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Steele v. American Honda Motor Company, Inc.

United States District Court, E.D. Michigan, Southern Division

September 5, 2019

ROBERT W. STEELE, Plaintiff,



         This matter is presently before the Court on plaintiff's motion for remand [docket entry 3], the motion of defendant American Honda Motor Company, Inc. (“AHM”) to dismiss [docket entry 7], and the motion of defendant Zeigler Imports, LLC (“Zeigler”) to dismiss [docket entry 11]. Pursuant to E.D. Mich. LR. 7.1(f)(2), the Court shall decide these motions without a hearing. For the reasons stated below, the Court shall deny plaintiff's motion, grant defendant Zeigler's motion, and grant in part defendant AHM's motion.

         This is a product liability and handicap discrimination case. Plaintiff, who is blind, alleges that on March 10, 2016, while attempting to cross a street in Kalamazoo, Michigan, he was struck and severely injured by a 2012 Honda electric vehicle. Am. Compl. ¶ 6. Plaintiff alleges that the vehicle “was being operated in the silent mode” and that he was not able to hear it approaching. Id. ¶ 8. Plaintiff filed suit in state court on March 4, 2019, naming AHM and John Doe Honda Dealership. The complaint identified the latter as “a domestic or foreign corporation doing business in Wayne County, Michigan, that sells or leases automobiles manufactured by American Honda Motor Co., Inc., ” id. ¶ 3, and as AHM's “designated agent that sold or leased the 2012 Vehicle to the driver, ” id. ¶ 5. Plaintiff asserts claims against both defendants for product liability (Count I) and for violation of his rights under Michigan's Persons With Disabilities Civil Rights Act (Count II).

         On June 14, 2019, AHM, which had been served with process on May 24, removed the case based on the parties' diversity of citizenship, as AHM is incorporated in and has its principal place of business in California, plaintiff is a resident of Michigan, and more than $75, 000 is in controversy. Notice of Removal ¶¶ 4-6. The removal notice correctly noted that under 28 U.S.C. § 1441(b), “[i]n determining whether a civil action is removable on the basis of the jurisdiction under section 1332(a) of this title, the citizenship of defendants sued under fictitious names shall be disregarded.”

         Plaintiff's Motion for Remand Based on Alleged Procedural Error

         On July 2, plaintiff filed the instant motion for remand, arguing that the removal was procedurally defective because the John Doe defendant (whom plaintiff, in an amended complaint also filed on July 2, has now identified as “Zeigler Imports, LLC d/b/a Zeigler Honda and d/b/a Zeigler Honda of Kalamazoo”) was served with process before the case was removed and therefore the case could not be removed without its consent. To show that he served Zeigler with process, plaintiff points to (1) a summons issued on March 4, 2019, identifying defendant as “JOHN DOE HONDA DEALERSHIP, ” Pl.'s Mot. for Remand, Ex. 2; and (2) plaintiff's attorney's Affidavit of Service, accompanied by a hand-written mail receipt that appears to show that plaintiff served Zeigler Honda at 4211 Stadium Dr., Kalamazoo, MI, with “a copy of the summons and complaint, together with jury demand” on May 22 or 23, 2019, id., Ex. 3. Apparently the summons and complaint were mailed under a May 20, 2019, cover letter from plaintiff's attorney stating, “I forward a copy of a lawsuit filed 3/4/2019 in Wayne County Circuit Court.” Zeigler's Mot. to Dismiss, Ex. 2.

         Plaintiff correctly notes that under 28 U.S.C. § 1446(b)(2)(A), “all defendants who have been properly joined and served must join in or consent to the removal of the action.” If Zeigler had been “properly joined and served” at the time AHM filed its removal notice on June 14, then Zeigler would have had to join in or consent to the removal. In the present case, however, Zeigler had not been “properly joined and served” as of June 14. At that point in time, plaintiff had served Zeigler with a summons and complaint naming John Doe Honda Dealership. The complaint did not contain any allegations or information from which the reader might surmise that the John Doe Honda Dealership referred to Zeigler in Kalamazoo. Rather, the complaint alleged that “JOHN DOE HONDA DEALERSHIP is a domestic or foreign corporation doing business in Wayne County, Michigan, ” Compl. ¶ 3, several counties distant, and more than 140 miles away, from Kalamazoo.

