Westley v. Progressive Insurance Company et al
Filing
18
ORDER & REASONS: ORDERED that Plaintiff's Motion to Remand (Rec. Doc. 7 ) is DENIED. FURTHER ORDERED that Progressive's Motion to Sever and Remand (Rec. Doc. 13 ) is GRANTED. FURTHER ORDERED that Plaintiff's claim against Malcolm Anthony Westley be severed from the matter at hand and be remanded to the 32nd Judicial District Court for the Parish of Terrebone. Signed by Judge Carl Barbier on 9/10/14. (sek)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TYEST SHAREL WESTLEY
CIVIL ACTION
VERSUS
NO: 14-1410
PROGRESSIVE SPECIALTY
INSURANCE CO., ET AL
SECTION:
J(2)
ORDER AND REASONS
Before the Court is a Motion to Remand (Rec. Doc. 7)
filed by
Plaintiff, Tyest Sharel Westley ("Plaintiff"), and an Opposition
(Rec. Doc.
14) by Defendant, Progressive Specialty Insurance
Company ("Progressive"), as well as a Motion to Sever and Remand
(Rec. Doc. 13) filed by Progressive and Plaintiff's Opposition
(Rec.
Doc.
15).
Having
considered
the
motion,
the
parties’
submissions, the record, and the applicable law, the Court finds,
for the reasons expressed below, that Plaintiff's Motion to Remand
be DENIED and that Progressive's Motion to Sever and Remand be
GRANTED.
PROCEDURAL AND FACTUAL BACKGROUND
Plaintiff alleges that on May 18, 2013 she borrowed from her
father, Defendant Malcolm Westley ("Malcolm"), a 2000 Ford F-250
pickup truck, which he owned. Although the truck contained an
insurance card that facially indicated that the Ford 250 was
insured, and which Plaintiff alleges she inspected, Malcolm never
1
advised Plaintiff that the insurance policy referenced on the card
had lapsed and that on May 18, 2013 the vehicle was uninsured.
Plaintiff, who was approximately five months pregnant on May
18, 2013, proceeded to drive the F-250 South on Highway LA 24 in
the left-hand lane. Plaintiff alleges that Defendant Terrance L.
Bowie ("Bowie") who was operating an 18-wheeler owned by Defendant
Bowie Farms & Trucking LLC ("Bowie Farms") abruptly attempted to
turn left from LA 24's right-hand lane, colliding with the F-250
operated by Plaintiff. Plaintiff was transported to Terrebone
General Hospital by ambulance for injuries sustained during the
collision.
On May 12, 2014, Plaintiff filed a petition for damages in the
32nd Judicial District Court for the Parish of Terrebone against
Defendants Progressive, Bowie Farms, Bowie, and Malcolm. Plaintiff
alleges that Bowie's failure to remain in his lane and to ensure
that the lanes could be switched prior to making a left-hand turn
contributed to the collision and constitutes negligence per se as
a violation of Louisiana's Motor Vehicle and Traffic Regulations,
specifically La. Rev. Stat. 32:79. (Rec. Doc. 1, Ex. 1, p. 4).
Plaintiff also alleges that Bowie Farms should be held severally
liable
under
theories
of
negligent
hiring,
supervision,
and
training as well as vicarious liability. (Rec. Doc. 1, Ex. 1, p. 56). Additionally, Plaintiff seeks damages against Progressive, the
insurance company that provided a liability policy covering the 18-
2
wheeler operated by Bowie, under Louisiana's Direct Action Statute.
(Rec. Doc. 1, Ex. 1, p. 6). Against these aforementioned defendants
Plaintiff seeks damages on behalf of herself and her minor child
including past and future medical expenses, pain and suffering,
mental anguish, and lost wages. (Rec. Doc. 1, Ex. 1, p. 7). In its
defense, Progressive claims that Plaintiff's recovery should be
barred or reduced in accordance with La. Rev. Stat. 32:866,1 the
"no pay, no play" statute, due to the lack of insurance coverage on
the F-250. (Rec. Doc. 3, p. 3).
