KELEMEN et al v. LIBERTY MUTUAL FIRE INSURANCE et al

Filing 20

OPINION filed. Signed by Judge Mary L. Cooper on 5/9/2013. (eaj)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
:
:
:
Plaintiffs,
:
:
v.
:
:
LIBERTY MUTUAL FIRE INSURANCE, :
et al.,
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Defendants.
:
:
INA KELEMEN, M.D., et al.,

CIVIL ACTION NO. 13-1798 (MLC)
O P I N I O N

JOHN Z. RACONZELLA brought an action against Ina Kelemen,
M.D., and Farmingdale Medical Associates (“FMA”) (collectively,
“Insureds”) in New Jersey state court to recover damages for
personal injuries (“Tort Action”).
Of Removal, Ex. A, Compl. at 2.)
Company (“LMFIC”),

(See dkt. entry no. 1, Notice
Liberty Mutual Fire Insurance

The Hartford Insurance Company Of The Midwest

(“HIC”), and ProSelect Insurance Company (“PSIC”) (collectively,
“Insurers”) allegedly provided coverage to the Insureds.
Compl. at 2-11.)

The Tort Action remains pending.

(See

(See dkt.

entry no. 17, PSIC Br. at 2 (stating same); dkt. entry no. 18,
Insureds Reply Br. at 2, 6-7 (stating same).)
THE INSUREDS then brought this separate action against the
Insurers in the same state court for, inter alia, a judgment
declaring that the Insurers are obligated to defend and indemnify
the Insureds in the Tort Action (“Declaratory Judgment Action”).

(See Compl.)1

The Insurers removed the Declaratory Judgment

Action to this Court pursuant to 28 U.S.C. § 1332(a).

(See

Notice Of Removal at 2-3.)2
THE INSUREDS now move to remand the Declaratory Judgment
Action.

(See dkt. entry no. 10, Notice Of Mot.)

brief in opposition.
opposition.

(See PSIC Br.)

(See id. at 1 n.1.)

PSIC files a

HIC joins in PSIC’s

LMFIC has not responded to the

1

The Complaint incorrectly lists (1) LMFIC as Liberty
Mutual Fire Insurance, and (2) PSIC as Coverys Pro Select
Insurance Company. (See Notice Of Removal at 1 (concerning
PSIC’s true name); dkt. entry no. 15, LMFIC Answer at 1
(identifying LMFIC as defendant).)
2

The Insurers have failed to properly plead the
citizenship of FMA, which is — according to the Court’s research
— a limited liability company. (See Notice Of Removal at 2
(incorrectly treating FMA as a corporation).) Limited liability
companies are unincorporated associations that are deemed to be
citizens of each state in which their members are citizens, not
the states in which they were formed or have their principal
places of business. Zambelli Fireworks Mfg. Co. v. Wood, 592
F.3d 412, 418-20 (3d Cir. 2010). The name of each member must be
specifically alleged, and the citizenship of each membership
layer must be traced and analyzed, to determine a limited
liability company’s citizenship. Id. at 420. As the Insurers
are represented by counsel, the Court “should not need to
underscore the importance of adequately pleading and proving
diversity”. CGB Occ. Therapy v. RHA Health Servs., 357 F.3d 375,
382 n.6 (3d Cir. 2004). But it appears that FMA is a New Jersey
medical practice, and thus the Court assumes here that no member
of FMA will be deemed to be a citizen of any state of which the
Insurers are deemed to be citizens, i.e., Massachusetts,
Wisconsin, Indiana, and Connecticut. (See Notice Of Removal at
3.)
2

motion.

For the following reasons, the Court will grant the

motion.

Oral argument is not necessary.

See L.Civ.R. 78.1(b).

A DETERMINATION as to any claim in the Declaratory Judgment
Action would necessarily affect — and thus interfere with — the
Tort Action.

Indeed, the Insurers could be named in the Tort

Action as defendants, as third-party defendants, or in some other
capacity.

As a result, this Court must abstain from adjudicating

the Declaratory Judgment Action.

See Wilton v. Seven Falls Co.,

515 U.S. 277, 280-90 (1995) (upholding Brillhart v. Excess Ins.
Co., 316 U.S. 491 (1942)).
THE DECLARATORY JUDGMENT ACTION (1) is, as the Court’s
shorthand reference suggests, a declaratory-judgment action
involving insurance-coverage issues, (2) concerns issues that
will be raised in the Tort Action, and (3) as the Insureds
correctly point out, could be adjudicated by the same judge
overseeing the Tort Action, as both actions were initiated in the
same court.

(See dkt. entry no. 10, Insureds Br. at 1, 8.)

result, the Declaratory Judgment Action should be remanded.

As a
See

Del Suppo, Inc. v. Nautilus Ins. Co., No. 07-952, 2007 WL
2345287, at *2-3 (W.D. Pa. Aug. 16, 2007) (declining jurisdiction
and remanding action where insurer removed insured’s action
seeking indemnification in underlying state court action); see
also Williams v. State Auto Prop. & Cas. Ins. Co., No. 08-4983,
2009 WL 1119502, at *2-3 (E.D. Pa. Apr. 24, 2009) (remanding

3

action concerning insurance coverage, and noting “the possibility
of interfering with the state court cases regarding the same
matter is substantial” because the conduct of certain parties
would need to be addressed in both the underlying state action
and the removed declaratory-judgment action).
THE COURT, in view of the pending Tort Action, must “promote
judicial economy by avoiding duplicative and piecemeal
litigation”.

State Auto Ins. Cos. v. Summy, 234 F.3d 131, 135

(3d Cir. 2001).

The desire of the Insurers to proceed in federal

court “has no special call on the federal forum”.

Id. at 136.

Therefore, the Court will grant the motion to remand.
FOR GOOD CAUSE APPEARING, the Court will issue an appropriate
order and judgment.3

s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated:

May 9, 2012

3

The Court notes that the plaintiffs could name Raconzella
in the Declaratory Judgment Action. See N.J.S.A. § 2A:16-56
(stating that when declaratory relief is sought, all persons
having an interest that would be affected by the declaration must
be made parties to the proceeding). Raconzella’s interests might
be affected if the Insureds are found to be liable in the Tort
Action, but have no insurance coverage.
4