UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
January 9, 2009
LIBRADO ACEVES, PLAINTIFF,
WAGNER SPRAY TECH CORPORATION, A CORPORATION, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
MEMORANDUM AND ORDER
Presently before the Court is Plaintiff's Motion to Amend the Complaint and Motion to Remand. For the following reasons, Plaintiff's Motion is granted.*fn1
Plaintiff alleges that on July 17, 2006, while working with a paint sprayer, he was injured by an electrical shock.
The sprayer was manufactured by Wagner Spray Tech Corporation ("Wagner") and its electrical cord was manufactured by Kord King Company ("Kord King"). ICI, now owned by Anzo Nobel, distributed the sprayer, and, approximately four months prior to the incident, the sprayer was repaired by LAD Enterprises, Inc. ("LAD"), at its Elk Grove facility.
As a result of the shock, Plaintiff allegedly suffered from brain, cardiac and neurological damage, psychological and psychiatric injury, ongoing anxiety and depression, and post traumatic stress disorder.
Because Plaintiff was injured during the course of his employment, he filed a workers' compensation claim. The workers' compensation carrier subsequently filed a subrogation action ("Subrogation Action") in Yolo County.
Plaintiff initially sought the advice of counsel, Jeffrey Jacobs, in February of 2008. Plaintiff subsequently filed the current Complaint in Yolo County Superior Court on July 17, 2008. Plaintiff alleged products liability and general negligence causes of action against Wagner; Spray Tech Systems, Inc. ("Spray Tech"); King Associates Ltd. ("King Assoc."); Kord King; ICI Group, Inc.; ICI; Anzo Nobel; LAD; and Does 1-100.
According to Mr. Jacobs, at the time he filed this action, he knew the identifies of some, but not all of the potentially responsible parties. Accordingly, pursuant to California law, he named Does 1-100 as fictitious defendants.
At the time or removal of this action, Plaintiff had not yet served any Defendants. Nevertheless, Defendant Kord King had actual notice of Plaintiff's suit and voluntarily answered the Complaint on August 29, 2008. That same day, Kord King removed the action to this Court alleging diversity of citizenship under 28 U.S.C. § 1332.
On September 29, 2008, Plaintiff filed the current Motion to Amend his Complaint, seeking to substitute the following parties for Doe Defendants: Westech Services, Inc., a California corporation ("Westech"); United Services Group, LLC, an LLC organized under California law ("USC CA"); United Services Group, LLC, an LLC organized under the laws of Washington ("USC WA"); and David Butler ("Butler"), a California citizen. Because such an amendment will destroy diversity, Plaintiff simultaneously moved to remand to state court.
Mr. Jacobs alleges that, at the time he filed the Complaint, he was unaware of the identity or potential liability of the above Defendants he now seeks to substitute. However, Kord King argues that because Plaintiff was present at depositions conducted in the Subrogation Action, Plaintiff had knowledge of the identities of the prospective defendants and is thereby precluded from making any substitutions. Specifically, Kord King claims that on March 27, 2008, three LAD documents were marked as exhibits to the deposition of one Edward Armas. Kord King claims that those documents put Mr. Jacobs on notice of the absent defendants' identities.
However, Mr. Jacobs contends that it was inspection of the paint sprayer, subsequent to the filing of the Complaint, that ultimately led him to believe either the Spraytech defendants or the repair technician, David Butler, was responsible for Plaintiff's injuries.
Moreover, Mr. Jacobs stated that he only recently discovered that LAD was dissolved on or about June 1, 2007. According to Mr. Jacobs, LAD was acquired by Westech and both LAD and Westech participated in some manner in the entity USG WA. However, USG WA was also dissolved on or about February 1, 2008, and on approximately February 22, 2008, USG CA was formed. Thus, Plaintiff alleges that Westech, USG WA, and USG CA are each ultimately responsible for the repairs conducted through the former LAD.
For the following reasons, the Court will allow amendment and remand to state court.
I. SUBSTITUTION OF DOE DEFENDANTS
California Code of Civil Procedure § 474 states, "When the plaintiff is ignorant of the name of a defendant, he must state that fact in the complaint...and such defendant may be designated in any pleading or proceeding by any name, and when his true name is discovered, the pleading or proceeding must be amended accordingly."
"Code of Civil Procedure section 474 is to be liberally construed. The relevant inquiry when the plaintiff seeks to substitute a real defendant for one sued fictitiously is what facts the plaintiff actually knew at the time the original complaint was filed. It is when plaintiff is actually ignorant of a certain fact, not when plaintiff might by the use of reasonable diligence have discovered it. Whether plaintiff's ignorance is from misfortune or negligence, plaintiff is alike ignorant, and this is all the statute requires." Fuller v. Tucker, 84 Cal. App. 4th 1163, 1170 (2d Dist. 2000) (internal citations and quotations omitted) (emphasis in original).
Moreover, "[i]f the identity of the Doe defendant is known but, at the time of the filing of the complaint the plaintiff did not know facts that would cause a reasonable person to believe that liability is probable, the requirements of section 474 are met. Section 474 allows a plaintiff in good faith to delay suing particular persons as named defendants until he has knowledge of sufficient facts to cause a reasonable person to believe liability is probable. The fact that the plaintiff had the means to obtain knowledge is irrelevant. In short, section 474 does not impose upon the plaintiff a duty to go in search of facts [he] does not actually have at the time [he] files [his] original pleading." McOwen v. Grossman, 153 Cal. App. 4th 937, 943-944 (2d. Dist. 2007) (internal citations and quotations omitted).
Mr. Jacobs stated under penalty of perjury that at the time he filed the Complaint he lacked actual knowledge of the identity or potential liability of the absent defendants he now seeks to add.
