Ace. Ins. Co., 416 F.3d 310, 315 (4th Cir.2005) (quoting 28 U.S.C. § 636(b)(1)); accord Fed.R.Civ.P. 72(b).

As to portions of the R & R to which no specific objection has been made, this Court “must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.’ ” Id. (quoting Fed.R.Civ.P. 72 advisory committee note). Moreover, in the absence of specific objections to the R & R, the Court need not give any explanation for adopting the Magistrate Judge’s analysis and recommendation. See Camby v. Davis, 718 F.2d 198, 199-200 (4th Cir.1983).

B. Joinder of a Non-diverse Party after Removal

“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.” ■ 28 U.S.C. § 1447(e). Whether to allow joinder of a non-diverse defendant is “committed to the sound discretion of the district court,” and in exercising this discretion, 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.” Mayes v. Rapoport, 198 F.3d 457, 462 (4th Cir.1999). In sum, “[t]he district court, with input from the parties, should balance the equities in deciding whether the plaintiff should be permitted to join a nondiverse defendant.” Id. at 463.

While the fraudulent joinder doctrine does not “directly” apply, “if the defendants can carry the heavy burden of proving fraudulent joinder, that fact should be a factor — -and perhaps the dis-[738]*738positive factor — that the court considers in deciding whether a plaintiff may join a nondiverse defendant” after removal. Id. at 463. Thus, the fraudulent joinder doctrine can be instructive and a factor heavily weighed by the court.

III. Discussion

A. Legal Standard Applied by Magistrate Judge

In their objections to the R & R, the Brothers’ Defendants first argue that the Magistrate Judge erred by requiring them . to show fraudulent joinder to prevent the addition of Defendant Roosken. Defendants misread the R & R. The Magistrate Judge explicitly stated that “the doctrine of fraudulent joinder only applies to parties joined before removal,” but noted that under Mayes fraudulent joinder, if shown, “should be a factor — and perhaps the dis-positive factor.” (Dkt. No. 32 at 4 (emphasis added)). Thus, Magistrate Judge “beg[an][her] analysis there.” (Id. at 5). The Magistrate Judge went on to weigh other factors and, “[a]fter considering all relevant factors in the case,” recommended that “the joinder of Defendant Rooskens be allowed because the balance of the equities weighs in the Plaintiffs favor.” (Dkt. No. 32 at 11-12).

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Bluebook (online)
103 F. Supp. 3d 734, 2015 U.S. Dist. LEXIS 57826, 2015 WL 1958468, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greenspan-v-brothers-property-corp-scd-2015.