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Keywords

contractlawsuitbreach of contractplaintiffdefendantjurisdictionattorneyliabilitypleamotioncitizenship
contractlawsuitbreach of contractplaintiffdefendantjurisdictionattorneyliabilitymotion

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Durable, Inc.; U.S. v.

Facts

Durable Specialties, Inc. filed a lawsuit against Sara Penrod and Liberty Mutual Insurance Company in state court, alleging breach of contract and violations of the Texas Insurance Code. Liberty removed the case to federal court, claiming diversity of citizenship and that Penrod was improperly joined. Durable contended that it had sufficiently alleged claims against Penrod, which warranted remand to state court.

Durable Specialties, Inc. filed a lawsuit against Sara Penrod and Liberty Mutual Insurance Company in state court, alleging breach of contract and violations of the Texas Insurance Code.

Issue

Whether Penrod was improperly joined to defeat diversity jurisdiction, thereby allowing the case to remain in federal court.

Whether Penrod was improperly joined to defeat diversity jurisdiction, thereby allowing the case to remain in federal court.

Rule

A party seeking to remove an action to federal court on the basis of improper joinder must establish that there is no possibility of recovery by the plaintiff against the in-state defendant.

A party seeking to remove an action to federal court on the basis of improper joinder must establish that there is no possibility of recovery by the plaintiff against the in-state defendant.

Analysis

The court analyzed the allegations made by Durable against Penrod and determined that there was a reasonable basis for predicting that state law might impose liability on Penrod. The court noted that the Texas pleading standard is more relaxed than the federal standard, allowing for a liberal construction of the allegations. Since Durable's claims against Penrod were deemed sufficient, the court found that Liberty did not meet its burden of proving improper joinder.

The court analyzed the allegations made by Durable against Penrod and determined that there was a reasonable basis for predicting that state law might impose liability on Penrod.

Conclusion

The court granted Durable's motion to remand the case to state court but denied the request for costs and attorney's fees.

The court granted Durable's motion to remand the case to state court but denied the request for costs and attorney's fees.

Who won?

Durable Specialties, Inc. prevailed in the case because the court found that Liberty did not establish that Penrod was improperly joined, thus allowing the case to be remanded to state court.

Durable Specialties, Inc. prevailed in the case because the court found that Liberty did not establish that Penrod was improperly joined, thus allowing the case to be remanded to state court.

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