Hall v. Westfield Insurance Company et al
Filing
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OPINION AND ORDER: 1) the Motion to Remand DE 5 is GRANTED; 2) the Motion for Attorney's Fees DE 5 is DENIED; 3) this matter is REMANDED to the Pike Circuit Court and STRICKEN from the active docket of this Court; and 4) all pending motions in this matter are DENIED without prejudice as moot. Signed by Judge Karen K. Caldwell on 10/20/2011. (RCB)cc: COR, PIKE CIRCUIT COURT certified copy w/docket sheet
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION at PIKEVILLE
CIVIL ACTION NO. 7:11-cv-120
DOUGLAS HALL, II, as
Administrator and Personal Representative
of Douglas C. Hall's Estate,
v.
PLAINTIFF,
OPINION AND ORDER
WESTFIELD INSURANCE COMPANY and
BOBBY VANOVER, as
Administrator of Justin C. Vanover's Estate,
DEFENDANTS.
*********
This matter is before the Court on the Plaintiff's Motion to Remand [DE 5]. The
issue in this case is whether the nondiverse estate named in this action is a "nominal"
defendant whose citizenship should be disregarded for purposes of determining diversity
jurisdiction. Because the estate is not a nominal party, the Motion to Remand must be
granted.
I.
Facts.
The Plaintiff files this action as the administrator and personal representative of
the estate of Douglas C. Hall who died after a traffic accident. The Plaintiff asserts that
Hall's death was caused by the negligence of Justin C. Vanover, the driver of the other
vehicle involved in the accident. Vanover also died after the accident.
The Plaintiff originally filed this action in Pike Circuit Court against Westfield
Insurance Company ("Westfield") and Bobby Vanover, as the administrator of Justin C.
Vanover's estate (the "Vanover Estate"). The Plaintiff asserts a wrongful death claim
against the Vanover Estate.
The other defendant, Westfield Insurance Company, was Hall's insurer at the time
of the accident. Hall's coverage included underinsured motorist's coverage ("UIM"). The
Plaintiff asserts that Justin C. Vanover did not have sufficient insurance coverage to
compensate Hall's estate for the damages Hall sustained as a result of the accident. The
Plaintiff asserts a claim against Westfield for UIM benefits.
Westfield removed the action to this Court, asserting that this Court has diversity
jurisdiction. The Plaintiff followed with a motion to remand the action to Pike Circuit
Court.
II.
Analysis.
The federal removal statute, 28 U.S.C. § 1441, grants defendants in civil suits the
right to remove cases from state courts to federal district courts when the latter would
have had original jurisdiction. Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d
904, 907 (6th Cir. 1999). In order for a defendant to remove a case to federal court based
upon diversity jurisdiction, there must be complete diversity of citizenship both at the
time the case is commenced and at the time the notice of removal is filed. Id.
The Plaintiff and the Vanover Estate are both Kentucky citizens. In its Notice of
Removal, Westfield argues that this Court nonetheless has diversity jurisdiction over this
action because the Vanover Estate is a nominal party and, thus, its citizenship should be
disregarded for purposes of determining whether this Court has diversity jurisdiction.
For this argument, Westfield cites Maiden v. North American Stainless, L.P., 125
Fed. App'x 1 (6th Cir. 2004), in which the court stated that, "[i]n determining whether
complete diversity exists, 'a federal court must disregard nominal or formal parties and
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rest jurisdiction only upon the citizenship of the real parties to the controversy.'” Id. at *2
(quoting Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 461 (1980)).
A real-party-in-interest plaintiff is “the person who is entitled to enforce the right
asserted under the governing substantive law.” Id. (quoting Certain Interested
Underwriters at Lloyd's of London v. Layne, 26 F.3d 39, 42-43 (6th Cir.1994)). A realparty-in-interest defendant is "one who, by the substantive law, has the duty sought to be
enforced or enjoined." Sun Oil Co. of Pennsylvania v. Pennsylvania Dept. of Labor &
Industry, 365 F.Supp. 1403, 1406 (E.D. Pa. 1973). A nominal party “is one who has no
interest in the result of the suit and need not have been made a party thereto.” Maiden,
125 Fed. App'x at *2 (quoting Grant County Deposit Bank v. McCampbell, 194 F.2d 469,
472 (6th Cir.1952)).
Here, the Plaintiff asserts a negligence claim directly against the Vanover Estate,
asserting that the Vanover Estate itself is liable for Justin C. Vanover's alleged breach of
the duty of care he owed the Plaintiff. If it should be determined that Justin C. Vanover
did breach that duty of care, then the Court would issue a judgment directing the Vanover
Estate itself to appropriately compensate the Plaintiff. Thus, the estate is a real-party-ininterest defendant.
Westfield argues that the Vanover Estate has no interest in the result of this suit
because, under KRS § 396.011(1), the estate can only be held liable for the amount of
Justin C. Vanover's insurance policy limits and the estate has already offered to pay that
amount to the Plaintiff. [DE 10, Response at 2, 5]. Thus, Westfield argues, because the
estate has already conceded liability and has offered to pay the Plaintiff the maximum
amount it could possibly be held liable for, it has no interest in the result of this litigation.
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It may well be that the Vanover Estate's liability will be limited in this case. But
that is irrelevant to the nominal-party analysis. In determining whether the estate is a
nominal party, the question is whether the plaintiff charges that the estate itself has
breached a duty owed to the plaintiff. Here, the Plaintiff makes that assertion. Thus, the
estate is not a nominal party.
This case is different from Maiden v. North American Stainless, L.P., 125 Fed.
App'x 1 (6th Cir. 2004) which Westfield cites in its response. In that case, the plaintiff
sued his employer for retaliatory discharge. In addition to his former employer, he also
named the Kentucky Labor Cabinet as a defendant. The Labor Cabinet had previously
filed an administrative action against the employer on the plaintiff's behalf and issued a
citation to the employer demanding that the employer grant the plaintiff various relief
including reinstatement and back pay. Id. at *1-2.
The court determined that the Labor Cabinet was a nominal party to the suit. The
plaintiff sought only a declaration from the court that he could proceed concurrently
against the employer in the civil action and in an action to recover any award granted by
the Labor Cabinet. Id. at *2. Noting that the plaintiff was not seeking to enforce any
duty owed by the Labor Cabinet to the plaintiff or to enjoin any action of the Labor
Cabinet, the court determined that "[a]ny ruling for [the plaintiff] in this action would not
impact the state administrative proceedings. In a word, the Labor Cabinet does not have
any interest in the outcome of this litigation Id.
Here, in contrast, the Plaintiff is asserting a claim directly against the Vanover
Estate seeking to enforce Justin C. Vanover's alleged duty of care to the Plaintiff. The
dispute between the parties regarding whether the estate's liability is limited to Justin C.
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Vanover's insurance policy limits simply makes clear that the Vanover Estate has an
interest in the result of this action. Accordingly, the estate is not a nominal party and the
Motion to Remand must be granted.
While the Court will grant the Motion to Remand, it does not find that the
removal of this action was without a reasonable basis. Accordingly, the Court declines to
award the Plaintiff attorney's fees under 28 U.S.C. § 1447(c).
For all these reasons, the Court hereby ORDERS as follows:
1)
the Motion to Remand [DE 5] is GRANTED;
2)
the Motion for Attorney's Fees [DE 5] is DENIED;
3)
this matter is REMANDED to the Pike Circuit Court and STRICKEN
from the active docket of this Court; and
4)
all pending motions in this matter are DENIED without prejudice as moot.
Dated this 20th day of October, 2011.
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