Miranda et al v. Selective Insurance Company of the Southeast et al

Filing 160

ORDER AND REASONS granting 148 Motion to Remand to State Court. Signed by Judge Carl Barbier on 2/1/2018. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

PEGGY ENRIQUES MIRANDA,
ET AL.

CIVIL ACTION

VERSUS

NO: 16-12555

SELECTIVE INSURANCE
COMPANY OF THE
SOUTHEAST, ET AL.

SECTION: “J”(5)

ORDER & REASONS
NATURE OF MOTION AND RELIEF REQUESTED
Before the Court is a Motion to Remand to State Court (Rec.
Doc. 148) filed by Plaintiffs, Jimmy and Peggy Miranda, and an
opposition thereto filed by Defendant, Dwight W. Andrus Insurance,
Inc. (Rec. Doc. 152).

Having considered the motion and legal

memoranda, the record, and the applicable law, the Court finds
that the motion should be GRANTED.
FACTS AND PROCEDURAL BACKGROUND
Plaintiffs

own

property

located

in

Covington,

Louisiana,

which sustained damage in a flooding event in March of 2016.
Plaintiffs allege that they contracted with Dwight W. Andrus
Insurance, Inc. (“Andrus”) for the procurement of flood insurance
coverage for their property.

Andrus obtained insurance from

Selective Insurance Company of the Southeast (“Selective”), a
Write-Your-Own Program Carrier participating in the National Flood
Insurance Program.

According to Plaintiffs, Selective would bill

Plaintiffs’

mortgage

company,

Nationstar

Mortgage,

LLC

(“Nationstar”) for the flood insurance premium, and the premium
would then be paid from an escrow account maintained by Nationstar.
However, when Plaintiffs’ property flooded on March 12, 2016,
Plaintiffs discovered that their property was not insured because
the policy had lapsed due to nonpayment.
The Plaintiffs’ property suffered damage as a result of the
flooding.

On June 2, 2016, Plaintiffs filed a lawsuit against

Selective, Nationstar, and Andrus in the 22nd Judicial District
Court for the Parish of St. Tammany, Louisiana. (Rec. Doc. 1-1.)
On July 8, 2016, Selective removed the case to this Court on the
basis of federal question jurisdiction pursuant to the National
Flood

Insurance

Plaintiffs

Act

later

(“NFIA”).

amended

42

their

U.S.C.

complaint

Solutions, LLC (“CoreLogic”) as a defendant.

§§

4001,

adding

et

seq.

CoreLogic

Selective filed a

Motion for Judgment on the Pleadings, which was granted by this
Court on the grounds that Plaintiffs’ state law claims against
Selective

were

preempted

by

federal

law.

(Rec.

Doc.

130).

Plaintiffs moved to dismiss Nationstar as a result of a settlement
agreement, which the Court granted. (Rec. Doc. 144.) The Court
also granted CoreLogic’s Motion to Dismiss for failure to state a
claim against it. (Rec. Doc. 99.)

Thus, since removal, Andrus is

the only remaining defendant in this case.

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On September 6, 2017, Plaintiffs filed a Motion to Remand
this matter back to state court arguing that all of the claims
raising federal question jurisdiction have been dismissed. (Rec.
Doc.

148.)

Andrus

has

filed

an

opposition

to

the

motion

acknowledging that there are no remaining allegations over which
this Court has original jurisdiction, but requesting that this
Court exercise supplemental jurisdiction over the remaining state
law claims.

(Rec. Doc. 152.) The motion is now before the Court

on the briefs and without oral argument.
LEGAL STANDARD AND DISCUSSION
When

Selective

predicated

removed

jurisdiction

on

this
the

case

National

(“NFIA”). 42 U.S.C. §§ 4001, et seq.
courts

original

Write-Your-Own

exclusive

(“WYO”)

jurisdiction

insurance

to

federal

Flood

court,

Insurance

it
Act

The NFIA grants federal
over

companies

lawsuits

like

against

Selective

for

disallowing claims made by insureds under Standard Flood Insurance
Policies (“SFIPs”).

42 U.S.C. § 4072.

WYO companies are the

fiscal agents of the United States by statute, and all payments on
SFIP claims come from the federal treasury. Wright v. Allstate
Ins. Co., 415 F.3d 384, 386 (5th Cir. 2005); 42 U.S.C. § 4071; see
Waltrip v. Brooks Agency, Inc., 417 F. Supp. 2d 768, 770 (E.D. Va.
2006) (“[A] significant federal interest exists in the uniform
application
coffers.”).

of

the

NFIP

as

it

directly

impacts

the

federal

Therefore, when an insured sues its WYO insurance
3

carrier over the handling of its claim under SFIP, the suit must
be brought in federal court.

Corliss v. S.C. Ins. Co., 03-2944,

2004 WL 2988497, at *2 (E.D. La. Dec. 14, 2004).

The Court must

determine whether federal jurisdiction remains in this case now
that Andrus is the only remaining Defendant.
Plaintiffs’

claims

against

Andrus

are

for

its

alleged

“failure to properly and fully provide and/or secure NFIP flood
insurance coverage for the policy period from November 2, 2015 –
November 2, 2016 and/or failing to inform Plaintiffs of non-payment
by Nationstar.” (Rec. Doc. 1-1 ¶ 21.)

