Serrano et al v. Otis Elevator Company et al, No. 2:2016cv15460 - Document 19 (E.D. La. 2017)
Court Description: ORDER & REASONS denying 7 Motion to Remand to State Court. Defendant Dacia Paz is DISMISSED as improperly joined. Signed by Judge Sarah S. Vance on 2/6/2017. (mmm)
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Serrano et al v. Otis Elevator Company et al Doc. 19 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA ANGIE SERRANO, ET AL. VERSUS CIVIL ACTION NO. 16-15460 OTIS ELEVATOR COMPANY, ET AL. SECTION “R” (4) ORD ER AN D REASON S Before the Court is plaintiffs Angie Serrano and Nelly Briceno’s m otion to rem and this case to state court. 1 For the following reasons, plaintiffs’ m otion to rem and is denied. I. BACKGROU N D On April 3, 20 16, plaintiffs Angie Serrano and Nelly Briceno were injured at the Westin New Orleans Canal Place hotel when the service elevator in which they were riding m alfunctioned and dropped m ultiple floors. At the tim e, plaintiffs were employees of Staff Pro Workforce, LLC, which was under contract to provide contract workers to the hotel. 2 According to plaintiffs, the drop was forceful enough that Briceno broke her 1 2 R. Doc. 7. R. Doc. 1-1 at 2 ¶ 2. Dockets.Justia.com leg and a vertebrae in her back, and Serrano was thrown to the ground where she struck her head. 3 On August 19, 20 16, plaintiffs filed suit in the Civil District Court for the Parish of Orleans. Plaintiffs nam ed as defendants the Otis Elevator Com pany, Interstate Management Com pany, LLC (the entity that provided hotel m anagement services for the hotel), Canal Place Borrower, LLC (the owner of the hotel, d/ b/ a The Westin New Orleans Canal Place), and Dacia Paz. 4 Paz was plaintiffs’ supervisor at the tim e of their injuries, and plaintiffs alleged that they notified Paz of sim ilar incidents of elevator m alfunctions before they were injured. 5 Plaintiffs’ suit alleged that defendants’ negligence was the cause of the elevator accident and their injuries. 6 On October 12, 20 16, defendants Canal Place and Interstate rem oved the case to this Court on the basis of diversity jurisdiction. 7 Plaintiffs now m ove to rem and, contending that incom plete diversity of the parties renders this Court without subject m atter jurisdiction. Indeed, it is undisputed that Serrano and Briceno, along with defendant Paz are Louisiana citizens for jurisdictional purposes. Rem oving defendants Canal 3 4 5 6 7 Id. ¶ 3. Id. at 1-2. Id. at 3 ¶ 5. Id. at 3-4. R. Doc. 1. 2 Place and Interstate argue that com plete diversity exists because Paz was im properly joined and therefore her citizenship should be ignored. 8 II. REMAN D BASED ON LACKIN G D IVERSITY JU RISD ICTION A. Im p ro p e r Jo in d e r Stan d ard Plaintiffs’ rem and m otion is governed by the standard for im proper joinder, as set forth below. A defendant m ay generally rem ove a civil action filed in state court if the federal court has original jurisdiction over the action. See 28 U.S.C. § 1441(a). The removing party bears the burden of showing that federal jurisdiction exists. See Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). In assessing whether rem oval was appropriate, the Court is guided by the principle, grounded in notions of com ity and the recognition that federal courts are courts of lim ited jurisdiction, that rem oval statutes should be strictly construed. See, e.g., Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720 , 723 (5th Cir. 20 0 2); N eal v. Kaw asaki Motors Corp., No. 95-668, 1995 WL 41990 1, at *4 (E.D. La. J uly 13, 1995). Though the Court m ust rem and to state court if at any tim e before final judgm ent it appears that it lacks subject m atter jurisdiction, the Court’s jurisdiction is 8 R. Doc. 9 at 1-2. 