govinfo:USCOURTS-moed-4_22-cv-00036-0

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 UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF MISSOURI 
EASTERN DIVISION 
 
GOEBEL & COMPANY FURNITURE, 
LLC, et al., 
) 
) 
 
 )  
  Plaintiffs, )  
 )  
 v. )  No. 4:22CV36 JCH 
 )  
THE CINCINNATI INSURANCE 
COMPANY, et al., 
) 
) 
 
 )  
  Defendants. )  
 
 
MEMORANDUM AND ORDER 
 This matter is before the Court on Defendant Cheryl Ellegood’s Motion to Dismiss for 
Fraudulent Joinder, filed January 10, 2022, and Plaintiffs’ Motion for Remand, filed February 2, 
2022.  (ECF Nos. 4, 11).  The motions are fully briefed and ready for disposition. 
BACKGROUND 
On or about December 9, 2021, Plaintiffs Goebel & Company Furniture,  LLC and 
Withers Holdings, LLC filed a Petition for Damages against Defendants The Cincinnati 
Insurance Company  (“Cincinnati Insurance” ) and Cheryl Ellegood  (“Ellegood”) in the Circuit 
Court of the City of St. Louis, Missouri.  ( Petition for Damages (hereinafter “Complaint” or 
“Compl.”), ECF No. 6).  As relevant here, in their Complaint Plaintiffs allege that between May 
2020, and March 2 021, at least three catastrophic storms struck the St. Louis metropolitan area.  
(Id., ¶ 29).  The storms carried significant amounts of hail, which damaged large portions of the 
roof of 401 Withers Avenue, St. Louis, Missouri, 63147 (“401 Withers”), a pro perty owned by 
Plaintiffs.1  (Id., ¶¶ 11, 30-31).  In the weeks following the storms significant amounts of 
 
1 Plaintiffs were owners of the premises, structures, and real property located at 401 Withers.  
(Compl., ¶ 11). 
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rainwater began to leak through the roof, and Plaintiffs claim that although they took all feasible 
measures to protect the building and machinery therein, machinery and equipment utilized by 
Plaintiffs in their manufacturing process suffered catastrophic water damage.  (Id., ¶¶ 32, 33). 
During the relevant time period,  Cincinnati Insurance had contracted to insure and cover 
the premises, structures, and real property at 401 Withers against certain losses.  (Compl., ¶ 15).  
Plaintiffs allege they  promptly notified Cincinnati Insurance of the loss.  ( Id., ¶ 34).  On April 
28, 2021, Plaintiffs entered into a contingency contract with Rehab Con struction (“Rehab”), 
pursuant to which Rehab agreed to conduct the repairs to 401 Withers upon payment for the loss 
by Cincinnati Insurance.  (Id., ¶ 35). 
Defendant Ellegood, a claims adjuster for Cincinnati Insurance, came to inspect the 
damaged areas of 401 Withers, and representatives of both Plaintiffs and Rehab were present for 
the inspection.  (Compl., ¶¶ 36, 37).  According to Plaintiffs, Ellegood conducted only a cursory 
inspection, and without taking photographs or measurements of the affected area s informed 
Plaintiffs that Cincinnati Insurance would pay only up to $100,000 for the storm damage.  ( Id., 
¶¶ 38, 39).  She allegedly advised Plaintiffs and the representative from Rehab that any estimate 
or claim submitted in excess of $100,000 would be t ransferred to Cincinnati Insurance’s legal 
department, and was likely to be denied.  (Id., ¶¶ 41, 42). 
Plaintiffs maintain that after Ellegood’s inspection and comments, Rehab submitted a 
repair estimate for a sum that was insufficient to conduct the necessary repairs to 401 Withers.  
(Compl., ¶ 43).  Plaintiffs therefore terminated the contingency agreement with Rehab, and 
subsequently signed a similar agreement with a replacement contractor, Storm Shield.  ( Id., ¶¶ 
44-46).  Storm Shield eventually su bmitted an estimate to Cincinnati Insurance in an amount 
approximately $350,000 more than the estimate submitted by Rehab.  ( Id., ¶ 46).   For its part, 
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Rehab has filed a claim against Plaintiffs for breach of contract, seeking damages in the amount 
of $57,632.22.  (Id., ¶ 47). 
Based on the foregoing allegations, Plaintiffs filed a Complaint asserting claims for 
breach of contract and vexatious refusal to pay against Cincinnati Insurance.  ( Compl., ¶¶ 69-
84).2  Plaintiffs further assert claim s for tortious interference with contract and tortious 
interference with business expectancy against Defendant Ellegood.  (Id., ¶¶ 85-100). 
 On January 10, 2022, Cincinnati Insurance and Ellegood  removed the case to this Court 
on the basis of diversity jurisdiction.  (ECF No. 1).  As grounds for the removal, Defendants note 
that at all relevant times Plaintiffs were both businesses incorporated and licensed to do business 
in the State of Missouri.  ( Id., ¶¶ 3, 4).  They assert that Cincinnati Insurance was an insurance 
company incorporated in the State of Ohio, and licensed to do business in the State of Missouri .  
(Id., ¶ 5).  With respect to Ellegood, Defendants maintain that although she was a Missouri 
citizen and resident, her citizenship should be ignored because her joinder as a non-diverse party 
was for the sole purpose of defeating federal diversity jurisdiction, and thus her fraudulent 
joinder should not prevent removal.  (Id., ¶¶ 6, 9-10). 
On January 10, 2022 , Ellegood filed the instant  Motion to Dismiss for Fraudulent 
Joinder.  (ECF No. 4).  Plaintiffs responded to the motion, and further filed a Motion for Remand 
on February 2, 2022.  (ECF Nos. 10, 11). 
DISCUSSION 
Generally, a  defendant may remove an action from state court to federal court if the 
federal court would have had original jurisdiction over the action.   28 U.S.C. § 1441(a).  Federal 
district courts have original jurisdiction over civil actions where the matter  is between citizens of 
 
