Hacienda Village Homeowners Association, Inc. v. Marsh & McLennan Companies, Inc. et al
Filing
44
OPINION AND ORDER granting 32 Motion for leave to file First Amended Complaint and to add parties, and the 36 Amended Complaint is the operative pleading. The Clerk is directed to remand the case to the Twentieth Judicial Circuit Court, in and f or Lee County, Florida, and to transmit a certified copy of this Opinion and Order to the Clerk of that Court. The Clerk shall terminate all deadlines and motions, and close the file (terminating 28 Motion for protective order; terminating 29 Motion to compel; terminating 38 Motion to quash; terminating 42 Motion for leave to file; terminating 43 Motion for leave to file; terminating 7 Motion to dismiss). Signed by Judge John E. Steele on 7/20/2011. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
HACIENDA
VILLAGE
HOMEOWNERS
ASSOCIATION, INC., a Florida nonprofit corporation,
Plaintiff,
vs.
Case No.
2:10-cv-604-FtM-29DNF
MARSH, INC. a foreign corporation,
SEABURY
&
SMITH,
INC.,
PAULA
MURDOCK, MARSH & MCLENNAN COMPANIES,
INC., a foreign corporation also
known as Marsh & McLennan Companies,
Inc.,
Defendants.
___________________________________
OPINION AND ORDER
This matter comes before the Court on Plaintiff’s Motion For
Leave To File First Amended Complaint And Jury Demand To Add
Parties (Doc. #32) filed on June 3, 2011.
Response (Doc. #33) on June 9, 2011.
Defendants filed a
Plaintiff filed a Reply (Doc.
#40) pursuant to Court Order on June 29, 2011.1
I.
On or about September 30, 2010, this case was removed from the
Twentieth Judicial Circuit Court, in and for Lee County, Florida on
the basis of diversity of citizenship.
(Doc. #1.)
The following
allegations are summarized from the original complaint (Doc. #2):
1
By a June 22, 2011 Order, the Court vacated the previous
Order (Doc. #35) granting the motion to amend and ordered plaintiff
to file a Reply. (Doc. #39.)
Hacienda Village Homeowners Association, Inc. (Hacienda) engaged
Paula A. Murdock (Murdock), who represented Marsh & McLennan
Companies, Inc. (MMC), as its broker, to obtain property insurance
for the association including insurance for the property of the
members of the association who owned their property in fee simple.
In or about December 2004, MMC, through Murdock, submitted a
Renewal Proposal of Insurance For Hacienda, which was with Landmark
American Insurance Company (Landmark) for approximately $19 million
in blanket coverage.
The proposal contained a $700,000 “named
storm wind/hail” deductible and a $126,000 premium.
6.)
(Id. at ¶¶ 5-
On or about December 24, 2004, Hacienda authorized MMC to
accept the insurance proposal.
On or about October 24, 2005, Hurricane Wilma struck Hacienda
and caused significant damage in the amount of $11,000,000.
When
Hacienda submitted a claim for damages, Ms. Murdock allegedly
delayed submission of the claim.
Landmark denied the claim.
On or about July 30, 2007,
(Id. at ¶¶ 8-11.)
On or about August 1, 2007, Landmark filed a Complaint for
Declaratory Relief in the Middle District of Florida against
Hacienda arguing that their insurance claim was untimely and that
Hacienda did not have an insurable interest in the entirety of the
property.
As it turns out, the policy secured by Murdock and MMC
contained a condominium association coverage form even though
Hacienda needed homeowners association coverage which would cover
-2-
the entirety of the property including the property owned by the
individual homeowners. On or about November 10, 2008, Landmark and
Hacienda ultimately settled the case for an amount less than the
damage sustained.
(Id. at ¶¶ 11-13.)
Hacienda asserts that all
defendants breached their duties to Hacienda by failing to procure
proper and adequate insurance and by failing to submit the claim
properly and/or in a timely manner.
(Id. at ¶¶ 14-15.)
Hacienda’s motion for leave to file an amended complaint seeks
to add two new defendants, Gresham and Associates, Inc. (Gresham)
and Advanced Insurance Underwriters, LLC (AIU).
5.)
(Doc. #32, ¶¶ 4-
Gresham is a Georgia corporation and AIU is a Florida limited
liability company.
denied
because
Defendants argue that the motion to amend be
the
addition
of
AIU
would
defeat
federal
jurisdiction.
II.
This case was removed based on diversity of citizenship under
Title 28, United States Code, Section 1332.
(Doc. #1.)
This
requires complete diversity of citizenship, and that the matter in
controversy exceed the sum or value of $75,000, exclusive of
interest and costs.
28 U.S.C. § 1332(a); Morrison v. Allstate
Indem. Co., 228 F.3d 1255, 1261 (11th Cir. 2000).
The presence of
a single plaintiff who is a citizen of the same State as a single
defendant
deprives
jurisdiction
over
the
the
district
entire
court
action.
