Castilla v. National Union Fire Insurance Co. of Pittsburgh Pennsylvania

Filing 21

ORDER denying 13 Motion to Remand to State Court. Signed by Judge James I. Cohn on 10/17/2011. (awe)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 11-62086-CIV-COHN/SELTZER
ROLANDO CASTILLA,
an individual,
Plaintiff,
v.
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH
PENNSYLVANIA, a corporation,
Defendant.
___________________________________/
ORDER DENYING MOTION TO REMAND
THIS CAUSE is before the Court on Plaintiff Rolando Castilla’s Motion to
Remand to State Court [DE 13]. The Court has considered the motion, Defendant
National Union Fire Insurance Company of Pittsburgh Pennsylvania’s Response [DE
19], and the record in this case, and is otherwise advised in the premises.
On July 5, 2011, Plaintiff filed this action in the Circuit Court of the Seventeenth
Judicial Circuit in and for Broward County, Florida. Complaint [DE 4-1]. The Complaint
was served on Defendant National Union Fire Insurance Company of Pittsburgh
Pennsylvania on August 23, 2011. Notice of Removal [DE 1] ¶ 3. On September 22,
2011, Defendant removed the action to this Court based on diversity jurisdiction. Id. ¶
1.
Diversity jurisdiction exists when the suit is between citizens of different states
and the amount in controversy exceeds $75,000, exclusive of interest and costs. 28
U.S.C. § 1332. The parties do not dispute that Plaintiff is a citizen of Florida, see Mot. ¶
2; Resp. at 7, nor do they dispute that the amount in controversy exceeds $75,000, see

Mot.; Resp. Instead, the dispute centers around Defendant’s citizenship. Plaintiff
contends that Defendant is a citizen of the same state as Plaintiff, and therefore seeks
to remand this case to state court for lack of federal jurisdiction.
28 U.S.C. § 1332(c)(1) sets forth the following rules regarding a corporation’s
citizenship:
[A] corporation shall be deemed to be a citizen of any State by which it has
been incorporated and of the State where it has its principal place of
business, except that in any direct action against the insurer of a policy or
contract of liability insurance, whether incorporated or unincorporated, to
which action the insured is not joined as a party-defendant, such insurer shall
be deemed a citizen of the State of which the insured is a citizen, as well as
of any State by which the insurer has been incorporated and of the State
where it has its principal place of business.
28 U.S.C. § 1332(c)(1). Plaintiff invokes the “direct action” exception to conclude that
Defendant must be a citizen of Plaintiff’s state, because Plaintiff is Defendant’s insured.
See Mot. ¶ 6. Defendant responds that this exception does not apply here.
“[C]ourts have uniformly defined the term ‘direct action’ as used in this section as
those cases in which a party suffering injuries or damage for which another is legally
responsible is entitled to bring suit against the other’s liability insurer without joining the
insured or first obtaining a judgment against him.” Fortson v. St. Paul Fire & Marine Ins.
Co., 751 F.2d 1157, 1159 (11th Cir. 1985). “The general rule has always been that the
direct action proviso does not affect suits brought by an insured against his own
insurer.” Bowers v. Cont’l Ins. Co., 753 F.2d 1574, 1576 (11th Cir. 1985) (citing White
v. United States Fid. & Guar. Co., 356 F.2d 746, 747-48 (1st Cir. 1966)).
Plaintiff writes in his Complaint, “This is an action for breach of contract arising
out of a contract entered into by Defendant . . . with Plaintiff.” Compl. ¶ 1. Such a case
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is not a “direct action against the insurer of a policy or contract of liability insurance,”
within the meaning of § 1332(c)(1). See Charles A. Wright, et al., Federal Practice and
Procedure § 3639 (Westlaw 2011) (explaining that actions by an insured against an
insurance company for breach of contract or declaratory judgment for benefits under a
policy are not “direct actions” under § 1332). Therefore, Defendant’s citizenship in this
case is based not on the state in which the insured is a citizen, but rather on the state in
which Defendant was incorporated and the state where it has its principal place of
business. See id. Defendant is a Pennsylvania corporation with its principal place of
business in New York. Resp. at 7. Therefore, as Defendant is not a citizen of Florida,
the parties are diverse.1 Accordingly, it is hereby
ORDERED AND ADJUDGED that Plaintiff’s Motion to Remand to State Court
[DE 13] is DENIED.
DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County,
Florida, on this 17th day of October, 2011.

Copies provided to:
Counsel of record via CM/ECF

1

Additionally, Plaintiff’s counsel failed to comply with the conferral requirements
of Local Rule 7.1(a)(3). Had counsel properly conferred with opposing counsel, the
parties might have been able to resolve this issue on their own. In the future, all
counsel shall comply with the Local Rules for the Southern District of Florida.
3