Lovett et al v. Allstate Insurance Company et al

Filing 7

ORDER denying Defendant Kent Henderson's 2 Motion to Dismiss. The Defendants are directed to show cause why the Court should not remand this case to the Circuit Court of Pike County, Mississippi. Defendants shall file their response within fourteen (14) days of the entry of this order. Signed by District Judge Keith Starrett on June 5, 2013 (dsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
HATTIESBURG DIVISION
RUSSELL E. LOVETT, et al.
V.

PLAINTIFFS
CIVIL ACTION NO. 2:13-CV-84-KS-MTP

ALLSTATE INSURANCE COMPANY, et al.

DEFENDANTS

MEMORANDUM OPINION AND ORDER
For the reasons stated below, the Court denies Defendant Kent Henderson’s
Motion to Dismiss [2] and orders Defendants to show cause why this case should not
be remanded to the Circuit Court of Pike County, Mississippi for lack of subject matter
jurisdiction.
A.

Motion to Dismiss [2]
Defendant Kent Henderson argues that he – an insurance agent – can not be

liable for simple negligence in handling a claim. He is correct. “[A]n insurance adjuster,
agent or other similar entity may not be held independently liable for simple
negligence in connection [with] its work on a claim. Such an entity may be held
independently liable for its work on a claim if and only if its acts amount to any one of
the following familiar types of conduct: gross negligence, malice, or reckless disregard
for the rights of the insured.” Gallagher Bassett Servs. v. Jeffcoat, 887 So. 2d 777, 784
(Miss. 2004); see also Jabour v. Life Ins. Co. of N. Am., 362 F. Supp. 2d 736, 740-41
(S.D. Miss. 2005).
But an insurance agent may be liable for negligence in performing his own

separate, independent duties. Binh Van Nguyen v. Regions Bank, 2010 U.S. Dist.
LEXIS 129360, at *13 (S.D. Miss. Dec. 7, 2010). “An insurance agent must use that
degree of diligence and care with reference thereto which a reasonably prudent person
would exercise in the transaction of his own business.” Mladineo v. Schmidt, 52 So. 3d
1154, 1162 (Miss. 2010). For example. if insurance agents offer advice to customers,
“they have a duty to exercise reasonable care in doing so.” Id. at 1163. Likewise, “if an
insurance agent or broker with a view to being compensated agrees to procure
insurance for another and through fault or neglect fails to do so, he will be liable for
any damage that results thereby.” Id. at 1164.
Plaintiffs alleged that Henderson failed to remit their premium payments to
Defendant Allstate Insurance Company during the months of October 2009 and
December 2009. Their allegations against him do not arise from the handling of a
claim. In fact, it is not clear from the record that these allegations arise from any duty
created by Plaintiff’s contract with Allstate. Instead, Plaintiffs’ Amended Complaint
asserts a simple negligence claim arising from Henderson’s failure to remit their
premium payments to Allstate. Henderson has not cited any legal authority suggesting
that his immunity from liability for simple negligence in claims handling should extend
to these allegations.
B.

Subject Matter Jurisdiction
“[F]ederal courts are courts of limited jurisdiction, having only the authority

endowed by the Constitution and that conferred by Congress.” Halmekangas v. State
Farm Fire & Cas. Co., 603 F.3d 290, 292 (5th Cir. 2010). This Court has removal
2

jurisdiction in any case where it has original jurisdiction. 28 U.S.C. § 1441(a). It has
“original jurisdiction of all civil actions arising under the Constitution, laws, or treaties
of the United States,” 28 U.S.C. § 1331, and “of all civil matters where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and
is between . . . [c]itizens of different States . . . .” 28 U.S.C. § 1332(a).
Plaintiffs did not assert a federal claim, and the parties to this matter are not
completely diverse, as Plaintiffs and Defendant Kent Henderson are citizens of
Mississippi. Accordingly, the Court orders Defendants to show cause why the Court
should not remand this case to the Circuit Court of Pike County, Mississippi.
Defendants shall file their response within fourteen (14) days of the entry of this order.
SO ORDERED AND ADJUDGED this 5th day of June, 2013.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE

3