Washington v. Underwriters at Lloyd's, London

Filing 7

NOTICE AND ORDER: Plaintiff shall file a Motion to Substitute the Complaint with a proposed comprehensive Amended Complaint that adequately: (1) identifies and alleges the citizenship of the appropriate defendant(s); and (2) sets out the amount in controversy. Plaintiff shall have twenty-one (21) days from the date of this Notice and Order to file the Motion to Substitute. No further leave of court is necessary to timely file the Motion to Substitute. Signed by Magistrate Judge Erin Wilder-Doomes on 4/16/2018. (KAH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
TOSHA WASHINGTON
CIVIL ACTION
VERSUS
NO. 17-1524-SDD-EWD
UNDERWRITERS AT LLOYD’S LONDON
NOTICE AND ORDER
On October 31, 2017, plaintiff, Tosha Washington (“Plaintiff”), filed a Complaint against
defendant, Underwriters at Lloyd’s, London (“Lloyd’s” or “Defendant”), for damages allegedly
arising from Defendant’s breach of an insurance contract.1 Plaintiff contends that Lloyd’s issued
a private flood insurance policy and that following long-duration flooding that caused damage to
Plaintiff’s insured property, Defendant failed to adequately compensate Plaintiff for covered
losses.
Plaintiff asserts that this court has federal subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1332.2 Plaintiff alleges that she is “domiciled” in Louisiana. This is a
sufficient allegation with respect to Plaintiff’s citizenship.3 However, with respect to Defendant,
Plaintiff alleges that Lloyd’s “is a foreign insurance company.”4 As explained herein, this is not
an adequate allegation of Lloyd’s citizenship, and also raises issues with respect to whether the
amount in controversy requirement of 28 U.S.C. § 1332 can be met in this case.

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R. Doc. 1.

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Although Plaintiff explicitly alleges that the amount in controversy exceeds $75,000, R. Doc. 1, ¶ 1, as described
herein, the naming of Lloyd’s as the defendant raises particular issues regarding the amount in controversy.
R. Doc. 1, ¶ 5. See, Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir. 1974) (“For diversity purposes, citizenship means
domicile, mere residence in the State is not sufficient.”).
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R. Doc. 1, ¶ 6.

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“Lloyd’s ‘presents a unique structure for jurisdictional analysis.’”5

As explained by the

Fifth Circuit:
Lloyds of London is not an insurance company but rather a selfregulating entity which operates and controls an insurance market.
The Lloyd’s entity provides a market for the buying and selling of
insurance risk among its members who collectively make up
Lloyd’s. Thus, a policyholder insures at Lloyd’s but not with
Lloyd’s.
The members or investors who collectively make up Lloyd’s are
called “Names” and they are the individuals and corporations who
finance the insurance market and ultimately insure risks. Names are
underwriters of Lloyd’s insurance and they invest in a percentage of
the policy risk in the hope of making return on their investment.
Lloyd’s requires Names to pay a membership fee, keep certain
deposits at Lloyd’s, and possess a certain degree of financial wealth.
Each Name is exposed to unlimited personal liability for his
proportionate share of the loss on a particular policy that the Name
has subscribed to as an underwriter. Typically hundreds of Names
will subscribe to a single policy, and the liability among the Names
is several, not joint.
Corfield v. Dallas Glan Hills, LP, 355 F.3d 853, 857-858 (5th Cir. 2003) (internal quotations and
citations omitted).
Based on this unique structure, courts in this Circuit have “found that when determining
the diversity of citizenship of the parties in a case involving Lloyd’s, the citizenship of all of the

NAG, Ltd. v. Certain Underwriters at Lloyd’s London, Civil Action No. 16-16728, 2017 WL 490634, at * 2 (E.D.
La. Feb. 6, 2017) (quoting McAuslin v. Grinnell Corp., Nos. 97-775, 97-803, 2000 WL 1059850, at *1 (E.D. La. Aug.
1, 2000) (citing E.R. Squibb & Sons, Inc. v. Accident & Cas. Ins. Co., 160 F.3d 925, 930 (2d Cir. 1998) (internal
quotations omitted))). See also, Rips, LLC v. Underwriters at Lloyd’s London, Civil Action No. 14-1969, 2015 WL
2452339, at * 1 (E.D. La. May 21, 2015) (“Although the complaint alleges that Lloyd’s is a foreign insurer doing
business in Louisiana, this characterization is inaccurate.”).
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Names subscribing to the policy must be taken into consideration.”6 Additionally, “the amount in
controversy must be established as to each Name subscribing to the policy.”7
Accordingly,
IT IS HEREBY ORDERED that Plaintiff shall file a Motion to Substitute the Complaint
with a proposed comprehensive Amended Complaint that adequately: (1) identifies and alleges the
citizenship of the appropriate defendant(s); and (2) sets out the amount in controversy. Plaintiff
shall have twenty-one (21) days from the date of this Notice and Order to file the Motion to
Substitute. No further leave of court is necessary to timely file the Motion to Substitute.
Signed in Baton Rouge, Louisiana, on April 16, 2018.

S
ERIN WILDER-DOOMES
UNITED STATES MAGISTRATE JUDGE

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NAG, 2017 WL 490634, at * 4. See also, Royal Ins. Co. of American v. Quinn-L Capital Corp., 3 F.3d 877, 883 (5th
Cir. 1993) (“for purposes of determining whether diversity jurisdiction exists, we conclude that the members of a
Lloyd’s group are the underwriters alone.”); NL Industries, Inc. v. OneBeacon American Ins. Co., 3:05-CV-2264, 435
F.Supp.2d 558, 564 (N.D. Tex. June 8, 2006) (“In this case, NL sued Certain Underwriters at Lloyd’s of London. As
such, the suit is against each Name or Underwriter who is a subscriber to the polices in question….As NL has sued
numerous Names, they are the ‘real’ parties to this action, and their citizenship must be distinctly and affirmatively
set forth, or established by proof.”); Cannon v. ZV Sterling Ins. Agency, Civil Action No. 09-819, 2010 WL 11538352
(M.D. La. April 6, 2010) (“a Syndicate is treated as an entity like a partnership, and the citizenship of each subscribing
Name to that Syndicate therefore must be considered when determining the citizenship of that Syndicate….”);
Jefferson v. American Sugar Refining, Inc., Civil Action No. 10-4442, 2017 WL 894652, at * 3 (E.D. La. March 3,
2017) (“To establish diversity jurisdiction, Lloyd’s must demonstrate that complete diversity exists between Plaintiffs
and all five Names alleged by Plaintiffs to have underwritten policies for Lykes.”).
NAG, 2017 WL 490634, at * 4. See also, Team One Properties LLC v. Certain Underwriters at Lloyd’s London,
No. 08-30027, 281 Fed. Appx. 323, at * 1 (5th Cir. June 9, 2008) (“The risk of the $70,000 policy was divided among
4,435 underwriters. The district court found that Team One did not demonstrate that the amount in controversy against
any completely diverse underwriter was in excess of the jurisdictional $75,000 exclusive of interest and costs. We
agree.”); Rips, 2015 WL 2452339, at * 2-3 (collecting cases requiring that the $75,000 minimum be met against each
individual name).
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