Sanchez v. Gilberto M. Aburto & W. Dairy Transp.
United States District Court for the Northern District of Texas, Dallas Division
October 12, 2018, Decided; October 12, 2018, Filed
Civil Action No. 3:18-CV-2460-L

Reporter
2018 U.S. Dist. LEXIS 175804 *
ELIZABETH KATHLEEN SANCHEZ, Plaintiff, v. GILBERTO M. ABURTO and WESTERN DAIRY TRANSPORT, LLC, Defendants.

MEMORANDUM OPINION AND ORDER
On September 14, 2018, Plaintiff Elizabeth Kathleen Sanchez (“Plaintiff”) filed this personal injury action against Defendants Gilberto M. Aburto (“Aburto”) and Western Dairy Transport, LLC (“Western Dairy”) (collectively, “Defendants”), alleging that “the [c]ourt has subject matter jurisdiction because there is complete diversity of parties and the claims for damages exceed $75,000.” Pl.’s Original Compl. 2. Regarding the parties’ citizenship, Plaintiff alleges that she “resid[es]” in Friona, Texas. Plaintiff alleges, based “[o]n information and belief” that: Aburto is a resident of Clovis, New Mexico; Western Dairy is a Delaware limited liability company doing business in Texas; and that [*2] “all members of Western Dairy [] are citizens of states other than Texas.” Id. at 1-2. Regarding the amount in controversy, Plaintiff alleges that she “seeks damages in excess of the minimum jurisdictional limits of the [c]ourt.” Id. at 2. The court issues this order because it questions whether it has subject matter jurisdiction based on the allegations in Plaintiff’s Original Complaint (“Complaint”) regarding diversity and the amount in controversy.
A federal court has subject matter jurisdiction over civil cases in which the amount in controversy exceeds $75,000, exclusive of interest and costs, and in which diversity of citizenship exists between the parties. 28 U.S.C. § 1332. Federal courts are courts of limited jurisdiction and must have statutory or constitutional power to adjudicate a claim. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994) (citations omitted); Home Builders Ass’n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998). Absent jurisdiction conferred by statute or the Constitution, they lack the power to adjudicate claims and must dismiss an action if subject matter jurisdiction is lacking. Id.; Stockman v. Federal Election Comm’n, 138 F.3d 144, 151 (5th Cir. 1998) (citing Veldhoen v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir. 1994)). A federal court must presume that an action lies outside its limited jurisdiction, and the burden of establishing that the court has subject matter jurisdiction to entertain an action rests with the party asserting [*3] jurisdiction. Kokkonen, 511 U.S. at 377 (citations omitted). “[S]ubject-matter jurisdiction cannot be created by waiver or consent.” Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001). A federal court has an independent duty, at any level of the proceedings, to determine whether it properly has subject matter jurisdiction over a case. Ruhgras AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999) (“[S]ubject-matter delineations must be policed by the courts on their own initiative even at the highest level.”); McDonal v. Abbott Labs., 408 F.3d 177, 182 n.5 (5th Cir. 2005) (A “federal court may raise subject matter jurisdiction sua sponte.”) (citation omitted).
Diversity of citizenship exists between the parties only if each plaintiff has a different citizenship from each defendant. Getty Oil Corp. v. Insurance Co. of North America, 841 F.2d 1254, 1258 (5th Cir. 1988). Otherwise stated, 28 U.S.C. § 1332 requires complete diversity of citizenship; that is, a district court cannot exercise jurisdiction if any plaintiff shares the same citizenship as any defendant. See Corfield v. Dallas Glen Hills LP, 355 F.3d 853, 857 (5th Cir. 2003) (citation omitted). “[T]he basis upon which jurisdiction depends must be alleged affirmatively and distinctly and cannot be established argumentatively or by mere inference.” Getty, 841 F.2d at 1259 (citing Illinois Cent. Gulf R.R. Co. v. Pargas, Inc., 706 F.2d 633, 636 n.2 (5th Cir. 1983)). Failure to allege adequately the basis of diversity mandates dismissal of the action. See Stafford v. Mobil Oil Corp., 945 F.2d 803, 805 (5th Cir. 1991).
