2018 WL 4096282

United States District Court, W.D. Pennsylvania.
PITTSBURGH LOGISTICS SYSTEMS, INC., Plaintiff,
v.
LANDSTAR RANGER, INC., et al., Defendants.
Civil Action No. 17-1667
|
Signed 08/28/2018
Attorneys and Law Firms
Jeffrey P. Myers, Jeffrey P. Myers Attorney at Law, Wexford, PA, for Plaintiff.
Timothy R. Smith, Paul Alexander Custer, Pion, Nerone, Girman, Winslow & Smith, P.C., Pittsburgh, PA, Thomas S. Brown, Butler Weihmuller Katz Craig LLP, Philadelphia, PA, for Defendants.

MEMORADNUM AND ORDER

MEMORANDUM
Cathy Bissoon, United States District Judge
*1 Pending before the Court is Defendant Affiliated FM Insurance Company’s (“AFM”) Motion to Dismiss (Doc. 3) and Defendant Landstar Ranger, Inc.’s (“Landstar”) Motion to Dismiss (Doc. 7). For the reasons that follow, AFM’s Motion to Dismiss will be GRANTED; and Landstar’s Motion to Dismiss will be GRANTED in part and DENIED in part.

BACKGROUND
Plaintiff, Pittsburgh Logistics Systems, Inc., brings this breach of contract action against Landstar Ranger, Inc. (“Landstar”). See generally, Compl. (Doc. 1-2).

In relevant part, Plaintiff alleges the following. Plaintiff contracted with Balcan Plastics LTD (“Balcan”) to coordinate shipping environmental equipment from a third-party site to Balcan’s facility. Id., at 9. Acting as the logistics coordinator, Plaintiff subcontracted the shipping services to Landstar through a “Motor Carriage Services Contract” (“Services Contract”).1 Id., at ¶ 5, 6. Landstar then breached the Services Contract in at least two ways. First, Landstar failed to adequately pick up and deliver the environmental equipment as the Services Contract required. Id., at ¶ 13. Second, Landstar’s truck collided into a bridge—which damaged Balcan’s equipment—while in route to Balcan. Id., at ¶¶ 15-17. Balcan’s insurer, AFM, covered the cost for the equipment’s inspection and replacement, but did not cover Plaintiff’s invoices for transportation services totaling $114,051.14. Id., at ¶ 19-20. AFM also failed to cover incidental delay and other “consequential damages.” Id., at ¶ 20. The Services Contract to which Plaintiff and Landstar entered limits liability and states as follows:
Rider D – Except as otherwise provided, CARRIER’S liability for consequential damages resulting from unreasonable delays in transit shall be subject to a maximum amount not to exceed $5,000 per shipment of actual damages sustained or expenses incurred.

Doc. 3-1. On these facts, Plaintiff asserts that Landstar is liable for actual and consequential damages stemming from Landstar’s alleged negligence and breach of contract. Id., at ¶ 27. Further, Plaintiff claims third-party beneficiary status to Balcan’s insurance contract (“Policy”) (Doc. 3-2) with Balcan’s insurer, AFM. Id., at 45. Lastly, Plaintiff claims that AFM unreasonably denied a portion of Balcan’s insurance claim, resulting in $168,544.86 in unrecoverable damages to which Plaintiff is entitled. Id. at ¶ 44.

ANALYSIS

I. Plaintiff’s Damages Claim.
Among other things, Landstar argues that Plaintiff’s cause of action prematurely asserts a contribution claim for damages that Plaintiff has yet to incur. See (Doc. 17) at 1. The Court agrees. Excepting certain consequential damages, Plaintiff’s damages claims against Defendants for losses sustained to Balcan’s equipment, as well as incidental delay damages, are premature.

*2 Pennsylvania law defines what is necessary for a party to state a breach of contract claim: “1) the existence of a contract, including its essential terms; 2) a breach of a duty imposed by the contract; and 3) resulting damages.” Walker Company, Inc. v. Excalibur Oil Group, Inc., 792 A.2d 1269, 1272 (Pa. Super. 2002) (quoting Williams v. Nationwide Mut. Ins. Co., 750 A.2d 881, 884 (Pa. Super. 2000) ). To sustain a claim for breach of contract, Plaintiff must adequately allege damages. Id.

Portions of Plaintiff’s damages claims are speculative. Plaintiff argues that AFM and Balcan could sue Plaintiff for damages sustained to Balcan’s equipment and incidental delay damages due to Landstar’s breach of contract and/or negligence.2 Yet Plaintiff, at this juncture, has not alleged that Balcan or AFM have actually sued Plaintiff for damages.

