Ladden v. Austin West Third Real Estate Holding, Inc.

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
BRUCE LADDEN,
Plaintiff
v.
AUSTIN WEST THIRD REAL
ESTATE HOLDING, INC., CBRE,
INC., TK ELEVATOR
CORPORATION,
Defendants
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No. 1:24-CV-01060-RP
REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
TO: 	THE HONORABLE ROBERT PITMAN
UNITED STATES DISTRICT JUDGE
Before the Court are the referred motions in this case, Dkts. 55; 57; 60, and all
related briefing. After reviewing the filings and the relevant law, the undersigned
recommends that the District Judge remand the case and deny the motions as moot.
I. 	BACKGROUND
Plaintiff Bruce Ladden, a Texas domiciliary, sued Defendant Austin West
Third Real Estate Holding, Inc. (“Austin West”) in state court, bringing negligence
and premises-liability 	claims 	based on 	injuries 	he 	suffered 	while 	entering an
allegedly malfunctioning elevator. Dkt. 1-1, at 4-5. In his original petition, Ladden
alleged that Austin West owned, controlled, managed, and/or operated the premises
where his injuries occurred. Id. at 5. He also alleged that Austin West’s principal
place of business was in Travis County, Texas. Id. at 3. Austin West removed the case
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to federal court, stating that it is a citizen of New York and thus the Court may
exercise diversity jurisdiction over the case. Dkt. 1, at 3.
Over two months later, Ladden filed his first amended complaint. Dkt. 11.
Ladden corrected his original petition by stating that Austin West is a Delaware
corporation with its principal place of business in New York. Id. at 2. Ladden also
added two new defendants: CBRE, Inc. (“CBRE”), which is a California corporation
with its principal place of business in Texas, and TK Elevator Corporation (“TKE”),
which is a Michigan corporation with its principal place of business in Georgia. Id. In
the amended complaint, Ladden clarified that at the time of his injury, Austin West
owned the premises, CBRE managed the property, and CBRE contracted with TKE
to service the elevators. Id. at 3.1
Austin West, CBRE, and TKE moved for summary judgment. Dkts. 55; 57.
Austin West and CBRE moved to file a crossclaim against TKE. Dkt. 60. The District
Judge referred the motions to the undersigned.
II. 	LEGAL STANDARDS
Courts have an independent obligation to assess subject-matter jurisdiction.
SXSW, LLC v. Fed. Ins. Co., 83 F.4th 405, 407 (5th Cir. 2023). Federal courts are
courts of limited jurisdiction possessing “only that power authorized by Constitution
and statute.” Gunn v. Minton, 568 U.S. 241, 256 (2013) (quoting Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). A defendant may remove a
civil case brought in state court to the federal district court in which the case could
1 Ladden also filed a second amended complaint naming Austin West, CBRE, and TKE as
defendants. Dkt. 26.
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have been brought if the district court would have original jurisdiction. 28 U.S.C.
§ 1441(a). “It is to be presumed that a cause lies outside this limited jurisdiction, and
the burden of establishing the contrary rests upon the party asserting jurisdiction.”
Energy Mgmt. Servs., LLC v. City of Alexandria, 739 F.3d 255, 258-59 (5th Cir. 2014)
(quoting Kokkonen, 511 U.S. at 377). Any ambiguities should be strictly construed in
favor of remand. See Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000).
A case may be removed pursuant to 28 U.S.C. § 1332 if there is “complete
diversity” of citizenship and the amount in controversy is greater than $75,000
exclusive of interests and costs. McLaughlin v. Miss. Power Co., 376 F.3d 344, 353
(5th Cir. 2004). To allege “complete diversity” in the removal context, a defendant
must show that “all persons on one side of the controversy [are] citizens of different
states than all persons on the other side.” SXSW, 83 F.4th at 407-08.
Generally, removal jurisdiction should be determined based on the state-court
complaint at the time of removal. Valdez v. State Farm Mut. Auto. Ins. Co., No. 1:23-
cv-476-RP, 2023 WL 3721203, at *1 (W.D. Tex. May 30, 2023) (citing Cavallini v.