3 fixed at of the time of rem oval. 28 U.S.C. § 1447(c); Doddy v. Oxy USA, Inc., 10 1 F.3d 448, 456 (5th Cir. 1996). For diversity jurisdiction to exist, the am ount in controversy m ust exceed $ 75,0 0 0 , and there m ust be com plete diversity between plaintiffs and defendants. See 28 U.S.C. § 1332(a); Ow en Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978). Here, the parties do not dispute that the am ountin-controversy-requirem ent is met, but they disagree about whether the com plete diversity requirement is satisfied. Indeed, Serrano, Briceno, and Paz have Louisiana citizenship, which would ordinarily destroy complete diversity. See McLaughlin v. Miss. Pow er Co., 376 F.3d 344, 353 (5th Cir. 20 0 4). And when a nondiverse party is properly joined as a defendant, no defendant m ay remove the case under 28 U.S.C. § 1332. But a defendant m ay rem ove by showing that the nondiverse party was joined im properly. Sm allw ood v. Ill. Cent. R. Co., 352 F.3d 220 , 222 (5th Cir. 20 0 3) (Sm allw ood I). The burden of demonstrating im proper joinder is a heavy one, as the doctrine is a narrow exception to the rule of com plete diversity. Id. A defendant m ay establish im proper joinder by showing either (1) actual fraud in pleading jurisdictional facts, or (2) the inability of the plaintiff to establish a cause of action against the nondiverse defendant. The test for fraudulent 4 joinder is “whether the defendant has dem onstrated that there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently m eans that there is no reasonable basis for the district court to predict that the plaintiff m ight be able to recover against an in-state defendant.” Sm allw ood v. Illinois Cent. R. Co., 385 F.3d 568, 574 (5th Cir. 20 0 4) (Sm allw ood II). The possibility m ust be reasonable, not merely theoretical. Great Plains Trust Co. v. Morgan Stanley Dean W itter & Co., 313 F.3d 30 5, 312 (5th Cir. 20 0 2). In analyzing whether a plaintiff has dem onstrated a reasonable possibility of recovery, the district court m ay “‘conduct a Rule 12(b)(6)-type analysis, looking initially at the allegations of the com plaint to determ ine whether the com plaint states a claim under state law against the in-state defendant.’” Menedez v. W al-Mart Stores, Inc., 364 Fed. App’x 62, 69 (5th Cir. 20 10 ) (per curiam ) (quoting Sm allw ood II, 385 F.3d at 573). The scope of the inquiry for improper joinder, however, is even broader than that for Rule 12(b)(6) because the Court m ay “pierce the pleadings” and consider sum m ary judgm ent-type evidence to determine whether the plaintiff has a basis in fact for his or her claim . Sm allw ood I, 352 F.3d at 223 n.8 (citing Travis v. Irby , 326 F.3d 644, 648-49 (5th Cir. 20 0 3)). See also Hornbuckle v. State Farm Lloy ds, 385 F.3d 538, 542 (5th Cir. 20 0 4). In 5 conducting this inquiry, the Court m ust “take into account all unchallenged factual allegations, including those alleged in the com plaint, in the light m ost favorable to the plaintiff.” Travis, 326 F.3d at 649. So, too, m ust the Court resolve all am biguities of state law in favor of the nonrem oving party. Id. Further, the Court m ust take care not to “m ov[e] beyond jurisdiction and into a resolution on the m erits.” Sm allw ood II, 385 F.3d at 574. III. D ISCU SSION Defendants argue that plaintiffs’ joinder of Paz was im proper because, according to defendants, Paz has tort im m unity under the Louisiana Workers’ Com pensation Act (LWCA), La. Stat. Ann. § 23:10 32, et seq., and therefore there is no reasonable basis for the Court to find that plaintiffs can recover against the in-state defendant Paz. Defendants do not contest that a 12(b)(6)-type inquiry would reveal a reasonable basis for recovery, but instead ask the Court to “pierce” plaintiff’s pleadings and conduct a sum m ary inquiry to determ ine Paz’s tort im m unity under the LWCA. Sm allw ood II, 385 F.3d at 573. A. Lo u is ian a W o rke rs ’ Co m p e n s atio n Act The LWCA provides the exclusive remedy for an em ployee injured by the negligent acts of his or her co-em ployees or em ployer when those injuries 6 arise out of and in the course of em ploym ent. See La. Stat. Ann. §§ 23:10 31 and 23:10 32; Vallery v. Southern Baptist