In essence, Plaintiff seeks contribution from Landstar for potential damages it may suffer should Balcan or AFM choose to sue Plaintiff for Landstar’s negligence. Plaintiff’s premature contribution claim, however, is not ripe for the Court’s adjudication. “[T]he right of contribution is a quasicontractual right arising by reason of an implied engagement of each to help bear the common burden.” Builders Supply Co. v. McCabe, 77 A.2d 368, 375 (Pa. 1951). “[N]o cause of action for contribution arises until one obligor pays more than his just share of the common obligation. Wilner v. Croyle, 252 A.2d 387, 391 (Pa. 1969). Before “the issue of contribution and indemnity is [ ] ripe for resolution,” the plaintiff must have suffered some harm. Glob. Ground Support, LLC v. Glazer Enters., Inc., No. 05-4373, 2006 U.S. Dist. LEXIS 2434, at *38 (E.D. Pa. Jan. 23, 2006); see also, Keybank Nat’l Ass’n v. Reidbord, Civil Action No. 05-144, 2005 U.S. Dist. LEXIS 29936, at *15-*16 (W.D. Pa. Nov. 28, 2005) (finding that because a claim for contribution by a plaintiff is not viable until judgment has been made, claiming contribution before plaintiff is held liable, pays out any damages or suffers any harm is a premature claim); Hotel Emples. & Rest. Local No. 274 Health & Welfare Fund v. Stadium Hotel Rest. Grp., No. 10-1279, 2012 U.S. Dist. LEXIS 40627, at *10-*11 (E.D. Pa. Mar. 26, 2012) (holding that when a plaintiff has not been held liable, has not been ordered to pay damages and has not suffered the damages sought, plaintiff has not been harmed and a contribution claim is premature and invalid).

*3 Plaintiff posits that it may be liable over to Balcan and/or AFM for damages resulting from Landstar’s conduct. But until Balcan or AFM sue, Plaintiff has not been damaged from Landstar’s failure to deliver on its contractual promises or its negligent performance.3 If Balcan and/or AFM so choose, they can sit on their damages claim against Plaintiff. In that instance, the statute of limitations would eventually run and Plaintiff would not be liable to Balcan and/or AFM for any damages. Because the Court cannot determine for certain whether Plaintiff will have an actual damages claim against Landstar until Balcan or AFM files suit, Plaintiff’s claim for future damages that have not yet incurred is not ripe for resolution.

Plaintiff also asserts a claim for lost revenue (unpaid invoices) stemming from Landstar’s alleged breach of contract. Damages suffered from lost revenue are potentially recoverable as consequential damages. “Recoverable incidental or consequential damages must be the direct and foreseeable results of the breach.” Fortney v. Tennekoon, Civil Action No. 95-4685, 1998 U.S. Dist. LEXIS 3926, at *32 (E.D. Pa. Mar. 12, 1998). Plaintiff alleges that Landstar’s breach prevented Plaintiff from collecting $114,051,14 in invoices from Balcan. Compl., ¶¶ 20, 27. The unpaid invoices constitute lost revenue from which Plaintiff could have potentially profited. Plaintiff’s potential profit loss was a direct and foreseeable result of Landstar’s breach; thus, these damages are available for recovery as consequential damages:
Lost profits are consequential damages when, as a result of the breach, the non-breaching party suffers loss of profits on collateral business arrangements. In the typical case, the ability of the non-breaching party to operate his business, and thereby generate profits on collateral transactions, is contingent on the performance of the primary contract. When the breaching party does not perform, the non-breaching party’s business is in some way hindered, and the profits from potential collateral exchanges are lost.
Atl. City Assocs., LLC v. Carter & Burgess Consultants, Inc., 453 F. App’x 174, 179-80 (3d Cir. 2011) (quoting Penncro Assocs., Inc. v. Sprint Spectrum, L.P., 499 F.3d 1151, 1156 (10th Cir. 2007) ). Landstar’s failure to perform inhibited Plaintiff from recovering on its contract with Balcan. Therefore, the profits that Plaintiff lost because Landstar breached the Services Contract are consequential lost profit damages.

Accordingly, Plaintiff’s claims for damages that depend on future suit and future damages are not ripe for resolution. The Court dismisses Plaintiff’s Count’s I and II without prejudice—to the extent that Plaintiff claims damages other than those incurred from unpaid invoices. But Plaintiff has stated a valid claim for lost profit damages.4

II. Oral Contract/Limitation of Liability
*4 At first blush, Plaintiff’s allegation that Plaintiff and Landstar entered an oral agreement seemingly is at odds with the allegation that Plaintiff and Landstar entered a Services Contract. Plaintiff alleges that “Landstar breached the oral agreement by failing to pick up the equipment from Ship & Shore on the specified date, failing to deliver the equipment to Balcan on the specified date, and by damaging the equipment while in transit.” The Services Contract is an agreement to which PLS agrees to periodically use Landstar for transportation services. Doc. 3-1. The Services Contract does not mention the terms for the Balcan shipment or any other specific shipments. Id.

The Services Contract contains an integration clause essentially precluding the parties from modifying the Services Contract unless set forth in an addendum. Id. Further, the Services Contract states that there are “no oral representations … affecting this instrument and that any future representation, agreements, understandings or waivers must be reduced to writing in order to be binding upon the parties.” Id. Thus, the Services Contract clearly contemplates that the terms for the individual shipments be reduced to writing. Specifically, the Services Contract contemplates that an Addendum is the only means of setting forth additional terms to the Services Contract. Id. The Court finds that Plaintiff has failed to even allege that a valid contract was in place for the Balcan shipment. Despite the Services Contract’s clear language requiring modifications to be in writing, Pennsylvania law allows oral modification. ADP, Inc. v. Morrow Motors, Inc., 969 A.2d 1244, 1250 (Pa. Super. Ct. 2009) ( [“A] written contract may be orally modified, even when the contract expressly provides that modifications must be in writing. […]”). Thus, the Court finds that Plaintiff adequately alleged an oral agreement that modified the Services Contract to incorporate the terms of the Balcan shipment.

