William Mauldin v. Allstate Insurance Company, et ( 2018 )

Case: 17-11274 Document: 00514754515 Page: 1 Date Filed: 12/10/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
No. 17-11274 December 10, 2018
Lyle W. Cayce
Clerk
WILLIAM MAULDIN, Individually and As Representative of The Estate of
Pauline Gibson, Deceased,
Plaintiff - Appellant
v.
ALLSTATE INSURANCE COMPANY; MAYELLA GONZALES; THERESA
HERNANDEZ,
Defendants - Appellees
Appeal from the United States District Court
for the Northern District of Texas
No. 4:17-CV-641
Before HIGGINBOTHAM, GRAVES, and WILLETT, Circuit Judges.
PER CURIAM:*
In this appeal we consider whether the district court had diversity
jurisdiction over Appellant William Mauldin’s (“Mauldin”) state law insurance
claims. Concluding that the district court’s denial of Mauldin’s motion to
remand was proper, we affirm.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 17-11274
I.
The underlying dispute arises from the alleged underpayment of
insurance claims by Allstate Property and Casualty Insurance Company
(“Allstate”). Mauldin filed his original petition in Texas state court individually
and as the representative of the estate of his grandmother, Pauline Gibson.
Mauldin alleges that the home he resided in with Gibson was damaged,
causing personal property and real estate damage. Mauldin claims that
Allstate failed to properly investigate the claim and eventually underpaid the
claim. In addition to Allstate, Mauldin named two individual defendants:
Mayella Gonzalez and Theresa Hernandez. 1
Before answering the complaint in state court, Allstate timely filed its
notice of removal in the Northern District of Texas pursuant to 28 U.S.C. §§
1441 and 1446. In that notice of removal, Allstate claimed that there was
diversity of citizenship between Mauldin and defendants Allstate and
Hernandez. With respect to Gonzalez, Allstate acknowledged that she was a
citizen of Texas, but argued that she had been fraudulently joined as a
defendant. Shortly thereafter, Mauldin filed an opposed motion to remand,
asserting that Allstate failed to establish diversity of citizenship and the
amount in controversy and identifying several purported procedural
deficiencies with Allstate’s notice of removal. The district court denied the
motion and dismissed Mauldin’s claims against Gonzalez. In the order
dismissing Gonzalez, the district court stated explicitly: “The court determines
that there is no just reason for delay in, and hereby directs, entry of final
judgment as to the dismissal of plaintiff’s claims against Gonzalez.” It
concurrently entered a separate final judgment as to Gonzalez, dismissing the
1The state court petition does not contain any specific factual allegations about the
individual defendants’ conduct or explain their relationship to Mauldin or Allstate.
2
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claims against her without prejudice. Two weeks later, the court granted
Allstate’s motion to transfer venue, transferring the action to the Western
District of Oklahoma. This appeal followed.
II.
Before turning to the merits of Mauldin’s argument, we must first
determine whether we have jurisdiction to hear this appeal. First, Allstate
contends that we lack subject matter jurisdiction because an order denying a
motion to remand is not a final order that is immediately appealable. As a
general rule, we have jurisdiction over “appeals from all final decisions of the
district courts” located within our circuit. 2 A final decision is generally one
“which ends the litigation on the merits and leaves nothing for the court to do
but execute the judgment.” 3 Following from that, “[a]n order denying a motion
to remand, ‘standing alone,’ is ‘obviously . . . not final and immediately
appealable’ as of right.” 4 However, we have recognized an exception to that
general rule where an order denying a motion to remand is accompanied by a
final judgment characterized by the district court as final and appealable
under 54(b) of the Federal Rules of Civil Procedure. 5
Allstate attempts to distinguish this case, arguing that the order
dismissing Gonzalez does not specifically cite to Rule 54(b) or state that the
order is appealable. Further, Allstate suggests that Mauldin’s focus in his
briefing on appeal is not the final order dismissing Gonzalez, but rather the
2 28 U.S.C. § 1291.
3 Catlin v. United States, 324 U.S. 229, 233 (1945).
4 Caterpillar Inc. v. Lewis, 519 U.S. 61, 74 (1996) (quoting Chicago, R.I. & P.R. Co. v.
Stude, 346 U.S. 574, 578 (1954) (internal alterations omitted)).
5 B., Inc. v. Miller Brewing Co., 663 F.2d 545, 548 (5th Cir. Unit A 1981) (“In this case
however, the trial court did more than merely rule upon the plaintiff's motion for remand.
The court actually proceeded to enter judgment in favor of the four Texas defendants;
judgments which the trial court expressly characterized as being final and appealable for the
purposes of Rule 54(b) of the Federal Rules of Civil Procedure.”)
