On December 7, 2018, Barnes sued United and Ms. McCormick in a Texas state court, asserting violations of Texas law relating to its insurance claim.

Thereafter, United informed Barnes that it had assumed any liability Ms. McCormick would have to Barnes in the case. United then removed the case to the U.S. District Court for the Northern District of Texas, alleging that diversity existed between Barnes and United and that the district court should disregard Ms. McCormick's citizenship due to United's assumption of her liability.

The district court rejected United's argument and remanded the case.

After the state court dismissed Ms. McCormick, United removed the case to district court for a second time, on the theory that it satisfied federal diversity requirements due to Ms. McCormick's dismissal. Barnes again moved to remand.

The District Court's Decision

The district court denied the motion to remand.

In its decision, the district court explained that removability of a case from state to federal court was subject to the so-called "voluntary-involuntary" rule, which provides that an action nonremovable when commenced "may become removable thereafter only by the voluntary act of the plaintiff."

The district court then examined the decision by the U.S. Court of Appeals for the Fifth Circuit in Hoyt v. Lane Constr. Corp., 927 F.3d 287 (5th Cir. 2019), articulating an "apparent exception" to the voluntary-involuntary rule.

In Hoyt, the Fifth Circuit upheld the removal of a case in which diversity was created when a state court granted the non-diverse defendant's summary judgment motion and dismissed that party. The summary judgment in Hoyt could not be reversed on appeal, because the plaintiff "apparently abandoned" the right to appeal.

The district court then pointed out that the effect of the state court's order dismissing Ms. McCormick was to leave only diverse parties and that the dismissal of Ms. McCormick could not be reversed on appeal given that Barnes had waived its right to appeal by not opposing the dismissal.

Accordingly, the district court concluded, although the voluntary-involuntary rule required an action of the plaintiff for a case to be removable, the Hoyt exception applied and, as a result, the case was removable.

The case is Barnes Burk Self Storage, LLC v. United Fire & Casualty Co., No. 7:19-cv-00099-M (N.D. Tex. Dec. 10, 2019). Attorneys involved include: For Barnes Burk Self Storage, LLC, Plaintiff: Robert W Loree, LEAD ATTORNEY, Loree & Lipscomb, San Antonio, TX. For Defendant United Fire & Casualty Company, LEAD ATTORNEY, J Chad Gauntt, Gaunnt Koen Binney & Kidd LLP, Spring, TX; Karl W Koen, Gaunnt Koen Binney Woodall & Kidd LLP, Dallas, TX.