Kord King claims that Mr. Jacobs had the requisite knowledge based on two invoices and a repair worksheet submitted as deposition exhibits in the Subrogation Action. The two invoices contain reference to United Services Group and the Repair Worksheet contains a signature alleged to be that of Mr. Butler. Nevertheless, under California law, even if those documents were sufficient to put Mr. Jacobs on notice of the identity of the absent defendants, which this Court doubts, because Plaintiff lacked actual knowledge, both individually or through his attorney, substitution pursuant to Section 474 is permissible.
II. JOINDER OF NON-DIVERSE DEFENDANTS
Accordingly, the Court must next determine if, under federal law, joinder of non-diverse defendants is proper. "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). Thus, "[w]here a plaintiff seeks to join a nondiverse defendant after removal, 28 U.S.C. § 1447(e) gives the district court discretion to allow the joinder or to not allow the joinder." Popeskovich v. Cantex, Inc., 2005 WL 1837123 *1 (E.D. Cal. 2005). "Once joinder of a nondiverse defendant is permitted, remand is mandatory." Id.
Six factors are relevant to the determination of whether plaintiff should be allowed to amend under such circumstances: "(1) whether the party sought to be joined is needed for just adjudication and would be joined under Federal Rule of Civil Procedure 19(a); (2) whether the statute of limitations would preclude an original action against the new defendants in state court; (3) whether there has been unexplained delay in requesting joinder; (4) whether joinder is intended solely to defeat federal jurisdiction; (5) whether the claims against the new defendant appear valid; and (6) whether denial of joinder will prejudice the plaintiff." IBC Aviation Services, Inc. v. Compania Mexicana De Aviacion, S.A. de C.V., 125 F. Supp. 2d 1008, 1011 (N.D. Cal. 2000) (internal citations omitted).
"Federal Rule of Civil Procedure 19 requires joinder of persons whose absence would preclude the grant of complete relief, or whose absence would impede their ability to protect their interests or would subject any of the parties to the danger of inconsistent obligations. A necessary party is one 'having an interest in the controversy, and who ought to be made [a] part[y]...' This standard is met when failure to join will lead to separate and redundant actions." Id., quoting CP Nat'l. Corp. v. Bonneville Power Admin., 928 F.2d 905, 910, 912 (9th Cir. 1991).
"Although courts consider whether a party would meet FRCP 19's standard for a necessary party, amendment under § 1447(e) is a less restrictive standard than for joinder under FRCP 19.
Courts disallow joinder of non-diverse defendants where those defendants are only tangentially related to the cause of action or would not prevent complete relief." Id. at 1011-1012 (internal citations omitted). "Courts that have approved discretionary joinder look at least for a high degree of involvement by the defendant in the occurrences that gave rise to the plaintiff's cause of action." Boon v. Allstate Ins. Co., 229 F. Supp. 2d 1016, 1022 (9th Cir. 2002).
According to Plaintiff, Mr. Butler personally handled the repairs which may have led to the malfunction of the sprayer. Moreover, the remaining entities are alleged either to own or to be successors in interest of an existing defendant. Therefore, these absent parties are more than tangentially related to the cause of action, and the first factor favors joinder.
Regarding the second factor, the parties agree that California's two-year statute of limitations governing personal injury claims is applicable here. See Cal. Code Civ. Pro. § 335.1 Plaintiff's injury allegedly occurred on July 17, 2006 and he filed the instant action on July 17, 2008. Thus, Plaintiff is time-barred from bringing a separate suit against the absent defendants in state court.
However, at least one court has noted that even if a state action against the defendant sought to be joined is not precluded by an applicable statute of limitations, requiring plaintiff to engage in dual litigation of the "same issues in two forums would be a waste of judicial resources and risks inconsistent results." IBC Aviation at 1012.
Accordingly, because Plaintiff's state law claims are now time-barred, and because, even if they were not, Plaintiff would be required to litigate entirely duplicative issues in two forums, this factor weighs in favor of joinder.
Additionally, Plaintiff initially filed this suit less than three months prior to filing his Motion to Amend. Notably, as of the date of removal of this action, Plaintiff had not yet served any Defendants. The case came before this Court only because, due to that lack of service, Kord King was free to voluntarily answer and unilaterally remove. However, the fact that this case was removed between Plaintiff's initial filing and his later Motion to Amend does not render his Motion untimely. Thus, the Court finds no unexpected delay weighs against joinder.
Moreover, there is no evidence indicating that Plaintiff seeks to join absent defendants solely to defeat diversity jurisdiction. Mr. Jacobs stated under penalty of perjury that he was unaware of the identity of the potential defendants at the time he filed the Complaint. As stated above, Mr. Butler is alleged to be the technician who actually performed the repairs at issue in this case. The absent entities are all alleged to be, in some form, owners or successors in interest of various existing Defendants. Thus, this Court cannot say from the record that Plaintiff's sole motive in seeking amendment is to destroy diversity, nor can the Court say that Plaintiff has no potential claims against the absent defendants.
Finally, denial of joinder will potentially prejudice Plaintiff in that his action is time-barred in state court and, even if he were able to proceed in separate actions, he would be required to engage in entirely duplicative litigation in multiple forums. Moreover, at such an early stage in these proceedings, the Court does not find that Defendants will suffer any prejudice should joinder be allowed.
Based on its evaluation of the above factors, the Court finds joinder of the absent defendants is appropriate.
Accordingly, Plaintiff's Motion to Amend and Remand is GRANTED.*fn2 The Clerk of the Court is directed to close the file.
IT IS SO ORDERED.