Sullivan et al v. The Travelers Indemnity Company of Connecticut et al

Filing 18

ORDER AND REASONS denying 7 Motion to Remand to State Court. IT IS ORDERED that Plaintiffs' motion to remand this case to state court is DENIED.IT IS FURTHER ORDERED that Defendant Michelle Broome is DISMISSED from this action as a defendant. Signed by Judge Susie Morgan on 11/30/2016. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SHANTEL SULLIVAN, ET AL.
Plaintiffs

CIVIL ACTION

VERSUS

NO. 16-15461

TRAVELERS INDEMNITY COMPANY
OF CONNECTICUT, ET AL.
Defendants

SECTION: “E”(5)

ORDER AND REASONS
Before the Court is a motion to remand filed by Plaintiffs. 1 Defendants oppose this
motion. 2 For the reasons that follow, Plaintiffs’ motion to remand 3 is DENIED.
FACTUAL & PROCEDURAL BACKGROUND
On September 12, 2016, Plaintiff Shantel Sullivan, individually and on behalf of
her minor child, Kyle Sullivan, and on behalf of the Decedent, Jeremy Sullivan,
commenced this action by filing a petition in the 24th Judicial District Court for the Parish
of Jefferson. 4 In their petition, Plaintiffs assert causes of action for wrongful death and
survival and vicarious liability against Defendants, Travelers Indemnity Company of
Connecticut, Travelers Indemnity Company of America (collectively “the Travelers
Defendants”) and Michelle Broome. 5 According to the petition, the claim relates to an
injury sustained by the Decedent on or about June 15, 2014, in the course and scope of
his employment as a manager at Le’ Creole Restaurant. 6 The petition alleges that
Defendants arbitrarily denied workers’ compensation benefits, particularly medical
treatment, to the Decedent, Jeremy Sullivan, with the knowledge a significant and life-

R. Doc. 7.
R. Doc. 8.
3 R. Doc. 7.
4 R. Doc. 1-1.
5 Id. at 12-13.
6 Id. at 3.
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threatening worsening of a condition was certain to follow the denial. 7 The petition alleges
Ms. Broome, the adjuster assigned to handle Mr. Sullivan’s workers’ compensation claim,
was notified in writing by Mr. Sullivan’s treating physicians that Mr. Sullivan had
developed a pain medication dependency while being treated for the injury sustained in
the course and scope of his employment. 8 The petition alleges that, despite knowledge of
Mr. Sullivan’s pain medication dependency, Ms. Broome and the Travelers Defendants
arbitrarily denied Mr. Sullivan’s request for continued medical care, treatment, and
benefits. 9
On October 12, 2016, the Travelers Defendants removed this to action to federal
court. 10 In the notice of removal, the Travelers Defendants assert Plaintiffs improperly
joined Michelle Broome as a defendant, even though Plaintiffs have no arguable claim for
recovery against her under Louisiana law, to defeat diversity jurisdiction and keep this
matter in state court. 11 According to the Travelers Defendants, “Because Broome was the
workers’ compensation claims adjustment professional assigned to Mr. Sullivan’s
compensation claim, Louisiana law . . . precludes a claim against her under the
circumstances as alleged in Plaintiff’s Petition.” 12
On October 21, 2016, Plaintiffs filed a motion to remand this action to state court,
arguing that the Court lacks subject-matter jurisdiction because they have a viable claim
against Defendant Michelle Broome. 13 On November 7, 2016, the Travelers Defendants
filed an opposition to the Plaintiffs’ motion to remand. 14

Id. at 12.
Id. at 5.
9 Id. at 11.
10 R. Doc. 1.
11 Id. at 5.
12 Id. at 6.
13 R. Doc. 7-1, at 6-8.
14 R. Doc. 8.
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LAW AND ANALYSIS
“Federal courts are courts of limited jurisdiction; without jurisdiction conferred by
statute, they lack the power to adjudicate claims.” 15 Pursuant to 28 U.S.C. § 1332, federal
district courts have original jurisdiction of all civil matters where the parties are citizens
of different states and the amount in controversy exceeds $75,000.

