Dunahoe et al v. Progressive County Mutual Insurance Co et al

Filing 39

MEMORANDUM ORDER re 36 MOTION for Leave to Amend Complaintfiled by Acey B Dunahoe, Celeste Dunahoe. Signed by Magistrate Judge Mark L Hornsby on 12/09/2015. (crt,Williams, L)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION

ACEY B. DUNAHOE, ET AL

CIVIL ACTION NO. 14-cv-0085

VERSUS

JUDGE FOOTE

PROGRESSIVE COUNTY MUTUAL
INSURANCE CO., ET AL

MAGISTRATE JUDGE HORNSBY

MEMORANDUM ORDER
Acey and Celeste Dunahoe (“Plaintiffs”) commenced this action by filing a state court
petition for injuries allegedly suffered in a car accident that occurred in Nacogdoches, Texas.
The petition named as defendants the driver of the other vehicle (Tate), his employer and the
owner of the vehicle (Onyx), and their alleged insurer (Progressive). Plaintiffs also named
as a defendant their own UM carrier. Defendants removed the case based on diversity
jurisdiction, and the case progressed toward trial. The parties recently advised the court that
Plaintiffs have resolved their claims with three principal defendants (Tate, Onyx, and
Progressive) but wish to reserve their rights against those parties to the extent they have
additional or excess insurance coverage. The parties are in the process of documenting that
settlement and will forward a formal dismissal request upon completion. As Judge Foote
noted in a prior order, the parties should use precise language describing which parties are
released and to what extent.
Plaintiffs have also filed a Motion for Leave to File Amended Complaint (Doc. 36)
by which they propose to add new defendant Lloyd’s Syndicate 1861, which is the alleged

excess liability insurer for Onyx. The proposed amended complaint (Doc. 34) does not set
forth with specificity the citizenship of this new defendant. If the new defendant shares the
Plaintiffs’ Louisiana citizenship, the court would have to decide whether to allow the
amendment and remand the case for lack of jurisdiction. That decision is governed by the
factors set forth in Hensgens v. Deere & Co., 833 F.2d 1179 (5th Cir. 1987). Because the
citizenship of the Lloyd’s defendant is not yet known, the Motion for Leave to Amend
Complaint (Doc. 36) is granted but reserving the right of the court to withdraw that grant
and strike the proposed amended complaint if it is determined that (1) the Lloyd’s defendant
is not diverse in citizenship and (2) the Hensgens analysis warrants denial of leave to amend.
It is unlikely that the citizenship of the Lloyd’s defendant can be determined without the
Lloyd’s defendant’s cooperation, so Plaintiffs are directed to promptly serve the prospective
new defendant with their complaint, the amended complaint, and a copy of this
Memorandum Order.
The determination of citizenship in a case involving a Lloyd’s insurer is sometimes
difficult. The Fifth Circuit in Royal Insurance Co. v. Quinn-L Capital Corp., 3 F.3d 877 (5th
Cir. 1993) addressed a Lloyd’s-type plan organized under Texas statutory law. Texas law
deemed such plans unincorporated associations, so the citizenship of each underwriter had
to be considered for diversity purposes.

Another form of Lloyd’s insurer is the

syndicate/name system associated with the Lloyd’s of London insurance market. The means
of determining citizenship of those insurer defendants is sometimes more fact intensive and

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less legally certain. See, e.g., Corfield v. Dallas Glen Hills, LP, 355 F.3d 853 (5th Cir. 2003)
and Certain Underwriters at Lloyd’s London v. Washington, 2009 WL 5215927 (E. D. La.
2009). The Lloyd’s defendant in this case should set forth in its answer or other response as
much detail as possible about its legal form and citizenship under the applicable rules.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 9th day of December,
2015.

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