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order denying the motion to remand. We find those distinctions unavailing. As
a preliminary matter, when determining whether the district court entered a
final order, “[w]e have . . . cautioned that ‘[t]he intention of the judge is crucial
in determining finality.’” 6 In dismissing Gonzalez and directing the entry of
final judgment, the district judge here quoted straight from Rule 54(b): “The
court determines that there is no just reason for delay in, and hereby directs,
entry of final judgment as to the dismissal of plaintiff’s claims against
Gonzalez.” The record reflects the intent of the district court to enter a Rule
54(b) final order. Although Allstate is correct that Mauldin spends most of his
energy on appeal rehashing the same arguments made below in his motion to
remand, that does not somehow cause him to forfeit his right to appeal given
the district court’s entry of final judgment; we have jurisdiction to review the
order denying the motion to remand by virtue of the final judgment entered
alongside it. 7
One additional jurisdictional question bears mention. Although not
raised by either party, because it is our duty to police the limits of our own
jurisdiction sua sponte, 8 we turn briefly to the question of whether the district
court’s subsequent order transferring the case to the Western District of
Oklahoma divested us of jurisdiction to consider this appeal. Under 28 U.S.C.
§ 1294(1) an appeal can be taken only by the “court of appeals for the circuit
6 McLaughlin v. Miss. Power Co., 376 F.3d 344, 350 (5th Cir. 2004) (quoting Vaughn
v. Mobil Oil Expl. & Producing S.E., Inc., 891 F.2d 1195, 1197 (5th Cir. 1990)).
7 See Ford v. Elsbury, 32 F.3d 931 (5th Cir. 1994) (“Further, the denial of the motion
to remand and the granting of the partial summary judgment were inextricably linked. Both
grew out of the same round of motions and briefing, both relied on the same evidentiary
showing, both are found in the same judgment and amended judgment, and both turned on
the district court's conclusion that no claim existed against the non-diverse defendants. In
such circumstances we have held that we can review on appeal the denial of the motion to
remand along with the grant of the final partial judgment.”).
8 Vincent v. Consol. Operating Co., 17 F.3d 782, 785 (5th Cir. 1994) (“We pause briefly
to address the matter of our own jurisdiction in this case. Although neither party has raised
the issue, we must do so sua sponte if we perceive any possible defect in our jurisdiction.”).
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embracing the district.” 9 Therefore as a general rule, when a case is transferred
to another circuit, it is removed from our jurisdiction. 10 The question becomes
whether “the appellate court in the transferor circuit retains jurisdiction over
an immediately appealable decision of its district court following a § 1404(a)
transfer, at least during the time period allowed for the filing of such an
appeal.” 11 In other words, having found that the district court’s order denying
the motion to remand and dismissing Gonzalez is immediately appealable, do
we lose jurisdiction to consider that appeal because of the subsequent transfer
to an out-of-circuit district court. We now hold that we do not, persuaded by
several sister circuits’ decisions holding that “an otherwise appealable order
remains appealable even if a transfer is ordered at a later time.” 12 As those
courts have recognized, it would make little sense to strip the transferor circuit
of jurisdiction because the plain language of § 1294 prevents the transferee
circuit court from reviewing a decision made by a district court in the
transferor circuit, meaning that without the right to appeal in the transferor
circuit, the appealing party would have no opportunity to pursue its appeal. 13
Because the Tenth Circuit has no jurisdiction to review a decision by the
Northern District of Texas, we hold that we retain jurisdiction over the
9 28 U.S.C. § 1294(1).
10 In re Red Barn Motors, Inc., 794 F.3d 481, 484 (5th Cir. 2015) (citing In re Sw.
Mobile Homes, Inc., 317 F.2d 65, 66 (5th Cir. 1963)).
11 TechnoSteel, LLC v. Beers Const. Co., 271 F.3d 151, 155 (4th Cir. 2001).
12 Jones v. InfoCure Corp., 310 F.3d 529, 533 (7th Cir. 2002) (citing TechnoSteel, 271
F.3d at 153 (“The district court’s decision denying the petition to compel arbitration, which
is immediately appealable under 9 U.S.C.A. § 16, is subject to review in our circuit
notwithstanding the concurrent § 1404(a) transfer of the balance of the action, rendering the
fact that the transfer was complete before the appeal was actually filed irrelevant.”)); see also
Terenkian v. Republic of Iraq, 694 F.3d 1122, 1129–30 (9th Cir. 2012) (finding that the district
court’s transfer to an out-of-circuit district court did not strip the court of jurisdiction over an
immediately appealable decision of a district court within its circuit.).
13 Terenkian, 694 F.3d at 1130.
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immediately appealable order denying the motion to remand and dismissing
Gonzalez from the suit.
III.