16

If these

requirements are met, a defendant generally may remove the action originally filed in
state court to federal court. 17 If a non-diverse defendant has been improperly joined, a
defendant may nonetheless remove the action, and that defendant’s citizenship is
disregarded for purposes of determining whether the federal court has diversity
jurisdiction.
The presence of Michelle Broome as a defendant in this case, if proper, defeats
complete diversity of citizenship and requires remand to state court. In this case, the
Travelers Defendants, as the removing parties, bear the burden of showing subject-matter
jurisdiction exists and that removal was proper. 18 In cases removed based on diversity
jurisdiction and improper joinder, 19 the removing party must show either: “(1) actual
fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a
cause of action against the non-diverse party in state court.” 20 The Travelers Defendants

In re FEMA Trailer Formaldehyde Products Liab. Litig. (Mississippi Plaintiffs), 668 F.3d 281, 286 (5th
Cir. 2012).
16 28 U.S.C. § 1332(a).
17 See 28 U.S.C. § 1441(a). An exception exists if any of the parties in interest properly joined and served as
defendants is a citizen of the state in which the action was brought. See 28 U.S.C. § 1441(b)(2). In this case,
Michelle Broome is alleged to be a citizen of Louisiana, which would preclude removal. See id.
18 See Manguno v. Prudential Property and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
19 The Fifth Circuit has stated that there is no substantive difference between the term “improper joinder”
and “fraudulent joinder,” but “improper joinder” is preferred. See Smallwood v. Illinois Cent. R. Co., 385
F.3d 568, 571 n.1 (5th Cir. 2004).
20 Travis v. Irby, 326 F.3d 644, 646–47 (5th Cir. 2003) (citing Griggs v. State Farm Lloyds, 181 F.3d 694,
698 (5th Cir. 1999)).
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do not dispute that both the Plaintiffs and Michelle Broome are Louisiana citizens, so
jurisdiction is based on there being no cause of action against Broome. 21
“The test for improper joinder where there is no allegation of actual fraud is
whether the defendant has demonstrated that there is no possibility of recovery by the
plaintiff against an in-state defendant.” 22 “In determining the validity of an allegation of
improper joinder, the district court must construe factual allegations, resolve contested
factual issues, and resolve ambiguities in the controlling state law in the plaintiff’s
favor.” 23 “The court may conduct 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 defendant.” 24
“With regard to insurance adjusters, Louisiana courts have consistently held that,
as a general rule, an insurance adjuster owes no duty to an insured to properly investigate
or handle claims, or advise an insured of coverage issues.” 25 “The duty to properly handle
claims is imposed by [Louisiana Revised Statutes sections 22:1973 and 22:1892], not by
Louisiana Civil Code article 2315.” 26 “Neither of these statutes provide[s] a remedy
against an insurance adjuster.” 27 The Motin court further explained, “These statutes,
penal in nature, must be strictly construed [and] [n]othing in the statutes suggests the

