Fraudulent Joinder to Defeat Diversity Jurisdiction?
A Tennessee homeowner sued a Tennessee construction contractor and its Michigan insurer in Bradley County Chancery Court after a retaining wall fell and caused more than $80,000 in damage to the home and surrounding property. The Michigan insurance company removed the action to U.S. District Court and asserted that the court had diversity jurisdiction. Anticipating the argument that there was not complete diversity because the homeowner and contractor were both in Tennessee, the insurance company alleged that the contractor had been fraudulently joined as a defendant in order to defeat diversity jurisdiction. The district court disagreed and remanded the matter to state court.
By No Contribution Where Theories of Liability Differ
John and Brenda Skipper must have felt more like John and Brenda “Flipper” after purchasing a property in Shelby County for $20,496 and then contracting to sell it for $63,000 just five months later. See Skipper v. Wells Fargo Bank, N.A., 2010 WL 1508297, 2 (Tenn. Ct. App. 2010). Although the couple invested close to $18,000 into the property in order to “flip” it, they still stood to make a cool $21,221 in profit from the sale. Unfortunately, the Skippers learned just before closing that there were two IRS tax liens totaling over $127,000 encumbering the property, which killed the sale.