United States District Court, C.D. California
Present: Honorable ANDRE BIROTTE JR., United States District
CIVIL MINUTES - GENERAL
[In Chambers] ORDER DENYING MOTION FOR REMAND
the Court is a Motion for Remand filed by Plaintiff Emil
Gasumyan ("Plaintiff). (Dkt. No. 23.) Defendant
Travelers Casualty Insurance Company of America
("Defendant") filed an Opposition. Plaintiff filed
an untimely Reply that the Court nevertheless considered. The
Motion is appropriate for disposition without oral argument
so the hearing set for May 15, 2017 is hereby VACATED.
See Fed. R. Civ. Proc. 78, Local Rule 7-15. The
Court DENIES the motion.
matter arises out of an insurance contract between Plaintiff
and Defendant Travelers. Plaintiff submitted a claim to
Travelers for coverage for damage to his bakery after it was
broken into and vandalized. FAC ¶ 15. Travelers denied
the claim on the ground that the insurance policy was not in
effect on the day of the incident. FAC ¶ 18. Plaintiff
filed a Complaint in state court asserting three state law
causes of action against Travelers. Travelers removed the
action based on diversity jurisdiction and then filed a
motion to strike portions of the Complaint. Plaintiff then
filed a First Amended Complaint (“FAC, ” Dkt. No.
11) that purported to add Pavel Arestov as a defendant and
adds a fourth cause of action, for negligent
misrepresentation. Plaintiff now moves to remand on the
ground that the addition of Arestov destroyed diversity
the motion lacks a statement of compliance with Local Rule
7-3 and on that basis alone should be denied.
the motion also fails on its merits. Plaintiff's argument
that adding non-diverse defendant Pavel Arestov destroyed
diversity fails for several reasons. The FAC did not
effectively add Arestov as a defendant: he is not named on
the face page of the FAC, nor is he identified on the docket.
Thus, for all intents and purposes, Arestov has not been
“added” as a defendant. Furthermore, Plaintiff
did not seek the issuance of a summons from the Court, as
required to serve Arestov with process. Also, under Fed. R.
Civ. Proc. 4(m), Plaintiff should have served Arestov with
the FAC within 90 days of filing it; Plaintiff filed the FAC
on November 27, 2016, so the 90 day deadline to serve passed
on February 27, 2017 and no proof of service for Arestov is
on the docket. Thus, even assuming Plaintiff had properly
“added” Arestov as a defendant, their failure to
serve Arestov would have prompted the Court to issue an order
to show cause why Arestov should not be dismissed for
Plaintiff's failure to prosecute. Even after Defendant
pointed out these defects in its April 21, 2017 opposition,
Plaintiff has not remedied them. Finally, Plaintiff has not
shown why joinder is appropriate under 28 U.S.C. 1447(e).
Indeed, all of the factors relevant to the analysis of
whether to permit joinder of a non-diverse party who would
defeat federal jurisdiction weight against joinder. See
McGrath v. Home Depot USA, Inc., 298 F.R.D. 601, 607
(S.D. Cal. 2014) (discussing factors). The Court therefore
rejects Plaintiff's attempt to join Arestov.
the foregoing also reinforces what is clear from the FAC
itself: that Arestov is a sham defendant whom Plaintiff
sought to add as a tactic to defeat diversity jurisdiction. A
non-diverse party may be disregarded for purposes of
determining whether jurisdiction exists if the court
determines that the party's joinder was
“fraudulent” or a “sham.” Morris
v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir.
2001); Ritchey v. Upjohn Drug Co., 139 F.3d 1313,
1318 (9th Cir. 1998); McCabe v. General Foods Corp.,
811 F.2d 1336, 1339 (9th Cir. 1987). The term
“fraudulent joinder” is a term of art and does
not imply any intent to deceive on the part of a plaintiff or
his counsel. Lewis v. Time Inc., 83 F.R.D. 455, 460
(E.D. Cal. 1979) aff'd 710 F.2d 549 (9th Cir.
1983) impliedly overruled on other grounds in Milkovich
v. Lorain Journal Co., 497 U.S. 1 (1990). The relevant
inquiry is whether the plaintiff has failed to state a cause
of action against the non-diverse defendant, and the failure
is “obvious according to the settled rules of the
state.” McCabe, 811 F.2d at 1339 (emphasis
added); see also Morris, 236 F.3d at 1067.
Arestov's joinder was fraudulent because the FAC does not
and cannot state a cause of action against Arestov. The FAC
alleges that “Arestov was the ‘claims
professional' assigned and employed by Travelers
Insurance to this case.” FAC ¶ 4. The FAC's
only other allegation as to Arestov appears in the fourth
cause of action, for negligent misrepresentation:
“Defendants, including Travelers Insurance and
Defendant Arestov, represented to Plaintiff that an important
fact was true.” FAC ¶ 42. The FAC does not allege
any specific conduct by Arestov - no other factual
allegations are connected to him. The FAC makes clear that
insofar as Arestov was involved in the misconduct alleged, it
was as an employee of Travelers for which Travelers, and not
Arestov personally, may be held liable.
Arestov was fraudulently joined (if at all), his citizenship
is disregarded for purposes of diversity jurisdiction.
Because the Plaintiff is diverse from Defendant Travelers,
and the amount in controversy exceeds $75, 000, diversity
motion for remand ...