Although Plaintiff alleges that a valid contract exists, Landstar’s liability may be limited. Rider D limits Landstar5 from “liability for consequential damages resulting from unreasonable delays in transit” to $5,000.00. Plaintiff alleges that “Landstar’s failure to ship the equipment as agreed” prevented Plaintiff from collecting $114,051.14. Compl., at ¶ 20. As discussed above, Plaintiff alleges that Landstar breached the agreement by delaying the equipment’s transport and damaging the equipment. Rider D contemplates that liability be limited for consequential damages resulting from unreasonable delays. Because the language “resulting from unreasonable delays” is ambiguous as to whether the limitation of liability clause limits liability when both delay and equipment damage contributed to Plaintiff’s consequential damages, the Court cannot dismiss Plaintiff’s consequential damages claim. Butters Living Tr. v. SWEPI, LP, 4:12-CV-02010, 2013 WL 3679533, at *5 (M.D. Pa. July 12, 2013) (“[T]he patent ambiguities in this written contract at a minimum compel resort to parol evidence to provide contractual coherence, making a motion to dismiss on the pleadings inappropriate, and suggesting instead that this dispute may resolved in the first instance only on summary judgment, where the court may consider undisputed matters outside the pleadings.”).

*5 Plaintiff’s claim for consequential damages survives dismissal, and the Court cannot find, at this juncture, that the clause limiting liability restricts Plaintiff to recovering only $5,000 in consequential damages.

III. Gist of the Action
The Services Contract contemplates that Landstar will be liable for incidental and consequential damages arising from Landstar’s negligent performance. “Pursuant to Pennsylvania’s gist of the action doctrine,
an alleged tort claim against a party to a contract, based on the party’s actions undertaken in the course of carrying out a contractual agreement, is barred when the gist or gravamen of the cause of action stated in the complaint, although sounding in tort, is, in actuality, a claim against the party for breach of its contractual obligations.

Bombardier Transp. Holdings USA, Inc. v. United Chemi-Con, Inc., No. 2:16-cv-01903, 2018 U.S. Dist. LEXIS 47075, at *25 (W.D. Pa. Mar. 22, 2018) (quoting Bruno v. Erie Ins. Co., 630 Pa. 79, 106 A.3d 48, 53 (Pa. 2014) ). “Accordingly, to evaluate the ‘gist’ of claims at issue, courts look to the nature of the duty alleged — if the duty is created by the terms of the parties’ contract, then the claim sounds in contract, but if the duty is imposed as a matter of law by virtue of social policy, then the claim sounds in tort.” Id.

Rider D limits damages arising from Landstar’s delay. The duty to timely deliver is a duty forged through the Services Contract. Thus, the gist of the action doctrine precludes Plaintiff’s damages claim, to the extent Plaintiff claims that Landstar’s negligent delay caused damage. Regarding the equipment damages, however, Landstar had a societal duty to transport goods with reasonable care. Negligently colliding into a bridge is outside the scope of reasonable care. Therefore, the gist of the action doctrine does not bar Plaintiff’s claim for damages arising from Landstar negligently crashing the equipment into the bridge. At present, however, only consequential lost profit damages are ripe.

IV. Plaintiff’s Status as a Third-Party Beneficiary.6
Plaintiff asserts its status as a third-party beneficiary to the Policy between AFM and Balcan and argues that Plaintiff’s status enables Plaintiff to enforce certain contractual rights against AFM. “[A]n action on a contract cannot be maintained against a person who is not a party to the contract unless the plaintiff is a third party beneficiary of the contract.” Commonwealth, State Pub. Sch. Bldg. Auth. v. Noble C. Quandel Co., 585 A.2d 1136, 1140 (Pa. Commw. Ct. 1991). As a general rule, under Pennsylvania law, both parties to the contract must have indicated in the contract itself that the purported third-party beneficiary is an intended third-party beneficiary. Two Rivers Terminal, L.P. v. Chevron USA, Inc., 96 F. Supp. 2d 432, 450 (M.D. Pa. 2000). That intention must affirmatively appear in the contract itself. Scarpitti v. Weborg, 609 A.2d at 149 (citing Spires v. Hanover Fire Insurance Company, 70 A.2d 828, 830-831 (Pa. 1950) ).

*6 Here, the parties’ intent to include Plaintiff as a beneficiary to the Policy (Doc. 3-2) does not appear in the Policy. The Policy does not mention Plaintiff, and Plaintiff does not allege in its Complaint that Balcan and AFM intended to name Plaintiff as a beneficiary to it. Accordingly, the Court must analyze whether an exception to the general rule bestows Plaintiff with third-party-beneficiary status. Pennsylvania has adopted Section 302 of the Restatement (second) of Contracts, which provides two exceptions to the general rule that both parties to the contract must have indicated their intent in the contract to include a third-party beneficiary:
(1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either
(a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or
(b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.
Section 302 of the Restatement (second) of Contracts. In analyzing Section 302, the Court must first find that the “circumstances are so compelling that recognition of the beneficiary’s right is appropriate to effectuate the intention of the parties.” Scarpitti v. Weborg, 609 A.2d 147, 150 (Pa. 1992). Even assuming, arguendo, that compelling circumstances exist, neither exception warrants Plaintiff receiving third-party-beneficiary status.