The law regarding the citizenship of natural persons is well established. A natural person is considered a citizen of the state where he or she [*4] is domiciled, that is, where the person has a fixed residence with the intent to remain there indefinitely. See Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 555-56 (5th Cir. 1985). “‘Citizenship’ and ‘residence’ are not synonymous.” Parker v. Overman, 59 U.S. 137, 141 (1855). “For diversity purposes, citizenship means domicile; mere residence in [a] [s]tate is not sufficient.” Preston v. Tenet Healthsystem Mem’l Med. Ctr., Inc., 485 F.3d 793, 799 (5th Cir. 2007) (citation and quotation marks omitted). “Domicile requires residence in [a] state and an intent to remain in the state.” Id. at 798 (citing Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989)). The citizenship of a limited liability company “is determined by the citizenship of all of its members.” Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008) (citations omitted). Allegations pertaining to citizenship that are made on “information and belief” are insufficient to establish citizenship, as “the basis upon which jurisdiction depends must be alleged affirmatively and distinctly and cannot be established argumentatively or by mere inference.” Pennie v. Obama, 255 F. Supp. 3d 648, 669 & 671 (N.D. Tex. 2017) (quoting Getty Oil Corp. v. Insurance Co. of N. Am., 841 F.2d 1254, 1259 (5th Cir. 1988)).
For diversity purposes, the amount in controversy normally is determined by the amount sought on the face of the plaintiff’s pleadings, so long as the plaintiff’s claim is made in good faith. 28 U.S.C. § 1446(c)(2); Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 553 (2014) (citation omitted). St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998); De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995).
“The burden of establishing subject matter jurisdiction in federal court rests on the party seeking to invoke it.” St. Paul Reinsurance, 134 F.3d at 1253 (footnote omitted). Accordingly, when [*5] a case is initially filed in federal court based on diversity jurisdiction, the burden rests with the plaintiff to establish that diversity exists and that the amount in controversy exceeds the jurisdictional threshold.
Plaintiff has the burden of establishing subject matter jurisdiction, as this case was initially filed by her in federal court, and she is the party in this action seeking to invoke it. See id. Plaintiff’s allegations regarding her and Aburto’s residency and her allegations based on “information and belief,” however, are insufficient to establish the citizenship of Plaintiff or Defendants.
The court also questions whether the requisite amount in controversy is satisfied. While Plaintiff alleges that her damages exceed $75,000, it is not facially apparent from Plaintiff’s pleadings whether this claim is made in good faith because her Complaint is devoid of any factual allegations from which the court can estimate the potential amount of actual damages that may be awarded based on the negligence claims asserted. Plaintiff alleges in conclusory fashion that she “sustained serious and incapacitating injuries” when the tractor-trailer driven by Aburto collided with the back [*6] of her vehicle. She also alleges in conclusory fashion that she is entitled to recover damages for past and future: pain and suffering, mental anguish, physical disfigurement and impairment, medical expenses, loss of consortium, lost wages and earning capacity. These formulaic allegations, however, are not supported by facts regarding the injuries Plaintiff suffered. For example, the allegations do not set forth the specific type or extent of injuries sustained, whether Plaintiff was hospitalized for an extended period of time, whether she underwent surgery, or whether the injuries sustained caused prolonged or permanent injury.
Plaintiff also seeks exemplary or punitive damages as a result of Defendants’ alleged gross negligence, which are recoverable under Texas law and can be factored by the court in determining whether the amount in controversy is met. United States Fire Ins. Co. v. Villegas, 242 F.3d 279, 284-85 (5th Cir. 2001). Again, however, without any factual allegations from which the court can assess the potential actual damages in this case, it has no way of reasonably inferring the potential for an award of exemplary damages. Moreover, while Plaintiff alleges that Aburto was “traveling at an unsafe speed for the rain and wet road conditions,” and [*7] he violated certain Texas statutes regarding maximum speed requirements, a defendant’s failure to pursue the safest course available or comply with a law or regulation does not, without more, establish gross negligence for purposes of recovering punitive damages under Tex. Civ. Prac. & Rem. Code Ann. § 41.003(a)(3). See Agrium U.S., Inc. v. Clark, 179 S.W.3d 765, 767, 2005 WL 3092120 (Tex. App.—Amarillo 2005, pet. denied) (discussing gross negligence standard for recovering punitive damages under § 41.003). Likewise, Plaintiff’s allegation that Western Dairy was negligent in hiring or retaining Aburto is insufficient without allegations, for example, that it actually knew he had been involved in prior accidents, lacked experience driving big trucks, had prior speeding tickets, or drove in a dangerous manner. Id. (citing Williams v. Steves Indus., Inc., 699 S.W.2d 570, 574 (Tex. 1985)). Accordingly, Plaintiff’s allegations with respect to her negligence claims and damages are insufficient to establish that the amount in controversy is satisfied.