Hosp., 630 So. 2d 861, 863 (La. App. 4 Cir. 1995); Chafflin v. John H. Carter Co., Inc., No. 96-2127, 1998 WL 19624, at *7 (E.D. La. J an. 20 , 1998). Therefore, the LWCA provides a statutory defense to tort claim s from em ployees injured on the job. The LWCA covers direct em ployers and em ployees, but also includes the concept of “statutory employer.” This is m eant to ensure that injured contracted em ployees have an effective rem edy by m aking it m ore difficult for an entity to avoid workers’ compensation liability by operating through interm ediaries. See Berthelot v. Murphy Oil, Inc., No. 0 9-4460 , 20 10 WL 10 3871, at *3 (discussing history of LWCA). But the “statutory employer” concept also operates as a defense to tort actions for em ployers who use contracted em ployees. The Act includes two types of statutory employer defenses, the “trade, business or occupation” defense, and the “two-contract” defense. La. Stat. Ann. § 23:10 61(A)(1). Defendants rely on the “twocontract” defense here. The “two-contract” theory creates a statutory em ployer relationship between a general contractor and the em ployees of its subcontractors, regardless of the general contractor’s trade or business. See Allen v. State ex rel. Ernest N . Moral-N ew Orleans Exhibition Hall Auth., 842 So. 2d 373, 7 378 (La. 20 0 3). The “two-contract” defense applies when: “(1) the principal enters into a contract with a third party; (2) pursuant to that contract, work m ust be performed; and (3) in order for the principal to fulfill its contractual obligation to perform the work, the principal enters into a subcontract for all or part of the work performed.” Id. With this defense, it is “irrelevant whether the subcontractor’s work is part of the work ordinarily performed by the principal.” Id. at 379. Thus, under the “two-contract” defense, an em ployer is im m une from liability for tort claim s from subcontracted em ployees. B. Su m m ary In qu iry “Ordinarily, if a plaintiff can survive a Rule 12(b)(6) challenge, there is no im proper joinder.” Sm allw ood II, 385 F.3d at 573. Even so, district courts m ay “pierce the pleadings and conduct a sum m ary inquiry” before slam m ing the door on a claim of improper joinder. Id. In cases in which a plaintiff has “stated a claim but m isstated or om itted discrete facts that would determ ine the propriety of joinder,” a summ ary inquiry m ight be useful. Id. Im portantly, the sum m ary inquiry is “appropriate only to identify the presence of discrete and undisputed facts that would preclude plaintiff’s recovery against the in-state defendant.” Id. 8 Plaintiffs argue that the inquiry sought by defendants under the LWCA and the “two-contract” defense would exceed the bounds set out in Sm allw od II. But Courts in this Circuit have addressed the issue of LWCA im m unity— including whether an injured plaintiff was in the course and scope of his or her em ployment, and the “two-contract” argum ent urged here—in the context of m otions to rem and for im proper joinder. See Collins v. Brice Bldg. Co., LLC, No. 12-2319, 20 12 WL 60 49149, at *3-5 (E.D. La. Dec. 5, 20 12) 9 ; Lebeau v. Marathon E.G. Production Ltd., No. 11-0 841, 20 11 WL 5920 950 , at *6 (S.D. Tex. Nov. 28, 20 11) (finding im proper joinder because of LWCA im m unity and rejecting argum ent that inquiry exceeded scope of Sm allw ood II); see also Carriere v. Sears, Roebuck and Co., 893 F.2d 98, 10 0 -0 1 (5th Cir. 1990 ) (affirm ing determ ination that nondiverse party was im properly joined because party was entitled to LWCA im m unity); Jernigan v. Ashland Oil Inc., 989 F.2d 812, 816 (5th Cir. 1993) (same); Keating v. Shell Chem . Co., 610 F.2d 328, 333 (5th Cir. 1980 ) (instructing district court to determ ine if accident occurred while plaintiff was in course and scope of his em ploym ent before deciding question of im proper joinder). 