LTC Management Services, LLC. et al v. Steele et al

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
LTC MANAGEMENT SERVICES, LLC, and 	)
HEALTH SYSTEMS, INC., 	)
)
Plaintiffs, 	)
)
vs. 	) 	Case No. 	4:25-00926-CV-DGK
)
JONATHAN STEELE, 	)
STEELE LAW FIRM, LLC, 	)
STEELE LAW FIRM II, LLC, 	)
STEELE CHAFFEE, LLC, 	)
MICHELLE WHITE, 	)
STEPHANIE ALEXANDER, 	)
)
Defendants. 	)
ORDER GRANTING MOTION TO REMAND
This case concerns Plaintiffs’ allegations that Defendants maliciously prosecuted a nursing
home negligence action against them by utilizing false affidavits and fabricated trial exhibits to
keep them in the case. 	Defendants deny the allegations.
Plaintiffs filed suit in the Circuit Court of Jackson County, Missouri. 	Defendants Jonathan
Steele, the Steele Law Firm, LLC, Steele Law Firm II, LLC, and Steele Chaffee, LLC (collectively
“the Steele Defendants”) removed to federal court by invoking the Court’s diversity jurisdiction.
Now before the Court is Plaintiff’s Motion to Remand and for an Award of Attorney’s Fees
and Costs. 	ECF No. 7. 	Because Defendant Michelle White is a non-diverse defendant, the Court
does not possess diversity jurisdiction to hear this case, and the motion to remand is GRANTED.
Further, because recent and controlling Eighth Circuit case law forecloses the Steele Defendants’
theory of removal, the Steele Defendants lacked an objectively reasonable basis for removal. 	The
Court awards Plaintiffs their fees and costs pursuant to 28 U.S.C. § 1447(c).
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Standard of Review
The statute governing removal provides in relevant part that “[a]ny civil action brought in
a State court . . . may be removed by the defendant or the defendants” if the federal court has
original jurisdiction over it. 	28 U.S.C. § 1441(a). 	Where, as here, the defendants have removed
the case to federal court by invoking the Court’s original jurisdiction via “diversity” jurisdiction,
the parties must be citizens of different states and the amount in controversy must exceed $75,000.
28 U.S.C. § 1332(a). 	Complete diversity between the parties is required; the presence of a single
plaintiff from the same state as a single defendant precludes removal. 	Exxon Mobil Corp. v.
Allapattah Servs., Inc., 545 U.S. 546, 553 (2005).
A plaintiff may challenge removal through a motion to remand. 	28 U.S.C. § 1447(c).
Once challenged, the defendant bears the burden of proving that removal is proper and all
procedural prerequisites are satisfied. 	State Farm Fire and Cas. Co. v. Valspar Corp., Inc., 824
F. Supp. 2d 923, 932 (D.S.D. 2010). 	All doubts about removal are resolved in favor of remand.
Cent. Iowa Power Co-op. v. Midwest Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 912
(8th Cir. 2009).
Discussion
There is no dispute that the amount in controversy here is over $75,000, and that both
Plaintiffs are citizens of Missouri.1 	There is also no dispute that Defendant Michelle White
(“White”) is a Missouri citizen.
The Steele Defendants removed this case via “snap removal,” that is, filing a notice of
1 	Plaintiff LTC Management Services, LLC is a limited liability company whose members are citizens of Missouri.
Plaintiff Health Systems, Inc. is incorporated in Missouri and has its principal place of business in Missouri.
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removal in the state court before Plaintiffs served White,2 thereby obviating the need to procure
her consent to removal. 	White is also the diversity destroying forum-state defendant.
The sole basis for federal jurisdiction identified by the Steele Defendants in their notice of
removal is “diversity jurisdiction.” 	Notice of Removal at 3, ECF No. 1. 	They contend complete
diversity exists because “White’s citizenship is not considered for purposes of removal because
she has not been served with process in this action.” 	Id. at 5.
After removal, they filed an Amended Notice of Removal which reiterated that this theory
was the sole basis of removal: 	“As a Missouri resident, Michelle White would ordinarily be a
citizen of the same state as the Plaintiffs. 	However, as set forth below, Michelle White’s
citizenship is not considered for purposes of removal because she has not been served with process
in this action.” 	Am. Notice of Removal at 5, ECF No. 6 (docketed as “DEMAND for Trial by
Jury”).
The Eighth Circuit, however, has already rejected this argument. 	In 2023, it held that,
service does not matter in evaluating the diversity of the parties.
See Pecherski v. Gen. Motors Corp., 636 F.2d 1156, 1160–61 (8th
Cir. 1981); see also 16 James Wm. Moore et al., Moore’s Federal
Practice § 	107.52[1] 	(3d 	ed. 	2023) 	(declaring 	that 	“whether
defendants have been served is irrelevant; diversity for purposes of
removal is based on the citizenship of all the parties named in the
complaint”). 	The citizenship of “all named plaintiffs and all named
defendants” count, Lincoln Prop., 546 U.S. at 84, 126 S.Ct. 606,
“regardless of service,” Pecherski, 636 F.2d at 1161.
