Thomas v. Allstate Vehicle & Property Insurance Company et al
Filing
15
ORDER denying 8 Motion to Strike; denying 8 Motion to Remand to State Court. Ordered that Defendant Virginia Conn d/b/a Ginny Conn Agency and Defendant Tyler Conn are dismissed from this action. The Clerk is requested to terminate those Defendant s on the docket; and that Plaintiff Thomasand the only remaining Defendant, Allstate, must notify the magistrate judge ofthis Order and submit a proposed order lifting stay to the magistrate judgepromptly, but no later than seven (7) days from the date of this Order. Signed by Chief District Judge Louis Guirola, Jr. on 5/17/17 (RLW)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
WALTER THOMAS, JR.
PLAINTIFF
v.
CAUSE NO. 1:17CV64-LG-RHW
ALLSTATE VEHICLE & PROPERTY
INSURANCE COMPANY, et al.
DEFENDANTS
ORDER DENYING MOTION TO STRIKE AND/OR REMAND
BEFORE THE COURT is the [8] Motion to Strike and/or Remand filed by
Plaintiff Walter Thomas, Jr., requesting that the Court strike certain defenses
raised by Defendant Allstate Vehicle & Property Insurance Company in its Answer,
or, in the alternative, remand this action to state court. Defendant Allstate has
responded to the Motion, but Thomas has not filed a reply and the time for doing so
has expired. Having considered the submission of the parties and the relevant law,
the Court finds that neither remand nor striking Allstate’s defenses is warranted.
BACKGROUND
Plaintiff Thomas instituted this action in the Circuit Court of Jackson
County, Mississippi, against Defendants Allstate, Virginia Conn d/b/a Ginny Conn
Agency, Tyler Conn,1 and multiple fictitious defendants arising out of a dispute over
insurance coverage. According to the allegations of the Complaint and the exhibits
thereto, Thomas owned certain property located in Mississippi, which property was
insured by an Insurance Contract with Defendant Allstate.
1
The Court refers to Virginia Conn d/b/a Ginny Conn Agency and Tyler Conn
as the “Conn Defendants” herein.
In January 2016, Thomas came to the property to mow the yard and
discovered that there had been a fire at the property. He alleges that “[a]s a result
of the fire, [he] incurred damage to the property in excess [of] $40,000.00.” (Compl.
3 (¶13), ECF No. 13-1).
However, Thomas contends that Defendants have “refused to make any
payment to Plaintiff as required under the Insurance Contract” and that
“Defendants’ refusal to make adequate payment to Plaintiff was made without a
reasonable basis in fact or law” and amounts to bad faith. (See id. at 4-5 (¶¶ 2022)). He requests that the Court “enter a declaratory judgment, that Defendants
must pay policy limits to Plaintiff herein, in order to satisfy the damages sustained
by Plaintiff in the underlying incident.” (Id. at 6 (¶28)). He also makes claims
pursuant to Mississippi state law for breach of contract, breach of the implied
covenant of good faith and fair dealing, and bad faith.
Allstate timely removed the action to this Court on March 9, 2017, on the
basis of diversity. See 28 U.S.C. §§ 1332, 1441, 1446. Allstate argues that the
Court has jurisdiction because “there is complete diversity of citizenship between
the proper parties” and the amount in controversy exceeds $75,000. (See Notice of
Removal 2, ECF No. 1). Thomas and the Conn Defendants are Mississippi citizens,
and Allstate is an Illinois citizen. However, Allstate states that the Court should
disregard the Conn Defendants’ citizenship because Thomas improperly joined them
2
in the state court action.2 In response, Thomas filed the pending Motion to Strike
and/or Remand. The Court discusses Thomas’ arguments for remand and for
striking Allstate’s defenses in turn below.
DISCUSSION
I.
MOTION TO REMAND
“The improper joinder doctrine constitutes a narrow exception to the rule of
complete diversity. The purpose underlying the improper joinder inquiry is to
determine whether or not the in-state defendant was properly joined.” Cuevas v.
BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011) (citations,
quotations marks, and brackets omitted). “To establish improper joinder, the
removing party must demonstrate 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.’” Id. (citation omitted).
Only the second way is before the Court in this action. Thus, the Court must
determine whether Allstate “has demonstrated that there is no possibility of
recovery by [Thomas] against [the Conn Defendants], which stated differently
means that there is no reasonable basis for th[is C]ourt to predict that [Thomas]
2
The Court already disregards “the citizenship of defendants sued under
fictitious names . . . .” 28 U.S.C. § 1441(b). The parties do not dispute that the
amount in controversy requirement for diversity jurisdiction is met here, and the
Court is also of the opinion that it is met.
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might be able to recover against” those Defendants.3 See id. “‘[T]here must be a
reasonable possibility of recovery, not merely a theoretical one.’” See Kling Realty
Co. v. Chevron USA, Inc., 575 F.3d 510, 513 (5th Cir. 2009) (citation omitted)
(emphasis in original). Conclusory and speculative allegations will not suffice to
preclude a determination of improper joinder. See, e.g., Garcia v. Premier Home
Furnishings, No. 2:12CV167-KS-MTP, 2013 WL 6001345, at *5 (S.D. Miss. Nov. 12,
2013).
Initially, Allstate has not mis-characterized “the standard for improper
joinder[,]” (Thomas Mem. 7, ECF No. 9), but articulated the proper standard in its
[1] Notice of Removal. (See id. at 4). Thomas is also incorrect that Allstate is trying
to improperly shift the burden of proof on a remand issue by arguing that Thomas’
conclusory allegations are insufficient to state a claim against the Conn
Defendants. If the Court were to accept Thomas’ argument, any plaintiff could
overcome a properly supported claim of fraudulent joinder with conclusory
allegations against a non-diverse defendant in his complaint, which is not the law.
See, e.g., Walden v. Am. Gen. Life, 244 F. Supp. 2d 689, 692 (S.D. Miss. 2003);
Garcia, 2013 WL 6001345, at *5; Rogers v. Shelter Mut. Ins. Co., No. 3:05 CV 57
WS, 2006 WL 839551, at *4 (S.D. Miss. Mar. 30, 2006).
3
In certain circumstances, the Court on considering remand may “pierce” the
pleadings, but the Court does not find that it is necessary to do so here. For
example, while Thomas has submitted pages of information related to a dispute
about a potential agreement to dismiss the agents or to voluntarily remand the
case, this dispute is irrelevant to the issue of this Court’s jurisdiction.
4
Having reviewed the Complaint, the Court agrees with Allstate that all of
Thomas’ causes of action stem from the denial of Thomas’ insurance claim. The
Court further agrees that there is an absence of facts to support a cognizable cause
of action against the insurance agents, the Conn Defendants – as opposed to the
insurance company, Allstate – based on that denial of claim, despite Thomas’
attempt to lump all Defendants together. See, e.g., Donald v. Arrowood Indem. Co.,
No. 2:10CV227KS-MTP, 2010 WL 4853290, at *7 (S.D. Miss. Nov. 23, 2010) (“a
plaintiff cannot rely upon general, conclusory, and/or collective allegations against
defendants in opposing a claim of improper joinder”). Allstate has met its burden of
proof in establishing fraudulent joinder.
In any event, none of Thomas’ claims against the Conn Defendants are
cognizable under Mississippi law, even if Thomas had made non-conclusory
allegations against those Defendants. There is no allegation that the Conn
Defendants were parties to the insurance contract, and the policy attached to the
Complaint establishes otherwise, eliminating the possibility of any breach of
contract claim against the Conn Defendants. See, e.g., Rhodes v. State Farm Fire &
Cas. Co., No. 108CV674-HSO-RHW, 2009 WL 563876, at *3-4 (S.D. Miss. Mar. 4,
2009); Smith v. Union Nat’l Life Ins. Co., 286 F. Supp. 2d 782, 787 (S.D. Miss.