9 Collins considered a m otion for summ ary judgment together with the m otion to rem and, but addressed the question of im proper joinder before addressing sum m ary judgm ent. 9 Plaintiffs do not address these cases. Additionally, in arguing that the inquiry sought exceeds Sm allw ood II, plaintiffs rely on cases that involve im m unity regim es or other defenses that have no application here. See Cason v. Chesapeake Operating, Inc, No. 10 -1443, 20 11 WL 20 120 3, at *1-4 (W.D. La. J an 18, 20 11); Catalano v. Cleggett-Lucas, No. 0 2-330 , 20 0 2 WL 50 6810 , at *2-3 (E.D. La. Mar. 28, 20 0 2). The sole case cited by plaintiffs concerning the LWCA deals with intentional torts, which are specifically exem pt from the LWCA. See Ohler v. Mobil Oil Corp., No. 91-4192, 1992 WL 280 62, at *1 (E.D. La. Feb. 5, 1992). In Cason, the court found that the inquiry necessary to determ ine if a party was entitled to Louisiana law contractor’s im m unity would go “far beyond the sum m ary inquiry envisioned by the Fifth Circuit in Sm allw ood and goes directly to the m erits of the case.” 20 11 WL 20 120 3, at *4 (citations and internal quotation m arks om itted). But Cason dealt with contractor’s im m unity under Louisiana law, La. Stat. Ann. § 9:2771, instead of im m unity under the LWCA. The statutory requirements for each im m unity are different, and the inquiry required in Cason is m uch m ore expansive than is required here. The same is true of Catalano v. Cleggett-Lucas, cited by 10 plaintiffs. 10 No. 0 2-330 , 20 0 2 WL 50 6810 , at *2-3 (E.D. La. Mar. 28, 20 0 2) (finding that affirmative defense of prescription did not bar rem and because to determ ine its applicability the Court m ust determ ine the date of plaintiff’s addiction to OxyContin, which was unlikely to have clear-cut onset date). See also Conner v. Kraem er-Show s Oilfield Servs., LLC, 876 F. Supp. 2d 750 , 755 (refusing to pierce pleadings because both parties had subm itted m ultiple affidavits and “dueling interpretations of m edical records,” and “alm ost all of the m aterial facts” were disputed). Plaintiffs also point to the case of Ohler v. Mobil Oil Corporation to argue that the question of LWCA tort im m unity should not be determ ined at this stage. In Ohler, an employee of Mobil was injured in an explosion at one of Mobil’s refineries. Mobil rem oved and the plaintiff m oved to rem and, and the defendants sim ilarly argued that the nondiverse defendants were im properly joined because they were im m une from suit under the LWCA. Ohler, No. 91-4192, 1992 WL 280 62, at *1 (E.D. La. Feb. 5, 1992). The Court found that there was a reasonable basis for liability and granted plaintiff’s 10 Plaintiffs also cite Cooper v. Brow n & W illiam son Tobacco Corp., No. 0 0 -2539, 20 0 1 WL 16770 49 (E.D. La. Apr. 12, 20 0 1). But while Cooper rejected defendants’ im proper joinder argument based on an affirm ative defense, the Cooper court m ade clear that m ade its decision largely because the first tim e defendants m entioned any possible affirm ative defenses was well after the case was initiated and that defendants had not even pleaded the existence of an affirmative defense. Id. at *1-2. 11 rem and m otion. Id. at *2. But the Ohler Court relied on the fact that the plaintiff asserted a claim of intentional tort, and claim s for intentional torts are exem pt from the LWCA. Id. at *1-2. Therefore the Court could not determ ine if the nondiverse defendants were improperly joined without exam ining if they com m itted an intentional tort, which would im perm issibly go to the m erits of plaintiff’s claim . Plaintiffs here allege solely negligence, and therefore Ohler is inapposite. An exam ination of the inquiry necessary here reveals that it is appropriate under Sm allw ood II. To determ ine if Paz is entitled to im m unity under the LWCA, the Court m ust determ ine (1) if plaintiffs were injured in the course and scope of their employm ent; and (2) if Paz is a statutory em ployee of plaintiff’s statutory em ployer. These facts can be determ ined without substantial evidentiary analysis or hearings. Thus, the Court finds that determ ining the application of tort im m unity from the LWCA does not exceed the scope of the Sm allw ood inquiry, nor im perm issibly enmesh the Court in the m erits of plaintiffs’ case. Sm allw ood II, 385 F.3d at 574, 574 n.12 (citation om itted); cf. Pitm an v. Crane Co., No. 13-83, 20 13 WL 140 3326, at *5 (E.D. La. Apr. 5, 20 13) (after “piercing the pleadings,” finding defendant had not m et burden to show im proper joinder because defendant 12 could not show plaintiff had no reasonable basis for recovery without getting into m erits of claim ). 