Given these deficiencies, the court must presume that this suit lies outside of its limited jurisdiction, unless Plaintiff can cure the jurisdictional deficiencies noted. Pennie, 255 F. Supp. 3d at 671 (quoting Howery, 243 F.3d at 919). Plaintiff shall, therefore, file an amended complaint that cures the deficiencies noted by October 26, 2018. Failure to do so will result in the sua sponte dismissal of this action [*8] for lack of subject matter jurisdiction.
It is so ordered this 12th day of October, 2018.
/s/ Sam A. Lindsay
Sam A. Lindsay
United States District Judge

Quiles v. Johnson
United States Court of Appeals for the Eighth Circuit
June 12, 2018, Submitted; October 12, 2018, Filed
No. 17-3055

Reporter
2018 U.S. App. LEXIS 28747 *
Rigoberto Quiles, Plaintiff – Appellant v. Alan Martin Johnson, Defendant – Appellee
Prior History: [*1] Appeal from United States District Court for the Southern District of Iowa – Des Moines.

LOKEN, Circuit Judge.
Rigoberto Quiles was severely injured when Alan Johnson fell asleep at the wheel and drove his tractor-trailer off I-80 in Adair County, Iowa. At the time of the accident, Quiles was a new employee of Swift Transportation Company of Arizona (“Swift”), an interstate motor carrier, who was completing Swift’s commercial driving training program. Johnson was transporting goods for Swift as an independent contractor and serving as Quiles’s “driving mentor” in Swift’s training program. Trainee Quiles was off-duty in the truck’s sleeper berth. After receiving workers’ compensation benefits from Swift, Quiles brought this diversity action against Johnson, alleging that Quiles’s injuries were caused by Johnson’s negligence in driving the truck. The district [*2] court1 granted Johnson’s motion for summary judgment, concluding that Quiles was a dual employee of Swift and Johnson, and therefore workers’ compensation benefits were Quiles’s exclusive remedy under the Iowa workers’ compensation statute. Quiles appeals, arguing that genuine issues of material fact preclude the conclusion that he was Johnson’s employee under Iowa law. Reviewing the district court’s grant of summary judgment de novo, including its interpretation of state law, we affirm. See HIP, Inc. v. Hormel Foods Corp., 888 F.3d 334, 338 (8th Cir. 2018) (standard of review).

I.
New Swift drivers must complete Swift’s commercial driving training program before they may drive a truck on their own. Swift hired Quiles as an at-will commercial driving trainee in November 2014. Swift’s Driver Handbook, which Quiles received and signed during orientation, described the training program as a mandatory driver-mentor “apprenticeship program.” The program required Quiles to complete at least two hundred hours of behind-the-wheel driving with an assigned mentor, who evaluates the trainee’s performance. For the first fifty hours, the mentor must sit in the passenger seat as the trainee drives. Thereafter, the trainee and mentor may “team drive,” meaning that [*3] while one drives, the other is off duty and may remain in the truck’s sleeper berth, which increases allowed operating time.
After orientation, Quiles completed fifty hours of training with a mentor but left this relationship and resigned from the program after the mentor failed to pick Quiles up at a prearranged location. Swift’s driver development supervisor persuaded Quiles not to leave the program and assigned him a new mentor, Alan Johnson. Quiles began training with Johnson in early December 2014. Johnson and trainee Quiles did not sign a written agreement. Johnson’s contract with Swift allowed him to participate in Swift’s driver-mentor program by paying Swift $.05 “per loaded dispatched mile” driven with a Swift trainee. The contract provided that a trainee “shall remain a [Swift] employee during the period of time he/she is assigned to [Johnson’s] truck. Any driver/trainee shall be considered a loaned employee or borrowed servant under applicable law.” Johnson could not terminate Quiles’ relationship with Swift, but Johnson could refuse to accept Quiles as a trainee and could discontinue the mentor relationship at any time. Likewise, Quiles could refuse or discontinue a mentor [*4] relationship at any time.
