O'Laughlin et al v. Foremost Insurance Company Grand Rapids, Michigan
ORDER SEVERING AND DISMISSING CERTAIN PLAINTIFFS FROM COMPLAINT, WITHOUT PREJUDICE -- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, the claims of all plaintiffs except the first-named plaintiffs, Theresa OLaughlin and Gerard Ryan are sua sponte severed from this action pursuant to Rule 21 of the Federal Rules of Civil Procedure and dismissed without prejudice to commencing separate actions for each insurance policy issued by defendant. Plaintiffs are directed to serve a copy of this Electronic Order and the Attached Written Memorandum and Order to defendant within five days of the date of this Order and immediately thereafter file proof of such service via ECF. SO ORDERED by Judge Dora Lizette Irizarry on 12/13/2013. (Irizarry, Dora)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------------------------------------THERESA O’LAUGHLIN and GERARD RYAN, and
ARTHUR and ANNE PIDORIANO, and MARGERET
FOREMOST INSURANCE COMPANY GRAND
DORA L. IRIZARRY, United States District Judge:
MEMORANDUM AND ORDER
On October 28, 2013, five (5) plaintiffs commenced this diversity action against
defendant Foremost Insurance Company, each seeking to recover his or her actual damages
resulting from defendant’s purported breach of contract, i.e., its failure to pay the full amount of
each plaintiff’s respective claims under an insurance policy issued to him or her by defendant.
(See generally Complaint (“Compl.”), Dkt. Entry No. 1.) For the reasons set forth below, the
claims of all plaintiffs except the first-named plaintiffs, Theresa O’Laughlin and Gerard Ryan
(collectively, the “O’Laughlin-Ryan Plaintiffs”) are sua sponte severed from this action pursuant
to Rule 21 of the Federal Rules of Civil Procedure and dismissed without prejudice to
commencing separate actions for each insurance policy issued by defendant.
The complaint alleges, inter alia: (1) that defendant is an insurance carrier “organized
and existing under and by virtue of the laws of the State of Michigan, (Compl. ¶ 2); (2) that
defendant issued an insurance policy to each plaintiff covering losses to his or her “dwelling and
personal property” (Compl., ¶ 6); (3) that each plaintiff paid all of the premiums on his or her
policy (id.); (4) that as a result of “Superstorm Sandy” (“the Storm”), each plaintiff’s insured
property and contents suffered “wind damage” in excess of $75,000 (Compl. ¶¶ 7-8); (5) that
each plaintiff reported and properly submitted a claim under his or her policy to defendant
(Compl. ¶ 9); (6) that defendant “wrongfully denied payment in the full amount of each
[p]laintiff’s claims” (Compl. ¶ 11); (7) that each plaintiff retained an independent expert to
evaluate the damages to his or her property and contents (Compl. ¶ 12); and (8) that plaintiffs’
“respective losses were thoroughly documented” (id.).
On October 29, 2013, five (5) plaintiffs commenced this action against defendant alleging
claims of breach of contract, fraudulent misrepresentation, breach of good faith and fair dealing,
and various violations of New York General Business Law §§ 349 & 350.
complaint asserts one (1) claim for relief for breach of contract, with each plaintiff seeking to
recover the actual damages he or she sustained as a result of defendant’s denial and/or limitation
of his or her claims under his or her respective insurance policy. (Compl. ¶¶ 14-18.)
Permissive Joinder of Plaintiffs
Rule 20(a)(1) of the Federal Rules of Civil Procedure permits the joinder of multiple
plaintiffs in an action if:
“(A) they assert any right to relief jointly, severally, or in the
alternative with respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences; and (B) any
question of law or fact common to all plaintiffs will arise in the
In determining whether claims relate to, or arise out of, the same “transaction” or
“occurrence” under Rule 20(a), “courts are to look to the logical relationship between the claims
and determine ‘whether the essential facts of the various claims are so logically connected that
considerations of judicial economy and fairness dictate that all the issues be resolved in one
lawsuit.’” Kalie v. Bank of America Corp., ___ F.R.D. ___, 2013 WL 4044951, at *3 (S.D.N.Y.
Aug. 9, 2013) (quoting United States v. Aquavella, 615 F. 2d 12, 22 (2d Cir. 1979)); see also
Abraham v. Am. Home Mortg. Servicing, Inc., ___ F. Supp. 2d ___, 2013 WL 2285205, at *3
(E.D.N.Y. May 23, 2013) (“The purpose of Rule 20 is to promote trial convenience and to
expedite the final determination of disputes.”) (quoting Vanderzalm v. Sechrist Indus., Inc., 875
F. Supp. 2d 179, 183 (E.D.N.Y. 2012). Plaintiffs bear the burden of demonstrating that joinder is
proper under Rule 20(a). Kalie, ___ F.R.D. ___, 2013 WL 4044951, at *5; see also Deskovic v.
City of Peekskill, 673 F. Supp. 2d 154, 159 (S.D.N.Y. 2009).
