Walker et al v. American National Insurance Company et al

Filing 47

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING DEFENDANTS 19 MOTION TO DISMISS WITH PREJUDICE; DENYING PLAINTIFFS 13 MOTION TO REMAND. Case Management Statement due by 9/6/2017; Case Management Conference set for 9/12/2017 02:00 PM.. (ndrS, COURT STAFF) (Filed on 8/22/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ANTHONY WALKER, ET AL., Case No. 16-cv-06255-HSG Plaintiffs, 8 v. 9 AMERICAN NATIONAL INSURANCE COMPANY, et al., 11 United States District Court Northern District of California 10 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE; DENYING PLAINTIFFS’ MOTION TO REMAND Defendants. Re: Dkt. Nos. 13, 19 12 Pending before the Court is Plaintiffs Anthony Walker and Pamela Walker’s (“Plaintiffs”) 13 motion to remand, which Defendant American National Insurance Company (“ANICO”) opposes. 14 See Dkt. Nos. 13, 20. Also before the Court is Defendant Rajeshvar Singh’s (“Mr. Singh,” 15 together, “Defendants”) motion to dismiss. Dkt. No. 19. The Court finds that these matters are 16 appropriate for disposition without oral argument and they are deemed submitted. See N.D. Civ. 17 L.R. 7–1(b). For the reasons described below, the Court DENIES the motion to remand and 18 GRANTS the motion to dismiss with prejudice. 19 I. LEGAL STANDARD 20 A defendant may remove a state court action to federal court on the basis of diversity of 21 citizenship. 28 U.S.C. § 1441(b); see also 28 U.S.C. § 1332. Diversity jurisdiction exists only 22 where there is: (1) complete diversity between the residency of the plaintiffs and the defendants; 23 and (2) a sufficient amount in controversy. 28 U.S.C. 1332(a). Where either of those elements of 24 diversity are lacking, federal courts must remand the action to the state court. See id. § 1447(c). 25 However, a district court may disregard a non-diverse party and retain federal jurisdiction if the 26 party resisting removal can show that the non-diverse party was fraudulently joined. Hunter v. 27 Phillip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009). Joinder is fraudulent “if the plaintiff 28 fails to state a cause of action against a resident defendant, and the failure is obvious according to 1 the settled rules of the state.” Id. However, there is a “general presumption against fraudulent 2 joinder,” and defendants who assert that a party is fraudulently joined carry a “heavy burden.” Id. 3 at 1046. Defendants must “show that the individuals joined in the action cannot be liable on any 4 theory.” Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). 5 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint 6 if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 7 dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its 8 face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). On a motion to dismiss, the Court 9 accepts as true a plaintiff’s well-pleaded factual allegations and construes all factual inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 11 United States District Court Northern District of California 10 1025, 1031 (9th Cir. 2008). But the plaintiff must allege facts sufficient to “raise a right to relief 12 above the speculative level.” Twombly, 550 U.S. at 555. 13 14 II. DISCUSSION Defendants do not dispute that Plaintiffs and Mr. Singh are residents of the same state. See 15 Dkt. No. 20 at 1. Plaintiffs thus argue “that this action [must] be remanded to state court because 16 diversity jurisdiction indisputably does not exist, and therefore this Court lacks jurisdiction to hear 17 this case.” Dkt. No. 13-1 at 2. However, ANICO contends that Mr. Singh is a sham defendant 18 who was fraudulently joined to this action in order to defeat federal diversity jurisdiction. Dkt. 19 No. 20 at 1. Specifically, Defendants contend that Plaintiffs’ motion to remand should be denied 20 and the claims against Mr. Singh should be dismissed because the complaint alleges that at all 21 relevant times, Mr. Singh was “a District Manager of [ANICO] and acting in the course and scope 22 of such agency and or employment with [ANICO].” Dkt. Nos. 1-1 ¶ 4, 19 at 4, 20 at 6. The Court 23 agrees with Defendants. 24 In general, under California law, “a negligence claim cannot be stated by an insured 25 against agents and employees of an insurer” because “[a]n agent of an insurance company is 26 generally immune from suits brought by claimants for actions taken while the agent was acting 27 within the scope of its agency.” Feizbakhsh v. Travelers Commer. Ins. Co., No. LA CV16-02165 28 JAK (Ex), 2016 U.S. Dist. LEXIS 123471, at *12 (C.D. Cal. Sept. 9, 2016). Because the 2 1 complaint alleges that Mr. Singh was at all relevant times an employee of ANICO, Mr. Singh is 2 immune from liability unless he was acting as a “dual agent,” or for his own advantage. See 3 Mercado v. Allstate Ins. Co., 340 F.3d 824, 826 (9th Cir. 2003) (holding that “[i]t is well 4 established that, unless an agent or employee acts as a dual agent . . . she cannot be held 5 individually liable as a defendant unless she acts for her own personal advantage.”). 6 “Under California law, a ‘dual agent’ theory requires that the insurance agent act on behalf 7 of the insured in some way beyond his or her capacity as an agent for the insurer. An insurance 8 agent cannot be a ‘dual agent’ unless he or she is either an independent broker or has a long-term, 9 special relationship with the insured.” Good v. Prudential Ins. Co. of America, 5 F. Supp. 804, 808 (N.D. Cal. 1998). Nothing in the complaint indicates that Mr. Singh was an independent 11 United States District Court Northern District of California 10 broker, or in a special relationship with Plaintiffs. To the contrary, it alleges that Mr. Singh was a 12 “District Manager of ANICO and acting in the course and scope of such agency and or 13 employment.” Dkt. No. 1-1 ¶ 4. Nor do Plaintiffs offer any facts to support a theory that Mr. 14 Singh, acting within the scope of his employment at ANICO, owed a special duty to Plaintiffs or 15 held himself out as having any particular expertise. See Mercado, 340 F.3d at 826 n.1 (stating that 16 “[a]n employee acts as a ‘dual agent” by assuming special duties for the benefit of the insured 17 beyond those required by her principal”). Instead, Plaintiffs only allege that Mr. Singh failed to 18 investigate Plaintiffs’ disputes, failed to provide Plaintiffs with adequate information pertaining to 19 their claims or policies, and refused to reinstate their policies. Id. Without more, these facts 20 cannot demonstrate that Mr. Singh was either acting as a dual agent or for his personal advantage 21 such that he may be personally liable in this action. Mr. Singh is thus immune from suit as 22 ANICO’s agent, and the Court GRANTS his motion to dismiss. While leave to amend a 23 complaint that has been dismissed should generally be freely granted, Fed. R. Civ. Proc. 15(a), 24 since Mr. Singh is immune from suit, “the pleading could not possibly be cured by the allegation 25 of other facts,” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000), and the Court grants Mr. 26 Singh’s motion with prejudice. 27 28 Accordingly, and for the same reasons, the Court finds that Mr. Singh was improperly joined in this action such that diversity jurisdiction is proper, and DENIES Plaintiffs’ motion to 3 1 remand. The Court SETS a case management conference for September 12, 2017 at 2:00 p.m. A 2 joint case management conference statement is due by September 6, 2017. 3 4 5 6 IT IS SO ORDERED. Dated: 8/22/2017 ______________________________________ HAYWOOD S. GILLIAM, JR. United States District Judge 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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