Because Quiles had completed fifty hours of training, he and mentor Johnson were authorized to team drive for the balance of Quiles’s training. When they drove as a team, as on the day of the accident, each operated under his separate agreement with Swift. Swift hired Johnson for specific trips as an independent trucking contractor. Johnson decided when he would transport shipments for Swift, which determined when his truck would operate with driver trainee Quiles. Swift paid trainee Quiles an hourly wage when he rode with mentor Johnson. Swift’s training program required the mentor to complete a Student Performance Assessment for every fifty hours of driving completed by the trainee; the trainee was required to complete Swift’s Driver Training Paperwork. When off duty in the sleeping berth, mentor Johnson could monitor Quiles’ driving via an application on his phone. All three contracting parties benefitted from this arrangement — Johnson received Quiles’ labor, permitting Johnson’s truck to operate more hours with team driving. Quiles received instruction from Johnson, an hourly wage from Swift when team driving with Johnson, and credit toward completing [*5] the training program. Swift received the benefit of having shipments delivered with team driving while its trainee advanced toward becoming an employee qualified to drive a Swift truck on his own.

II.
“When an employer’s workers’ compensation liability is insured and benefits are recoverable, an action for workers’ compensation benefits is the exclusive remedy available to an employee against an employer for work-related injury.” Subcliff v. Brandt Engineered Prods., Ltd., 459 F. Supp. 2d 843, 850 (S.D. Iowa 2006); see Iowa Code § 85.20(1) (2014). The workers’ compensation statute defines “worker” or “employee” as “a person who has entered into the employment of, or works under contract of service, express or implied, or apprenticeship, for an employer.” § 85.61(11). The critical issue in determining whether an injured worker is limited to the exclusive workers’ compensation remedy “is whether the worker entered into a contract of hire, express or implied.” Parson v. Procter & Gamble Mfg. Co., 514 N.W.2d 891, 893 (Iowa 1994). “The intent of the parties is the overriding element in determining whether an employment contract existed.” Rouse v. State, 369 N.W.2d 811, 814 (Iowa 1985). “In Iowa, a contract will be implied where there has been a mutual manifestation of assent by acts and deeds (rather than words) to the same terms of an agreement.” McBride v. City of Sioux City, 444 N.W.2d 85, 90 (Iowa 1989).
Under the Iowa statute, as in other States, “an employee may have more [*6] than one employer.” Caterpillar Tractor Co. v. Shook, 313 N.W.2d 503, 506 (Iowa 1981); see Beaver v. Jacuzzi Bros., Inc., 454 F.2d 284, 285 (8th Cir. 1972) (“As a matter of common experience and of present business practices . . . it is clear that an employee may be employed by more than one employer even while doing the same work.”). A claim of dual employment may be made by a putative employee seeking workers’ compensation benefits, or by a putative employer seeking to limit the plaintiff in a tort action to the exclusive workers’ compensation remedy. Dual employment is not contrary to policies underlying the workers’ compensation statute. “Nothing in the statute prohibits joint employers from allocating between themselves the responsibility for obtaining insurance for their mutual workers’ compensation liability.” Subcliff, 459 F. Supp. 2d at 851. In a dual employment case, the question is whether an employee of a “general” employer — here, Swift — simultaneously served as the employee of a “special” employer — here, Johnson. “Although in Iowa an employee may have two employers, the presumption is that a general employer, such as [Swift], is the sole employer.” Swanson v. White Consol. Inds., Inc., 30 F.3d 971, 974 (8th Cir. 1994); see Parson, 514 N.W.2d at 894. The sole issue on appeal is whether the district court erred in concluding that, at the time of the accident, Quiles was the dual employee of Swift and Johnson.
As the [*7] district court noted, in the great majority of reported dual employment or “borrowed worker” decisions, the general employer was a temporary employment agency or broker in the business of “loaning” its employees to clients on a temporary basis to do the clients’ work for a fee. Because the broker employed the temporary worker, paid his or her wages and fringe benefits, and paid premiums to provide workers’ compensation insurance covering the temporary work, the question was whether the client was a special employer when the temporary employee suffered a work-related injury. In Iowa, these cases have turned on a fact-intensive analysis of whether there was a separate contract for hire, express or implied, between the employee and the special employer. See Parson, 514 N.W.2d at 894-97 (no express contract; strong evidence special employer did not intend to employ; summary judgment for employer reversed); Fletcher v. Apache Hose & Belting Co., 519 N.W.2d 839, 840-41 (Iowa App. 1994) (no express contract but intent to employ temporary worker clear; special employer prevailed); Jones v. Sheller-Globe Corp., 487 N.W.2d 88, 93 (Iowa App. 1992) (special employer prevailed because of its exclusive control over and benefit from the loaned employee’s work; workers compensation provided through the broker); Subcliff, 459 F. Supp. 2d at 852 (express contract for hire established special employer’s [*8] control over work; summary judgment for employer granted); Swanson, 30 F.3d at 974-75 (summary judgment for employee reversed; existence of contract for hire a disputed fact).
