Specialty Underwriters Alliance v. Peebles McManus LLC et al

Filing 60

MEMORANDUM OPINION AND ORDER denying the Motions to Dismiss 53 and 54 filed by Paul Peebles and Sandra McManus. Signed by Hon. Chief Judge Mark E. Fuller on 11/30/09. (Attachments: # 1 Civil Appeals Checklist)(br, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA E A S T E R N DIVISION S P E C IA L T Y UNDERWRITERS A L L IA N C E , P la in tif f , v. P E E B L E S MCMANUS LLC, et al., D e f e n d a n ts. ) ) ) ) ) ) ) ) )

C A S E NO. 3:08-cv-888-MEF (W O ¯ D o Not Publish)

MEMORANDUM OPINION AND ORDER
P la in tif f Specialty Underwriters Alliance ("SUA") filed this action in federal court to g e t a declaratory judgment on whether it is required under the terms of an insurance contract to indemnify the parties to a pending state-court lawsuit from potential losses. This cause is before the Court on Defendant Paul Peebles's ("Peebles") Motion to Dismiss (Doc. # 53) a n d Defendant Sandra McManus's ("McManus") Motion to Dismiss (Doc. # 54), both filed o n September 11, 2009. For the following reasons, this Court will deny both motions. T h e motions are substantively identical. Both motions argue that the Court should d is m is s Peebles and McManus from this action for four reasons: (1) Neither Peebles nor M c M a n u s are parties to the underlying state-court lawsuit; (2) SUA has failed to sue Gary M c M a n u s , who is the only party to the state-court lawsuit who is not sued in the instant a c tio n as well; (3) SUA has brought suit against "fictitious" parties, which is a litigation p ra c tic e the Federal Rules of Civil Procedure do not permit; and (4) SUA has not complied w ith this Court's Order of June 25, 2009, which threatened to dismiss Defendant Peebles

McManus LLC on jurisdictional grounds unless SUA amended its complaint to include in f o rm a tio n about the citizenship of Peebles McManus LLC's memberSowners, namely P e e b le s and McManus. (Doc. # 36.) A s SUA aptly stated in its response to the motions, Peebles and McManus's argum e n ts "do not make sense." (Doc. # 56 at 2.) In fact, it appears to this Court as if Peebles a n d McManus's arguments are predicated on a basic misunderstanding about the procedural p o s tu re of this case. This action is not in federal court upon removal under 28 U.S.C. § 1441. Rather, it is a federal lawsuit originally filed in federal court pursuant to this Court's divers ity jurisdiction under 28 U.S.C. § 1332. Even though this action relates to the underlying s ta te -c o u rt lawsuit, it is a separate and independent action. T h e re f o re , the fact that McManus and Peebles are not parties to the state-court lawsuit is irrelevant because the federal- and state-court actions at issue here are separate lawsuits. What is more, SUA had good reason to add Peebles and McManus to this action in order to e s ta b lis h this Court's diversity jurisdiction over Peebles McManus LLC. L ik e w is e , it is of no moment that Gary McManus is not a defendant in the instant a c tio n . SUA is the master of its complaint. Provided that SUA is not required to join Gary M c M a n u s under Rule 19 of the Federal Rules of Civil Procedure, which Peebles and McM a n u s have not argued, SUA has complete discretion to choose which defendants it wishes to hale into federal court. Nonetheless, SUA had a legitimate reason to leave Gary McManus o u t: he is not a party to the insurance contract that is the subject-matter of this case.

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Peebles and McManus's assertions that SUA's complaint brings suit against fictitious p a rtie s is simply wrong. SUA's Amended Complaint does not contain any reference to any f ic titio u s parties. (See Doc. # 43-4.) L a stly, SUA has fully complied with this Court's Order of June 25, 2009. As is re q u ire d to establish jurisdiction over Peebles McManus LLC, SUA's Amended Complaint lis ts both Peebles and McManus as parties to the instant action and provides information a b o u t their citizenship. (Id. ¶ 6S8.) C on sequently, this Court will not dismiss either Peebles or McManus from this action. Both defendants are properly pleaded in the Amended Complaint, and neither defendant has p ro v id e d any other basis for dismissal. Nor will the Court remand the case to state court. The Court has no authority to remand a case that has not been removed. A c c o rd in g ly, it is hereby ORDERED as follows: 1. is DENIED. 2. S a n d ra McManus's Motion to Dismiss (Doc. # 54), filed on September 11, P a u l Peebles's Motion to Dismiss (Doc. # 53), filed on September 11, 2009,

2 0 0 9 , is DENIED. D O N E this the 30th day of November, 2009.

/s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE

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