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Courts have uniformly ruled that the phrase "a defendant or defendants" in 28 U.S.C.S. § 1446(a) requires that all defendants join in or otherwise consent to a notice of removal filed under 28 U.S.C.S. § 1441(a). The failure of all defendants to join in or otherwise consent to a notice of removal constitutes a defect other than lack of subject matter jurisdiction, which is waived unless it is raised in a motion to remand within 30 days after the filing of the notice of removal under § 1446(a).
Plaintiff was a building contractor incorporated under the laws of a state other than North Carolina and registered to do business in North Carolina. Before plaintiff began the construction project, plaintiff obtained multiple layers of insurance to cover the construction project itself and plaintiff's liabilities while working on the construction project, including a series of commercial general liability insurance policies that Travelers Indemnity Company of Illinois (“Travelers”), an insurance company incorporated under the laws of a state other than North Carolina, issued. Subsequently, plaintiff hired Ignacio Herrera, Marina Herrera, and Herrera Masonry, Inc. (collectively "the Herrera Defendants") as masonry subcontractors to perform work on the construction project. The Herrera Contract allegedly contained an agreement between Plaintiff and the Herrera Defendants in which the Herrera Defendants assumed responsibility for assuring that their workmanship and material were in compliance with all local, state and/or federal codes. After a portion of the construction project collapsed for a number of reasons, including errors, omissions, and deficiencies in the Herrera Defendants’ masonry, plaintiff repaired and rebuilt the collapsed portion. Subsequently, plaintiff filed the present civil action, demanding payment and indemnity from both Travelers and the Herrera Defendants for losses and damages due to defective work and breaches of contract. Travelers responded to plaintiff’s complaint by filing a notice of removal pursuant to 28 U.S.C. §§ 1441 and 1446. Moreover, Travelers filed a motion to dismiss the Herrera Defendants, arguing that the court should disregard the Herrera Defendants for jurisdictional purposes and dismiss the Herrera Defendants because the latter did not qualify as necessary parties or proper parties to the controversy between plaintiff and Travelers. On the other hand, the Herrera Defendants and the plaintiff respectively filed motions to remand, contending that the court lacked jurisdiction of the subject matter because plaintiff and the Herrera Defendants were all citizens of the State of North Carolina, and there was no complete diversity between the parties.
The Court noted that plaintiff’s claim against Travelers for breach of contract and Plaintiff's claims against the Herrera Defendants depended upon proof of common issues of fact related to causation and damages. If the court decided to drop the Herrera Defendants from the present civil action, plaintiff could likely present the same evidence of causation and damages in its state court action against the Herrera Defendants and in its federal court action against Travelers because Plaintiff would have to prove the same facts relevant to causation and damages in each case. In addition to the threat of duplicitous litigation posed by dropping the Herrera Defendants, separate trials could result in inconsistent verdicts even if Plaintiff presented the same evidence of causation and damages during each trial. Moreover, the Court held that even assuming that Travelers might suffer prejudice by having issues of insurance coverage heard by the same jury deciding the Herrera Defendants' liability for Plaintiff's losses, the North Carolina Rules of Civil Procedure provide safeguards to counter prejudice and many other potentially harsh effects of broad joinder rules. For these reasons, the court in its discretion will decline to drop the Herrera Defendants from the case in order to create complete diversity between Plaintiff and Travelers. Because complete diversity did not exist between the parties, the Court lacked jurisdiction of the present case under Section 1332(a)(1) of Title 28, as a basis for removal under Section 1441(a) of Title 28, and all defendants properly joined in this civil action have failed to join in or otherwise consent to Travelers' notice of removal as required by Section 1446(a) of Title 28. Therefore, the court will grant Plaintiff's and the Herrera Defendants' motions to remand the civil action.