State Farm Mut. Auto. Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995)). However, “courts
may consider information submitted after removal if it clarifies the jurisdictional
facts as they existed at the time of removal.” Edwards v. Mathews, No. 3:23-CV-0857-
B, 2023 WL 4424268, at *3 n.4 (N.D. Tex. July 10, 2023) (citing Cavallini, 44 F.3d at
265). Additionally, if after removal the plaintiff seeks to join an additional defendant
whose joinder would destroy subject-matter jurisdiction, the court may either deny
joinder or permit joinder and remand the case. 28 U.S.C. § 1447(e). If at any time
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before 	final 	judgment 	it 	appears 	that 	the 	district 	court 	lacks 	subject-matter
jurisdiction, the case should be remanded. Id. § 1447(c).
III. 	DISCUSSION
A. 	Ladden was required to seek leave to add CBRE as a defendant.
CBRE, a Texas domiciliary, is not diverse from Ladden. It is undisputed that
Ladden is a Texas domiciliary. See Dkts. 1-1, at 3; 1, at 3; 11, at 1; 26, at 1. It is also
undisputed that CBRE maintains its principal place of business in Dallas, Texas. See
Dkts. 11, at 2; 26, at 2. Since a corporation is a citizen of its state of incorporation and
principal place of business, CBRE is a Texas domiciliary. 28 U.S.C. § 1332(c)(1); see
also Taylor v. Alford, No. EP-19-CV-00017-FM, 2019 WL 13199715, at *2 (W.D. Tex.
Mar. 6, 2019).
Because CBRE is not diverse from Ladden, to add CBRE as a defendant,
Ladden was required to seek leave of Court. Generally, under Federal Rule of Civil
Procedure 15, a plaintiff may amend his complaint once as a matter of course no later
than 21 days after serving it or 21 days after service of a responsive pleading. Fed. R.
Civ. P. 15(a)(1). In all other cases, the plaintiff may amend only with defendants’
written consent or permission from the court. Id. at 15(a)(2). “A party may make a
Rule 15(a) amendment to add a party.” David Wilkes Builders, LLC v. Nat’l Am. Ins.
Co., No. 1:24-cv-921-DAE, 2025 WL 1914862, at *2 (W.D. Tex. June 11, 2025).
However, for cases removed to federal court based on diversity jurisdiction, Rule 15(a)
must be read in conjunction with 28 U.S.C. § 1447(e). Id. Section 1447(e) provides,
“[i]f after removal the plaintiff seeks to join additional defendants whose joinder
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would destroy subject matter jurisdiction, the court may deny joinder, or permit
joinder and remand the action to the State court.” 28 U.S.C. § 1447(e).
“Courts in the Fifth Circuit have interpreted the interplay between Rule 15(a)
and 28 U.S.C. § 1447(e) to require a plaintiff to seek leave of Court to amend its
complaint to add a nondiverse party.” David Wilkes, 2025 WL 1914862, at *2 (citing
Irigoyen v. State Farm Lloyds, No. CA-C-03-324-H, 2004 WL 398553, at *2 (S.D. Tex.
Jan. 5, 2004) (“In the Fifth Circuit, it is understood that the propriety of post-removal
joinder in an amended pleading such that it would destroy diversity jurisdiction is
always a question to be presented to the district court in the form of a motion for leave
to file an amended pleading.”)); Boyce v. CitiMortgage, Inc., 992 F. Supp. 2d 709, 715
(W.D. Tex. 2014) (holding that section 1447(e) “allows the Court discretion to permit
or deny joinder, even when a party may otherwise amend as a matter of course”);
Adey/Vandling, Ltd. v. Am. First Ins. Co., No. A-11-CV-1007-LY, 2012 WL 534838,
at *2 (W.D. Tex. Feb. 17, 2012) (“[F]ederal courts have concluded that when the
amendment would deprive the court of subject matter jurisdiction, a party may not
rely on Rule 15(a) to amend a pleading without leave of court and such an amendment
must be analyzed pursuant to § 1447(e).”).
Ladden did not move for leave to file either of his amended complaints as
required.2 The undersigned will therefore construe Ladden’s amended complaints as
2 He filed his first amended complaint outside the 21-day period governed by Rule 15(a)(1)
and without obtaining written consent from opposing counsel or the Court’s leave as required
under Rule 15(a)(2). Dkt. 11. Ladden obtained consent from Austin West, CBRE, and TKE to
file his second amended complaint, but he did not seek leave from the Court. Dkt. 26; see Dkt.
27.
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seeking leave to join CBRE as a nondiverse defendant. See David Wilkes, 2025 WL
1914862, at *3 (construing plaintiff’s amended complaint as seeking leave to join
nondiverse defendant).