M & B Oil, Inc. v. Fed. Mut. Ins. Co., 66 F.4th 1106, 1109 (8th Cir. 2023). 	It further explained,
2 In fact, it appears Plaintiffs served Defendant White with the Petition two days before the Steele Defendants removed
the case, another problem with removal here.
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So what happens if the action is removed before the plaintiff
“properly join[s] and serve[s]” the forum-state defendant? 	28
U.S.C. § 1441(b)(2). 	Although we have yet to weigh in on the
question, many courts have held that the forum-defendant rule does
not apply. 	A defendant can remove the case to federal court,
assuming 	there 	is 	“original 	jurisdiction,” 	if 	the 	forum-state
defendant has yet to be “properly ... served.” 	Id.
Even if we assume these courts are right, snap removal cannot cure
a lack of complete diversity. 	Remember that the forum-defendant
rule only applies when the case is, in the words of the statute,
“otherwise removable,” meaning there is “original jurisdiction.”
28 U.S.C. § 1441(a), (b)(2). 	It then adds a further limitation based
on the citizenship of the defendant. 	It does not subtract the
requirement that the parties be completely diverse.
Indeed, as we recently explained, the forum-defendant rule is not
jurisdictional at all. 	Violating it does not destroy jurisdiction.
Complying with it cannot create jurisdiction either. 	Snap removal
or not, an absence of complete diversity makes a federal forum
unavailable.
Id. at 1009-10 (emphasis in original) (citation to caselaw omitted). 	In short, because the
citizenship of all named plaintiffs and all named defendants counts, regardless of the status of
service upon them, the requirements for diversity jurisdiction were never met here, thus there was
no original jurisdiction from which the removal statute could operate. 	Hence, the Court must
remand this case.
In their suggestions in opposition to remand, the Steele Defendants argue for the first time
that White was fraudulently joined and the Court should ignore her citizenship because the
citizenship of a fraudulently joined party cannot be used to defeat diversity. 	Resp. at 2, ECF No.
16. 	The Court cannot consider this argument, however, because neither the Notice of Removal
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nor the Amended Notice of Removal identified fraudulent joinder as a basis for removal. 	See
Robinson v. Allstate Vehicle & Prop. Ins. Co., No. 1:18CV00252 ACL, 2019 WL 952100, at *3
(E.D. Mo. Feb. 27, 2019) (“Defendants have not … sought leave to amend their notice of removal.
Given that the time period to amend the notice of removal has expired, Defendant’s fraudulent
joinder allegation is untimely.”). 	Hence, the Court must grant the motion to remand.
As for Plaintiff’s request for attorneys’ fees, the Supreme Court has instructed that
“[a]bsent unusual circumstances, courts may award attorney’s fees under § 1447(c) only where the
removing party lacked an objectively reasonable basis for seeking removal.” 	Martin v. Franklin
Capital Corp., 546 U.S. 132, 141 (2005). 	The purpose of § 1447(c) is to “deter removals sought
for the purpose of prolonging litigation and imposing costs on the opposing party,” not to
discourage defendants from seeking removal in all but the most obvious cases. 	Id. at 140. 	In the
present case, because there was binding Eighth Circuit caselaw directly on point foreclosing the
Steele Defendants’ argument, the Steele Defendants lacked an objectively reasonable basis for
removing this case. 	The Court awards Plaintiffs their fees and costs pursuant to 28 U.S.C.
§ 1447(c). 	Cf. Schoenfeld v. Keiber, No. 07-4020-CV-C-NKL, 2007 WL 1112621, at *3 (W.D.
Mo. 2007) (awarding the plaintiff attorneys’ fees under § 1447(c) because there was binding
Eighth Circuit authority rejecting defendant’s argument for removal).
Conclusion
Plaintiffs’ motion to remand and for an award of attorneys’ fees under 28 U.S.C. § 1447(c),
is GRANTED. 	The Clerk of the Court shall remand this case to the Circuit Court of Jackson
County, Missouri.
Plaintiffs shall file their fee application within fourteen days. 	This application may be
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made under seal. 	The Steele Defendants shall have seven days to file a response, and this response
may be filed under seal. 	If the Steele Defendants dispute Plaintiffs’ counsel’s hourly rate, their
attorneys shall file their own billing records detailing the amount they have charged in connection
with litigating removal and remand in this case. 	If the Steele Defendants file a response, Plaintiffs
shall have seven days to file a reply. 	The Court will then rule on the existing record.3
IT IS SO ORDERED.
Date: 	April 23, 2026 	/s/ Greg Kays
GREG KAYS, JUDGE
UNITED STATES DISTRICT COURT
3 	Of course, the parties are free to agree on an award of attorneys’ fees. 	If they do, they should file a joint notice
informing the Court they have reached an agreement.
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