Regarding the first exception, performance of the alleged contract will not satisfy any existing payment obligation to Plaintiff. The Policy insures Balcan against “ALL RISKS OF PHYSICAL LOSS OR DAMAGE.” Doc. 3-2. It does not insure against contractual obligations, which include unpaid invoices and delay damages.7 As discussed above, Plaintiff’s claim for physical damages caused to Balcan’s equipment are not ripe. Suing to enforce coverage under the Policy for Plaintiff’s outstanding invoices would be futile because the Policy does not cover that contractual obligation. At this juncture, AFM has not obliged itself to insure any damages to which Plaintiff has an interest. Therefore, enforcing the Policy would not satisfy any obligation to Plaintiff.

Regarding the second exception, the circumstances do not indicate that AFM intended to confer to Plaintiff the benefit of the Policy at the time AFM contracted with Balcan. Insurance companies typically insure their clients against the risks associated with physical loss or damages. Some insurance policies contain contractual liability insurance, which indemnifies the insured from certain stated contractual liabilities. As articulated on the first page of Balcan’s Policy, AFM insured Balcan against physical loss or damage, but not contractual liabilities. Thus, the Policy did not intend to insure Balcan for its contractual obligations with third-parties. Plaintiff seeks a benefit from the Policy that the Policy does not provide.

Having concluded that Balcan and AFM did not express their intent to include Plaintiff as a beneficiary to the policy, and that neither of the Section 302 exceptions apply, the Court finds that Plaintiff failed to plead sufficient facts warranting its recognition as a third-party beneficiary. Given that some of Plaintiff’s potential damages have yet to ripen, the Court dismisses Plaintiff’s Count V without prejudice.8

V. Plaintiff’s Unjust Enrichment Claim Against AFM.
*7 Where an unjust enrichment is found, the law implies a contract, which requires the defendant to pay to a plaintiff the value of the benefit conferred. Schenck v. K.E. David, Ltd., 666 A.2d 327 (Pa. Super. 1995). The elements necessary to prove unjust enrichment are: “[1] benefits conferred on defendant by plaintiff; [ 2] appreciation of such benefits by defendant; and [3] acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.” Id. at 328. (quoting Wolf v. Wolf, 356 Pa. Super. 365, 514 A.2d 901 (1986), overruled on other grounds, Vanbuskirk v. Vanbuskirk, 527 Pa. 218, 590 A.2d 4 (1991) ).

Plaintiff pleaded no facts in its Complaint stating what, if any, benefit it conferred upon AFM. Further, the Court fails to see what facts Plaintiff could possibly plead given the chance to amend. AFM is a third-party insurer that did not contract with Plaintiff for any services, and Plaintiff has not alleged that it provided AFM with any services. Therefore, the Court finds that Plaintiff has not and cannot state a claim upon which relief can be granted and dismisses Count VI with prejudice.

VI. Plaintiff’s Unjust Enrichment Claim against Landstar
Plaintiff alleges that it compensated Landstar for its transportation services, and that Plaintiff did not receive adequate value for the payment it made. Compl., ¶¶ 13, 30, 33. Without providing adequate value, it would be inequitable for Landstar to retain the money that Plaintiff paid for those services. Viewing the allegations in the light most favorable to Plaintiff, Plaintiff has sufficiently alleged that Landstar obtained an unjust benefit from Plaintiff. Plaintiff’s unjust enrichment claim against Landstar survives dismissal.

ORDER
For the reasons set forth above, AFM’s Motions to Dismiss (Doc. 3) is GRANTED. Accordingly, Plaintiff’s claim for breach of contract as a third-party beneficiary to Affiliated FM Insurance Company’s insurance contract with Balcan Plastics LTD is hereby DISMISSED without prejudice. Plaintiff’s claim for unjust enrichment as a third-party beneficiary to Affiliated FM Insurance Company’s insurance contract with Balcan Plastics LTD is hereby DISMISSED with prejudice.

Landstar’s Motion to Dismiss (Doc. 7) is GRANTED in part and DENIED in part. Plaintiff’s claim for damages stemming from the cost of inspecting and replacing Balcan’s equipment, as well as Balcan’s shipping delay damages, are hereby DISMISSED without prejudice.

Defendants’ Motions to Dismiss are DENIED as to all remaining claims, including Plaintiff’s claim for damages incurred against Landstar Ranger, Inc. for unpaid invoices and Plaintiff’s negligence claim for consequential damages. Given that the bulk of Plaintiff’s claims have not ripened, the Court will stay this action until all of Plaintiff’s claims ripen or the statute of limitations on those claims expires. Plaintiff’s counsel shall move the Court to reopen this case after all of Plaintiff’s above-mentioned claims have ripened or expired. After the Court reopens this case, the Court will issue an order with the deadline to amend the Complaint, if Plaintiff so chooses.

IT IS SO ORDERED.
All Citations
Slip Copy, 2018 WL 4096282

Footnotes

1
Plaintiff does not allege that Balcan contracted with Plaintiff to perform any task other than coordinating the shipment of Balcan’s environmental equipment with a third party.

2
Plaintiff attaches a piece of correspondence to its Opposition (Doc. 15-4) from AFM that demands payment for the loss sustained to Balcan’s equipment. In deciding motions to dismiss pursuant to Rule 12(b)(6), courts generally consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record and documents that form the basis of a claim. See In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997); Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). A document forms the basis of a claim if the document is “integral to or explicitly relied upon in the complaint.” Burlington Coat Factory, 114 F.3d at 1426 (emphasis omitted). Plaintiff, however, does not mention AFM’s demand in its Complaint, and it is not integral to Plaintiff’s claim. Therefore, the Court need not determine whether AFM’s demand ripens Plaintiff’s premature contribution claim.