1. Course and Scope of Em ploy m ent Plaintiffs argue that their injuries occurred after they com pleted their shifts, so they were no longer on duty and thus the LWCA should not apply. 11 For an injury to be covered by the LWCA, the injury m ust both “arise out of” and “occur in the course of” em ployment. Harris v. W al-Mart Stores, Inc., 20 5 F.3d 847, 848 (5th Cir. 20 0 0 ). “The arising out of prong focuses on the character or source of the risk and on the relationship of the risk to the nature of em ploym ent,” while the “course of em ploym ent” prong exam ines tim e, place, and employm ent activity. Id. (internal quotation m arks om itted). A strong showing on one prong will com pensate for a weaker showing in the other, and vice versa. Id. The Fifth Circuit has observed that Louisiana courts liberally construe the LWCA “so as to include all services that can reasonably be said to be within the statute not only when the injured person seeks its protection, but when he attempts to have him self excluded from the coverage of the act.” Id. at 849 (citation om itted). 11 R. Doc. 7-2 at 6-7. 13 According to plaintiffs’ own allegations, the injury occurred in the hotel’s service elevator, on the hotel prem ises, 12 and plaintiffs’ m otion to rem and states that the accident occurred shortly after they finished their shifts. 13 Further, defendant subm its the affidavit of David Bilbe, the General Manager of the hotel, who attests that when the accident occurred, plaintiffs had not yet clocked out, nor had they turned in their assignments, a requirement before one can finish his or her shift. 14 Additionally, Bilbe attests that plaintiffs were still in their housekeeping uniform s when the accident occurred. 15 Plaintiffs subm it no evidence in response to Bilbe’s affidavit and point to nothing indicating Bilbe’s attestations are false, beyond calling the affidavit “self-serving.”16 Even if the Court were to take plaintiffs’ contested allegation that they were off-duty as true, the LWCA would still apply. Louisiana courts consistently hold that em ployees are covered by the Act when they are injured on their em ployer’s prem ises, even if they have com pleted their shifts. See, e.g., Sislo v. N ew Orleans Center for Creative Arts, 198 So. 2d 12 R. Doc. 1-1 at 1. R. Doc. 7-2 at 6 (“Just before entering the service elevator in question, Plaintiffs had cleaned their last rooms and com pleted their shift.”) (em phasis added). 14 R. Doc. 9-1 at 2 ¶ 8. 15 Id. 16 R. Doc. 12 at 3. 14 13 120 2, 120 8 (La. App. 4 Cir. 20 16) (noting that it has “long been well settled, . . . that [the LWCA] envision[s] extension of coverage to em ployees from the tim e they reach the em ployer’s prem ises until they depart therefrom ”) (quoting Carter v. Lanzetta, 193 So. 2d 259, 261 (La. 1966)); Mitchell v. Brookshire Grocery Co., 653 So. 2d 20 2, 20 4 (La. App. 2 Cir. 1995) (“Even if an em ployee has finished his day’s work and is in the act of leaving, he is entitled to a reasonable period while still on the em ployer’s prem ises which is regarded as within the course of employm ent.”); Bosse v. W estinghouse Electric, Inc., 637 So. 2d 1157, 1159-60 (La. App. 4 Cir. 1994) (finding that injuries sustained in elevator accident which occurred approximately 45 m inutes before plaintiff’s shift started were covered by LWCA); see also Harris, 20 5 F.3d at 851 (finding that injury to off-the-clock em ployee caused by physical defect in em ployer’s prem ises covered by LWCA). Plaintiffs cite no case stating that the course and scope of one’s em ploym ent ends at the exact m om ent his or her shift ends. As the above authority m akes clear, there is no m erit to plaintiff’s argum ent that their injuries were not in the course and scope of their em ploym ent. 2. Tw o-Contract Defense Next, the Court m ust address whether Paz has tort im m unity under the LWCA pursuant to the “two-contract” defense. 