Finally, Plaintiff also seeks damages against her father,
Malcolm, for his alleged negligent conduct in failing to maintain
insurance on the F-250 and failing to advise her that the vehicle
lacked insurance. Under Louisiana's "no pay, no play" statute," as
a result of Malcolm's failure to maintain insurance on the F-250,
Plaintiff,
as
the
operator
of
an
uninsured
vehicle,
may
be
precluded from recovering the first $15,000 of bodily injury
damages she seeks against Progressive and the other defendants.
(Rec. Doc. 7, p. 1). Plaintiff claims that Malcolm should be held
liable to indemnify her for the amount she is precluded from
recovering against the defendants as a result of this alleged
1
La. R.S. 32:866, widely recognized as the "no pay, no play" statute,
provides that "[t]here shall be no recovery for the first fifteen thousand
dollars of bodily injury and no recovery for the first twenty-five thousand
dollars of property damage based on any cause or right of action arising out of
a motor vehicle accident, for such injury or damages occasioned by an owner or
operator of a motor vehicle involved in such accident who fails to own or
maintain compulsory motor vehicle liability security." La. Rev. Stat. Ann. §
32:866(A)(1) (2010).
3
negligent conduct.
(Rec. Doc. 1, Ex. 1, p. 7).
On June 18, 2014, Defendant removed the action to this Court
based on diversity jurisdiction.
PARTIES' ARGUMENTS
Plaintiff argues that this entire matter should be remanded to
state court for lack of complete diversity among the parties. Both
Malcolm and Plaintiff are citizens of Louisiana, making diversity
jurisdiction improper. Plaintiff further contends that joinder of
Malcolm as a defendant is proper both because she has a valid claim
against Malcolm and also because the claim is sufficiently related
to her claims against the other defendants.
Progressive, in both its motion to sever and remand as well as
its opposition to Plaintiff's motion, rejects Plaintiff's assertion
that the entire matter should be remanded, and instead, argues that
Plaintiff's claim against Malcolm should be severed and remanded
based on two contentions. First, because Plaintiff has no valid
cause of action against Malcolm that would yield a possibility of
recovery, and second, because Plaintiff's claim against Malcolm is
not sufficiently related to the other claims so as to make joinder
appropriate.
A. Improper Joinder
Plaintiff contends that she has a valid claim against Malcolm
under a theory of negligence on the basis that Malcolm owed her a
duty to maintain insurance coverage on the Ford F-250 and to advise
4
her of any existing deficiencies in the coverage at the time she
borrowed the vehicle. By failing to renew the insurance policy and
by also failing to notify Plaintiff that the car lacked insurance
coverage at the time she borrowed it, Plaintiff asserts that
Malcolm breached this duty, which may ultimately result in her
preclusion from recovering damages under the "no pay, no play"
statute. Plaintiff relies entirely on the case of
Costly v.
Batiste,2 which she interprets to hold that when a person makes a
"good faith effort" to ensure a vehicle which she operates is
insured, and subsequent to an accident determines it is uninsured,
she may still recover despite the "no pay, no play" statute against
"the person that precluded [her] from recovering." (Rec. Doc. 7, p.
6). Plaintiff contends that she made a "good faith effort" to
ensure the F-250 was insured at the time she borrowed it by
"inspect[ing] the insurance card in the vehicle," and that Malcolm
never informed her otherwise. (Rec. Doc. 7, p. 5).
Plaintiff
asserts that her conduct is sufficient to prove that Malcolm must
indemnify her for any amount she may be precluded from recovering
against Progressive under the "no pay, no play" statute, because he
2
In Costly, the plaintiff driver attempted
to purchase automobile
insurance; he paid approximately $400 to purchase a policy and was provided with
an insurance card. Costly v. Batiste, 802 So.2d 752, 754 (5th Cir. 2001). On
that same day, plaintiff was in a car accident, subsequent to which he was
informed that the insurance policy he believed he had purchased was never made
effective. Id. Plaintiff then filed a claim seeking damages against this
insurance company, to which the insurance company raised the "no pay, no play"
statute as an affirmative defense. Id. In denying the insurance company's motion
for summary judgment, the Fifth Circuit found that because the plaintiff had
acted in "good faith" to obtain insurance, questions of material facts remained
regarding whether his claim against his insurance company was viable. Id.