3
The Federal Rules of Civil Procedure do not include a provision allowing plaintiffs to sue third parties in the face of threatened litigation without being first named as a defendant. The Federal Rules of Civil Procedure, however, do permit defendants to implead a person “who is or may be liable to the third-party plaintiff for all or part of the plaintiff’s claim against the third-party plaintiff.” (emphasis added.) Rule 14(a) “permits a defendant to bring in a third-party defendant even though the defendant’s claim is purely inchoate—i.e., has not yet accrued under the governing substantive law—so long as the third-party defendant may become liable for all or part of the plaintiff’s judgment.” Andrulonis v. United States, 26 F.3d 1224, 1233 (2d Cir. 1994). See also IHP Industrial, Inc. v. Permalert, ESP, 178 F.R.D. 483, 487 (S.D. Miss. 1997) (“Rule 14 does not require that the third-party plaintiff await the outcome of the plaintiff’s claim against it before it may assert its third-party claim” even when the defendant’s cause of action for indemnity has not yet arisen under state law).

4
The Court notes that $114,051,14 in invoice revenue may not be equal to actual profits that Plaintiff would have received.

5
Landstar is referred to as the defined term “CARRIER” throughout the Services Contract, including in the Rider D. “When parties define the terms used in a contract, those definitions govern the construction of the contract.” Eannarino v. Eannarino, 439 A.2d 760, 762 (Pa. Super. Ct. 1982). Rider D clearly references Landstar’s limitation of liability.

6
The Court need not delve into whether Plaintiff is a “carrier.” The Court finds that Plaintiff fails, as a matter of law, to allege its status as a third-party beneficiary to the claims that have already ripened. Further, the Court finds it premature to determine, as a matter of law, whether Plaintiff is a carrier pursuant to the Policy’s intended definition. As the parties have aptly argued, the Policy’s definition of “carrier” could conceivably be interpreted in different ways. Evidence may be needed in light of this ambiguity. Further, it remains unclear whether the Policy intended to adopt the Carmack Amendment’s carrier definition.

7
The Court acknowledges that Plaintiff pleaded that Balcan submitted an insurance claim to AFM for invoices and that AFM rejected this claim. Even taking these facts as true, the Policy clearly does not insure against contractual liabilities. And whether Balcan submitted the claim is irrelevant to whether AFM has a contractual obligation to pay on it.

8
The insurance policy insures against physical damages caused to Balcan’s property. Should Balcan or AFM sue Plaintiff for damages incurred to Balcan’s equipment, Plaintiff may have a claim as a third-party beneficiary.

2018 WL 4140683

United States District Court, S.D. Texas, Brownsville Division.
Zenon PINA-MARTINEZ, Jr., Plaintiff,
v.
Jose Francisco Romero SALDANA, et al., Defendants.
Civil Action No. 1:18-CV-31
|
Signed 08/30/2018
Attorneys and Law Firms
James Michael Moore, The Moore Law Firm, McAllen, TX, Tomas Francisco Tijerina, Law Office of Benigno (Trey) Martinez, Brownsville, TX, for Plaintiff.
Tamara L. Rodriguez, Glenn D. Romero, Vidaurri, Lyde, Rodriguez & Haynes, LLP, Edinburg, TX, for Defendants.

OPINION AND ORDER
Fernando Rodriguez, Jr., United States District Judge
*1 Pending before the Court is Plaintiffs’ Opposed Motion to Remand (Doc. 6). Having reviewed the Motion, the briefing of the parties, the relevant facts, and the applicable law, the Court finds that Plaintiffs’ Motion to Remand should be granted and this matter should be remanded to state court for further proceedings.

Background
This case arises from an automobile accident that caused one fatality. In February 2016, Plaintiff Zenon Piña-Martinez, Jr. was driving his sports utility vehicle on a Farm-to-Market Road in South Texas, with his wife as a passenger next to him, and the youngest of their three children in the back seat. In the moments before the accident, they drove behind a commercial 18-wheel tractor trailer. Although the parties dispute the cause of the accident, it is clear that Mr. Piña-Martinez’s vehicle impacted with the rear corner of the tractor trailer, killing Mr. Piña-Martinez’s wife, and injuring Mr. Piña-Martinez.

In Texas state court, Mr. Piña-Martinez filed claims against Autotransportes Romedu SA de CV, which is the owner of the truck, and against Jose Francisco Romero Saldaña, the truck driver at the time of the accident. Mr. Piña-Martinez filed his lawsuit in three capacities: (1) his individual capacity; (2) as the Personal Representative of the Estate of Arely Guadalupe Vidal Camacho, his wife (“Estate of Mrs. Camacho”); and (3) as next friend of EJP, BLP, and JLP, their three minor children. The Plaintiffs allege causes of action based on Texas law for, inter alia, negligence, gross negligence, and wrongful death.

In February 2018, the Defendants removed the action to federal court based on diversity jurisdiction.

On March 2, 2018, the Plaintiffs filed their motion to remand, arguing that the Court lacked jurisdiction due to the absence of complete diversity. The issue turns on the citizenship of the parties. The Plaintiffs include citizens of Mexico (Mr. Piña-Martinez and the Estate of Mrs. Camacho) and of Texas (the three minor children). Both defendants are citizens of Mexico.

