Shropshire v. UNUM Life Insurance Company of America et al
Filing
8
MEMORANDUM OPINION AND ORDER: (1) Plaintiff's 5 Motion to Remand to State Court is GRANTED. (2) This matter is REMANDED to the Fayette County Circuit Court. (3) This matter shall be STRICKEN FROM THE COURT'S ACTIVE DOCKET. Signed by Judge Joseph M. Hood on August 6, 2012. (AWD) cc: COR,Fayette Circuit Court (certified copy)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
MELODY SHROPSHIRE,
)
)
)
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
UNUM LIFE INSURANCE
COMPANY OF AMERICA, and
LEXINGTON-FAYETTE URBAN
COUNTY GOVERNMENT,
Defendants.
**
Plaintiff
Melody
**
Action No. 5:12-cv-166-JMH
MEMORANDUM OPINION AND ORDER
**
**
Shropshire
**
(“Plaintiff”),
a
Kentucky
resident, filed this action in Fayette Circuit Court against
Unum
Life
Insurance
Company
of
America
(“Unum”),
a
Maine
company, and her former employer, Lexington-Fayette Urban County
Government (“LFUGC”).
Removal
[DE
1],
On May 23, 2012, Unum filed a Notice of
removing
the
above-referenced
matter
from
Fayette Circuit Court, alleging that this Court has jurisdiction
pursuant to 28 U.S.C. §§ 1332 and 1441.
Specifically, Unum
alleges that the amount in controversy exceeds $75,000 and that
complete diversity exists because LFUCG was fraudulently joined
as a party to this action.
On June 21, 2012, Plaintiff filed a
motion to remand this matter to state court.
[DE 5].
Unum has
filed a response [DE 6] and Plaintiff has filed her reply [DE
7].
For
the
following
reasons,
Plaintiff’s
motion
will
be
granted and this matter will be remanded to state court.
Generally, federal diversity jurisdiction over a cause of
action exists where the amount in controversy exceeds $75,000
and there is complete diversity between the parties.
§ 1332.
28 U.S.C.
Section 1441 of Title 28 of the United States Code
provides that a defendant may remove such an action brought in
state
court
to
federal
district
court.
The
party
invoking
federal court jurisdiction – in this case, Unum – has the burden
of
demonstrating
diversity
and
with
competent
proof
amount-in-controversy
that
the
requirements
completeare
met.
Cleveland Hous. Renewal Project v. Deutsche Bank Trust Co.,
621
F.3d 554, 559 (6th Cir. 2010) (citing Hertz Corp. v. Friend, 130
S.Ct. 1181, 1194-95 (2010)).
Unum contends that complete diversity exists because LFUCG
has
been
joined
fraudulently
–
that
is,
for
the
purpose
of
defeating diversity jurisdiction and, thus, LFUCG should not be
counted for purposes of determining whether diversity exists.
See Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d 904,
907 (6th Cir. 1999) (Fraudulent joinder occurs when the nonremoving party joins a party against whom there is no colorable
cause of action.).
colorable
claim
Unum argues that Plaintiff has asserted no
against
LFUCG
and,
in
any
event,
sovereign
immunity shields LFUCG from any claims that Plaintiff may have.
2
Defendant bears a heavy burden to prove that fraudulent joinder
exists
and
all
disputed
issues
of
law
and
fact
are
to
be
resolved in favor of Plaintiff.
See Walker v. Philip Morris
USA,
953
Inc.,
443
F.
App’x
946,
(6th
Cir.
2011).
In
determining whether a colorable claim exists, the Court looks to
state law.
See Jerome-Duncan, 176 F.3d at 907.
“There can be
no fraudulent joinder unless it be clear that there can be no
recovery under the law of the state on the cause alleged or on
the facts in view of the law.”
Alexander v. Elec. Data Sys.
Corp., 13 F.3d 940, 949 (6th Cir. 1994) (citing Bobby Jones
Garden Apartments, Inc. v. Suleski, 391 F.2d 172, 176 (5th Cir.
1968)).
In attempting to remove this action to federal court, Unum
asks
the
Court
to
engage
in
a
substantive
analysis
more
appropriately reserved for a motion to dismiss or a motion for
summary judgment.
cannot
say,
as
a
Based on the record before it, the Court
matter
of
law,
colorable claim against LFUCG.
that
Plaintiff
presents
no
While it is true that, as a
general matter, LFUCG is protected by sovereign immunity, this
immunity is not impenetrable because sovereign immunity can be
waived.
See
Phillips
v.
Lexington-Fayette
Urban
County
Government, 331 S.W.3d 629, 631-32 (Ky. Ct. App. 2010).