         Plainly, Zeigler was not “properly joined and served” as of June 14. As the Michigan Court of Appeals has stated, “defendants not specifically named in ‘John Doe' complaints are not yet parties to the suit and, if added later, are considered new parties to the litigation.” Thomas v. Process Equip. Corp., 154 Mich.App. 78, 85 (1986) (emphasis added). Zeigler did not become a party to this action until plaintiff specifically named it in his amended complaint, which was not filed until after AHM removed the case. Therefore, Zeigler was not required to join in or consent to the removal. Plaintiff's procedural objection to the removal is unfounded.

         Plaintiff's Motion for Remand Based on Alleged Lack of Subject Matter Jurisdiction; Joinder of Zeigler, a Non-Diverse Defendant; Zeigler's Motion to Dismiss

         Plaintiff also argues that this matter must be remanded because the Court “lacks subject matter jurisdiction in that there is no diversity jurisdiction because at least one Defendant is a Michigan citizen.” Pl.'s Mot. for Remand ¶ 30(c). Diversity jurisdiction was present at the time of removal because the only named defendant, AHM, is a citizen of California, plaintiff is a citizen of Michigan, and more than $75, 000 is in controversy. Diversity was not destroyed until plaintiff amended his complaint post-removal to replace John Doe Honda Dealership with Zeigler, which is also a citizen of Michigan.

         This circumstance is governed by 28 U.S.C. § 1447(e), which states: “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.”[1]The Sixth Circuit has stated that

[a] district court may base its discretionary determination under § 1447(e) on the following factors: (1) the extent to which the proposed amendment's intent was to destroy federal jurisdiction, (2) whether the plaintiff was dilatory in filing the motion to amend, (3) whether the plaintiff would be significantly injured if the motion to amend were denied, and (4) any other equitable factors. Bailey v. Bayer CropScience, L.P., 563 F.3d 302, 309 (8th Cir. 2009); Mayes v. Rapoport, 198 F.3d 457, 462-63 (4th Cir. 1999).

Telecom Decision Makers, Inc. v. Access Integrated Networks, Inc., 654 Fed.Appx. 218, 221 (6th Cir. 2016). Among the “other equitable factors” a court may consider is whether the non-diverse defendant has been fraudulently joined. See Mayes, 198 F.3d at 463. “To prove fraudulent joinder, the removing party must show that the plaintiff cannot establish a cause of action against the non-diverse defendant.” Roof v. Bel Brands USA, Inc., 641 Fed.Appx. 492, 496 (6th Cir. 2016) (citation omitted). “Further, [a]ny disputed questions [of] fact and ambiguities in the controlling state law [should be resolved] . . . in favor of the nonremoving party.” Id. (alternations in original; citations and internal quotation marks omitted). That is to say, “the question is whether there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved.” Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 949 (6th Cir. 1994) (quoting Bobby Jones Garden Apartments, Inc. v. Suleski, 391 F.2d 172, 176 (5th Cir. 1968)).

         In the present case, the first two of the Telecom factors favor permitting Zeigler's joinder. First, it is not apparent that plaintiff joined Zeigler in order to destroy federal jurisdiction. Although plaintiff filed his amended complaint naming Zeigler (on July 2) after the case was removed (on June 14), it appears that before removal plaintiff's attorney believed that Zeigler may be the John Doe mentioned in the complaint. As noted above, plaintiff's counsel mailed a copy of the complaint to Zeigler Honda under a cover letter dated May 20. Naming Zeigler was clearly not a post-removal afterthought. Second, plaintiff was not particularly dilatory in seeking to join Zeigler, as he filed his amended complaint approximately six weeks after mailing the summons and original complaint to Zeigler. However, the third and fourth Telecom factors weigh heavily against permitting Zeigler's joinder because plaintiff's claims against Zeigler (to the extent they are cognizable at all) are time-barred. This establishes both that Zeigler's joinder was fraudulent and that plaintiff will suffer no prejudice if Zeigler's joinder is denied.

         The untimeliness of plaintiff's claims against Zeigler is undebatable. Plaintiff concedes that both of his claims (product liability and handicap discrimination) are subject to the three-year limitations period of Mich. Comp. Laws § 600.5805(2). See Am. Compl. ¶ 9; Pl.'s Resp. to Zeigler's Mot. to Dismiss at 6. His claims accrued on March 10, 2016, the date on which he alleges he was injured. See Am. Compl. ¶¶ 6, 8. Plaintiff ...

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