COMMUNITY CLAIMS ASSOCIATES, INC. et al v. ROSENBERG et al

Filing 2

OPINION & ORDER Remanding this case to Superior Court of New Jersey, Ocean County; Denying Defendant Douglas Rosenberg's application to proceed in forma pauperis as moot. Signed by Judge Anne E. Thompson on 11/3/2011. (eaj)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
COMMUNITY CLAIMS ASSOCIATES,
INC. and Barry SIPE,
Plaintiffs,

Civ. No. 11-6428

v.

OPINION and ORDER

Max ROSENBERG, Douglas W.
ROSENBERG, Jean A. ROSENBERG, Jeffrey
M. ROSENBERG, THE ESTATE OF
ELEANOR ROSENBERG,
Defendants.
THOMPSON, U.S.D.J.
This matter has come before the Court on Defendant Douglas Rosenberg‟s Notice of
Removal [Docket # 1]. This case involves a dispute over who the proper beneficiary of
insurance proceeds is, and additionally, alleged defamation on online consumer reporting sites
related to the insurance policy. Defendant argues that removal jurisdiction is proper pursuant to
28 U.S.C. § 1332. Complete diversity does not exist in this case, however, and therefore
removal is improper. The Court moves sua sponte to remand this case to state court for further
proceedings.
Removal jurisdiction is proper in “any civil action brought in a State court of which the
district courts of the United States have original jurisdiction,” unless otherwise provided by
Congress. 28 U.S.C. § 1441(a). “The propriety of removal thus depends on whether the case
originally could have been filed in federal court.” City of Chi. v. Int'l Coll. of Surgeons, 522 U.S.
156, 163 (1997).

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In diversity jurisdiction cases under 28 U.S.C. § 1332, a district court has “original
jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between (1) Citizens of different States . . . .” 28
U.S.C. § 1332(a)(1). “[A] proper exercise of federal jurisdiction requires satisfaction of . . .
complete diversity between the parties, that is, every plaintiff must be of diverse state citizenship
from every defendant.” In re Briscoe, 448 F.3d 201, 215 (3d Cir. 2006) (citing Grand Union
Supermarkets of the Virgin Islands, Inc. v. H.E. Lockhart Mgmt., Inc., 316 F.3d 408, 410 (3d Cir.
2003)). In this case, both Plaintiffs are citizens of the State of New Jersey. Defendants Max
Rosenberg and The Estate of Eleanor Rosenberg1 (collectively, “the New Jersey Defendants”)
are also citizens of the State of New Jersey. The remaining Defendants, Douglas Rosenberg,
Jean Rosenberg, and Jeffrey Rosenberg (collectively, “the Washington Defendants”), are citizens
of the State of Washington. Therefore, there is not complete diversity. Thus, in order to
establish diversity jurisdiction for purposes of removal, the Washington Defendants must show
that that the New Jersey Defendants were fraudulently joined.
Under the doctrine of fraudulent joinder, a “diverse defendant may still remove the action
if it can establish that the non-diverse defendants were „fraudulently‟ named or joined solely to
defeat diversity jurisdiction.” Id. at 216. “Joinder is fraudulent if „there is no reasonable basis
in fact or colorable ground supporting the claim against the joined defendant, or no real intention
in good faith to prosecute the action against the defendant or seek a joint judgment.‟” Id.
(quoting Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 32 (3d Cir. 1985)). The Plaintiffs in
this case have brought an action (1) seeking a declaratory judgment that Max Rosenberg, and not
any of the Washington Defendants, is the lawful beneficiary of the insurance proceeds at issue;

1

In diversity cases, “the legal representative of the estate of a decedent shall be deemed to be a citizen only of the
same State as the decedent . . . .” 28 U.S.C. § 1332(c)(2).

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and (2) seeking to hold Douglas Rosenberg liable for defamation. (See Notice of Removal, Ex.
A, at 10–16) [1-3]. Defendant Douglas Rosenberg alleges only the conclusory statement that
there is no possibility that Plaintiffs can establish liability against either Max Rosenberg or Jean
Rosenberg because of fraudulent joinder. No specific reason is presented. This Court, after
consideration of the Notice of Removal and its attached exhibits, believes that a genuine
controversy exists as to who is the lawful beneficiary of the insurance proceeds. As such, despite
Defendant Douglas Rosenberg‟s contentions, Max and Jean Rosenberg were not fraudulent
joined. Therefore, complete diversity is lacking in this case.
For the reasons stated above, IT IS on this 3rd day of November, 2011
ORDERED that this case be remanded to the state court from which it was removed; and
it is
ORDERED that Defendant Douglas Rosenberg‟s application to proceed in forma
pauperis is DENIED as moot; and it is
ORDERED that this case is CLOSED.

/s/ Anne E. Thompson
ANNE E. THOMPSON, U.S.D.J.

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