15 In support, defendants subm it a Hotel Managem ent Agreem ent between Patriot Mortgage Borrower, L.L.C., and Interstate, in which Interstate agreed to operate the hotel. 17 Patriot owned the hotel before Canal Place, and assigned its rights and duties under the Agreement to Canal Place. 18 Defendants also subm it an Agreem ent for the Supply of Contract Labor between Interstate (as agent for Canal Place) and Staff Pro Workforce. 19 Bilbe’s affidavit attests that Interstate entered into the contract with Staff Pro in order to fulfill its obligations to operate the hotel. 20 All of the elem ents of the two-contract defense are m et here. Canal Place had a contract with Interstate, and under that contract, Interstate had to perform the work necessary to operate the hotel. In order to do so, Interstate entered into a subcontract with Staff Pro, in which Staff Pro (and its em ployees) agreed to perform part of the work. This is a clear exam ple of statutory employment under the two-contract defense. See Collins, 20 12 WL 60 49149, at *4; Groover v. Scottsdale Ins. Co., 586 F.3d 10 12, 10 15 (5th Cir. 20 0 9). Plaintiffs adm it in their com plaint that they were em ployees of Staff Pro at the time of the accident. 21 Thus, as plaintiffs m ake no argument and 17 18 19 20 21 R. Doc. 9-1 at 4. Id. at 10 . Id. at 12. Id. at 2 ¶ 4. R. Doc. 1-1 at 2 ¶ 2. 16 subm it no evidence to the contrary, there is no dispute that Interstate is the statutory employer of plaintiffs. It is well settled that em ployees of statutory em ployers are also im m une from tort liability as statutory co-employees. See Collins, 20 12 WL 60 49149, at *5 (“[C]ourts have repeatedly held that statutory co-em ployees are provided tort im m unity.”) (citing Dean v. Baker Hughes, Inc., No. 10 385, 20 10 WL 5463422, at *4 (W.D. La. Dec. 29, 20 10 ); Calais v. Exxon Pipeline Co., 430 So. 2d 321, 324 (La. App. 3 Cir. 1983)). Plaintiffs allege that Ms. Paz’s em ploym ent status has not yet been established, but Bilbe’s affidavit attests that Paz was a W-2 payroll em ployee of Interstate at the time of the accident. 22 Paz’s employment status can easily be determ ined without substantial evidentiary analysis. Plaintiffs “dispute” Paz’s status as an em ployee of Interstate but offer nothing whatsoever in evidence to put her em ploym ent status in dispute. Bilbe’s affidavit attests, based on his knowledge as General Manager of the hotel, that Paz is an em ployee of Interstate, and there is no evidence in the record indicating otherwise. Therefore, Paz’s status as an em ployee of Interstate is not disputed. Because Interstate is plaintiffs’ statutory employer, and because Paz is an employee of Interstate, Paz is also entitled to im m unity as a statutory co-employee. 22 R. Doc. 9-1 at 2 ¶ 7. 17 See, e.g., Collins, 20 12 WL 60 49149, at *5. Therefore, plaintiffs do not have a reasonable basis for recovery against the nondiverse defendant Paz. Because plaintiffs lack a reasonable basis for recovery against Paz, defendants have m et their heavy burden in establishing that Paz was im properly joined. Accordingly, diversity jurisdiction exists, and plaintiffs’ m otion to rem and m ust be denied. IV. CON CLU SION For the foregoing reasons, plaintiffs’ m otion to remand is DENIED. Defendant Dacia Paz is DISMISSED as im properly joined. 6th New Orleans, Louisiana, this _ _ _ _ _ day of February, 20 17. _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 18
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