Cahoon v. L.B. White Company, LLC

Background

Christopher John Cahoon suffered fatal injuries in a propane-gas flash fire in Lakeville, Minnesota, on or about January 21, 2016. Donna Cahoon, who was appointed trustee for the decedent’s next of kin, brought a wrongful-death action under Minnesota law against L.B. White Company, Inc.; Hurricane Products, Inc.; Quality Propane of MN; and Carpentry Contractors Company. The original complaint identified L.B. White as “L.B. White Company, LLC,” while the first amended complaint identified it as “L.B. White Company, Inc.”

Cahoon originally filed the action in Dakota County District Court. Carpentry removed it to federal court based on diversity jurisdiction. Cahoon moved to remand, arguing that Carpentry was a Minnesota citizen and therefore destroyed complete diversity. Carpentry responded that “Carpentry Contractors Company” was an assumed name used by BEP/Lyman LLC and was not itself a legal entity subject to suit. The opinion states that the record was unclear about BEP/Lyman’s exact citizenship, but no party presented evidence or argument indicating that BEP/Lyman was a Minnesota citizen.

Cahoon later filed a second amended complaint without obtaining written consent from the defendants or leave from the court. Quality Propane moved to strike that complaint and also moved to dismiss the claim against it. Carpentry separately moved to dismiss the claim against it.

Motion to remand

The court denied Cahoon’s motion to remand. Federal diversity jurisdiction requires more than $75,000 in controversy and complete diversity, meaning that no plaintiff shares citizenship with any defendant. The party removing a case bears the burden of showing that federal jurisdiction exists.

Applying Minnesota law, the court explained that an assumed name is not a separate legal entity; it is a label used by another person or entity to conduct business. Carpentry presented evidence that it was an assumed name under which BEP/Lyman did business in Minnesota. Because Carpentry was not a legal entity subject to suit, Cahoon’s naming of Carpentry did not defeat complete diversity. The court therefore concluded that Carpentry had shown that diversity jurisdiction existed and denied the motion to remand.

Motion to strike

The court granted Quality Propane’s motion to strike the second amended complaint. Under the applicable civil procedure rule, a plaintiff may amend once as a matter of course within specified time limits; otherwise, the plaintiff must obtain the opposing parties’ written consent or the court’s permission. Cahoon had already amended once as a matter of course and filed the second amended complaint without the required consent or permission.

The court held that the February 1, 2019 second amended complaint was procedurally improper and struck it. The January 9, 2019 first amended complaint remained the operative complaint.

Motions to dismiss

The court denied both motions to dismiss. A motion to dismiss for failure to state a claim tests whether the complaint alleges enough facts to present a plausible claim for relief. Carpentry and Quality Propane argued that their names were assumed names, not legal entities, and therefore that claims could not be maintained directly against them.

The court agreed that assumed names lack the capacity to be sued. But it concluded that the naming problem did not require dismissal because Cahoon had actually intended to sue BEP/Lyman and EDPO, LLC, the entities doing business under the names Carpentry Contractors Company and Quality Propane. Under Minnesota law, a misnomer—a mistake in naming a party—does not prevent jurisdiction over the intended defendant when the intended defendant was properly served and was not misled.

The record showed that Cahoon served the summons and complaint on Scott Richter, whom Carpentry acknowledged was a BEP/Lyman executive officer. The court rejected Carpentry’s argument that only BEP/Lyman’s registered agent could accept service. The court also found that Cahoon served EDPO at its principal place of business and that EDPO did not dispute the service or claim that it was misled. The court therefore acquired jurisdiction over BEP/Lyman and EDPO, even though Cahoon needed to seek leave to amend the complaint to correct the names.

The court also rejected Quality Propane’s statute-of-limitations argument. It concluded that the circumstances allowing an amended complaint to relate back to the original complaint were present, including notice to the intended defendant, lack of prejudice, and knowledge that the action would have been brought against it but for a mistake about the proper party’s identity.

Disposition

The court denied Cahoon’s motion to remand; granted Quality Propane of MN’s motion to strike and struck the second amended complaint; denied Carpentry Contractors Company’s motion to dismiss; and denied Quality Propane of MN’s motion to dismiss.