As for
Plaintiff’s individual claims against LFFUCG, the Court finds
that
they
are
at
least
colorable.
3
While
Unum
argues
that
Plaintiff has not stated a claim against LFUCG for violations of
the Kentucky Consumer Protection Act (“KCPA”), Kentucky case law
indicates
that
the
purchase
covered under the Act.
of
an
insurance
policy
may
be
Stevens v. Motorists Mut. Ins. Co., 759
S.W.2d 819, 820 (Ky. 1988); see generally Craig & Bishop, Inc.
v. Piles, 247 S.W.3d 897, 904 (Ky. 2008) (KCPA to be construed
broadly).
As
for
Plaintiff’s
breach-of-fiduciary-duty
claims,
Kentucky defines a fiduciary relationship as “one founded on
trust or confidence reposed by one person in the integrity and
fidelity
of
another
and
which
also
necessarily
involves
an
undertaking in which a duty is created in one person to act
primarily for another’s benefit in matters connected with such
undertaking.”
Dauley v. Hops of Bowling Green, Ltd., No. 2001-
CA-001601-MR, 2003 WL 1340013, *2 (Ky. Ct. App. Feb. 21, 2003)
(unpublished opinion) (citing St. Martin v. KFC Corp., 935 F.
Supp.
898,
Kentucky
908
law
(W.D.
that
Ky.
1996)).
forecloses
the
Unum
has
existence
pointed
of
a
to
no
fiduciary
relationship between Plaintiff and LFUCG under the circumstances
at hand.
claim
Fraudulent joinder does not arise simply because a
ultimately
Specialty
Ins.
may
Co.
v.
prove
unsuccessful.
Pucek,
No.
See
5:09-cv-49-JMH,
3711261, at *3 (E.D. Ky. Nov. 4, 2009).
North
2009
Am.
WL
Accordingly, Unum has
not met its burden of showing that UNUM’s claims against LFUCG
are entirely without merit and, accordingly, not colorable.
4
While the lack of complete diversity alone is enough to
defeat
federal
failed
to
jurisdiction,
meet
its
burden
the
with
controversy requirement, as well.
a
case
to
federal
court
Court
has
notes
respect
to
that
Unum
the
has
amount-in-
A defendant seeking to remove
the
burden
of
showing,
by
a
preponderance of the evidence, that the amount in controversy
exceeds $75,000.
F.3d
560,
572
See Hayes v. Equitable Energy Res. Co., 266
(6th
Cir.
2001);
28
U.S.C.
§
1332.
When
a
plaintiff seeks to recover an unspecified amount that is “not
self-evidently
greater
or
less
than
the
federal
amount-in-
controversy requirement,” a defendant can remove the case only
by showing that the claim “more likely than not” exceeds the
statutory requirement.
Gafford v. Gen. Elec. Co., 997 F.2d 150,
158 (6th Cir. 1993), overturned on other grounds by Hertz Corp.
v. Friend, -U.S.-, 130 S.Ct. 1181 (2010).
While proof within a
legal certainty is not required, Id., the removing defendant
must
provide
competent
proof
that
the
requirement
Cleveland Hous. Renewal Project, 621 F.3d at 559.
is
met.
Based on the
record, it is far from clear that the damages Plaintiff seeks
exceed $75,000.
unpaid
benefits.
By her own account, she seeks $12,418.72 in
While
she
also
seeks
punitive
and
other
damages, Unum has failed to present competent proof that these
damages, coupled with the unpaid benefits, exceed $75,000.
As
this Court has stated, competent evidence is not difficult to
5
obtain.
See King v. Household Fin. Corp. II, 593 F. Supp. 2d
958, 961 (E.D. Ky. 2009).
Such evidence can be obtained through
interrogatories or requests for admissions.
Id. (citing Marcum
v. State Farm Mut. Auto. Ins. Co., No. 6:07-269-DCR, 2007 WL
2461623, *3 (E.D. Ky. Aug. 22, 2007)).
That Plaintiff has not
offered to stipulate to a lesser amount of damages is of no
consequence, as the burden of proving the amount in controversy
is
placed
upon
the
removing
defendant,
not
the
plaintiff.
Defendant’s proffered evidence does not show that, more likely
than
not,
the
amount
in
controversy
in
this
matter
exceeds
$75,000.
Based on the foregoing, IT IS ORDERED that:
1)
Plaintiff’s motion to remand [DE 5] is GRANTED;
2)
This matter is hereby REMANDED to the Fayette County
Circuit Court; and
3)
This matter shall be STRICKEN FROM THE COURT’S ACTIVE
DOCKET.
This the 6th day of August, 2012.
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