Parker et al v. Morton et al

Filing 47

ORDER entered on Georgia Farm Bureau Mutual Insurance Company and State Farm Mutual Automobile Insurance Company's Motions to Intervene. (Docs. 41 & 44). Because Georgia Farm's intervention would destroy diversity jurisdiction, its moti on to intervene (Doc. 41) is DENIED. State Farm's motion to intervene (Doc. 44) is GRANTED, presuming it timely files a pleading that sets out the claim or defense for which intervention is sought. State Farm shall file its required pleading on or before Friday, April 24, 2019. Signed by Chief Judge Kristi K. DuBose on 4/16/2019. (mcb) Modified on 4/16/2019 (mcb).

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
BERNA E. PARKER, et al.,
Plaintiffs,
vs.
RANDY LEE MORTON,
Defendant.

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Civil Action No. 18-00234-KD-B

ORDER
This action is before the Court on Georgia Farm Bureau Mutual Insurance Company
(“Georgia Farm”) and State Farm Mutual Automobile Insurance Company’s (“State Farm”)
Motions to Intervene. (Docs. 41 & 44). Plaintiffs Berna Parker and Beverly Wall (“Plaintiffs”)
have responded to the motions, and they have no objections to either motions to intervene. (Docs.
41 & 44).
Diversity jurisdiction (28 U.S.C. § 1332) is the basis for this case’s federal jurisdiction.1
However, Plaintiffs and Georgia Farm are not diverse because, for purposes of diversity
jurisdiction analysis, both Plaintiffs and Georgia Farm are citizens of Georgia.2 As the Court will
explain, Georgia Farm’s Motion to Intervene will be denied because its intervention would
destroy diversity jurisdiction. State Farm’s Motion to Intervene will be granted if and when State
Farm complies with Federal Rule of Civil Procedure 24(c), which requires the motion be
“accompanied by a pleading that sets out the claim or defense for which intervention is sought.”

1

Because this is a diversity case, Alabama substantive law applies. Erie R.R. Co. v. Tompkins,
304 U.S. 64 (1938).
2
State Farm and Plaintiffs are, however, citizens of different states for the purposes of diversity
jurisdiction analysis.

I.

PROCEDURAL BACKGROUND
Plaintiffs allege Defendant Randy Lee Morton negligently operated a motor vehicle and

collided with Plaintiffs on or about May 21, 2016. (Doc. 1). Plaintiffs allege a negligence claim
against the Defendant. Plaintiffs filed a complaint in federal court on May 18, 2018. In that first
complaint, Plaintiffs sued (1) Randy Lee Morton; (2) Georgia Farm; and (3) State Farm. (Id.).
Plaintiffs alleged diversity jurisdiction was present. (Id.).
Plaintiffs later moved to dismiss Georgia Farm and State Farm without prejudice. (Doc.
29). In that motion, Plaintiffs noted that the Magistrate Judge had expressed concerns regarding
the parties’ lack of diversity and ordered Plaintiffs to show cause why the case should not be
dismissed for lack of jurisdiction. (Id. at 1). Instead of filing a show cause response, Plaintiffs
moved for leave to dismiss Georgia Farm and State Farm. Plaintiffs noted that Georgia Farm is
a “nondiverse [d]efendant.” (Id.). They further requested that State Farm be dismissed because
State Farm is Wall’s excess underinsured motorist insurance carrier. Plaintiffs stated that “State
Farm is not responsible for the payment of any damages until the Georgia Farm . . . policy is
exhausted.” (Id. at 2). At the same time, Plaintiffs submitted a memorandum in support of their
motion to dismiss.
The memorandum Plaintiffs submitted acknowledged “[c]omplete diversity of
citizenship [was] lacking as both Plaintiffs and one (1) Defendant, Georgia Farm Bureau, are
citizens of the State of Georgia . . . .” (Doc. 30 at 2). Nevertheless, Plaintiffs argued that this
problem could be remedied. Plaintiffs argued that, “It is well settled that a jurisdictional defect
may be ‘cured by the dismissal of the party that . . . destroyed diversity.’” Landmark Equity Fund
II, LLC v. Residential Fund 76, LLC, 631 F. App’x 882, 884 (11th Cir. 2015) (quoting Grupo