B. 	CBRE’s joinder should be permitted.
The Fifth Circuit supplied factors courts should consider in deciding whether
to permit joinder of a nondiverse defendant in Hensgens v. Deere & Co., 833 F.2d
1179, 1182 (5th Cir. 1987). See David Wilkes, 2025 WL 1914862, at *2. To balance the
defendant’s interest in maintaining the federal forum with the risk of parallel
lawsuits, 	courts 	should 	consider 	(1) 	“the 	extent 	to 	which 	the 	purpose 	of 	the
amendment is to defeat federal jurisdiction,” (2) “whether plaintiff has been dilatory
in asking for an amendment,” (3) “whether plaintiff will be significantly injured if
amendment is not allowed,” and (4) “any other factors bearing on the equities.”
Hensgens, 833 F.2d at 1182.
Applied to this case, there is no indication that the purpose of CBRE’s addition
is to defeat federal jurisdiction. See id. In determining whether the purpose of the
amendment is to defeat federal jurisdiction, courts consider whether the plaintiff can
state a colorable claim against the new defendant, whether the plaintiff knew or
should have known the identity of the nondiverse defendant at the time the complaint
was filed, and whether the plaintiff moved to add the nondiverse defendant “shortly
after removal and prior to any additional discovery.” David Wilkes, 2025 WL 1914862,
at *3 (collecting cases). Additionally, if a plaintiff did not file a motion to remand
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before moving to amend, the court may reasonably conclude that the primary reason
to amend was not to defeat jurisdiction. See Boyce, 992 F. Supp. 2d at 717.
Initially, the undersigned raised the issue of subject-matter jurisdiction sua
sponte; Ladden agreed that the Court could exercise diversity jurisdiction, albeit
erroneously, and did not move to remand the case. See Dkt. 26, at 2 (“Plaintiff agrees
that jurisdiction is established pursuant to 28 U.S.C. § 1332 since there is diversity
of parties[.]”). Further, Ladden states a colorable claim against CBRE. For example,
to state a premises liability claim under Texas law, Ladden must establish
(1) that [the defendant] had actual or constructive knowledge of some
condition on the premises; (2) that the condition posted an unreasonable
risk of harm to [the plaintiff]; (3) that [the defendant] did not exercise
reasonable care to reduce or to eliminate the risk; and (4) that [the
defendant’s] failure to use such care proximately caused [the plaintiff’s]
personal injuries.
Martinez v. Home Depot USA, Inc., No. SA-21-CV-00841-XR, 2023 WL 2874452, at
*4-5 (W.D. Tex. Apr. 10, 2023) (quoting United Scaffolding, Inc. v. Levine, 537 S.W.3d
463, 471 (Tex. 2017)).3 Ladden alleges in his amended complaint that CBRE had
actual knowledge or reasonably should have known about the faulty elevator, that
the elevator posed an unreasonable risk of harm, that CBRE breached its duty of care
by failing to make the elevator reasonably safe, and that CBRE’s failure to do so
proximately caused Ladden’s injuries. Dkt. 11, at 5-6; see also Dkt. 26, at 5-6.
3 “A premises-liability defendant may be held liable for a dangerous condition on the property
if it assumed control over and responsibility for the premises, even if it did not own or
physically occupy the property.” United Scaffolding, 537 S.W. 3d at 473 (internal quotation
marks omitted); see also Farrar v. Sabine Mgmt. Corp., 362 S.W.3d 694, 699 (Tex. App.—
Houston [1st Dist.] 2011, no pet.) (applying the test for premises liability to a property
manager).
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Additionally, 	CBRE 	managed the 	premises 	at 	the 	time 	Ladden’s 	injury
occurred and is therefore an obvious defendant in this action, especially given
Ladden’s apparent discovery—after the filing of his original petition—that Austin
West did not manage the property at the time of his injury. See Dkts. 1-1, at 5
(alleging 	that 	Austin 	West 	owned, 	controlled, 	managed, 	and/or 	operated 	the
premises); 11 (alleging that Austin West owned the premises and CBRE managed it).
The undersigned finds that the purpose of CBRE’s addition was not to defeat federal
jurisdiction. This factor weighs in favor of joinder.