*2 Following the Initial Pretrial Conference, the Court requested supplemental briefing on two issues. See Order (Doc. 12). First, the Court ordered briefing as to whether a conflict of interest precluded Plaintiffs’ counsel from representing all of the Plaintiffs. The second issue focused on whether the Court had the authority to realign the parties so that Mr. Piña-Martinez in his individual capacity and as the representative of the Estate of Mrs. Camacho became defendants with respect to the minor children’s claims and, if so, whether diversity jurisdiction would exist if such a realignment occurred. The Court also appointed a guardian ad litem for the minor Plaintiffs and requested that he also brief the indicated issues. The parties have provided the requested supplemental briefing. See Plaintiffs’ Additional Briefing in Support of Motion to Remand (Doc. 14); Defendants’ Briefing Regarding Conflict of Interest and Realignment (Doc. 15); Plaintiffs’ Response to Defendant’s Briefing Regarding Plaintiffs’ Motion to Remand (Doc. 16); Guardian Ad Litem Brief (Doc. 17); Defendants Jose Francisco Romero Saldaña and Autotransportes Romedu, S.A. de C.V.’s Brief in Reply to Plaintiff’s Additional Brief in Support of Motion to Remand (Doc. 18).

I. Standard
Federal district courts are of limited jurisdiction, and may hear only those cases authorized by a federal statute, the Constitution, or a United States treaty. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). Under 28 U.S.C. § 1441(a), any state-court civil action over which the federal courts would have original jurisdiction may be removed from state to federal court. However, the defendant seeking to remove a case to federal court shoulders the burden of proof in demonstrating that removal is proper. Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007) (citing Guillory v. PPG Indus., Inc., 434 F.3d 303, 308 (5th Cir. 2005) ). A court must strictly construe the removal statute in favor of remand and against removal. See In re HotHed Inc., 477 F.3d 320, 323 (5th Cir. 2007) (citations omitted). When there is no subject-matter jurisdiction, remand is mandatory. 28 U.S.C. § 1447(c).

To establish diversity jurisdiction, courts require complete diversity of parties. See Chick Kam Choo v. Exxon Corp., 764 F.2d 1148, 1151 (5th Cir. 1985). In cases involving parties with citizenship in foreign countries, diversity jurisdiction cannot be maintained by an alien against a citizen of a state and a citizen of some foreign country. Id. The requirement of complete diversity in the alienage context requires, for instance, that if at least one plaintiff is a Mexican citizen, no defendant can be a citizen of a foreign country.

II. Analysis
Under controlling law, complete diversity does not exist in this matter. While that conclusion usually ends the matter and requires remand, the Defendants urge the Court to disregard the jurisdictional allegations as fraudulently made. Based on the facts in the record, however, the Court denies this request. In addition, the Court also declines to realign the parties so as to create complete diversity. As a result, no grounds exist to maintain this action in federal court.

A. Complete diversity does not exist.
Section 1332(a) of Title 28 of the United States Code provides a number of independent bases for diversity jurisdiction, including what courts at times refer to as “alienage jurisdiction.” See 28 U.S.C. § 1332(a)(2). While diversity jurisdiction usually concerns cases involving citizens of different States within the United States, the doctrine of alienage jurisdiction arises in cases involving a citizen of a foreign state and a citizen of the United States. The rules regarding complete diversity apply equally to cases of alienage jurisdiction. See Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535 (5th Cir. 2014); Chick Kam Choo, 764 F.2d at 1153. This means that if at least one plaintiff and at least one defendant have citizenship in a foreign state, complete diversity does not exist and the court cannot maintain the action. Chick Kam Choo, 764 F.2d at 1153.

In this lawsuit, the parties on both sides include citizens of Mexico. On the Plaintiffs’ side, Mr. Piña-Martinez and the estate of his deceased wife, Mrs. Camacho, are both citizens of Mexico for diversity purposes.1 While the minor children are citizens of Texas, their presence does not negate the Mexican citizenship of their father and the estate of their mother. As for the defendants, both Mr. Saldaña and Autotransportes are citizens of Mexico. As a result, no complete diversity exists under the controlling law of alienage jurisdiction.

B. The evidence before the Court does not establish fraud in the pleading of jurisdictional facts.
*3 Courts recognize the doctrine of fraudulent joinder as an exception to the complete diversity rule. In these cases, the removing party typically argues that the plaintiff seeks to defeat federal jurisdiction through the joinder of a non-diverse party against whom, under the governing law, relief is impossible. See e.g., Johnson v. Heublein Inc., 227 F.3d 236, 240 (5th Cir. 2000); Jernigan v. Ashland Oil Inc., 989 F.2d 812, 815 (5th Cir.), cert denied, 510 U.S. 868 (1993). The burden of showing fraudulent joinder is on the party alleging it, and this burden is a heavy one. Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 259 (5th Cir. 1995); B. Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). All doubts are resolved against removal. Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir.), cert. denied, 530 U.S. 1229 (2000); Blackmore v. Rock-Tenn Co., Mill Div., Inc., 756 F.Supp. 288, 289 (N.D. Tex. 1991).

A removing defendant can demonstrate improper joinder by showing “actual fraud in the pleading of jurisdictional facts”. Travis v. Irby, 326 F.3d 644, 646 (5th Cir. 2003). The court must evaluate the factual allegations made in the state-court pleadings in the light most favorable to the plaintiff. See B. Inc., 663 F.2d at 549.