2 Plaintiffs further assert claims for breach of contract and vexatious refusal to pay against 
Cincinnati Insurance in connection with damage al legedly caused by a sinkhole that formed in 
the rear parking area of 401 Withers.  (Compl., ¶¶ 52-68). 
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different states, and the amount in controversy is greater than $75,000. 3  28 U.S.C. § 1332(a)(1).  
Such cases thus may be removed, provided none “of the parties in interest properly joined and 
served as defendants is a citizen of the State in which such action is brought.”   28 U.S.C. § 
1441(b)(2).  “Removal statutes are strictly construed, and any doubts about the propriety of 
removal are resolved in favor of remand. ”  Byrd v. TVI, Inc ., No. 4:15CV1439 CDP, 2015 WL 
5568454, at *1 (E.D. Mo. Sept. 21, 2015)  (citation omitted);  see also  In re Business Men ’s 
Assurance Co. of America, 992 F.2d 181, 183 (8th Cir. 1993).  
In the instant case, as noted above both Plaintiffs and Defendant Ellegood purportedly are 
citizens of the State of Missouri.  Complete diversity of citizenship therefore does not exist, and 
removal is precluded unless Defendant Ellegood was fraudulently joi ned.  See Knudson v. 
Systems Painters, Inc., 634 F.3d 968, 976 (8 th Cir. 2011) (internal quotation marks and citations 
omitted) (“[A] plaintiff cannot defeat a defendant’ s right of removal by fraudulently joining a 
defendant who has no real connection with the controversy.”)  “The purpose of this [fraudulent 
joinder] exception is to strike a balance between the plaintiff’s right to select a particular forum 
and the defendant’s right to remove the case to federal court.”  Id. (citation omitted). 
Joinder of a defendant is fraudulent where there exists no reasonable basis in law or fact 
to support the claims asserted against her.  Hubbard v. Federated Mut. Ins. Co. , 799 F.3d 1 224, 
1227 (8 th Cir. 2015).  “This reasonableness standard requires the defendant to do more than 
merely prove that the plaintiff’s claim should be dismissed pursuant to a Rule 12(b)(6) motion.”  
Waller v. Blast Fitness Group, LLC, No. 4:15CV586 AGF, 2015 W L 7737298, at *3 (E.D. Mo. 
Dec. 1, 2015) (internal quotation marks and citations omitted).  The question turns on whether 
the plaintiffs might have a “colorable” claim against the non-diverse or resident defendant.  Junk 
v. Terminix Intern. Co., 628 F.3d 439, 446 (8 th Cir. 2010), cert. denied, 565 U.S. 816 (2011) .  If 
 
