United States District Court, E.D. Virginia, Richmond Division
TYRONE REED SCOTT, Administrator of the Estate of Delia Scott, Plaintiff,
CG BELLKOR, LLC, et al, Defendants.
Hannah Lauck, Judge
matter comes before the Court on three motions: (1) the
Motion to Dismiss Non-Diverse Parties filed by Defendant
Fickling Management Services ("Fickling") (the
"Motion to Drop Parties"), (ECF No. 18); (2) the
Motion to Dismiss for Failure to State a Claim filed by
Fickling (the "Fickling Motion to Dismiss"), (ECF
No. 20); and, (3) the Motion to Dismiss for Failure to State
a Claim/Lack of Subject Matter Jurisdiction filed by
Defendant Blue Valley Apartments, LLC ("Blue
Valley") (the "Blue Valley Motion to
Dismiss"), (ECF No. 22). Defendants CG Bellkor, LLC and
Premier Re Fund, III LLC have not appeared in this case.
Tyrone Reed Scott has responded to the Motion to Drop
Parties, (ECF No. 24), the Fickling Motion to Dismiss, (ECF
No. 26), and the Blue Valley Motion to Dismiss, (ECF No. 25).
Fickling replied to Plaintiffs response to the Motion to Drop
Parties, (ECF No. 28), and to Plaintiffs response to the
Fickling Motion to Dismiss, (ECF No. 29). Blue Valley replied
to Plaintiffs response to the Blue Valley Motion. (ECF No.
27.) Accordingly, the matters are ripe for disposition. The
Court dispenses with oral argument because the materials
before it adequately present the facts and legal contentions,
and argument would not aid the decisional process. For the
reasons that follow, the Court will grant the Motion to Drop
Parties, the Fickling Motion to Dismiss, and the Blue Valley
Motion to Dismiss.
Factual and Procedural Background
filed two complaints in the Circuit Court for the City of
Richmond. Fickling removed this case ("Scott
/') with Blue Valley's consent, and Blue Valley
removed the other, Tyrone Scott v. CG Bellkor, LLC,
et al. ("Scott IF), No. 3:16cvl4 (E.D. Va.
filed Jan. 6, 2016), with Fickling's consent. Both
defendants removed pursuant to 28 U.S.C. §§
1446, asserting diversity jurisdiction under 28
U.S.C. § 1332 as the basis for removal. Both complaints named as
defendants CG Bellkor, LLC, Blue Valley Apartments, Inc., and
Fickling Management Services. Scott II also named as
a defendant Premier RE Fund, III LLC. In all other respects,
the two complaints were identical. The Court consolidated the
two cases into this case number, and directed the parties to
address the issue of fraudulent joinder and file responsive
pleadings. (May 17, 2016 O. 3, ECF No. 17.) Fickling then
filed the Motion to Drop Parties and the Fickling Motion to
Dismiss, and Blue Valley filed the Blue Valley Motion to
Dismiss. All motions are ripe for disposition.
Summary of Allegations in the
Scott, a Virginia resident, worked as a Leasing Agent at the
Chamberlayne Garden Apartments (the "Apartments").
(Compl. ¶ 13.) On December 19, 2013, Ms. Scott reported
to work at the Apartments' Management Office with the
Apartments' Property Manager, Carolyn Chapman. During Ms.
Scott's shift, a man named Benjamin Dancy entered the
leasing office and asked to speak with a leasing agent who no
longer worked for the Apartments. When Ms. Scott told Dancy
that the leasing agent Dancy asked for no longer worked
there, Dancy pulled out a knife, robbed Ms. Scott, and
ushered Ms. Scott and Ms. Chapman into the bathroom adjacent
to the leasing office. Dancy then stabbed Ms. Scott multiple
times. Ms. Scott died from the stab wounds that night.
the incident on December 19, 2013, Ms. Scott had
"advised [the Apartments'] Management of the
criminal activity on or around [the Apartments]" and had
requested that the Apartments' Management hire security
to "patrol the area and protect" the employees.
(Compl. ¶¶ 18, 19.)
brings a claim of negligence against CG Bellkor, LLC, Blue
Valley, Fickling, and Premier Re Fund III arising out of Ms.
Scott's death. In support of his claim, Plaintiff asserts
that all defendants: (1) "should have known that there
was increased criminal activity at or surrounding the
[Apartments], " (Compl. ¶ 21); (2) "had a duty
to act to prevent or eliminate a known threat, " (Compl.
¶ 22); (3) had additional duties to "provide
adequate security, [and to] protect from foreseeable acts,
" (Compl. ¶ 24); and, (4) "should have known
that security was necessary to patrol and protect [Ms.