Though Johnson’s contract with Swift stated that a driver trainee such as Quiles “shall be considered a loaned employee or borrowed servant under applicable law,” the relationship between Swift and Johnson was much different than an employment broker’s typical relationship with its clients. Assuming the requisite contract for hire between Quiles and Johnson, the leading workers’ compensation treatise describes the resulting three-party relationship as “joint employment”:
Joint employment occurs when a single employee, under contract with two employers, and under the simultaneous control of both, simultaneously performs services for both employers, and when the service for each employer is the same as, or is closely related to, that for the other. In such a case, both employers are liable for workers’ compensation.
2 Larson’s Workers’ Compensation, Desk Edition § 68.01, at p. 68-1. Quiles performed closely related services for both Swift and Johnson, under the simultaneous control of both. “Where a legitimate joint employment relationship is present it is to be expected that the employee’s [*9] relationship with both employers would evince the attributes of employment encapsulated in the Henderson factors.”2 Subcliff, 459 F. Supp. 2d at 853. The agreement between Johnson and Swift provided that Johnson would provide workers’ compensation insurance for his own employees, but Swift would provide workers’ compensation for driver trainees assigned to Johnson. Johnson understood that the $0.05 he paid Swift for each loaded dispatched mile that a trainee rode in his truck was in part to pay for workers’ compensation coverage.
Although we think it clear that the agreement between Johnson and Swift established a joint employer relationship whenever independent contractor Johnson agreed to serve as mentor for a Swift employee completing its mandatory apprenticeship training program, the question remains whether Quiles and Johnson entered into an express or implied contract for hire when they agreed that Johnson would serve as Quiles’s mentor. The district court concluded that undisputed facts demonstrate that Quiles intended to form an employment relationship with Johnson as well as Swift:
The most persuasive action Quiles took was when he agreed to participate in the apprenticeship program as described in his employment [*10] agreement with Swift. All his subsequent actions demonstrate a continuing commitment to the apprenticeship program. Quiles agreed to accept a mentor in order to finish his apprenticeship. He then went to work with Johnson and participated in a team driving arrangement for four days before the collision occurred. He was free to end the relationship at any time and request a new mentor, but did not do so. From having reviewed the [training program] materials when he began his employment, Quiles was aware of the mentor’s role in evaluating and training him during his apprenticeship, and of the fact that Johnson could indirectly control Quiles’ pay by choosing when the semi would be operational. . . . It is particularly telling that Quiles continued to work with Johnson given that he had terminated his relationship with another mentor because he was dissatisfied with the prior mentor’s work habits.
After careful review of the summary judgment record, we agree with this analysis. Like the district court, we consider it significant that the Iowa workers’ compensation statute includes an “apprenticeship” as one type of “contract of service, express or implied” that is performed “for an employer.” [*11] § 85.61(11); see Black’s Law Dictionary 122 (10th ed. 2014) (defining “apprentice” as “someone who works for an employer for a fixed period in order to learn a particular skill or job”); Henderson, 178 N.W.2d at 433 (“In modern times, the apprentice works for the master for wages, usually less than that received by the journeyman who has finished his training.”). When a general employer’s apprenticeship program requires its employee to apprentice with an independent contractor in performing work for the general employer’s benefit, a joint employment is likely to occur.
Quiles enrolled in Swift’s driving program knowing he would need to train under a mentor to complete Swift’s apprenticeship program. The parties’ separate agreements with Swift, and their actions in team driving to deliver shipments for Swift in Johnson’s truck, demonstrate that both Johnson and Quiles intended to enter into an apprentice relationship — “the overriding element in determining whether an employment contract existed.” Rouse, 369 N.W.2d at 814. Whether a contract is express or implied concerns only the evidence by which the contract is proved. See Newman v. City of Indianola, 232 N.W.2d 568, 574 (Iowa 1975). Here, by both their words and their actions, Johnson and Quiles manifested their assent that Quiles would serve as Johnson’s [*12] apprentice when they engaged in team driving to deliver shipments for Swift. We therefore conclude that Johnson and Quiles entered into an employment relationship in which Swift and Johnson were joint employers mutually liable under Iowa law to provide Quiles workers’ compensation benefits when he suffered a work-related injury, an obligation Swift has fully performed. Accordingly, the workers’ compensation benefits Quiles received are his exclusive remedy against Johnson.
The judgment of the district court is affirmed.