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Hack v. Axa Equitable Life Ins. Co.

United States District Court, D. Massachusetts

September 28, 2016

TERRENCE C. HACK, Plaintiff
v.
AXA EQUITABLE LIFE INS. CO. and DISABILITY MANAGEMENT SERVICES, INC., Defendant.

          MEMORANDUM AND ORDER

          WOLF, D.J.

         I. SUMMARY

         Plaintiff Dr. Terrence C. Hack has sued defendants Axa Equitable Life Ins. Co. ("Axa") and Disability Management Services, Inc. ("DMSI"), alleging that they improperly refused to classify him as having a "Total Disability" under two disability insurance policies that he purchased from Axa. He asserts claims against Axa for breach of contract and breach of the covenant of good faith and fair dealing. Hack also alleges that DMSI intentionally interfered with his contractual relations. He asserts claims against both defendants for negligence, declaratory judgment, and violation of Massachusetts General Laws Chapters 93A and 176D.

         Hack filed this case in the Superior Court for Middlesex County of the Commonwealth of Massachusetts. Defendants removed it to this court on the basis of diversity jurisdiction. See 28 U.S.C. §§1441, 1332.

         Hack has filed a motion to remand this case to the Massachusetts state court. He argues that this case was improperly removed because the parties are not diverse. He argues that DMSI is a citizen of Massachusetts because its principal place of business is in the state. Defendants oppose the motion to remand. They stated in the Notice of Removal and argue in their Opposition to Hack's motion that DMSI was improperly joined as a defendant. In particular, they assert that there is no reasonable possibility that Hack has stated a claim against DMSI on which relief can be granted.

         For the reasons explained in this Memorandum, the Motion to Remand is being allowed.

         II. APPLICABLE STANDARD

         "When plaintiffs file a civil action in state court over which the federal courts would have had original jurisdiction based on diversity of citizenship, the defendants may remove the action to federal court, 28 U.S.C. §1441(a), provided that no defendant 'is a citizen of the State in which such action is brought.1" Universal Truck & Equip. Co. v. Southworth-Milton, Inc., 765 F.3d 103, 107-08 (1st Cir, 2014) (quoting 28 U.S.C. §1441(b)).

         "This right of removal cannot be defeated by a fraudulent joinder of a non-diverse defendant 'having no real connection with the controversy.1" Mills v. Allegiance Healthcare Corp., 178 F.Supp.2d 1, 4 [D. Mass. 2001) (quoting Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921). "A joinder is a sham and fraudulent if it is ' without any reasonable basis in fact and without any purpose to prosecute the cause in good faith against the [defendant].'" Id. (quoting Wilson, 257 U.S. at 98).

         "[I]t is generally recognized that, under the doctrine of fraudulent joinder, removal is not defeated by the joinder of a non-diverse defendant where there is no reasonable possibility that the state's highest court would find that the complaint states a cause of action upon which relief may be granted against the non-diverse defendant." Universal Truck & Equip. Co. v. Southworth-Milton, Inc., 765 F.3d 103, 108 (1st Cir. 2014).

In order to show that naming a non-diverse defendant is a "fraudulent joinder" effected to defeat diversity, the defendant must demonstrate, by clear and convincing evidence, either that there has been outright fraud committed in the plaintiff's pleadings, or that there is no possibility, based on the pleadings, that the plaintiff can state a cause of action against the non-diverse defendant in state court.

Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 207 (2d Cir.2001); see also Mills, 178 F.Supp.2d at 5 (employing the Whitaker standard); In re Fresenius Granuflo/Naturalyte Dialysate Prod.Liab. Litiq., 6 F.Supp.3d 321');">76 F.Supp.3d 321, 332 (D. Mass. 2015) (same).

         "In assessing a claim of fraudulent joinder, the court is not bound by the allegations in the complaint and may consider affidavits and other materials that bear on the question of whether there is a reasonable basis for joinder of a defendant." In reFresenius ...


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