Having determined we have jurisdiction, we turn to the merits of
Mauldin’s appeal, which essentially rehashes his motion to remand rejected
below. Mauldin contends that Allstate’s removal filing was procedurally
deficient for failing to file all state court documents, improperly filing “a
veritable ‘flurry’ of extraneous documents,” and failing to join all state court
defendants in the removal filing or otherwise obtain their consent. Mauldin
then turns to his substantive arguments, asserting that Allstate failed to
establish diversity or the amount in controversy. His complaints can be
disposed of swiftly.
The statute governing removal requires that the removing party file a
notice of removal stating the grounds for removal, together with a copy of “all
process, pleadings, and orders served upon such defendant . . . in such action.” 14
Mauldin points to three “citation documents” and a “civil case information
sheet” which he suggests were not filed, as well as the improper filing of
unidentified extraneous documents. While Allstate responds to each claim in
its brief, Mauldin’s argument fails for the simple reason that the complained-
of procedural defects (assuming they exist) are not jurisdictional and do not
require remand. 15 Next we turn to Mauldin’s complaint that only one
defendant joined in the notice of removal and Allstate has not submitted proof
of the non-removing defendants’ consent. The removal statute requires that all
defendants join in or consent to removal. 16 First, the failure to join in the
14 28 U.S.C. § 1446(a).
15 Dukes v. S.C. Ins. Co., 770 F.2d 545, 547–48 (5th Cir. 1985) (“Failure to file a copy
of the removal petition with the state court clerk is a procedural defect, and does not defeat
the federal court's jurisdiction.”).
16 28 U.S.C. § 1446(b)(2)(A).
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removal petition is procedural and “not a jurisdictional defect.” 17 Moreover, we
agree with the district court that defendant Hernandez did consent to the
removal. 18 With respect to Gonzalez, this court has repeatedly made clear that
a removing defendant “need not obtain the consent of a co-defendant that the
removing party contends is improperly joined.” 19
Mauldin’s substantive arguments fare no better. Where a state court
complaint alleges a damages amount, that number controls for purposes of
determining whether the amount in controversy threshold is met when the
case is removed to federal court. 20 In his state court petition, Mauldin sought
damages between $200,000 and $1,000,000, satisfying the amount in
controversy requirement. With respect to diversity of citizenship, we agree
with Allstate that the district court correctly determined that Gonzalez was
improperly joined and complete diversity existed. Mauldin advances no
argument that Gonzalez was properly joined, instead just reasserting that
Allstate did not offer sufficient proof of diversity. The burden to establish
jurisdiction falls to the removing party, and the burden on those who claim
fraudulent joinder “is a heavy one.” 21 Nonetheless, reviewing the district
court’s joinder determination de novo, we affirm its conclusion that Gonzalez
was not a proper party to the suit. Reviewing again Mauldin’s state court
petition, he does not make any allegations naming Gonzalez or discussing her
17 Johnson v. Helmerich & Payne, Inc., 892 F.2d 422, 423 (5th Cir. 1990).
18 The notice of removal states that “Defendant Hernandez consents to this removal”
and is signed by her counsel. There is no requirement that Hernadez actually sign the
petition for removal. Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1262 n.11 (5th Cir.
1988) (“This does not mean that each defendant must sign the original petition for removal,
but there must be some timely filed written indication from each served defendant, or from
some person or entity purporting to formally act on its behalf in this respect and to have
authority to do so, that it has actually consented to such action.”).
19 Rico v. Flores, 481 F.3d 234, 239 (5th Cir. 2007).
20 Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995).
21 Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003).
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conduct, and the complaint offers no basis for entitlement to relief from
Gonzalez, whose only connection to the underlying dispute was in conducting
Mauldin’s examination under oath as Allstate’s attorney. 22 Reviewing
Gonzalez’s affidavit, her limited role demonstrates she had no duty or liability
to Mauldin for the insurance claims raised in his petition, and he does not state
a claim entitling him to relief against Gonzalez. 23
IV.
Finding that we have jurisdiction to consider this appeal, we affirm the
district court’s order denying Mauldin’s motion to remand and dismissing
Gonzalez from the case. Appellant’s motion to supplement the record is
DENIED.
22 Mauldin specifies that Allstate insured against the losses at issue but with respect
to Hernandez and Gonzalez, merely alleges “and in due course all of the Defendants became
involved in this matter.”
23 See, e.g., Badon v. RJR Nabisco, Inc., 224 F.3d 382, 393 (5th Cir. 2000) (“We agree
with the district court that, considering defendants' affidavits ‘in light of the plaintiffs’ lack
of evidence,’ there is no reasonable basis for predicting that plaintiffs might establish liability
in their conspiracy claim against the in-state defendants.”).
8