Lee, Jr. v. Progressive Select Insurance Company et al

Filing 11

ORDER AND REASONS granting 7 Motion to Remand to State Court. Signed by Judge Eldon E. Fallon on 8/17/2017. (Attachments: # 1 Remand Letter)(jls)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
WILLIE LEE, JR.

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VERSUS
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PROGRESSIVE SELECT INSURANCE CO., ET AL *

CIVIL ACTION
NO. 17-5549
SECTION "L" (1)

ORDER & REASONS
Currently before the Court is Plaintiff’s Motion to Remand. R. Doc. 7. Defendant
opposes the motion. R. Doc. 10. Having reviewed the parties’ arguments and the applicable law,
the Court now issues this Order and Reasons.
I. BACKGROUND
This case arises from a motor vehicle accident that occurred on October 30, 2016 in
Orleans Parish. R. Doc. 1-2 at 1. Plaintiff Willie Lee, Jr., a Louisiana resident, alleges that while
driving for Uber in the middle lane of Interstate 10 around 3:51 a.m., he was rear-ended by a
vehicle operated by Defendant Alex Cowart. R. Doc. 1-2 at 1-2. The accident, Plaintiff asserts,
caused his car to cross the rightmost travel lane and strike the guard rail. R. Doc. 1-2 at 2.
Defendant Progressive Select Insurance Company (“Progressive”) is Cowart’s insurance
provider. R. Doc. 1-2 at 3. Defendant James River Insurance Company (“James River”) is
Plaintiff’s un-insured/under-insured motorist insurance provider. R. Doc. 1-2 at 3.
Plaintiff asserts that the accident was solely and proximately caused by Cowart’s
negligence, because Defendant Cowart failed to maintain a proper lookout and carelessly
operated and steered his vehicle. R. Doc. 1-2 at 2. Plaintiff contends that as a result of the
accident, he suffered physical and mental pain, loss of enjoyment of life, medical expenses, lost

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earnings and earning capacity, and property damage. R. Doc. 1-2 at 3. Although the pleadings
lack specificity, Plaintiff’s exhibits indicate that he suffers from neck and back pain, as well as
bulging disks. R. Doc. 1-5. Plaintiff seeks to hold Defendants Cowart, Progressive, and James
River liable jointly and in solido because Cowart’s insurance policy, issued by Progressive, is
insufficient to compensate Plaintiff for his injuries. R. Doc. 1-2 at 4.
Defendant James River removed this action from the Civil District Court for Orleans
Parish. R. Doc. 1. James River admits that on the face of the pleadings, the parties are not diverse
because Cowart, like Plaintiff, is a Louisiana citizen. R. Doc. 1 at 3. However, James River
argues that removal is in fact appropriate because both Cowart and Progressive were improperly
joined. R. Doc. 1 at 3. James River contends that Cowart and Progressive settled their claims
with Plaintiff prior to the filing of this case, and thus are merely nominal parties whose
citizenship need not be considered for the purposes of removal. 1 R. Doc. 1 at 4.
Following removal, James River timely answered the complaint, generally denying
Plaintiff’s allegations. R. Doc. 4. James River also posits several affirmative defenses including
contributory negligence, failure to state a claim, and collateral source. R. Doc. 4 at 3.
II. PRESENT MOTION
In response to James River’s Notice of Removal, Plaintiff moved to remand the case to
the Civil District Court for the Parish of Orleans. R. Doc. 7. Plaintiff argues that James River
has failed to demonstrate that Cowart and Progressive are improperly joined; thus removal is
inappropriate. R. Doc. 7 at 2. In particular, Plaintiff argues that a removing party must show that
there is no possible way for a plaintiff to establish an action against the non-diverse party. R.
Doc. 7-2 at 1. A valid settlement agreement can be proof of no cause of action. R. Doc. 7-2 at 1

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James River’s Notice of Removal illustrates that although the pleadings do not specify an
amount in controversy, the damages in this case exceed the $75,000 jurisdictional requirement R. Doc. 1

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(citing Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir. 1983)). However, Plaintiff
argues that according to Louisiana law, a valid settlement agreement must be in writing and
signed, or recited in open court and capable of being transcribed into the record. 2 R. Doc. 7-2 at
1 (citing Taco Tico of New Orleans, Inc. v. Argonaut Great Cent. Ins. Co., 09-3502, 2009 WL
2160436 at *2 (E.D. La. July 16, 2009)). Plaintiff contends that the letter from Progressive to
Plaintiff is merely an offer to settle and not a valid settlement, and thus, James River has failed to
meet its burden of establishing that Progressive and Cowart are nominal parties to the action.
James River timely filed an opposition to Plaintiff’s motion to remand. R. Doc. 10. James
River argues that the April 24, 2017 letter from Progressive uses unequivocal language to
illustrate that the parties reached a settlement agreement, and that the enclosed $15,000 check
demonstrates that the settlement was confected. R. Doc. 10 at 2-3. In accordance with Louisiana
Civil Code Article 3072, the Progressive letter is in writing. R. Doc. 10 at 3. Thus, James River
contends that Plaintiff reached a valid settlement Defendant Cowart, such that there is complete
diversity between the parties. R. Doc. 10 at 3.
III.LAW AND ANALYSIS
Diversity jurisdiction under 28 U.S.C. § 1332 exists where the mater in controversy
exceeds $75,000 and there is complete diversity of citizenship. The parties in the instant case do
not dispute that Plaintiff’s claims put more than $75,000 in dispute. In dispute, however, is
whether the defendant driver, Alex Cowart, a resident of Louisiana, defeats complete diversity of
citizenship since Plaintiff is also a Louisiana resident. In order to establish diversity jurisdiction,
Defendant bears “the heavy burden of proving that non-diverse defendants have been