Scott], " (Compl. ¶ 23). Plaintiff avers that
"[a]s a direct and proximate result of the negligent
actions of the Defendants ... [Ms. Scott] has suffered a loss
of life, wages[J and future income." (Compl. at 4.)
Plaintiff, as the administrator of Ms. Scott's estate,
sues on Ms. Scott's behalf seeking one hundred million
dollars in compensatory damages and one hundred million
dollars in punitive damages.
Analysis; Motion to Drop Parties
federal courts are courts of limited subject-matter
jurisdiction, if the Court lacks jurisdiction over this
matter, it cannot rule on the merits of the Fickling Motion
to Dismiss or the Blue Valley Motion to Dismiss. Instead, the
Court must remand this case to the state court. Accordingly,
the Court will address the Motion to Drop Parties first.
Motion to Drop Parties seeks to dismiss CG Bellkor, LLC
("CG Bellkor") and Premier RE Fund, III LLC
("Premier") as fraudulently joined. (Mot. Drop
Parties 2.) Fickling argues that the Court should drop CG
Bellkor because it "ceased to exist as a legal entity on
December 5, 2013, two weeks before the incident sued upon in
this matter." (Id. at 3.) On May 30, 2013, CG
Bellkor sold the Apartments to Blue Valley and
"relinquished ownership, operations[, ] and maintenance
of the Apartments." (Id.) Therefore, "[a]s
of May 30, 2013, more than six months prior to the incident
complained of [in Plaintiffs Complaint], CG Bellkor no longer
owned, operated[, ] or maintained the Apartments."
(Id.) Fickling contends that Premier should be
dropped because it "had no interest, ownership or
otherwise, and no operations or maintenance responsibilities
with respect to the Apartments on December 19, 2013."
(Id. at 4.)
contrary to the allegations in Plaintiffs Complaint, Fickling
contends that "Premier did not "merge with or
purchase stock" or "assume the debts and/or
liabilities" of either CG Bellkor or Blue Valley.
according to Fickling, the important dates and events are as
May 30, 2013:
CG Bellkor sold the Apartments
May 30, 2013:
Blue Valley bought the apartments
December 5, 2013:
CG Bellkor ceased to exist as a legal entity
December 19, 2013:
Ms. Scott murdered at the Apartments
May 15, 2014:
Premier formed as a corporate entity
July 28, 2014:
Premier first acquired an interest in the Apartments
support of its Motion to Drop Parties, Fickling refers to the
Notice of Cancellation of Existence of CG Bellkor, LLC (the
"Notice of Cancellation"), (ECF No. 1-3), and the
Substitute Trustee's Deed (the "Deed"), (ECF
No. 1-4), both of which were attached to Fickling's
Notice of Removal, and attaches the Affidavit of Jonathan
Cutler, Manager of Premier RE Fund III LLC (the "Cutler
Affidavit"), (ECF No. 19-1). The Notice of Cancellation
comes from the Commonwealth of Virginia State Corporation
Commission Office of the Clerk and states that, because the
Commission did not receive CG Bellkor's annual
registration fee on or before November 30, 2013, CG
Bellkor's "existence was automatically canceled as
of that date." (Notice Cancellation 1.) The cancellation
means that CG Bellkor "is no longer authorized to
transact business and its properties and affairs have passed
automatically to its managers, members, or holders of its
interests as trustees in liquidation." (Id.)
The Deed, dated June 14, 2013, indicates that CG Bellkor
defaulted on a Note, which was secured by the Apartments.
(Deed of Trust ¶ A.) On November 8, 2012, Fannie Mae
accelerated the Note and loan, and appointed a substitute
trustee who sold the property at a public auction on May 30,
2013. (Id. ¶¶ C-E.) Fannie Mae bought the
property at auction and sold it to Blue Valley. (Id.
¶ F, G.)
Affidavit of Jonathan Cutler outlines the lack of
relationship between Premier and CG Bellkor or Blue Valley.
Cutler, the Manager of Premier RE Fund III LLC, attests that
Premier formed as a corporate entity on May 15, 2014, and
first acquired an ownership interest in the Apartments on
July 28, 2014. Cutler states that Premier "acquired
Chamberlayne Garden Apartments from Blue Valley Apartments,
Inc. through a traditional real estate purchase agreement,
with no consideration or contemplation of merging, purchasing
stock[, ] or assuming the debts and/or liabilities of Blue
Valley Apartments, Inc., or any other entity." (Cutler
Aff. ¶ 8.) Specifically, Cutler swears that Premier
"did not merge with or purchase stock" and
"did not, at any time, assume the debts and/or
liabilities" of Blue Valley. (Id. ¶¶
9, 10.) Cutler vows that Premier "does not now, nor has
it ever had, [sic] any relationships or conducted any
transactions, business or otherwise, with CG Bellkor."
