Parrett v. AllState Insurance Company et al

Filing 15

MEMORANDUM OPINION AND ORDER that Mr. Parrett's 12 Motion to Remand is GRANTED; that this case is REMANDED to the Circuit Court of Coosa County, Alabama; that the clerk is DIRECTED to take appropriate steps to effect the remand. Signed by Honorable William Keith Watkins on 5/28/2009. (cc, ) Copy mailed to Circuit Court Clerk for Coosa County.

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION W IL L IA M MURLOW PARRETT JR., P la in tif f , v. A L L S T A T E INSURANCE CO., et al., D e f e n d a n ts. ) ) ) ) ) ) ) ) )

C A S E NO. 2:08-CV-983-WKW[WO]

M E M O R A N D U M OPINION AND ORDER B e f o re the court is Plaintiff William Murlow Parrett Jr.'s Motion to Remand (Doc. # 12). Moving to remand this action to the Circuit Court of Coosa County, Alabama, for lack o f diversity jurisdiction, 28 U.S.C. § 1332(a), Mr. Parrett asserts that complete diversity of c itiz e n s h ip does not exist because Defendant Randy Smith is a non-diverse Defendant. Defendants Allstate Indemnity Co. (improperly designated in the complaint as "Allstate In s u ra n c e Company") and Mr. Smith filed a Response (Doc. # 13), arguing that, in the a b s e n c e of Mr. Smith's fraudulent joinder, complete diversity exists. Mr. Parrett filed a R e p ly. (Doc. # 14.) For the reasons to follow, the Motion to Remand is due to be granted. I . STANDARD OF REVIEW " D iv e rs ity jurisdiction, as a general rule, requires complete diversity­every plaintiff m u s t be diverse from every defendant." Palmer v. Hosp. Auth. of Randolph County, 22 F.3d 1 5 5 9 , 1564 (11th Cir. 1994); see also 28 U.S.C. § 1332(a). If, however, non-diverse parties a re fraudulently joined to an action, their citizenship will not be considered for purposes of

determining diversity jurisdiction. Tedder v. F.M.C. Corp., 590 F.2d 115, 117 (5th Cir. 1 9 7 9 ) (per curiam).1 The Eleventh Circuit recognizes three forms of fraudulent joinder. T r ig g s v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998) (citing Coker v. A m o c o Oil Co., 709 F.2d 1433, 1440 (11th Cir. 1983), superseded by statute on other g r o u n d s as stated in Georgetown Manor, Inc. v. Ethan Allen, Inc., 991 F.2d 1533, 1540 (11th C ir. 1993)). The one relevant to this case is fraudulent joinder "when there is no possibility th a t the plaintiff can prove a cause of action against the resident (non-diverse) defendant." Id. The removing party bears the burden of proving fraudulent joinder, and the burden is "heavy." Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997) (internal quotation m a rk s and citation omitted). "[A]ll factual issues and questions of controlling substantive la w " must be viewed in the light most favorable to the plaintiff. Coker, 709 F.2d at 1440; a c c o r d Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1380 (11th Cir. 1998). "[I]f there is a n y possibility that the state law might impose liability on a resident defendant under the c irc u m s ta n c e s alleged in the complaint, the federal court cannot find that joinder of the re s id e n t defendant was fraudulent, and remand is necessary." Florence v. Crescent Res., L L C , 484 F.3d 1293, 1299 (11th Cir. 2007). Although for purposes of determining

f ra u d u le n t joinder, courts may consider affidavits and deposition transcripts submitted by

In Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions handed down by the former Fifth Circuit prior to October 1, 1981.