at 5. Plaintiff does not contest this issue. R. Doc. 7.
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Louisiana Civil Code Article 3072 provides that a settlement agreement must be “in writing or
recited in open court,” but does not suggest that a signature is required. Louisiana jurisprudence, however,
has interpreted Article 3072 to require that a written agreement be signed by the parties. See City of Baton

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fraudulently joined to defeat diversity.” Burden v. Gen. Dynamics Corp., 60 F.3d 213, 217 (5th
Cir. 1995). Defendant can sustain this burden “either by showing that (1) there has been outright
fraud in Plaintiff’s recitation of jurisdictional facts, or (2) there is no possibility that Plaintiff
would be able to establish a cause of action against the non-diverse defendant in state court.” Id.
At issue in the instant case is the latter inquiry. To satisfy the standard for fraudulent joinder,
Defendant must show that there is “no reasonable possibility” that Plaintiff will be able to
establish a cause of action against the non-diverse Defendants in state court under Louisiana law.
Stanley v. Wyeth, Inc., 2006 WL 2588147, *3 (E.D. La. 2006) (citing Burden v. Gen. Dynamics
Corp., 60 F.3d 213, 217 (5th Cir. 1995)). “The Court has to evaluate all facts in the light most
favorable to plaintiffs and resolve all contested issues of controlling substantive law in plaintiffs'
favor.” Id.
Defendants who have settled are nominal parties who are “no longer effectively a party to
the case.” Id. Although Louisiana Civil Code article 3072 does not require that a written
settlement agreement be signed by the constituent parties, Louisiana jurisprudence suggests that
such a requirement exists. In Sullivan v. Sullivan, the Louisiana Supreme Court explained that
“the requirement that the agreement be reduced to writing necessarily implied that the agreement
be evidenced by documentation signed by both parties.” 671 So.2d 315, 317 (La. 1996) (citing
Felder v. Georgia Pacific Corp., 405 So.2d 521 (La. 1981). The Court further reasoned that “to
serve as written proof of the agreement . . . [it] must be signed by both parties, obligating both to
do what they have agreed on.” Id. Because Defendant James River is the party seeking removal,
it has the burden of demonstrating the existence of an enforceable settlement agreement. See
Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921); Sid Richardson Carbon & Gasoline
Co. v. Interenergy Res., 99 F.3d 746, 751 (5th Cir. 1996).

Rouge v. Douglas, 984 So.2d 746, 749 (La. App. 1 Cir. 2008)).

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Evaluating the facts of this case in the light most favorable to Plaintiff, the Court finds
that Defendant has not met this burden. Under Louisiana law, a settlement is not valid until it is
signed by both parties. See Sullivan, 671 So.2d at 317. Here, the only evidence of a settlement
between Plaintiff and Defendant Cowart is a letter from Progressive Insurance to Plaintiff and his
attorney. R. Doc. 1-3. The letter is not signed by Plaintiff or his counsel. In fact, the letter
specifically requests that Plaintiff sign and return an enclosed release; however, there is no
evidence that Plaintiff ever signed the release. While Defendant argues that Progressive sent a
check to settle Plaintiffs claims against Defendants Cowart and Progressive, there is no
indication that Plaintiff cashed the check. Viewing these facts in the light most favorable to
Plaintiff, the Court finds there was not a final settlement agreement between the parties.
Although there appears to be a clear intent to settle, this intent is not formalized by a written doc.
A written doc is an essential requirement for a complete settlement under Louisiana law. As
such, Plaintiff does have a potential claim against the non-diverse Defendant, such that
Defendant Cowart is not fraudulently joined, and therefore the parties are not completely diverse.
IV. CONCLUSION
For the foregoing reasons,
IT IS ORDERED that Plaintiff’s Motion to Remand, R. Doc. 7, is hereby GRANTED.
The above-captioned matter is REMANDED to the Civil District Court for the Parish of Orleans
for further proceedings.

New Orleans, Louisiana, this 17th day of August, 2017.

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UNITED STATES DISTRICT COURT JUDGE

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