Tracy et al v. USAA Casualty Insurance Company
Order re: Motions to Remand. The defendant is ordered to file proof that it is a corporation by 10/26/2017. Signed by District Judge William H. Steele on 10/17/17. Copy mailed to Plaintiffs. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
JESSICA TRACY, etc. et al.,
USAA CASUALTY INSURANCE
) CIVIL ACTION 17-0356-WS-MU
This matter is before the Court on the plaintiffs’ motion to remand and
second motion to remand. (Docs. 8, 12). The parties have filed briefs in support
of their respective positions, (Docs. 8, 10-12, 15-16),1 and the motions are ripe for
The defendant is the plaintiffs’ home insurer. The complaint alleges the
home was destroyed by fire and asserts causes of action for breach of contract and
various state-law torts. The complaint does not demand any particular amount of
damages. (Doc. 1-1 at 3-9). However, the plaintiffs demanded payment of 75%
of the contents coverage, on the grounds that the policy requires such payment,
without inventory, in the event of a total loss. (Doc. 1-4 at 2). The policy
provides contents coverage in the amount of $180,750, (Doc. 1-2 at 5), so it is
clear the complaint demands in excess of $75,000, exclusive of interest and costs.
The plaintiffs do not disagree with this assessment.
Instead, the plaintiffs argue that complete diversity of citizenship is lacking.
The complaint alleges that the plaintiffs are citizens of Alabama. (Doc. 1-1 at 3).
The defendant filed a surreply without authorization. (Doc. 15). Accordingly, it
will not be considered. This ruling has little effect, since the defendant makes the same
argument in its brief in opposition to the plaintiff’s second motion to remand.
The defendant says it is a citizen of Texas, (Doc. 1 at 2; Doc. 1-3 at 2-3), but the
plaintiffs invoke Section 1332(c)(1)(A) for the proposition that the defendant by
law shares their citizenship. As the defendant points out, Section 1332(c)(1)(A)
applies only to a “direct action,” and “for purposes of demonstrating diversity, a
direct action is one in which an injured third-party claimant sues an insurance
company for payment of a claim without first joining or obtaining judgment
against the company’s insured.” Kong v. Allied Professional Insurance Co., 750
F.3d 1295, 1300 (11th Cir. 2014) (emphasis added); accord Fortson v. St. Paul
Fire and Marine Insurance Co., 751 F.2d 1157, 1159 (11th Cir. 1985) (“We hold
that unless the cause of action against the insurance company is of such a nature
that the liability sought to be imposed could be imposed against the insured, the
action is not a direct action” for purposes of Section 1332(c)(1)(A)) (emphasis
added). The plaintiffs are not third-party claimants, and the liability they seek to
impose on the defendant could not be imposed on themselves. Quite plainly, this
is not a direct action for diversity purposes. The defendant pointed this out, and
the plaintiffs offer no argument to the contrary.
Instead, the plaintiffs change tacks. In their reply brief and in their second
motion to remand, they advise the Court that they have filed an amended
complaint that substitutes an Alabama citizen for a fictitious defendant. That
amendment, they say, destroys diversity and requires remand. Except that the
plaintiffs have not in fact filed an amended complaint, nor (despite their
representation to the contrary) is such a document attached to their reply brief or
second motion. The defendant describes the amended complaint (which it
believes was filed in state court post-removal) as “void,” but it would appear more
precisely to be non-existent. The plaintiffs are of course free to seek leave to file
an amended complaint in this Court, but any such effort will be subject to Section
Pursuant to Section 1332(c)(1), the citizenship of a corporation is
determined by its state (or states) of incorporation and the state of its principal
place of business. The citizenship of any unincorporated entity is determined by
other means. E.g., Rolling Hills MHP, L.P. v. Comcast SCH Holdings, L.L C., 374
F.3d 1020, 1022 (11th Cir. 2004). The defendant has not directly addressed
whether it is a corporation; instead, it describes itself as a “company,” which could
be an unincorporated entity such as a limited liability company. E.g., id.
Therefore, the defendant is ordered to file and serve, on or before October 26,
2017, proof (by evidence and not merely by unsworn assertion) that it is a
corporation, along with its state(s) of incorporation and principal place of business
or, if it is not in fact a corporation, proof of its citizenship as an unincorporated
entity. Should the defendant do so, the Court will deny the plaintiffs’ motions to
remand; should the defendant fail, the Court will grant the plaintiffs’ motions and
remand this action for want of subject matter jurisdiction.
DONE and ORDERED this 17th day of October, 2017.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE
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