Patricia Ayala v. Gabriel Building Supply

569 F. App'x 241
CourtCourt of Appeals for the Fifth Circuit
DecidedMay 28, 2014
Docket13-30532, 13-31246
StatusUnpublished
Cited by14 cases

This text of 569 F. App'x 241 (Patricia Ayala v. Gabriel Building Supply) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Patricia Ayala v. Gabriel Building Supply, 569 F. App'x 241 (5th Cir. 2014).

Opinion

PER CURIAM: *

Patricia Ayala brought suit in Louisiana state court against a manufacturer, its insurers, and a retail store alleging that defects in a propane heater caused the death of her husband. The case was removed to federal court by the manufacturer and insurers who argued the non-diverse retailer, Gabriel Building Supply, was improperly joined. The district court, finding improper joinder, dismissed Gabriel, and retained jurisdiction over the remaining defendants. The court later granted summary judgment for the defendants on Ayala’s products liability claim. The district court also sanctioned Ayala’s counsel for filing a second, nearly identical action in state court after the district court denied Ayala’s motion to remand the case. Ayala argues the court erred in dismissing Gabriel from the suit and denying her motion to remand. She also appeals the grant of summary judgment for the remaining defendants on her products liability claim. Ayala’s counsel challenges the imposition of sanctions. We AFFIRM the district court’s dismissal of Gabriel from the suit and the court’s grant of summary judgment for the remaining defendants on Ayala’s products liability claim. The imposition of sanctions is REVERSED.

FACTUAL & PROCEDURAL BACKGROUND

In 2011, Ayala purchased a Mr. Heater portable propane heater from Gabriel in Ponchatoula, Louisiana. The heater was manufactured by the defendants, Enerco Group, Inc. and Mr. Heater, Inc. On February 2, 2011, Ayala’s husband, Louis R. Ayala III, was using the Mr. Heater in the Ayalas’ shed when it exploded, severely burning Louis and causing significant damage to the shed. Louis was hospitalized for severe burns on his entire back, hips, shoulders, arms, and the back of his head. He underwent multiple surgeries but died due to these injuries on August 4, 2011.

Ayala filed suit in Louisiana state court, individually and on behalf of the estate of her husband, against Gabriel Building Supply, Enerco Group, Inc., Mr. Heater Corp., and the defendants’ insurers. Enerco and Mr. Heater filed a notice of removal in the federal district court for the Eastern District of Louisiana, contending that the retailer Gabriel was improperly joined, and there would be complete diversity of citizenship once Gabriel was dismissed. Enerco and Mr. Heater argued that, as the non-manufacturer retailer of the heater, Gabriel could only be liable for damages in tort if it knew or should have known that the product was defective and failed to notify Ayala of the defect. Ayala had not made such an allegation. Ayala filed an amended complaint in the district court, adding a claim of liability for “handling and • merchandising,” and simultaneously moved to remand the case. She argued the complaint did state a claim against Gabriel for its own negligence in accordance with Louisiana law. On May 3, 2012, the district court dismissed Ayala’s claims against Gabriel, finding no reasonable basis to predict that a state court would allow recovery against Gabriel.

After dismissing Gabriel from the suit, the district court also dismissed Ayala’s claims for negligence, strict liability, and for manufacture of an ultra-hazardous product. The court held that any recovery *244 could only occur under the Louisiana Products Liability Act (“LPLA”). Enerco and Mr. Heater filed motions for partial summary judgment seeking dismissal of Ayala’s remaining products liability claims under the LPLA. The district court granted the motions and dismissed Ayala’s claims on April 26, 2013. Ayala timely appealed the court’s grant of summary judgment for Enerco and Mr. Heater.

In September 2012, after Gabriel was dismissed from the suit in federal court, Ayala filed a second state court action naming only Gabriel as a defendant. Gabriel then filed a third party demand against Mr. Heater. After Gabriel filed the demand, Ayala filed in state court a motion for leave to file an amended petition in which she asserted claims against Mr. Heater virtually identical to the claims pending in the ongoing suit in federal court. Mr. Heater filed a motion in the ongoing federal proceeding to enjoin the second state court action and requesting sanctions and costs. On November 7, 2012, the district court granted Mr. Heater’s motion to enjoin the state court proceedings, reserving the question of sanctions for a later date. At a hearing on December 5, 2012, the court determined that sanctions were appropriate and awarded costs and attorney’s fees to Mr. Heater. The court then referred the case to the magistrate judge for further proceedings on the amount of costs and fees. On October 29, 2013, the magistrate judge issued a report and recommendation ordering fees and costs in the amount of $5,045. Before the magistrate judge issued its final order on the amount of fees and costs, Ayala had already filed a notice of appeal in April 2013 seeking review of the district court’s final order granting summary judgment for the defendants as well as the court’s December 5 order imposing sanctions. After the October 2013 final order on the amount of sanctions, Ayala filed what she termed an “Amended Notice of Appeal” stating she was amending her first notice of appeal to include the court’s October order. The amended notice of appeal from the final order determining the amount of sanctions was given a separate case number, 13-31246. We have consolidated the two appeals.

We have these rulings to review: (1) the district court’s determination that Gabriel was improperly joined and the denial of Ayala’s motion to remand; (2) the district court’s grant of summary judgment for Enerco and Mr. Heater on Ayala’s remaining products liability claims; and (3) the imposition of sanctions against Ayala’s counsel. Ayala has also argued on appeal that the defendants obstructed the discovery process with improper discovery tactics.

DISCUSSION

I. Improper joinder

We review de novo both the district court’s denial of a motion to remand to state court and the district court’s improper-joinder determination. Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 401 (5th Cir.2013) (improper joinder); Campbell v. Stone Ins., Inc., 509 F.3d 665, 669 (5th Cir.2007) (motion to remand). Improper joinder is “a narrow exception to the rule of complete diversity.” McDonal v. Abbott Labs., 408 F.3d 177, 183 (5th Cir.2005). To establish improper joinder, the party seeking removal must demonstrate either: “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” Id. Only the second way is before us. It requires examination of “whether the defendant has demonstrated ... that there is no reasonable basis for the district court to predict that the plain *245 tiff might be able to recover against an instate defendant.” Id. “A ‘mere theoretical possibility of recovery under local law* will not preclude a finding of improper joinder.” Smallwood v. Ill. Cent. R.R. Co.,

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569 F. App'x 241, Counsel Stack Legal Research, https://law.counselstack.com/opinion/patricia-ayala-v-gabriel-building-supply-ca5-2014.