Second, Ladden has not been dilatory in seeking an amendment. See Hensgens,
833 F.2d at 1182. In analyzing this factor, courts consider the amount of time that
has passed between the plaintiff’s motion to amend and the filing of the original
petition and notice of removal. David Wilkes, 2025 WL 1914862, at *4 (citing Anzures
v. Prologis Tex. I LLC, 886 F. Supp. 2d 555, 562 (W.D. Tex. 2012)). “Generally, a
plaintiff is not dilatory in seeking leave to amend a complaint ‘when no trial or pre-
trial dates [have been] scheduled and no significant activity beyond the pleading
stage has occurred.’” Id. (citing Boyce, 992 F. Supp. 2d at 720). Ladden first moved to
add CBRE as a defendant before the Court entered a scheduling order and before any
other significant activity occurred in this case. See Dkts. 11 (amending the complaint
on November 26, 2024); 20 (the parties’ agreed scheduling order, entered on January
2, 2025). Ladden was not dilatory in seeking amendment, and this factor weighs in
favor of joinder.
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Third, Ladden may be injured if amendment is not allowed. In considering this
factor, courts look to “‘whether a plaintiff can be afforded complete relief in the
absence of amendment.’” David Wilkes, 2025 WL 1914862, at *4 (quoting Anzures,
886 F. Supp. 2d at 565). Courts also consider “‘whether the plaintiff will be forced to
litigate their action against the non-diverse defendants in a different court system,
on a different timetable, subject to different procedural rules and conflicting results,
and under the weight of additional financial burden.’” Id. (quoting Adley/Vandling,
2012 WL 534838, at *4).
Here, it is unclear whether Ladden could win complete relief in the absence of
CBRE. While Ladden alleges that CBRE “singularly or in combination with others”
engaged in certain acts or omissions breaching the duty of care it owed to Ladden,
Ladden seeks money damages on claims for which Austin West and TKE are also
defendants. Dkts. 11, at 5-6; 26, at 4-6; see Boyce, 992 F. Supp. 2d at 721 (finding the
third factor did not weigh in favor of adding the nondiverse defendant where plaintiff
sought money damages on claims levied against both the diverse and nondiverse
defendant). Additionally, there is no indication that Austin West and TKE would not
be able to satisfy a future judgment. See Anzures, 886 F. Supp. 2d at 555. But it is
clear that if the Court denied joinder, Ladden would be forced to litigate his case
against CBRE in state court on a different timetable, subject to different procedural
rules and potentially conflicting results, and under the weight of additional financial
burden. See David Wilkes, 2025 WL 1914862, at *4. Litigating a duplicate case
against CBRE alone would be particularly complicated given CBRE’s contractual
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relationships with both Austin West and TKE. See Dkt. 11, at 3 (alleging that Austin
West owned the premises, that CBRE managed it, and that TKE serviced the
elevators); see also Dkt. 26, at 3. While this factor presents a closer question, the
undersigned finds that overall, this factor weighs in favor of joinder.
The undersigned does not identify any other factors bearing on the equities in
this case. On balance, the Hensgens factors each weigh in favor of joinder. No factor
weighs against or is neutral with respect to joinder. Therefore, the District Judge
should permit Ladden to join CBRE as a defendant in this case.
C. 	Because diversity is not complete, the case should be remanded.
If the District Judge adopts the undersigned’s recommendation to allow
CBRE’s joinder, this case should be remanded to state court. As discussed, it is
undisputed that Ladden is a Texas domiciliary. See Dkts. 1-1, at 3; 1, at 3; 11, at 1;
26, at 1. It is also undisputed that CBRE is a Texas domiciliary. See Dkts. 11, at 2;
26, at 2. Since Ladden and CBRE are each domiciled in Texas, diversity is not
complete. See SXSW, 83 F.4th at 407-08. The District Judge should remand this case.
IV. 	RECOMMENDATION
In accordance with the above discussion, the undersigned RECOMMENDS
that the District Judge REMAND this case.
The undersigned FURTHER RECOMMENDS that the District Judge DENY
the referred motions, Dkts. 55; 57; 60, as MOOT.
V. 	WARNINGS
The parties may file objections to this report and recommendation. A party
filing objections must specifically identify those findings or recommendations to
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which objections are being made. The District Judge need not consider frivolous,
conclusive, or general objections. See Battle v. United States Parole Comm’n, 834 F.2d
419, 421 (5th Cir. 1987). A party’s failure to file written objections to the proposed
findings and recommendations contained in this report within fourteen days after the
party is served with a copy of the report shall bar that party from de novo review by
the District Judge of the proposed findings and recommendations in the report and,
except upon grounds of plain error, shall bar the party from appellate review of
unobjected-to proposed factual findings and legal conclusions accepted by the District
Judge. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985);
Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).
SIGNED December 5, 2025.
DUSTIN M. HOWELL
UNITED STATES MAGISTRATE JUDGE
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