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Dataflux v. Atlas Glob. Grp., LP, 541 U.S. 567, 572 (2004). However, Plaintiffs noted that before
dismissing the nondiverse party, courts must determine whether the party to be dismissed is
dispensable. If the nondiverse party is dispensable, “the court may dismiss that party and the
claims against it, and retain jurisdiction over any remaining diverse parties.” Landmark Equity
Fund II, LLC, 631 F. App’x at 884–85.
The Magistrate Judge entered a Report and Recommendation recommending Plaintiffs’
motion be granted. (Doc. 35). The Report and Recommendation found that because Alabama law
does not require an uninsured/underinsured motorist carrier be joined in the insured’s primary
case against an alleged tortfeasor, Georgia Farm and State Farm were not required parties under
FED. R. CIV. P. 19(a). (Id. at 6). It additionally found that even if Georgia Farm and State farm
were required parties, their presence was dispensable. The Report and Recommendation
observed that if Georgia Farm was not dismissed, Plaintiffs’ would have no available remedy
because the two-year statute of limitations has expired on their tort claims. (Id. at 7). Accordingly,
the Report and Recommendation concluded that FED. R. CIV. P. 19(b)’s factors strongly favored
Georgia Farm and State Farm’s dismissal. (Id. at 8).
Notably, Georgia Farm did not object to the Report and Recommendation. Instead, it
merely responded to the Report and Recommendation. (Doc. 36). It stated that it had no position
on Plaintiffs’ motion because, in Georgia Farm’s view, Georgia Farm still had the right to
subsequently intervene. (Id. at 1). It stated that if the Court granted Plaintiffs’ motion, it would
“intervene back into this litigation.” (Id.). Specifically, Georgia Farm “believes that it is
consistent with Alabama law for an underinsured carrier to have limited participation at the outset
of any such litigation to adequately determine if it is appropriate to ‘opt out’ and that such
determination cannot be made until some initial discovery takes place.” (Id. at 4).

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This Court adopted the Magistrate Judge’s Report and Recommendation and granted
Plaintiffs’ motion for voluntary dismissal without prejudice. (Doc. 37). In the Order, the Court
noted that “should Defendant successfully intervene, the issue of diversity will have to be
revisited.” (Id. at 1 n.1). It is now time to revisit diversity.
II.

DISCUSSION
Although neither Georgia Farm nor State Farm identifies whether intervention is sought

as a matter of right, pursuant to Rule 24(a), or instead permissively, pursuant to Rule 24(b), the
Court presumes they intend to intervene permissively. This assumption is based on two facts.
First, Georgia Farm and State Farm make no argument that their interest is not adequately
represented by the existing defendant. And this Court will not make the argument for them. See
Davis v. Butts, 290 F.3d 1297, 1300 (11th Cir. 2002) (holding that to intervene as a matter of
right, a party must establish that “(1) his application to intervene is timely; (2) he has an interest
relating to the property or transaction which is the subject of the action; (3) he is so situated that
disposition of the action, as a practical matter, may impede or impair his ability to protect that
interest; and (4) his interest is represented inadequately by the existing parties to the suit.”)
(quoting Purcell v. BankAtlantic Fin. Corp., 85 F.3d 1508, 1512 (11th Cir.1996)).

Second,

neither Georgia Farm nor State Farm objected to the Magistrate Judge’s conclusion that they are
not required parties under Rule 19(a). And since Rule 19(a)(1)(B) mirrors Rule 24(a)(2), if
Georgia Farm and State Farm are not required parties, they do not have a right to intervene.
A partying seeking to permissively intervene need only show that it “has a claim or
defense that shares with the main action a common question of law or fact . . . .” FED. R. CIV. P.
24(b)(1)(B). Generally, two elements must be addressed: Whether “(1) the application to

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intervene was timely; and (2) [whether] the intervenor’s claim or defense and the main action
have a question of law or fact in common.” Purcell, 85 F.3d at 1513 (bracketed text added).
The Court addresses the motions separately given each motion’s jurisdictional
implications.
a. Georgia Farm’s Motion
Georgia Farm seeks to “intervene in this matter for the limited purpose of participating
in the initial discovery of this litigation so it can determine, through the discovery process,
whether it would be in its best interest to opt out or remain in the litigation.” (Doc. 41 at 1).
Georgia Farm is a Georgia corporation. (Doc. 9 at 1-2.) Plaintiffs are citizens of Georgia. (Doc.
39 at 1). Therefore, Plaintiffs and Georgia Farm are not diverse.
Federal courts are courts of limited jurisdiction. As a result of this limitation, federal
district courts have the power and “obligation at any time to inquire into jurisdiction[.]” Am.
Civil Liberties Union of Florida, Inc. v. City of Sarasota, 859 F.3d 1337, 1340 (11th Cir. 2017)
(quoting Fitzgerald v. Seaboard Sys. R.R., 760 F.2d 1249, 1251 (11th Cir. 1985)). And once a
court concludes it lacks subject matter jurisdiction, “the court is powerless to continue.” Univ. of
S. Alabama v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999). This obligation extends to
considering the citizenship of the parties seeking to intervene. Harris v. Amoco Prod. Co., 768
F.2d 669, 675 (5th Cir. 1985) (“It is well-established, for example, that a party must have
“independent jurisdictional grounds” to intervene permissively under Rule 24(b).”); Lincoln
Gen. Ins. Co. v. Aisha’s Learning Ctr., 2004 WL 2533575, at *4 (N.D. Tex. Nov. 9, 2004) (“[T]o
permissively intervene under Rule 24(b), an independent jurisdictional basis must be
established[.]”); Sunpoint Sec., Inc. v. Porta, 192 F.R.D. 716, 718–19 (M.D. Fla. 2000)
(“Motions to intervene require an independent basis for subject matter jurisdiction.”); 13B