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either party, in addition to the plaintiff's pleadings at the time of removal, Legg v. Wyeth, 428 F .3 d 1317, 1322 (11th Cir. 2005), "the jurisdictional inquiry must not subsume substantive d e te rm in a tio n ," Crowe, 113 F.3d at 1538 (citation and internal quotation marks omitted). Courts must be "certain" of their jurisdiction and "are not to weigh the merits of a plaintiff's c la im beyond determining whether it is an arguable one under state law." Id. (internal q u o ta tio n marks and citation omitted). I I . BACKGROUND In his complaint, Mr. Parrett brings a state-law claim against Mr. Smith alleging that h e was negligent "in the manner [that] he procured insurance for [Mr. Parrett]." (Compl. 3.) The complaint and the permissible evidence establish that Mr. Parrett purchased a h o m e o w n e r's insurance policy from Allstate for his residence in Coosa County, Alabama. Mr. Smith is the Allstate agent who procured the policy for Mr. Parrett. Although Mr. Parrett in f o rm e d Mr. Smith that the square footage of his home was approximately 1400 to 1450 f e e t, Mr. Smith "informed [Mr. Parrett] that he needed to put 1500 on the application since it was just an estimate, just to be safe and to qualify [him] for a certain kind of coverage." (Pl. Aff. 2.) On July 10, 2007, while the policy was in effect, Mr. Parrett's home was destroyed b y fire. Mr. Parrett's insurance claim, however, was denied. An Allstate insurance adjuster to ld Mr. Parrett that his "claim was being denied in part because [he] had overstated the s q u a re footage of [his] house in an attempt to defraud Allstate." (Pl. Aff. 2.)

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III. DISCUSSION D e f e n d a n ts' arguments for fraudulent joinder are twofold. First, Defendants contend th a t there is no possibility that Mr. Parrett can prove his claim against Mr. Smith because Mr. S m ith "did, in fact, procure a policy of insurance" for Mr. Parrett. (Resp. 6.) Defendants c o n te n d that a claim for negligent procurement of insurance can be maintained only when a n agent fails altogether to procure any insurance for a plaintiff. (Resp. 6.) No Alabama c a s e , however, has been cited that expressly imposes the limitation urged by Defendants, and th e re are cases from which an oppositive conclusion can be drawn. See, e.g., Hickox v. S to v e r , 551 So. 2d 259, 260-61 (Ala. 1989) (discussing a claim for negligent failure to p r o c u r e "full, complete, and adequate insurance for the plaintiffs"), overruled on other g r o u n d s by Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala. 1997); Kanellis v. Pac. In d e m . Co., 917 So. 2d 149, 153 (Ala. Civ. App. 2005) (discussing a claim for negligent p ro c u re m e n t of insurance based upon allegations that the insurance coverage obtained was in a d e q u a te ). The court's only duty at this stage is to determine whether there is a possibility th a t an Alabama court could find that Mr. Parrett's complaint states a claim for negligent p ro c u re m e n t against Mr. Smith. The foregoing authority negates Defendants' argument that th e requisite legal possibility does not exist. Second, relying upon an affidavit and other evidence, Defendants argue that "the in f o rm a tio n provided by [Mr.] Smith to Allstate in procuring the policy had absolutely n o th in g to do with Allstate's decision to deny the claim." (Resp. 7.) Mr. Parrett, however,

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has presented evidence directly to the contrary. (Pl. Aff. 2 (attesting that one of Allstate's in s u ra n c e adjusters told Mr. Parrett that his "claim was being denied in part because [he] had o v e rs ta te d the square footage of [his] house in an attempt to defraud Allstate").) This dispute in the evidence makes the claim an arguable one under state law. IV. CONCLUSION C o n tro llin g precedent requires Defendants to bear the weighty burden of establishing f ra u d u le n t joinder. That burden has not been met. Accordingly, it is ORDERED that Mr. P a rre tt's Motion to Remand (Doc. # 12) is GRANTED and that this case is REMANDED to the Circuit Court of Coosa County, Alabama. The Clerk of the Court is DIRECTED to ta k e appropriate steps to effect the remand. D O N E this 28th day of May, 2009. /s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE

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