5
breached his duty to inform her of the F-250's lack of insurance
coverage.
Progressive argues that Plaintiff's claim against Malcolm is
fraudulent because Plaintiff joined Malcolm as "the only nondiverse Defendant in this matter . . . . solely for the purpose of
defeating
diversity
jurisdiction."
(Rec.
Doc.
14,
p.
1).
Progressive first asserts that based on the clear language of the
"no pay, no play" statute, the duty to insure the vehicle fell both
to Malcolm, as owner, and Plaintiff, as operator of the vehicle.
Progressive next contends that there is no basis in Louisiana law
for imposing a duty on Malcolm to "explain the parameters of the
insurance coverage on the vehicle he allowed [Plaintiff] to borrow
or to 'advise her' that the vehcile [sic] did not have insurance on
the date of the accident." (Rec. Doc. 14, p. 5). Progressive
further argues that Plaintiff provided no legal support for the
existence of the alleged duty, and that the Fifth Circuit's opinion
in Costly is inapplicable to the matter at hand because it is
merely dicta in a summary judgment ruling. (Rec. Doc. 14, p. 8).
Because of this alleged lack of legal basis and the impossibility
of any potential recovery by Plaintiff, Progressive contends that
Plaintiff's claim against Malcolm should be severed from the matter
at hand and remanded.
B. Severance
Plaintiff contends that her claim against Malcolm was properly
6
joined to her claims against the other defendants in this matter
under Article 463 of the Louisiana Code of Civil Procedure and
should not be severed.
Plaintiff argues that the claim is "deeply
legally and factually intertwined with her cause of action against
Progressive," both because it arises out of the same transaction as
the other claims (the automobile accident), and because the claims
share common legal and factual issues.
(Rec. Doc. 7, p. 7).
Furthermore, Plaintiff asserts that Malcolm's liability is entirely
dependent on a finding of the other defendants' liability; if
Progressive and its insureds are not found liable for causing the
accident, then Malcolm will face no liability. (Rec. Doc. 15, p.
5). As such, Plaintiff asserts that requiring two separate trials
would
"result
in
piecemeal
litigation"
and
would
be
counterintuitive to concepts of judicial efficiency. (Rec. Doc. 15,
p. 2).
Progressive argues that even if Plaintiff's claim against
Malcolm is not found fraudulent, it should be severed and remanded
because it was improperly joined under Federal Rule of Civil
Procedure 20.3 Progressive contends that the claim against Malcolm
and the claims against the remaining defendants arise out of two
separate and distinct occurrences; the claim against Bowie arises
3
Defendant notes in its opposition that this Court has found "no
substantive difference between Rule 20 of the Federal Rules of Civil Procedure
and Article 463 of the Louisiana Code of Civil Procedure." See Defourneaux v.
Metro. Prop. & Cas. Ins. Co., No. 06-3809, 2006 U.S. Dist. LEXIS 67031 at *2
(E.D. La. Aug. 30, 2006) (Feldman, J.).
7
out of the automobile accident, while the claim against Malcolm
arises out of his failure to advise Plaintiff of the F-250's lack
of insurance coverage. (Rec. Doc. 14, p. 11). Further, Progressive
argues that the claims do not overlap in either fact or law;
Plaintiff's negligence claim against Malcolm turns upon "fraudulent
representations and conversations with her father," whereas her
claim against Progressive centers around "motor vehicle laws [and]
medical causation." (Rec. Doc. 14, p. 11). As such, Progressive
contends that the claims are "two wholly separate causes of action"
and Plaintiff's joinder of the claim against Malcolm to the current
matter is not appropriate. (Rec. Doc. 14, p.11).