-3-
of
original
Exxon
Mobil
diversity
Corp.
v.
Allapattah Servs., Inc., 545 U.S. 546, 553 (2005).
A limited
liability company is a citizen of any state of which a member is a
citizen.
Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C.,
374 F.3d 1020, 1022 (11th Cir. 2004).
The decision concerning whether to allow a complaint which has
been removed from state court to be amended is governed not by Rule
15(a) but by 28 U.S.C. § 1447(e).
Ingram v. CSX Transp., Inc., 146
F.3d 858, 862 (11th Cir. 1998).
Pursuant to 28 U.S.C. § 1447(e),
“If after removal the plaintiff seeks to join additional defendants
whose joinder would destroy subject matter jurisdiction, the court
may deny joinder, or permit joinder and remand the action to the
State court.”
A district court has only two options: (1) deny the
requested joinder, or (2) allow the joinder and remand the case to
state court.
1447(e),
a
Ingram, 146 F.3d at 862.
post-removal
request
to
join
Thus, under section
a
non-diverse
party
defendant “is left to the discretion of the district court . . .”
Dean v. Barber, 951 F.2d 1210, 1215 (11th Cir. 1992).
“In exercising discretion to deny joinder, or to permit
joinder and remand the case to state court, § 1447(e) requires an
evaluation of the prejudice to the parties.
Specifically, in
deciding whether amendment of the complaint should be allowed, the
court should consider several factors including: (1) the extent to
which
the
purpose
of
the
amendment
is
to
defeat
federal
jurisdiction; (2) whether the plaintiff has been dilatory in asking
-4-
for the amendment; (3) whether the plaintiff will be significantly
injured if the amendment is not allowed; and (4) any other factors
bearing on the equities.”
Mehta v. New York Life Ins. Co., No.
8:09-cv-59, 2009 WL 2252270 at *3 (M.D. Fla. July 28, 2009)(citing
Hensgens v. Deere & Co., 833 F.3d 1179, 1182 (5th Cir. 1987)).
Additionally, the Court should consider whether the joinder of
the non-diverse party is fraudulent.
Bechtelheimer v. Cont’l
Airlines, Inc., No. 8:10-cv-2114, 2011 WL 1346860 at *2 (M.D. Fla.
April 1, 2011)(citing Triggs v. John Crump Toyota, Inc., 154 F.3d
1284, 1287 (11th Cir. 1998)(“Fraudulent joinder is a judicially
created doctrine that provides an exception to the requirement of
complete diversity.”)).
The Eleventh Circuit has determined that fraudulent
joinder occurs in three situations. [ ] The first
situation occurs “when there is no possibility that the
plaintiff can prove a cause of action against the
resident (non-diverse) defendant.” [ ] The second
situation involves “outright fraud in the plaintiff’s
pleading of jurisdictional facts.” [ ] The third
situation arises “where a diverse defendant is joined
with a non-diverse defendant as to whom there is no
joint, several, or alternative liability and where the
claim against the diverse defendant has no real
connection to the claim against the non-diverse
defendant.”
Id. “The burden of establishing fraudulent joinder is a heavy one.
Where a
plaintiff
states
even
a
colorable
claim
against
the
resident defendant, joinder is proper and the case should be
remanded to state court.”
Pacheco de Perez v. AT&T Co., 139 F.3d
1368, 1380 (11th Cir. 1998).
“In making its determination, the
-5-
district court must evaluate factual allegations in the light most
favorable to the plaintiff and resolve any uncertainties about the
applicable law in the plaintiff’s favor.”
Id.
A. Gresham
According to the proposed First Amended Complaint (Doc. #36),
Gresham is a Georgia corporation with its principal place of
business in Georgia.
(Id. at ¶5.)
Defendants do not oppose the
addition of Gresham as a party as it would not defeat this Court’s
jurisdiction. Additionally, it appears that plaintiff seeks to add
Gresham
in
good
faith.
Accordingly,
the
Court
will
grant
plaintiff’s motion insofar as it adds Gresham as a defendant.
B. AIU
The parties main dispute concerns the joinder of AIU.
a Florida limited liability company.
If the Court allows AIU to be
joined it must remand the case to state court.
862.
AIU is
Ingram, 146 F.3d at
The Court will address each of the § 1447(e) factors
described in Mehta, 2009 WL 2252270 at *3, as well as whether the
joinder of AIU is fraudulent.
(1) Attempt to Defeat Federal Jurisdiction
Defendants argue that by adding AIU plaintiff is merely trying
to defeat this Court’s jurisdiction because any claims against AIU
are time barred and plaintiff was aware of AIU’s involvement at the
time the initial complaint was filed.
contrary.
-6-
Plaintiff argues to the
Plaintiff asserts that AIU was negligent in the submission of
its insurance claim which occurred sometime in 2006 or 2007. (Doc.
