Rice et al v. Progressive Preferred Insurance Company

Filing 16

MEMORANDUM AND ORDER re: IT IS HEREBY ORDERED that plaintiffs' motion to remand [Doc. # 13 ] is denied.. Signed by District Judge Carol E. Jackson on 5/9/16. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
EMILY RICE and CHARLYNDA
SNODGRASS,
Plaintiffs,
vs.
PROGRESSIVE PREFERRED INSURANCE
COMPANY,
Defendant.

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Case No. 4:16-CV-452 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on plaintiffs’ motion to remand the action to
the Circuit Court for St. Louis City from which it was removed. Defendant has filed
a response in opposition.
I.

Background

At all relevant times, plaintiffs were insured under policies of automobile
insurance

issued

by

defendant

Progressive

Preferred

Insurance

Company

(Progressive). Plaintiff Emily Rice was involved in a motor vehicle accident with an
underinsured motorist on November 15, 2013, and sustained multiple physical
injuries. Plaintiff Charlynda Snodgrass sustained multiple physical injuries resulting
from a motor vehicle accident with an underinsured motorist that occurred on
October 27, 2012. On March 11, 2016, plaintiffs filed this action in state court for
failure to pay underinsured motorist benefits and for statutory damages under
Mo.Rev.Stat. § 375.420 for vexatious refusal to pay.

Defendant removed the

action to this Court on the basis of diversity of citizenship jurisdiction. Plaintiffs are

citizens of Missouri, and defendant is incorporated and has its principal place of
business in Ohio. Plaintiffs argue that the case should be remanded because there
is no diversity of citizenship under 28 U.S.C. § 1332(c)(1).
II.

Legal Standard

“The propriety of removal to federal court depends on whether the claim
comes within the scope of the federal court’s subject matter jurisdiction.” Peters v.
Union Pacific R. Co., 80 F.3d 257, 260 (8th Cir. 1996) (citing 28 U.S.C. § 1441(b)).
“A defendant may remove a state law claim to federal court only if the action
originally could have been filed there.” In re Prempro Products Liability Litigation,
591 F.3d 613, 619 (8th Cir. 2010) (citing Phipps v. FDIC, 417 F.3d 1006, 1010 (8th
Cir. 2005)). The removing defendant bears the burden of establishing federal
jurisdiction by a preponderance of the evidence. Altimore v. Mount Mercy College,
420 F.3d 763, 768 (8th Cir. 2005). “All doubts about federal jurisdiction should be
resolved in favor of remand to state court.” In re Prempro, 591 F.3d at 620 (citing
Wilkinson v. Shackelford, 478 F.3d 957, 963 (8th Cir. 2007)).
III.

Discussion

Removal in this case was premised on diversity of citizenship jurisdiction,
which requires an amount in controversy greater than $75,000, exclusive of
interest and costs, and complete diversity of citizenship among the litigants. 28
U.S.C. § 1332(a). “Complete diversity of citizenship exists where no defendant
holds citizenship in the same state where any plaintiff holds citizenship.” OnePoint
Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007).

Plaintiffs do not

dispute that the amount in controversy is satisfied. Instead, they argue that their

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claims are “direct actions” under 28 U.S.C. § 1332(c) and that defendant is
therefore considered to be a citizen of Missouri.
Section 1332(c)(1) provides: “[i]n any direct action against the insurer of a
policy or contract of liability insurance . . . to which action the insured is not joined
as a party defendant, such insurer shall be deemed a citizen of . . . every State . . .
of which the insured is a citizen.” “Direct action,” as used in this statute, is a term
of art. Dasta v. Response Worldwide Ins. Co., No. 10-6014-CV-SJ-ODS, 2010 WL
2902734, at *1 (W.D. Mo. July 20, 2010). The term “direct action” in § 1332(c)(1)
refers to actions authorized by statutes in some states, in which an injured party
can sue a tortfeasor’s insurer without joining the tortfeasor. See Home Indemn. Co.
v. Moore, 499 F.2d 1202, 1205 (8th Cir. 1974).
This case is not a “direct action” under § 1332(c)(1) because plaintiffs are
suing their own insurers, not the insurers of the third-party tortfeasors, i.e,. the
underinsured motorists. See Antonacci v. State Farm Mut. Auto. Ins. Co., No. 4:05CV-2173 CAS, 2006 WL 568344, at *1 (E.D. Mo. Mar. 7, 2006).

Further, plaintiffs’

claims for vexatious refusal do not render this a direct action. See Mazurkiewicz v.
Country Mut. Ins. Co., No. 4:11CV2089 RWS, 2012 WL 10833, at *1 (E.D. Mo. Jan.
3, 2012) (action for underinsured motorist coverage and vexatious refusal not
direct action under § 1332(c)(1)); Dasta v. Response Worldwide Ins. Co., No. 106014-CV-SJ-ODS, 2010 WL 2902734, at *1 (W.D. Mo. July 20, 2010) (claim for
vexatious refusal to pay not direct action); Brown–Woods v. Safeco Ins. Co. of Ill.,
2010 WL 2671494, at *2 (E.D. Mo. Jun. 30, 2010) (same). Defendant is not
deemed to be a citizen of Missouri under §1332(c) and there is complete diversity
of citizenship.

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Accordingly,
IT IS HEREBY ORDERED that plaintiffs’ motion to remand [Doc. # 13] is
denied.

CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 9th day of May, 2016.

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