R. Doc. 1, at 4.
Rodrigue v. Continental Ins. Co., No. 14-1797, 2014 WL 4999465, at *2 (E.D. La. Oct. 7, 2014) (citing
Smallwood, 385 F.3d a 573).
23 Rodrigue, 2014 WL 4999465, at *2 (citing Burden v. Gen. Dynamics Corp., 60 F.3d 213, 216 (5th Cir.
1995)).
24 Smallwood, 385 F.3d at 573.
25 St. Marie v. State Farm Fire & Cas. Co., No. CIV.A., 06-8725, 2007 WL 1017588, at *3 (E.D. La. Mar. 28,
2007) (citing Pellerin v. Cash Pharmacy, 396 So. 2d 371 (La. Ct. App. 1981); Rosina, 2006 WL 3141247, at
*1; Rich v. Bud’s Boat Rentals, No. CIV.A. 96-3279, 1997 WL 785668 (E.D. La. Dec. 18, 1997)).
26 See Motin v. Travelers Ins. Co., No. CIV.A. 03-2487, 2003 WL 22533673, at *4 (E.D. La. Nov. 4, 2003)
(describing La. R.S. 22:1973 and 22:1892, formerly cited to as, respectively, La. R.S. 22:1220 and 22:658).
27 Id. (citing Nero v. La. Indep. Ins. Agencies, Inc., No. CIV.A. 02-3317, 2003 WL 203145, at *2 (E.D. La.
Jan. 29, 2003); Yates v. Sw. Life Ins. Co., No. CIV.A. 97-3204, 1998 WL 61033, at *4 (E.D. La. Feb. 12,
1998)).
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Louisiana Legislature’s intent to impose upon insurance adjusters the duties the statutes
explicitly impose upon the insurer.” 28
There is, however, a narrow exception to the rule whereby an insurance adjuster
who assumes an independent tort duty to the insured or commits fraud may be liable for
breach of his or her duty.29 “An insurance adjuster may be held liable under Louisiana
law, however, ‘where [the adjuster] has engaged in fraud toward the claimant or where
[the adjuster] has provided the claimant false information regarding the potential success
of the claim and has reason to know that the claimant will rely on that information.” 30
Having conducted a Rule 12(b)(6)-type analysis, looking to the allegations of the
Plaintiffs’ state-court petition, the Court finds the Plaintiffs have not stated a claim for
relief under Louisiana law against the non-diverse Defendant, Michelle Broome. The
Plaintiffs do not allege Ms. Broome has assumed a duty under Pellerin and its progeny or
that she engaged in any fraud or misrepresentations. 31 At most, Plaintiffs allege Ms.
Broome improperly investigated/adjusted the insurance claim, resulting in the ultimate
denial of Mr. Sullivan’s request for continued medical care, treatment and benefits.
Plaintiffs’ disagreement with Ms. Broome’s method of adjusting claims and ultimate
claims decision cannot form the basis of a claim against her under Louisiana law. 32 As a

Id. (citing Yates, 1998 WL 61033, at *4; Matter of Hanover Corp., 67 F.3d 70 (5th Cir. 1995)).
See St. Marie, 2007 WL 1017588, at *3 (citing Pellerin, 396 So. 2d at 373).
30 Hoffman v. Ellender, No. CIV.A. 15-309-JWD, 2015 WL 4873342, at *5 (M.D. La. July 23, 2015) (citing
Southern Hotels Ltd. P’ship v. Lloyd’s Underwriters at London Cos., No. 95-2739, 1996 WL 48001, at *1
(E.D. La. Aug. 7, 1996); Pellerin, 396 So. 2d at 373).
31 Instead, the Plaintiffs maintain their cause of action against Broome is under Louisiana Civil Code art.
2315. R. Doc. 12, 3. A claim against an insurance adjuster may not be brought under Louisiana Civil Code
art 2315. See Motin, 2003 WL 22533673, at *4. The Plaintiffs also rely on Weber v. State, 635 So. 2d 188
(La. 1994), and its progeny, but the cases cited by Plaintiffs do not apply to claims against an insurance
adjuster.
32 Hoffman, 2015 WL 4873342, at *6.
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result, the Court finds Broome was improperly joined and therefore the Plaintiffs’ motion
to remand 33 must be denied.
CONCLUSION
IT IS ORDERED that Plaintiffs’ motion to remand 34 this case to state court is
DENIED.
IT IS FURTHER ORDERED that Defendant Michelle Broome is DISMISSED
from this action as a defendant. 35
New Orleans, Louisiana, this 30th day of November, 2016.
_____________ __________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

R. Doc. 7.
R. Doc. 7.
35 See Robinson v. Wal-Mart Stores, Inc., No. CV 15-6871, 2016 WL 1572078, at *4 n.35 (E.D. La. Apr. 19,
2016) (“A finding of improper joinder is tantamount to dismissal of the defendant who was improperly
joined.” (quoting Butler v. La. State Univ. Health Sciences Ctr., No. 12-CV-1838, 2012 WL 7784402, at *4
(W.D. La. Nov. 19, 2012))).
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