Plaintiffs’ claims in this case are not properly joined pursuant to Rule 20(a)(1) of the
Federal Rules of Civil Procedure. Indeed, judicial economy and fairness dictate that plaintiffs’
claims under each distinct insurance policy issued by defendant be tried separately. In order for
a plaintiff’s right to relief to relate to, or arise out of, a transaction or occurrence for purposes of
Rule 20(a), the “transaction” or “occurrence” must relate to the contract purportedly breached by
defendant, i.e., the insurance policy. The five (5) plaintiffs herein separately purchased, and
were issued, three (3) distinct insurance policies from defendant at different times; each of those
three (3) insurance policies relates to a separate and distinct property; each plaintiff separately
performed his or her own obligations under his or her respective insurance policy, e.g., paid the
premiums and submitted claims thereunder; and each plaintiff seeks to recover his or her actual
damages as a result of defendant’s purported breach of his or her respective insurance policy,
i.e., either defendant’s outright denial of his or her claims or its failure to pay the entire amounts
claimed by him or her. The fact that plaintiffs’ separate properties, for which they made distinct
claims under the separate insurance policies issued to them by defendant, all sustained damage as
a result of the same storm is immaterial for purposes of Rule 20(a) of the Federal Rules of Civil
Procedure, i.e., each plaintiff’s right to relief under his or her respective insurance policy issued
by defendant is not affected by the fact that the wind that allegedly damaged his or her property
may have been occasioned by the Storm.
Moreover, defendant likely will have different
justifications for denying and/or limiting each plaintiff’s claims. Since the three (3) insurance
policies upon which plaintiffs claim a right to relief do not relate to, or arise out of, the “same
transaction, occurrence, or series of transaction or occurrences,” plaintiffs are not properly joined
in this action pursuant to Rule 20(a) of the Federal Rules of Civil Procedure.
Rule 21 of the Federal Rules of Civil Procedure provides, in relevant part, that
“[m]isjoinder of parties is not a ground for dismissing an action. On motion or on its own, the
court may at any time, on just terms, add or drop a party.” Thus, “[i]f a court concludes that
[parties] have been improperly joined under Rule 20, it has broad discretion under Rule 21 to
sever [those] parties . . . from the action.” Kalie, ___ F.R.D. ___, 2013 WL 4044951, at *3
(quoting Deskovic, 673 F. Supp. 2d at 159-60); see also Adams v. US Bank, NA, 2013 WL
5437060, at *4 (E.D.N.Y. Sept. 27, 2013).
To determine whether to sever parties improperly joined under Rule 20(a), courts
generally consider, in addition to the factors set forth in Rule 20(a), “whether settlement of the
claims or judicial economy would be facilitated;  whether prejudice would be avoided if
severance were granted; and  whether different witnesses and documentary proof are required
for the separate claims.” Crown Cork & Seal Co., Inc. Master Retirement Trust v. Credit Suisse
First Boston Corp., 288 F.R.D. 331, 333 (S.D.N.Y. 2013) (quoting Erausquin v. Notz, Stucki
Mgmt. (Bermuda) Ltd., 806 F. Supp. 2d 712, 720 (S.D.N.Y. 2011)). “A court should consider
whether severance will ‘serve the ends of justice and further the prompt and efficient disposition
of litigation.’” Crown Cork, 288 F.R.D. at 332 (quoting T.S.I. 27, Inc. v. Berman Enters., Inc.,
115 F.R.D. 252, 254 (S.D.N.Y. 1987)); see also In re Ski Train Fire in Kaprun, Austria, on
November 11, 2004, 224 F.R.D. 543, 546 (S.D.N.Y. 2004).
Joinder of the claims of five (5) plaintiffs involving three (3) separate insurance policies
does not serve the interest of judicial economy.
There will be little, if any, overlapping
discovery and each plaintiff’s breach of contract claim will require distinct witnesses and
documentary proof. “The interest in economy is affirmatively disserved by forcing these many
parties to attend a common trial at which these separate, unrelated claims . . . would be
resolved.” Kalie, ___ F.R.D. ___, 2013 WL 4044951, at *6. Furthermore, settlement of the
claims is likely to be facilitated if the claims relating to three (3) separate insurance policies are
litigated separately. See Adams, 2013 WL 5437060, at *4. In addition, “[a] joint trial could lead
to confusion of the jury and thereby prejudice [the] defendant.” Kalie, ___ F.R.D. ___, 2013
WL 4044951, at *6 (quotations and citation omitted). Accordingly, all claims by plaintiffs other
than the O’Laughlin-Ryan Plaintiffs are sua sponte severed pursuant to Rule 21 of the Federal
Rules of Civil Procedure and dismissed without prejudice to commencing separate actions for
each insurance policy issued by defendant.
For the reasons stated herein, all claims by plaintiffs other than the O’Laughlin-Ryan
Plaintiffs are sua sponte severed pursuant to Rule 21 of the Federal Rules of Civil Procedure and
dismissed without prejudice to commencing separate actions for each insurance policy issued by
Dated: Brooklyn, New York
December 13, 2013
DORA L. IRIZARRY
United States District Judge
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