3 Plaintiffs do not dispute that the amount in controversy here is greater than $75,000. 
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not, the joinder is fraudulent  and dismissal of the defendant is proper .  See Thompson v. R.J. 
Reynolds Tobacco Co., 760 F.3d 913, 918 (8 th Cir. 2014); Filla v. Norfolk Southern Ry. Co., 336 
F.3d 806, 810 (8 th Cir. 2003) (internal quotation marks and citation omitted) (“[I]f it is clear 
under governing state law that the complaint does not state a cause of action against the non -
diverse defendant, the joinder is fraudulent and federal jurisdiction of the case should be 
retained.”).  At all times Defendants Cincinnati Insurance and Ellego od, as the removing part ies 
alleging fraudulent joinder , bear the burden of proving the alleged fraud.   Waller, 2015 WL 
7737298, at *3. 
As noted above, in their Complaint Plaintiffs assert claims for tortious interference with 
contract and tortious interference with business expectancy against Defendant Ellegood.  Under 
Missouri law, “a claim for tortious interference with a contract or bu siness expectancy requires 
proof of each of the following:  ‘(1) a contract or valid business expectancy; (2) defendant’s 
knowledge of the contract or relationship; (3) a breach induced or caused by defendant’s 
intentional interference; (4) absence of justification; and (5) damages.’”  Rail Switching Services, 
Inc. v. Marquis-Missouri Terminal, LLC, 533 S.W.3d 245, 257 (Mo. App. 2017), quoting Bishop 
& Assocs., LLC v. Ameren Corp., 520 S.W.3d 463, 472 (Mo. banc 2017). 
Plaintiffs’ allegations with respect to  Defendant Ellegood are as follows:  (1) at the time 
of Ellegood’s inspection of 401 Withers, Plaintiffs had a valid contingency contract with Rehab 
to conduct the estimate and subsequent repairs to the damaged property , and/or a valid business 
expectancy that Rehab would undertake to do so; (2) Ellegood knew or should have known of 
the existence of Plaintiffs’ contract or business expectancy; (3) Ellegood’s statements about the 
value of the claim and the amount Cincinnati Insurance was willing to pay were made with the 
intent to cause Rehab to submit an artificially low estimate; (4) Ellegood lacked legal 
justification for said statements; and (5) as a result of Ellegood’s statements Plaintiffs’ contract 
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was breached and/or its business expectancy was thwar ted, and Plaintiffs thereby suffered 
damages.  (Compl., ¶¶ 86-93, 95-100). 
In her Motion to Dismiss,  Ellegood asserts Plaintiffs’ claims against her must be 
dismissed because they fail to demonstrate she lacked justification for her actions.  Missouri law 
is clear that not every interference with contractual relations gives rise to a claim for damages.  
Pillow v. General American Life Ins. Co., 564 S.W.2d 276, 283 (Mo. App. 1978).  Rather, “[i]t is 
only where the interference is wrongful that a cause of action exists.”  Id.    Furthermore, “‘if the 
defendant has a legitimate interest, economic or otherwise, in the expectancy the plaintiff seeks 
to protect, then the plaintiff must show that the defendant employed improper means in seeking 
to further only his or her own interest s.’”  Phyllis Schlafly Revocable Trust v. Cori , 512 
F.Supp.3d 916, 929 (E.D. Mo. 2021), quoting W. Blue Print Co. v. Roberts , 367 S.W.3d 7, 20 
(Mo. banc 2012).  “Improper means are those that are independently wrongful, such as threats, 
violence, trespass, defamation, misrepresentation of fact, restraint of trade, or any other wrongful 
act recognized by statute or the common law.”  Id. (internal quotation marks and citation 
omitted). 
Upon consideration, the Court agrees that Plaintiffs fail to satisfy eleme nt four of their 
claims against Ellegood.  In the Complaint itself, they admit that “Defendant Ellegood was 
employed by Defendant Cincinnati as an agent and/or claims adjuster for Defendant Cincinnati, 
and her acts and/or omissions giving rise to this clai m were within the course and scope of her 
employment.”  (Compl., ¶ 5).  Despite Plaintiffs’ characterization of Ellegood’s comments as 
improper, coercive and threatening, the Court finds she was performing her role as a claims 
adjuster at the time she made them.  See Council Tower Ass’n v. Axis Specialty Ins. Co., 630 F.3d 
725, 731 (8 th Cir. 2011) (agreeing with the district court that the plaintiff could not show a lack 
of justification for the claims adjuster’s statements because his job was to investigat e and report 
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on the cause of loss).  Under these circumstances, the Court will dismiss Plaintiffs ’ claims 
against Defendant Ellegood, and deny their Motion for Remand.4 
CONCLUSION 
Accordingly, 
IT IS HEREBY ORDERED that Defendant Cheryl Ellegood’s Motion to Dismiss  for 
Fraudulent Joinder (ECF No. 4) is  GRANTED, and she is DISMISSED as a Defendant in this 
matter. 
IT IS FURTHE R ORDERED that Plaintiffs ’ Moti on for Re mand (ECF No. 11) is 
DENIED. 
Dated this 11th Day of April, 2022. 
/s/ Jean C. Hamilton 
UNITED STATES DISTRICT JUDGE 
4 In light of the foregoing, the Court need not consider Ellegoo d’s contention that Plaintiffs’ 
claim for tortious interference with contract must be dismissed because it is based on a form of 
tort that is not recognized under Missouri law. 
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