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Wright et al., Federal Practice and Procedure § 3608 (2nd ed. 1984) (“permissive intervenors
under Rule 24(b) are required to meet jurisdictional requirements so that the existence of diversity
must be redetermined at the time intervention is requested.”).
When a putative intervenor’s presence would destroy diversity jurisdiction, many courts,
including this one, have denied the motion to intervene. See e.g., Coltin Elec., Inc. v. Cont’l Cas.
Co., 2013 WL 1150920, at *3 (S.D. Ala. Mar. 19, 2013) (DuBose, J.) (denying motion to
intervene as a defendant because plaintiff could not bring any claims against intervening
defendant because it would destroy diversity jurisdiction); Sunpoint Sec., Inc., 192 F.R.D. at
718–19 (denying motion to intervene because the intervenor lacked both diversity and federal
question jurisdiction and its nondiverse presence was based solely on diversity).
Georgia Farm argues its citizenship may be disregarded because it is a nominal party
participating in the case consistent with Alabama law. (Doc. 36 at 3–4); accord Navarro Sav.
Ass’n v. Lee, 446 U.S. 458, 460–61 (1980) (instructing that for purposes of diversity jurisdiction
“a federal court must disregard nominal or formal parties and rest jurisdiction only upon the
citizenship of real parties to the controversy”).
“Under Alabama’s uninsured motorist statute, in order for an insured to be entitled to
UIM benefits, the insured must be “legally entitled to recover” from the owner or driver of the
underinsured vehicle.” Smith v. Nationwide Mutual Insurance Company, 2018 WL 4635740, at
*4 (N.D. Ala. 2018) (citing Ala. Code § 32-7-23). The Alabama Supreme Court, in Lowe v.
Nationwide Ins. Co., 521 So.2d 1309 (Ala. 1988), explained the process to protect the carrier and
insured’s rights and to stave off evidence of insurance from the jury. There it held,
[a] plaintiff is allowed either to join as a party defendant his own liability insurer
in a suit against the underinsured motorist or merely to give it notice of the filing
of the action against the motorist and of the possibility of a claim under the
underinsured motorist coverage at the conclusion of the trial. If the insurer is named

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as a party, it would have the right, within a reasonable time after service of process,
to elect either to participate in the trial (in which case its identity and the reason for
its being involved are proper information for the jury), or not to participate in the
trial (in which case no mention of it or its potential involvement is permitted by the
trial court). Under either election, the insurer would be bound by the factfinder’s
decisions on the issues of liability and damages. If the insurer is not joined but
merely is given notice of the filing of the action, it can decide either to intervene or
to stay out of the case. The results of either choice parallel those set out above—
where the insurer is joined as a party defendant.
Id. 1310 (emphasis in original). As a result, under Alabama law, a carrier is allowed to intervene.
For Georgia Farm’s proposition that it should be considered a nominal party, it cites
Broyles v. Bayless, 878 F.2d 1400 (11th Cir. 1989), and Toole v. Chupp, 456 F. Supp. 2d 1218
(M.D. Ala. 2006). In both cases, the courts ignored the nondiverse carrier’s citizenship. Both are
distinguishable from the present case. In Broyles, the Eleventh Circuit addressed Tennessee’s
underlying uninsured motorist carrier law, which, “in contrast to Alabama liability insurance law,
Tennessee liability insurance law does not give the insurer the option to opt out.” Summerlin v.
Nelson, 2017 WL 2177361, at *5 n.7 (M.D. Ala. Apr. 21, 2017), report and recommendation
adopted, 2017 WL 2177337 (M.D. Ala. May 17, 2017). And in Toole, the Court noted that the
insurance company had “opted out” of the litigation. Toole, 456 F. Supp. 2d at 1221 (“Now that
ALFA has opted out (and even has made explicit in its notice of opt out that it “agrees to be
bound by the verdict of the jury and agrees to pay any judgement in accordance with its policy
of insurance”), the Tooles and ALFA simply have no dispute between them at this time.”).
Unlike in Toole, a case in which the carrier had opted out, here, Georgia Farm has
decidedly not opted out of the litigation. It previously answered Plaintiffs’ complaint, and it also
intends to propound discovery. The circumstances of its presence therefore more closely
resemble the carrier’s position in Summerlin, 2017 WL 2177361, at *4. In Summerlin, the court
did not consider the carrier a nominal party because it had not filed a notice with court stating it