Specifically, Plaintiffs

assert the following claims against Andrus: breach of contract,
breach of fiduciary duty, negligent misrepresentation, negligence
pursuant to Article 2315, and detrimental reliance.

Andrus admits

that there are no remaining allegations that would fall under the
original jurisdiction of this Court.

See Landry v. State Farm

Fire & Cas. Co., 428 F. Supp. 2d 531, 534 (E.D. La. 2006) (“claims
involving procurement of NFIA policies do not fall within the
Court's federal question jurisdiction”).

Andrus is not a WYO

insurance carrier and is not a fiscal agent of the United States,
thus, federal funds are not implicated.

Furthermore, Plaintiffs

are not alleging that Andrus breached the SFIP; rather, Plaintiffs
allege that they entered into a contract with Andrus to procure
flood insurance on their property and that Andrus breached this
contract by failing to procure flood insurance. The interpretation
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of NFIP regulations is not an issue in this case.

See Sullivan v.

State Farm & Cas. Co., 06-1677, 2006 WL 2119320, at *3 (E.D. La.
July 27, 2006) (finding that because “Plaintiffs’ claims do not
arise from [the insurer’s] compliance with FEMA regulations under
an

NFIP

policy,

but

rather

are

claims

that

relate

to

the

procurement of insurance and errors and omissions of an insurance
agent,” the case did not fall under the court's federal question
jurisdiction.”); see also Waltrip v. Brooks Agency, Inc., 417 F.
Supp. 2d 768, 770 (E.D. Va. 2006) (Federal question “jurisdiction
does

not

exist

negligence,

in

breach

a
of

lawsuit

bringing

contract,

or

state

fraud

law

claims

relating

procurement of flood insurance under the NFIP.”).

to

of
the

As such, the

Court agrees with the parties that the remaining claims against
Andrus do not raise federal question jurisdiction.
Next,

the

Court

must

determine

whether

to

exercise

supplemental jurisdiction over the state claims asserted against
Andrus.

Pursuant to 28 U.S.C. § 1367(a), a court may exercise

supplemental jurisdiction over claims “that are so related to
claims in the action within such original jurisdiction that they
form part of the same case or controversy.”

Furthermore, section

1367(c) allows a district court to decline to exercise supplemental
jurisdiction over a claim, if any of the following four factors
are met and weigh in favor of doing so:

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(1) the claim raises a novel or complex issue of State
law,
(2) the claim substantially predominates over the claim
or claims over which the district court has original
jurisdiction,
(3) the district court has dismissed all claims over
which it has original jurisdiction, or
(4) in exceptional circumstances, there are other
compelling reasons for declining jurisdiction.
28 U.S.C. § 1367(c).
In addition to the statutory factors, the Court must also
consider

the

four

common

law

factors

of

judicial

economy,

convenience, fairness, and comity when deciding whether to remand
a case.

See e.g., Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343,

350 (1988); Enoch v. Lampasas Cty., 641 F.3d 155, 159 (5th Cir.
2011).

When

all

federal

claims

are

dismissed

or

otherwise

eliminated before trial, the court should generally decline to
exercise supplemental jurisdiction over any remaining state law
claims.

Hammerman & Gainer, Inc. v. City of New Orleans, 17-4780,

2017 WL 2241090, at *2 (E.D. La. May 23, 2017) (citing Bass v.
Parkwood Hosp., 180 F.3d 234, 247 (5th Cir. 1999)).
The facts of this case support remanding the proceedings back
to state court.

It is undisputed that all federal claims over

which this Court had original jurisdiction have been dismissed by
adjudication or settlement.

Additionally, determination of this

case requires an analysis of state law governing the duty of an
insurance agent.

Louisiana state courts are better situated to

6

adjudicate matters that may require an interpretation of state
case and statutory law.
The common law factors also weigh in favor of a remand.

While

the Court recognizes that this matter has been pending before this
Court for over a year, this Court’s prior rulings did not involve
any of the claims asserted against Andrus.

In addition, although

briefing on Andrus’ Motion for Summary Judgment has recently been
completed, the Court has not yet ruled on the motion, therefore,
a remand to state court would not create an unnecessary waste of
judicial resources.

The parties’ briefs on the motion may easily

be submitted to the state district court in the Parish of St.
Tammany for its consideration.

Furthermore, St. Tammany is a more

convenient venue for this case, as Plaintiffs point out, the
damaged property and witnesses are located there.

Because the

trial for this case is still months away, neither party would be
prejudiced by remanding the case to state court.

In sum, the Court

finds that a remand is appropriate at this time and declines to
exercise

supplemental

jurisdiction

claims against Andrus.

7

over

Plaintiffs’

state

law

CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion to Remand to
State Court (Rec. Doc. 148) be GRANTED.
New Orleans, Louisiana this 1st day of February, 2018.

CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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