LEGAL STANDARD
Generally, a defendant may remove a civil action filed in
state
court
jurisdiction.
if
a
See
federal
court
would
28 U.S.C. § 1441(a).
have
had
original
Original diversity
jurisdiction is appropriate where the matter in controversy exceeds
$75,000 and is between citizens of different states.
28 U.S.C. §
1332(a)(1). A defendant can remove a state action to federal court
based on original diversity jurisdiction unless a properly joined
defendant is a citizen of the state where the action was brought.
28 U.S.C. § 1441(b).
The removing party bears the burden of
establishing that federal jurisdiction exists at the time of
removal.
1995).
DeAguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir.
Ambiguities are construed against removal and in favor of
8
remand, because removal statutes are to be strictly construed.
Manguno v. Prudential Prop. & Cas. Ins., 276 F.3d 720, 723 (5th
Cir. 2002).
DISCUSSION
A. Improper Joinder
There are two ways to establish improper joinder: (1) actual
fraud in the pleading of jurisdictional facts, or (2) inability of
the plaintiff to establish a cause of action against the nondiverse party in state court.
Smallwood v. Ill. Cent. R.R., 385
F.3d 568, 573 (5th Cir. 2004) (en banc).
When there is no
allegation of actual fraud, the test for improper joinder is
whether the defendant has demonstrated that there is no possibility
of recovery by the plaintiff against an in-state defendant.
Id.
A mere theoretical possibility of recovery is not sufficient to
preclude a finding of improper joinder.
Id.
A court should
ordinarily resolve the issue by conducting a Rule 12(b)(6)-type
analysis, looking initially at the allegations of the complaint to
determine whether the complaint states a claim under state law
against the in-state defendants. Id. Where a plaintiff has stated
a claim, but has misstated or omitted discrete and undisputed facts
that would preclude recovery, the Court may, in its discretion,
pierce the pleadings and conduct a summary inquiry. Id. at 573-74.
In order for a cause of action to survive a Rule 12(b)(6)
motion to dismiss, the plaintiff must plead enough facts to “state
9
a claim for relief that is plausible on its face.”
Ashcroft v.
Iqbal, 556 U.S. 662 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). The court “must accept all well-pleaded
facts as true and view them in the light most favorable to the nonmoving party.”
In re Southern Scrap Material Co., LLC, 541 F.3d
584, 587 (5th Cir. 2008). Here, Progressive contends that Plaintiff
did not present a valid claim of negligence against Malcolm and
that Plaintiff cannot prevail under any other theory of liability.
In all claims of negligence, plaintiffs are required to prove
the following elements:
"(1) the defendant had a duty to conform his or her
conduct to a specific standard of care; (2) the defendant
failed to conform his or her conduct to the appropriate
standard; (3) the defendant's substandard conduct was the
cause-in-fact
of
the
plaintiff's
injuries;
(4)
the
defendant's substandard conduct was a legal cause of the
plaintiff's injuries; and (5) actual damages."
Melancon v. Louisiana Office of Student Fin. Assistance, 567
F.Supp. 2d 873 (E.D. La. 2008) (Barbier, J.). Plaintiff's complaint
alleges that the duty owed to her by Malcolm required him both to
insure the F-250 and to advise her if the vehicle was lacking
insurance, and his failure to perform either act caused her to be
precluded from recovering against the remaining defendants under
10
the "no pay, no play" statute. (Rec. Doc. 1, Ex. 1, p. 7). However,
while Louisiana law has recognized that owners of vehicles have a
general duty to obtain a minimum level of insurance on their
vehicles, as evident by the "no pay, no play statute," Plaintiff
has provided no legal support to show that Malcolm owed her this
duty personally. Moreover, Plaintiff has failed to sufficiently
prove that Louisiana law imposes a duty on owners of vehicles to
advise
operators
coverage.
when
Plaintiff's
the
vehicle
allegation
lacks
that
adequate
Costly
stands
insurance
for
the
proposition that a person who makes a "good faith effort" to obtain
insurance has a cause of action for indemnification against the
entity or individual who precludes the sought insurance policy from
being created is both misguided and irrelevant to the factual
circumstances of the present matter. In caselaw subsequent to
Costly, Louisiana courts have definitively stated that no "good
faith exception" to the "no pay, no play" statute exists. Carrion
v. Sandifer, 40,880 (La. App. 1 Cir. 4/12/06); 926 So.2d 784, 788.