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intended to opt out, because it had not indicated it would forgo participation, and because it had
answered the complaint in state court and federal court. Id. (“Defendant ALFA’s participation in
the proceedings, coupled with the fact that it has yet to opt out, suggests to the undersigned that
Defendant ALFA is more than a nominal party in the litigation at this time.”). This decision stood
in contrast to other Middle District of Alabama cases that determined a nondiverse party was
nominal and ignored its citizenship where the carrier had opted out. See Oliver v. Rodriguez,
2008 WL 928328, at *2 (M.D. Ala. Apr. 4, 2008).
For the foregoing reasons, Georgia Farm’s motion is DENIED.
b. State Farm’s Motion
State Farm states that is has a financial stake and/or interest in the outcome of this
litigation, and that if it was not allowed to have limited intervention, it could impair State Farm’s
ability to protect its interest. (Doc. 44 at 4). State Farm’s motion to intervene does not pose a
jurisdiction challenge.
State Farm’s motion to intervene is timely because there has been no undue delay and
any delay in its motion will not prejudice the existing parties. Its defense also has questions of
law or fact in common with the main action. The Court will therefore, in its discretion, permit
State Farm to intervene.
Federal Rule of Civil Procedure 24(c) requires that any motion to intervene must “be
accompanied by a pleading that sets out the claim or defense for which intervention is sought.”
State Farm’s motion was not accompanied by a pleading. In some instances, this procedural
defect has resulted in the motion to intervene being denied. See e.g., Dillard v. City of Foley, 166
F.R.D. 503, 506 (M.D. Ala. 1996) (Thompson, J.) (denying motion to intervene as procedurally
defective because “Rule 24(c) requires that a motion to intervene be accompanied by a pleading

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setting forth the claim for which intervention is sought.”). Notwithstanding its plain meaning,
“Judicial interpretation of this rule has been liberal and the courts have held that the proper
approach to the rule is to disregard non-prejudicial defects.” WJA Realty Ltd. P’ship v. Nelson,
708 F. Supp. 1268, 1272 (S.D. Fla. 1989). See also Loyd v. Alabama Dep’t of Corr., 176 F.3d
1336, 1341 (11th Cir. 1999) (“[W]e have also held that we will “disregard nonprejudicial
technical defects” in complying with Rule 24(c).”) (citing Piambino v. Bailey, 757 F.2d 1112,
1121 (11th Cir. 1985)).3
Although State Farm’s motion includes sufficient information to explain its motivations to
intervene, it should rectify the procedural defect by promptly filing a pleading. See WJA Realty
Ltd. P’ship v. Nelson, 708 F. Supp. 1268, 1272 (S.D. Fla. 1989) (“Failure to file an accompanying
pleading, however, may be rectified by the later filing of such a pleading.”). State Farm shall
file its required pleading on or before Friday, April 24, 2019.
III.

CONCLUSION
Because Georgia Farm’s intervention would destroy diversity jurisdiction, its motion to

intervene (Doc. 41) is DENIED. State Farm’s motion to intervene (Doc. 44) is GRANTED,
presuming it timely files a pleading that sets out the claim or defense for which intervention is
sought.
DONE and ORDERED this the 16th day of April 2019.
/s/ Kristi K. DuBose
KRISTI K. DuBOSE
CHIEF UNITED STATES DISTRICT JUDGE

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“Some courts of appeals have denied intervention to movants who have failed strictly to heed
the requirements of Rule 24(c), see, e.g., Abramson v. Pennwood Investment Corp., 392 F.2d
759, 761–62 (2d Cir. 1968), but the majority of circuits, including this circuit, has not, choosing
instead to disregard nonprejudicial technical defects.” Piambino, 757 F.2d at 1121.

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