Tucker et al v. The Travelers Indemnity Company of Connecticut et al

Filing 27

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING 18 MOTION TO REMAND( 14 Motion to Dismiss-moot). (ndrS, COURT STAFF) (Filed on 10/4/2017)

Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DON TUCKER, et al., Plaintiffs, 8 v. 9 10 11 Case No. 17-cv-04613-HSG ORDER GRANTING MOTION TO REMAND Re: Dkt. Nos. 14, 18 THE TRAVELERS INDEMNITY COMPANY OF CONNECTICUT, et al., United States District Court Northern District of California Defendants. 12 Pending before the Court is Defendant Diane Frazier’s motion to dismiss the negligent 13 14 misrepresentation claim against her, Dkt. No. 14, and Plaintiffs Don Tucker and Martin Aguilar’s 15 motion to remand for lack of diversity jurisdiction, Dkt. No. 18. Because subject-matter 16 jurisdiction is a threshold issue, the Court addresses Plaintiffs’ motion to remand first. 17 I. LEGAL STANDARD 18 A defendant may remove a state court action to federal court on the basis of diversity of 19 citizenship. 28 U.S.C. § 1441(b); see also 28 U.S.C. § 1332. Diversity jurisdiction exists only 20 where there is: (1) complete diversity between the residency of the plaintiffs and the defendants; 21 and (2) a sufficient amount in controversy. 28 U.S.C. § 1332(a). Where either element of 22 diversity is lacking, federal courts must remand the action to the state court. See id. § 1447(c). 23 However, a district court may disregard a non-diverse party and retain federal jurisdiction 24 if the party resisting removal can show that the non-diverse party was fraudulently joined. Hunter 25 v. Phillip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009). Joinder is fraudulent “if the plaintiff 26 fails to state a cause of action against a resident defendant, and the failure is obvious according to 27 the settled rules of the state.” Id. However, there is a “general presumption against fraudulent 28 joinder,” and defendants who assert that a party is fraudulently joined carry a “heavy burden.” Id. 1 at 1046. Defendants must “show that the individuals joined in the action cannot be liable on any 2 theory.” Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). 3 II. ANALYSIS Here, Plaintiffs are residents of California and so is Defendant Frazier. See Dkt. No. 1, Ex. 4 A (“Compl.”) ¶¶ 7–10. The Court finds that Defendants have failed to meet their “heavy burden” 6 of establishing fraudulent joinder. Id. at 1046. The California Court of Appeal has opened the 7 door to claims against insurance adjusters, holding that “a cause of action for negligent 8 misrepresentation can lie against an insurance adjuster.” See Bock v. Hansen, 255 Cal. App. 4th 9 215, 231 (Cal. Ct. App. 2014). In Bock, homeowners sued their insurer and the claims adjuster for 10 damages caused when a tree limb crashed onto the plaintiffs’ home. See id. at 219. The plaintiffs 11 United States District Court Northern District of California 5 brought, inter alia, a negligent misrepresentation claim against the adjuster based on his allegedly 12 false statement that the plaintiffs’ policy did not cover the cost of cleanup. See id.at 223. The 13 Court of Appeal concluded that the insurance adjuster owed a duty of care to the homeowners and 14 that he could be held liable for his characterization of the insurance policy. See id. 229–30. 15 Here too, Plaintiffs allege that Defendant Frazier, an insurance adjuster for Defendant 16 Travelers Indemnity Company of Connecticut, stated that Travelers would deny all coverage 17 because Tucker’s insurance excluded injuries arising from work done on residential property. 18 Compl. ¶¶ 4, 11–12. Plaintiffs’ negligent misrepresentation claim is premised on this allegedly 19 “false and untrue” statement because, according to Plaintiffs, “the [p]olicy does not contain an 20 exclusion for injuries arising from work at a family residence” and Defendant Frazier should have 21 known this. Id. ¶¶ 12, 43–44. Regardless of whether Bock may represent a minority view among 22 California courts, the decision demonstrates that it is not obvious under California law that 23 Plaintiffs cannot state a negligent misrepresentation claim of the type they have alleged here 24 against Defendant Frazier. 25 III. CONCLUSION 26 Because the Court lacks subject matter jurisdiction, it REMANDS the case to San 27 Francisco Superior Court. The motion to dismiss is MOOT and the Clerk is directed to remand 28 2 1 2 3 4 5 the case to the state court and to close the federal case. IT IS SO ORDERED. Dated: 10/4/2017 ______________________________________ HAYWOOD S. GILLIAM, JR. United States District Judge 6 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 3

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?