In the instant case, the Defendants challenge the alleged citizenship of Mr. Piña-Martinez and the Estate of Mrs. Camacho, effectively arguing that the plaintiffs have engaged in fraud in the pleading of jurisdictional facts, and that they should be treated as citizens of Texas and not of Mexico. Defendants’ Response to Plaintiff’s Motion for Remand (Doc 8) at ¶¶ 7-9. The Defendants ground this argument on an allegation the Plaintiffs made in an initial lawsuit concerning the same accident, which this Court dismissed without prejudice, and in which the Plaintiffs alleged that they were citizens of Texas. See Application and Notice of Removal (Doc. 1) at Exh. 2 (Plaintiffs’ Original Petition in the previous state-court action, alleging that “[a]ll parties are Texas citizens”); id. at Exh. 1 (July 26, 2016, Order dismissing without prejudice the previous lawsuit that had been removed to the Southern District of Texas). The Defendants argue that it is only later, in the present action, that the Plaintiffs allege that Mr. Piña-Martinez and the Estate of Mrs. Camacho are citizens of Mexico. See Response (Doc. 8) at ¶¶ 7-9.

*4 The Defendants do not assert that the Plaintiffs have sued a non-diverse defendant solely to defeat complete jurisdiction, and against which no plausible cause of action exists. Rather, the dispute focuses on Mr. Piña-Martinez, in his individual capacity and as representative of the Estate of Mrs. Camacho, alleging Texas citizenship in a previous, related matter, and now alleging Mexican citizenship. Mr. Piña-Martinez has submitted evidence confirming the Mexican citizenship of himself and his deceased wife. See Plaintiffs’ Opposed Motion to Remand (Doc. 6) at Exh. B. The Defendants offer no controverting evidence, despite bearing the burden on the issue. See Mas v. Perry, 489 F.2d 1396 (5th Cir. 1974) (recognizing that the party invoking federal jurisdiction bears the burden when “diversity jurisdiction is properly challenged”). The Defendants do highlight Mr. Piña-Martinez’s allegation in the prior lawsuit, but cite no authority establishing that a party is bound for the purpose of jurisdictional analysis to an allegation filed in an antecedent case.2 In addition, any doubts that affect whether diversity jurisdiction exists are resolved in favor of the party contesting removal. As a result, this Court finds that Mr. Piña-Martinez, in both his individual capacity and as representative of the Estate of Mrs. Camacho, is a Mexican citizen.

C. The Court declines to realign the parties to create complete diversity.
While typically a court determines diversity at the time suit is filed, the court is not always bound by the way a plaintiff aligns the parties. In certain situations “[i]t is the court’s duty to ‘look beyond the pleadings, and arrange the parties according to their sides in the dispute.’ ” Lowe v. Ingalls Shipbuilding, A Div. of Litton Sys., Inc., 723 F.2d 1173, 1178 (5th Cir. 1984) (citing Wright, Miller, & Cooper, Federal Practice and Procedure: Jurisdiction § 3607– 8.). Generally, the test of proper alignment “is whether the parties with the same ‘ultimate interests’ in the outcome of the action are on the same side.” Id.

Courts have considered whether it is appropriate to realign the parties so as to establish complete diversity. See, e.g., City of Indianapolis v. Chase Nat’l Bank of City of N.Y., 314 U.S. 63 (1941); Zurn Indus., Inc. v. Acton Constr. Co., Inc., 847 F.2d 234 (5th Cir. 1988). When determining whether the opposing parties are properly aligned in matters involving a challenge to diversity jurisdiction, courts assess whether “the necessary collision of interest exists,” analyzing “the principal purpose of the suit, and the primary and controlling matter in dispute.” City of Indianapolis, 314 U.S. at 71. The court asks whether the case entails a “bona fide dispute between citizens of different states.” Zurn, 847 F.2d at 237.

In several cases involving vehicular accidents, for example, family members have brought suit not only against a vehicle’s manufacturer, but also against a relative who drove the vehicle and who had the same citizenship as the plaintiffs. See, e.g., Martinez v. Cont’l Tire N. Am., Inc., No. H-08-2148, 2008 WL 10720254 at *3 (S.D. Tex. Oct. 6, 2008); Kahn Swick & Foti, LLC v. Spector Roseman Kodroff & Willis, PC, No. 14–1979, 2014 WL 7140312 at *4 (E.D. La. Dec. 12, 2014); Eagle Capital Corp. v. Munlake Contractors, Inc., No. 5:10–cv–99, 2012 WL 568701 at *7 (S.D. Miss. Feb 21, 2012). These courts considered whether the non-diverse, defendant family member should be realigned as a plaintiff, establishing complete diversity as against the corporate defendant. They declined to do so, as have other courts in cases involving other factual scenarios. See e.g., Washington v. Ernster, 551 F.Supp 2d 568 (E.D. Tex. 2007); Prime Income Asset Mgmt. Co., Inc., v. Waters Edge Living LLC, No. 3:07-CV-0102-D, 2007 WL 2229050 (N.D. Tex. Aug. 3, 2007); Roblez v. Ramos, No. Civ.A. 301CV0336-G, 2001 WL 896942 at *3 (N.D. Tex. Aug. 1, 2001); but see, e.g., Keen v. Burlington N. Santa Fe. Corp., 438 F.Supp.2d 724 (S.D. Tex. 2006) (realigning a non-diverse defendant as a plaintiff, and denying the motion to remand).