2003); Burchfield v. Foremost Ins. Grp., No. 4:16-CV-00172-DMB-JMV, 2017 WL
1167278, at *4 (N.D. Miss. Mar. 28, 2017). Likewise, Thomas has no claim for
breach of the implied covenant of good faith and fair dealing or bad faith against
5
the Conn Defendants. See, e.g., Rhodes, 2009 WL 563876, at *4; Smith, 286 F.
Supp. 2d at 787; Rogers, 2006 WL 839551, at *4; Burchfield, 2017 WL 1167278, at
*4-5. And, unlike the cases cited by Thomas, (see Thomas Mem. 8 n.8, ECF No. 9),
there are no allegations supporting a misrepresentation claim against the agents.
Accordingly, the Court finds that there is not an arguably reasonable basis
for predicting that Thomas might be able to recover against the Conn Defendants.
Disregarding the citizenship of the Conn Defendants, the Court has diversity
jurisdiction. Therefore, the Court will deny the motion to remand and dismiss the
Conn Defendants from this action. See Burchfield, 2017 WL 1167278, at *6 (“Where
a plaintiff improperly joins defendants, dismissal of claims against those defendants
is appropriate.”) (citation and quotation marks omitted).
II.
MOTION TO STRIKE
Thomas claims that in response to Allstate’s removal of this action from state
court, he presented
Allstate with a stipulation that its Agent placed the correct policy for
the property at issue, and that the only basis for Allstate’s
determination of coverage was the terms of the correct policy for the
subject loss. In other words, Thomas sought to allow Allstate to
establish by stipulation that the basis of its removal was accurate, and
that there was no claim to be had against its Agent.4
(Mot. 1-2, ECF No. 8).
4
Thomas did not plead a negligent procurement or failure to procure claim
against the Conn Defendants, or include any facts that would establish any such
claim. See, e.g., Andrews v. Miss. Farm Bureau Cas. Ins. Co., 187 F. Supp. 3d 749,
759 n.9 (S.D. Miss. 2016); Scotty’s Recycling, LLC v. Philadelphia Sec. Ins., No.
3:11CV341-DPJ-FKB, 2013 WL 442865, at *3 (S.D. Miss. Feb. 5, 2013).
6
Allstate “responded that it would agree to waive coverage defenses that
resulted from an error in the placement of the policy (i.e., an error of the Agent) only
if Plaintiff would agree to drop his punitive damages claim against Allstate for
wrongful denial of coverage.” (Id. at 2) (emphasis in original). Thomas states that
this response constitutes bad faith and abuse of process, and he asks this Court to
strike “Allstate’s defenses to coverage based on either its policy terms of the actions
of its Agent . . . .” (Id. at 3).
The Court is not persuaded that Allstate’s conduct amounts to bad faith or
abuse of process, and will not strike Allstate’s defenses or order that Allstate pay
Thomas his “attorney’s fees and costs associated with responding to the Removal
. . . .” (See Thomas Mem. 14, ECF No. 9).
CONCLUSION
The Court is of the opinion that it has diversity jurisdiction over this action
and, thus, remand is unwarranted. The Court will dismiss the improperly joined
Defendants. The Court is also of the opinion that Plaintiff Thomas’ request for
sanctions against Allstate is not well-taken.
IT IS THEREFORE ORDERED AND ADJUDGED that the [8] Motion to
Strike Allstate’s Defenses and/or Remand filed by Plaintiff Walter Thomas, Jr., and
all relief requested therein, is DENIED.
IT IS FURTHER ORDERED AND ADJUDGED that Defendant Virginia
Conn d/b/a Ginny Conn Agency and Defendant Tyler Conn are DISMISSED from
this action. The Clerk is requested to terminate those Defendants on the docket.
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IT IS FURTHER ORDERED AND ADJUDGED that Plaintiff Thomas
and the only remaining Defendant, Allstate, must notify the magistrate judge of
this Order and submit a proposed order lifting stay to the magistrate judge
promptly, but no later than seven (7) days from the date of this Order.
SO ORDERED AND ADJUDGED this the 17th day of May, 2017.
s/
Louis Guirola, Jr.
LOUIS GUIROLA, JR.
CHIEF U.S. DISTRICT JUDGE
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