(Id. ¶ 4.) Premier "did not merge with or
purchase stock" and "did not, at any time, assume
the debts and/or liabilities" of CG Bellkor.
(Id. ¶¶ 5, 6.) Cutler affirms that Premier
"had no interest, ownership or otherwise, and no
operations or maintenance responsibilities with respect to
Chamberlayne Garden Apartments as of December 19, 2013."
(Id. ¶ 11.)
offers no evidence to rebut the Cutler Affidavit, the Notice
of Cancellation, or the Deed. Plaintiff concedes that
"there is no dispute about when Premiere [sic] acquired
the subject property, " but argues that Premier's
lack of interest in the Apartments at the time of Ms.
Scott's death "does not preclude Premier from being
held liable." (Pl.'s Resp. Mot. Dismiss Parties 3,
ECF No. 24.) Plaintiff contends that "just because CG
Belkor [sic] owned the land before the incident does not
necessarily indicate that CG Belkor [sic] relinquished all
responsibilities." (Id.) Plaintiff further
states that "Plaintiff is uncertain as to whether or not
the acquisition by Premiere [sic] was an outright land
transfer, a stock/asset purchase, or if Premier assumed any
responsibilities for handling debts and/or claims against the
party before they acquired ownership." (Id. at
4.) Plaintiff presents nothing to support his bald
speculations that the information in the Cutler Affidavit is
28 U.S.C. § 1441(a),  a defendant may remove a civil action to a
federal district court if the plaintiff could have originally
brought the action in federal court. 28 U.S.C. §
1441(a). Section 1446 delineates the procedure for removal,
including the requirement that the defendant file a notice of
removal in the district court and the state court.
See 28 U.S.C. §§ 1446(a), (d). The state
court loses jurisdiction upon the removal of an action to
federal court. 28 U.S.C. § 1446(d) ("[T]he State
court shall proceed no further unless and until the case is
party seeking removal bears the initial burden of
establishing federal jurisdiction." Abraham v.
Cracker Barrel Old Country Store, Inc., Civil Action No.
3:1 lcvl82, 2011 WL 1790168, at *1 (E.D. Va. May 9, 2011)
(citing Mulcahey v. Columbia Organic Chem. Co., 29
F.3d 148, 151 (4th Cir. 1994)). No presumption favoring the
existence of federal subject matter jurisdiction exists
because federal courts have limited, not general,
jurisdiction. Id. (citing Pinkley Inc. v. City
of Frederick, 191 F.3d 394, 399 (4th Cir. 1999)). Courts
must construe removal jurisdiction strictly. Id.
(citing Mulcahey, 29 F.3d at 151). "If federal
jurisdiction is doubtful, a remand is necessary."
Id. (quoting Mulcahey, 29 F.3d at 151).
diversity jurisdiction requires complete diversity of
citizenship. Id. at *2 (citing Carden v. Arkoma
Assocs., 494 U.S. 185, 187 (1990)); see also 28
U.S.C. § 1332(a)(1). "[T]he 'citizenship of
each plaintiff [must be] diverse from the citizenship of each
defendant.'" Abraham, 2011 WL 1790168, at
*2 (quoting Caterpillar Inc. v. Lewis, 519 U.S. 61,
68 (1996) (second alteration in original)).
The Fraudulent Joinder Doctrine
fraudulent joinder doctrine operates as an exception to the
complete diversity requirement, permitting a district court
to disregard, for jurisdictional purposes, the citizenship of
certain nondiverse defendants, assume jurisdiction over a
case, and dismiss the nondiverse defendants, thereby
retaining jurisdiction. Id. (citing Mayes v.
Rapoport,198 F.3d 457, 461 (4th Cir. 1999)). "To
show fraudulent joinder, the removing party must demonstrate
either 'outright fraud in the plaintiffs pleading of
jurisdictional facts' or that 'there is no
possibility that the plaintiff would be able to
establish a cause of action against the in-state defendant in
state court.'" Hartley v. CSX Transp.,
Inc.,187 F.3d 422, 424 (4th Cir. 1999) (alteration in
original) (quoting Marshall v. Manville Sales Corp.,6 F.3d 229, 232 (4th Cir. 1993)). "The party alleging
fraudulent joinder bears a heavy burden-it must show that the
plaintiff cannot establish a claim even after resolving all
issues of law and fact in the plaintiffs favor."
Id. "This standard is even more favorable to
the plaintiff than the standard for ruling on a motion to
dismiss under [Federal Rule of Civil Procedure]
12(b)(6)." Id. A defendant is fraudulently
joined "if there is no 'reasonable basis for
predicting that state law might impose ...