*5 The heavy burden that courts apply when considering realignment in the context of removal stems from the need to balance “the plaintiff’s (mostly unlimited) right to choose his forum against the defendant’s (conditional) right to a federal forum.” Roblez, 2001 WL 896942 at *2. The doctrine strikes a “reasonable balance among not rewarding abusive pleading by the plaintiff, the plaintiff’s tactical prerogative to select the forum, and the defendant’s statutory right to remove.” Id. To prove fraudulent joinder, a defendant must not simply present a plausible rationale favoring realignment. The defendant must demonstrate that a party should be realigned, and that the supporting reasons overcome the court’s deference to the plaintiff’s choice of forum. If the plaintiff has a “plausible justification for alignment of the parties”, the plaintiff’s tactical prerogative should be upheld. See id. at *4.

In the present matter, the Defendants argue that realignment is proper because the parties are not currently aligned according to their true interests. The Defendants posit that both Mr. Camacho and his deceased wife acted negligently and caused or at least contributed to the occurrence of the accident. See Defendant’s Briefing Regarding Conflict of Interest and Realignment (Doc. 15) at ¶ 2. According to the Defendants, the “primary and controlling matter in dispute is determining whose negligence caused the crash and death of [Decedent].” Id. at ¶ 5. From the perspective of the minor children, the Defendants continue, Mr. Piña-Martinez and the Estate of Mrs. Camacho should be aligned as additional defendants. Id.

Although the Defendants raise the colorable defense that Mr. Piña-Martinez and his deceased wife may have proportionate responsibility in connection with the accident, this defense does not in itself justify realignment. Mr. Piña-Martinez, in his individual capacity and as representative of the Estate of Mrs. Camacho, has also presented colorable claims against the defendants. The Plaintiffs deny responsibility and any negligence on their part. At this stage in the case, the court accepts these allegations as presenting a bona fide dispute between Mr. Piña-Martinez and the Estate of Mrs. Camacho against the Defendants. While the Defendants rightfully raise the possibility that the minor children could potentially assert claims against Mr. Piña-Martinez and the Estate of Mrs. Camacho, the Plaintiffs have not chosen to do so at this time, and have presented a unified front against the Defendants.3 The Plaintiffs have demonstrated a “plausible justification for alignment of the parties”, and this alignment is their tactical prerogative that the Court will not disturb.

The Defendants rely on Keen v. Burlington Northern Santa Fe Corporation to support their request for realignment and maintaining the action in federal court. While this decision demonstrates that federal courts possess the authority to realign cases in a manner that creates complete diversity, the facts in Keen render it distinguishable from the present lawsuit. The Keen case arose following an accident in which a vehicle that Ruth Keen was driving collided with a train. After her husband sued the railroad in state court, Ruth Keen intervened as an additional plaintiff. Mr. Keen then filed a cross-claim against Ruth Keen, ostensibly making her a non-diverse defendant with respect to Mr. Keen. The railroad company removed the action to federal court. In declining the motion to remand, the court realigned Ruth Keen as a plaintiff, highlighting that Mr. Keen did not actually plead a cause of action against her, that he alleged that “she was only a 1% cause of the collision”, and that the “railroad Defendants were 100% responsible … for the accident.” Id. In contrast, in the present case, Mr. Piña-Martinez, both individually and as representative of the Estate of Mrs. Camacho, has non-trivial claims against the Defendants. Although the Defendants argue that these two Plaintiffs’ own negligence may have played a role in the accident, this argument does not mean that Mr. Piña-Martinez and the Estate of Mrs. Camacho have no true interest in their causes of action. For that reason, the rationale in Keen does not apply.4

III. Conclusion
*6 Accordingly, it is:

Ordered that Plaintiffs’ Motion to Remand is GRANTED; and

Ordered that this case is REMANDED to the 103rd Judicial District Court of Cameron County, Texas.

All Citations
Slip Copy, 2018 WL 4140683

Footnotes

1
For purposes of the survival claim, the citizenship of Mrs. Camacho controls. See, e.g., Acridge v. Evangelical Lutheran Good Samaritan Soc., 334 F.3d 444, 447–48 (5th Cir. 2003); Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2004); TEX. CIV. PRAC. & REM. CODE § 71.021. The Plaintiffs allege that Mrs. Camacho was a Mexican citizen. See Plaintiffs’ Motion to Remand (Doc. 6) at Exh. B.

2
At the Initial Pretrial Conference on May 1, 2018, the Court confirmed the Defendants’ ability to depose Mr. Piña-Martinez regarding the jurisdictional allegations. While the parties noted that some difficulties could arise because Mr. Piña-Martinez resided in Mexico and did not have the ability to travel to the United States legally, the Defendants have not argued that they lacked the ability to probe the veracity of the Plaintiffs’ jurisdictional allegations.

3
In a sealed filing, the guardian ad litem for the minor children provided conclusions supporting this finding. See Guardian Ad Litem Brief (Doc. 17).

4
The Dawson case is similarly inapposite. See Dawson v. Legion Indem. Co., No. Civ. 3:99–CV–2772–H, 2000 WL 124813, at *2 (N.D. Tex. Feb. 1, 2000). In that case, the non-diverse plaintiff had “no real pecuniary interest in the outcome of the declaratory judgment action.”