#36, ¶18.)
Defendants argue that pursuant to Florida Statute
§ 95.11(3)(a) the four year statute of limitations on negligence
actions
would
complaint.
have
run
prior
(Doc. #33, p. 4.)
to
the
filing
of
the
initial
However, “a negligence/malpractice
cause of action accrues when the client incurs damages at the
conclusion of the related or underlying judicial proceedings . . .”
Blumberg v. USAA Cas. Ins. Co., 790 So. 2d 1061, 1065 (Fla. 2001).
Plaintiff’s claim had not accrued against any of the defendants for
negligence
until
concluded.
Id.
the
judicial
proceedings
against
Landmark
Plaintiff’s cause of action against AIU for
negligently submitting its insurance claim did not accrue until the
judicial proceedings with Landmark concluded in or about November
2008.
(See Doc. #36, ¶17.)
As the initial complaint was filed on
September 30, 2010, a common law negligence action against AIU is
not time barred.
Additionally, the Court is simply not persuaded
that Hacienda is merely adding AIU to defeat federal jurisdiction.
(2) Dilatory in asking for the amendment
Plaintiff asserts that defense counsel only recently advised
that Murdock left MMC prior to Hurricane Wilma, and thus MMC should
not be held liable for the negligent claim submission.
Thus,
plaintiff only recently knew that it had a viable claim against
AIU.
(Doc. #40, p. 2.)
Defendants assert that plaintiff knew of
-7-
AIU’s involvement since August 2010 and that it was suspicious that
plaintiff sought an amendment after Defendants filed a Notice (Doc.
#7) that it had a pending motion.
Plaintiff’s contention that they recently learned that Murdoch
was employed with AIU when its insurance claim was submitted is a
reasonable
one.
The
Court
evaluates
factual
allegations
in
plaintiff’s favor, and finds that plaintiff was not dilatory in
asking for an amendment.
(3) Significant Injury to the Plaintiff
Plaintiff asserts if it were unable to add AIU it would be
prejudiced by the possibility of inconsistent verdicts, discovery
would be duplicative, increasing the costs of litigation, and there
would be the possibility of a lack of complete relief.
p. 4.)
(Doc. #40,
Defendants assert that AIU is not an indispensable party
and that plaintiff should pursue its claim against AIU in state
court.
(Doc. #33, p. 5.)
The
Court
finds
that
plaintiff’s
claim
against
AIU
is
intertwined with its claims against the other defendants and that
questions of law and fact common to all defendants would arise such
that parallel proceedings in state court would be a waste of
judicial resources.
(4) Equities
The Court does not discount defendants’ assertion that it will
be prejudiced by a remand after devoting time and incurring costs
-8-
in this case.
However, after evaluating plaintiff’s allegations
against AIU, and its argument that AIU should be joined, the Court
finds that the factors and the balance of the equities weigh in
favor of granting plaintiff’s motion to amend.
(5) Fraudulent Joinder
The Court has also considered whether the joinder of AIU is
fraudulent.
However, none of the fraudulent joinder situations is
applicable in this case.
As stated above, plaintiff does have a
plausible cause of action against AIU, as it may be vicariously
liable for Murdock’s negligent submission of the insurance claim.
Further, defendants did not contend that there was outright fraud
in the jurisdictional facts.
Additionally, AIU may be jointly,
severally, or alternatively, liable for any negligence in the
submission
of
the
insurance
claim
by
Murdock
and
there
are
questions of fact which link all of the other defendants with AIU.
Therefore,
fraudulent.
the
Court
finds
that
the
joinder
of
AIU
is
not
See Tillman v. R.J. Reynolds Tobacco, 340 F.3d 1277,
1279 (11th Cir. 2003)(“If there is a possibility that a state court
would find that the complaint states a cause of action against any
of the resident defendants, the federal court must find that the
joinder was proper . . .”).
Thus, the Court finds that Hacienda should be allowed to amend
its complaint to add AIU as a defendant.
-9-
Since joinder will be
allowed, the case must be remanded to state court due to the
parties’ lack of complete diversity.
Ingram, 146 F.3d at 862.
Accordingly, it is now
ORDERED:
1.
Plaintiff’s
Motion
For
Leave
To
File
First
Amended
Complaint And Jury Demand To Add Parties (Doc. #32) is GRANTED.
2.
Plaintiff’s Amended Complaint (Doc. #36) is the operative
pleading.
3.
The Clerk is directed to remand the case to the Circuit
Court of the Twentieth Judicial Circuit, in and for Lee County,
Florida, and to transmit a certified copy of this Opinion and Order
to the Clerk of that Court.
4.
The Clerk is directed to close this case and terminate all
previously scheduled deadlines and other pending motions as moot.
DONE AND ORDERED at Fort Myers, Florida, this
July, 2011.
Copies:
Counsel of record
-10-
20th
day of
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