As such, Plaintiff's act in inspecting the insurance card in the F250 prior to operating the vehicle, even if determined to be a
"good faith effort" to ensure the car was insured, in no way
affects the viability of her claim against Malcolm.
Furthermore, even if Louisiana courts did recognize a good
faith exception to the "no pay, no play" statute, this does not
support Plaintiff's argument that the owner of a vehicle has a duty
11
to
any
operator
of
that
car
to
divulge
any
deficiencies
in
insurance coverage. In Costly, the Fifth Circuit ruled only that
the plaintiff may have a viable claim against his insurance
company.
Costly,
802
So.2d
at
754.
Louisiana
courts
have
recognized that insurance companies have a legal duty to supply
truthful information to their insured. French Market Plaza Corp. v.
Sequoia Ins. Co., 480 F.Supp. 821, 824-25 (E.D. La. 1979). However,
rather than bringing a claim against her own insurance company,
Plaintiff has sued her father, the owner of the car. Louisiana
courts have not imposed a similar heightened duty on individual car
owners to be truthful regarding the status of their vehicle's
insurance
coverage,
and
Plaintiff
has
provided
no
additional
support to prove that such a duty exists.
Because Plaintiff has not proven that Malcolm owed Plaintiff
any duty to disclose the F-250's inadequate insurance coverage, she
has failed to show any possibility of relief under a claim of
negligence or any other legal theory. As such, she lacks a valid
cause of action against Malcolm and the joinder of this claim is
determined to be improper.
B. Severance
A district court has broad discretion to sever claims before
it. Brunet v. United Gas Pipeline Co., 15 F.3d 500, 505 (5th Cir.
1994); FED. R. CIV. P. 21 (West 2007). Severance may be conducted in
12
accordance with Federal Rule of Civil Procedure 21 which provides
that "any claim against a party may be severed and proceeded with
separately." FED. R. CIV. P. 21; E. Cornell Malone, Corp. v. Sisters
of the Holy Family, st. Mary's Academy of the Holy Family, 922
F.Supp.2d 550, 561 (E.D. La. 2013). In determining whether to sever
claims, the district court may consider several factors, including:
(1) "whether the claims arose out of the same transaction or
occurrence"; (2) "whether the claims present common questions of
law or fact"; (3) "whether settlement of judicial economy would be
promoted"; (4) "whether prejudice would be averted by severance";
and (5) "whether different witnesses and documentary proof are
required."
David v. Signal Int'l, LLC, No. 08-1220, 2013 WL
5740318, at *2 (E.D. La. Oct. 22, 2013) (Morgan, J.). Additionally,
an "important consideration" for district courts in determining
whether severance is appropriate is whether a potentially severable
claim has been fraudulently joined to attempt to defeat diversity
jurisdiction. Defourneaux v. Metropolitan Property and Cas. Ins.
Co., No. 06-3809, 2006 WL 2524165, at *1 (E.D. La. Aug. 20, 2006)
(Feldman, J.).
Even if Plaintiff may have a legal basis for her claim against
Malcolm, this claim lacks a sufficient relation to the other claims
in this matter to be considered properly joined. Plaintiff's claim
for negligence against Malcolm arises from Malcolm's actions prior
to the accident that occurred on May 18, 2014, namely his failure
13
to advise her of the F-250's lack of insurance. In contrast,
Plaintiff's claims against the remaining defendants which comprise
the bulk of this lawsuit concern the alleged negligent actions
immediately causing the accident. As such, the claims do not arise
out of same transaction or occurrence, as alleged by Plaintiff, but
instead concern two distinct events.
