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JM & GW Enterprises v. Matworks Company LLC

United States District Court, D. Maryland

June 11, 2019

JM & GW ENTERPRISES, et al., Plaintiffs,
v.
THE MATWORKS COMPANY LLC, Defendant.

          MEMORANDUM OPINION

          PETER J. MESSITTE, UNITED STATES DISTRICT JUDGE

         Plaintiffs JM & GW Enterprises, LLC and Jodie Leamer filed a Complaint in the Circuit Court for Prince George's County, Maryland against The Matworks Company alleging (a) breach of contract, (b) breach of contract-improper termination, (c) intentional interference with contractual relations, (d) defamation (as to Leamer), (e) intentional infliction of emotional distress (as to Leamer), and (f) conversion. ECF No. 1-2.

         The case was filed in the Circuit Court for Prince George's County pursuant to a forum selection clause in the contracts between JM & GW and Matworks that form the basis of the former's claims here. Matworks, however, removed the case to this Court, accompanied by a Motion to sever JM & GW's contract-related claims from Leamer's personal injury claims. ECF No. 5. Plaintiffs, in turn, have filed a Motion to Remand to State Court. ECF No. 7. For the reasons that follow, Defendant's Motion to Sever is DENIED and Plaintiffs' Motion to Remand is GRANTED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         JM & GW is a Texas limited liability corporation that operates primarily as a commercial janitorial services company in Texas. Leamer is a resident of Texas and the managing member of JM & GW there. Matworks is a Maryland LLC that installs, manages, and maintains commercial flooring in retail businesses throughout the United States. It sub-contracted to JM & GW to provide cleaning and maintenance services on floors at several retail establishments in Texas (the contracts). JM & GW and Leamer now sue Matworks for the referenced causes of action.

         JM & GW claims breach of contract, alleging that Matworks (a) failed to pay for services rendered, and (b) terminated its contracts with JM & GW in a manner inconsistent with the contracts. JM & GW further claims that Matworks intentionally interfered with contractual relations by contacting various JM & GW employees and urging them to terminate their employment with JM & GW and accept instead direct employment with Matworks or the retail establishment where the JM & GW contracts were being performed. Finally, JM & GW posits a conversion claim against Matworks, alleging that after terminating its contracts, Matworks prevented JM & GW from returning to the stores where its equipment was stored in order to recover its equipment. Matworks is now purportedly using JM & GW's equipment to perform the services JM & GW previously performed under the contracts.

         Leamer sues for defamation and intentional infliction of emotional distress. These claims stem from an alleged incident in which an unidentified Matworks employee surreptitiously took a photo of Leamer, attached a sexually suggestive (and false) statement to it, and sent it via text message to others within and outside the Matworks organization.

         Matworks removed the case to this Court, claiming diversity jurisdiction and, as indicated, seeks to sever Leamer's claims from those of JM & GW. Plaintiffs have filed a Motion to Remand the entire case back to state court.

         II. LEGAL STANDARD

         Removal jurisdiction must be strictly construed because it raises significant federalism concerns. Mulcahey v. Columbia Organic Chemicals Co., 29 F.3d 148, 151 (4th Cir. 1994) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941)). Federal courts have diversity jurisdiction where the parties are completely diverse and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332. In cases where the parties are not completely diverse but the amount in controversy is satisfied, courts may drop non-diverse parties in order to achieve complete diversity pursuant to Federal Rule of Civil Procedure 21. Sullivan v. Calvert Memorial Hospital, 117 F.Supp.3d 702, 704-05 (D. Md. July 30, 2015). Courts in this District recognize that “as a prudential matter, federal courts should give effect to a valid and enforceable forum-selection clause, despite the fact that the case was properly removed.” Callender v. Anthes, No. DKC 14-0121, 2014 WL 1577787 (D. Md. April 18, 2014).

         A district court has broad discretion to decide whether joinder or severance of parties is appropriate under the Federal Rules of Civil Procedure. See Saval v. BL, LTD., 710 F.2d 1027, 1031-32 (4th Cir. 1983). “Courts have recognized a presumption in favor of the nonmoving party that all claims in a case will be resolved in a single trial and not be severed, placing the burden on the party moving for severance to show that (1) it will be severely prejudiced without a separate trial; and (2) the issue to be severed is so distinct and separable that a trial of that issue alone may proceed without injustice.” Equal Rights Center v. Equity Residential, 483 F.Supp.2d 482, 489 (D. Md. 2007) (Davis, J.). “While Rule 21 is silent on the standard applicable for determining misjoinder, courts have uniformly held that parties are misjoined when they fail to satisfy either of the preconditions for permissive joinder of parties set forth in Rule 20(a).” Hanna v. Gravett, 262 F.Supp.2d 643, 647 (E.D.V.A. 2003).

         Rule 20(a) allows multiple plaintiffs to join in the same action if the relief sought arises out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all plaintiffs will arise in the action. The Supreme Court has explained that joinder should be used to allow the “broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties, and remedies is strongly encouraged.” United Mine Workers of America v. Gibbs, 383 U.S. 715, 724 (1966). Therefore, “the rule should be construed in light of its purpose, which is to promote trial convenience and expedite the final determination of disputes, thereby preventing multiple lawsuits.” Saval, 710 F.2d at 1031.

         III. DISCUSSION

         Plaintiffs argue that the case must be remanded in its entirety to state court because of a forum-selection clause in the contracts between JM & GW, on the one hand, and Matworks, on the other, which specifies the state courts in Prince George's County as the ...


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