Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Smith v. Polaris Industries, Inc.

United States District Court, D. South Dakota, Southern Division

July 28, 2016

STACI SMITH, Plaintiff,
v.
POLARIS INDUSTRIES, INC., and POLARIS SALES, INC., Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION TO AMEND AMENDED COMPLAINT AND REMAND TO STATE COURT

          KAREN E. SCHREIER UNITED STATES DISTRICT JUDGE

         Plaintiff, Staci Smith, brings this action against defendants, Polaris Industries, Inc., and Polaris Sales, Inc., alleging multiple causes of action surrounding an ATV accident. Smith seeks to amend her complaint and to have her case remanded to state court. Polaris resists the motion. For the reasons stated below, the court grants Smith’s motion.

         BACKGROUND

         Smith and her husband purchased a Polaris ATV from MidAmerica Motoplex. Two days later, while the couple was riding the ATV, the ATV’s throttle got stuck in the wide-open position causing the ATV to accelerate rapidly. As a result, Smith was thrown from the ATV. The fall caused injuries to Smith’s cervical spine, left knee, left shoulder, and left hip. An inspection of the ATV showed that the malfunction occurred because of water damage to the throttle control. Docket 17-4 at 3. The Smiths received this information sometime before filing their suit. Document 18 at 5.

         Smith started litigation against Polaris Industries, Inc., and Polaris Sales, Inc., on October 21, 2015. Polaris removed the case to federal court on November 2, 2015. During the parties’ Rule 26 conference, plaintiff’s counsel received a copy of the owner’s manual for the ATV. The manual explains that the ATV cannot be power washed and that “[h]igh water pressure may damage components.” Docket 17 at 1; Docket 17-1 at 120. After receiving the manual, Smith decided that MidAmerica needed to be added to the case. Docket at 2. Plaintiff’s counsel asked defense counsel whether Polaris intended to assert third-party claims against MidAmerica. Id. On December 11, 2015, plaintiff’s counsel sent an email to defense counsel asking if Polaris intended to add MidAmerica to this case. Docket 17-3 at 3. On December 16, defense counsel replied that Polaris would not add MidAmerica as a defendant. Id. at 2. Two days later, plaintiff’s counsel responded that Smith would file a motion to amend the complaint and to remand the case to state court. Id. at 1. On December 24, 2015, Smith filed her motion.

         LEGAL STANDARD

         Generally, motions to amend are freely granted when justice so requires. Fed.R.Civ.P. 15(a). This standard changes, however, when the plaintiff seeks to amend her complaint and the amendment would destroy the court’s subject matter jurisdiction. In this situation, the Eighth Circuit Court of Appeals has explained:

The district court, when faced with an amended pleading naming a new nondiverse defendant in a removed case, should scrutinize that amendment more closely than an ordinary amendment. . . . In this situation, justice requires that the district court consider a number of factors to balance the defendant’s interests in maintaining the federal forum with the competing interests of not having parallel lawsuits.

Bailey v. Bayer CropScience L.P., 563 F.3d 302, 309 (8th Cir. 2009) (quoting Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987)). When deciding whether remand is appropriate, a court must consider these criteria: “(1) the extent to which the joinder of the nondiverse party is sought to defeat federal jurisdiction, (2) whether [the] plaintiff has been dilatory in asking for amendment, and (3) whether [the] plaintiff will be significantly injured if amendment is not allowed.” Id. (alterations in original) (quoting Le Duc v. Bujake, 777 F.Supp. 10, 12 (E.D. Mo. 1991)). Here the court has two options: (1) deny joinder and maintain federal jurisdiction, or (2) permit joinder and remand the case to state court. 28 U.S.C. § 1447(e).

         DISCUSSION

         The issue before the court involves a balancing of two interests: (1) Polaris’s interest in maintaining the federal forum and (2) the competing interest in avoiding parallel litigation. Bailey, 563 F.3d at 309 (quoting Hensgens, 833 F.2d at 1182). Under the analysis outlined in Bailey, the court finds that the prevailing interests in this situation require that the case be remanded to state court.

         A. Smith does not seek joinder to defeat federal jurisdiction.

         It appears Smith seeks to add MidAmerica as a defendant to the case because MidAmerica’s actions may have caused the ATV’s throttle to malfunction-not because Smith seeks to destroy federal jurisdiction. Neither party disputes that Smith has a potential claim against MidAmerica. See Docket 17-3 at 2 (stating “Polaris is adamant that this is a dealer/customer matter . . . just dealer and customer negligence.”); Docket 19 at 8; Docket 18 at 3-6. Neither party argues that Smith is adding a frivolous claim in hopes of destroying federal jurisdiction.

         Rather, the heart of Polaris’s argument is that MidAmerica is a sham defendant. To support its theory, Polaris raises two arguments: (1) MidAmerica is “no longer in business” so any judgment against it is not collectable[1] and (2) Smith should have known she had a claim against MidAmerica before she filed her complaint.[2] This court finds neither argument persuasive. Although MidAmerica may no longer be in business as a Polaris dealer, there is evidence that MidAmerica has a $1, 000, 000 liability insurance policy that could apply to Smith’s claim. Docket 22 at 2; Docket 23-1. If there is liability insurance, Smith can collect a judgment against MidAmerica. And even if Smith should have known she had a claim against MidAmerica before she filed her complaint-that does not mean Smith’s motion to amend is driven by a desire to destroy diversity. As explained in Smith’s brief, MidAmerica was helping Smith and her husband fix their ATV and prepare for trial. Docket 22 at 3-4. Smith believed “MidAmerica representatives would be cooperative witnesses in establishing [Polaris’s] fault.” Id. at 4. This view has changed. Smith now believes ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.