This Court has not required that claims against joined parties
share all questions of law and fact, and has instead held that
joinder may be appropriate so long as there "be at least one common
question of law or fact." Guedry v. Marino, 164 F.R.D. 181 (E.D.
La. 1995) (Jones, J.). However, when claims against defendants are
based entirely on distinct legal theories with only a distant
factual overlap, this Court has held joinder to be inappropriate.
Berthelot v. Boh Brothers Construction Co., L.L.C., No. 05-4182,
2006 WL 1984661 at *12 (E.D. La. June 1, 2006).
For instance, in
Berthelot, despite the fact that the plaintiff's claims against all
defendants arose out of the flooding of the 17th Street Canal in the
aftermath of Hurricane Katrina, this Court held that claims against
one defendant based in negligence had "virtually no relation" to
claims against other "insured defendants" resting on
contract
interpretation. Id. Thus, the fact that two claims may share a
loose connection to one act is not always sufficient to make
joinder of those claims proper. Here, contrary to Plaintiff's
allegations, the mere fact that her claims against Malcolm and the
14
other defendants both derive in some way from Plaintiff's car
accident with Bowie does not present a sufficient relation of fact
and law for joinder to be appropriate. Here, like in Berthelot,
there are no issues of law common to both claims. Plaintiff's claim
against Malcolm rests entirely on his alleged negligence in failing
to advise her of the F-250's deficient insurance coverage, whereas
Plaintiff's claims against Bowie, Bowie Farms, and Progressive deal
entirely with distinct causes of action, including Bowie's alleged
negligence per se in failing to abide by state traffic regulations.
Additionally, the issues of fact determinative in Plaintiff's claim
against Malcolm have no impact or relation to those at issue in her
claims against Bowie and the remaining defendants. The distinctions
between these claims necessitate both different witnesses as well
as
different
evidence.
Evidence
concerning
Plaintiff's
claim
against Malcolm will lie in conversations between Plaintiff and
Malcolm and the extent of Malcolm's disclosure of the deficiencies
in the insurance coverage. On the other hand, the remaining claims
must be decided based on entirely different evidence, such as
witnesses present at the time of the accident as well as Bowie's
own testimony.
Furthermore,
contrary
to
Plaintiff's
contentions,
consolidating these two distinct claims does not promote judicial
economy. While
district courts are directed to take a liberal
approach to joinder when this would be in the best interest of
15
judicial economy, this Court has recognized that severance is
appropriate
when
"any
practical
benefit
accrued
through
the
conservation of judicial resources will be outweighed by the burden
imposed . . . in defending multiple claims, with different factual
scenarios, in one trial." Campo v. State Farm Fire and Cas. Co, No.
06-2611, 2007 WL 2155792 at *3 (E.D. La. July 26, 2007) (Fallon,
J.) (quoting Rohr v. Metropolitan Insurance & Cas. Co., No. 0610511, 2007 WL 163037 at *2 (E.D. La. Jan 17, 2007) (Feldman, J.).
Here,
the
defendants
burden
imposed
resulting
from
on
this
the
use
Court
of
and
the
different
individual
evidence
and
witnesses to support each claim greatly outweighs any benefit of
efficiency that may be achieved through the joinder of Plaintiff's
claim against Malcolm to this matter. Finally, Plaintiff does not
contend, nor do the facts indicate, that any prejudice would result
to the parties as a result of the Court's severance of this claim.
Because Progressive has shown that there is no sufficient
relation between Plaintiff's claim against Malcolm and the other
claims comprising the lawsuit so as to warrant joinder, the claim
against Malcolm should be severed.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiff's Motion to Remand
(Rec. Doc. 7) is DENIED.
16
IT IS FURTHER ORDERED that Progressive's Motion to Sever and
Remand (Rec. Doc. 13) is GRANTED.
IT IS FURTHER ORDERED that Plaintiff's claim against Malcolm
Anthony Westley be severed from the matter at hand and be remanded
to the 32nd Judicial District Court for the Parish of Terrebone.
New Orleans, Louisiana this 10th Day of September, 2014.
________________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
17
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