Falcone et al v. Underwriters at Lloyd's London et al

Filing 8

MEMORANDUM & ORDER. For the reasons outlined in the M&O, the claim of Joanne Peterson is sua sponte SEVERED and DISMISSED WITHOUT PREJUDICE to commencing a separate action. If Ms. Peterson wishes to commence a separate action, she must do so within 3 0 days of the date of this Order. Additionally, the statute(s) of limitations for any claim asserted herein is tolled for a period of 30 days from the date of this Order. Party Joanne Peterson is TERMINATED from this action. Ordered by Judge Joanna Seybert on 12/17/2013. (Nohs, Bonnie)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
ROBERT FALCONE and JOANNE PETERSON,
Plaintiffs,
-against-

MEMORANDUM & ORDER
13-CV-5950(JS)(AKT)

UNDERWRITERS AT LLOYD’S, LONDON
(LLOYD’S LONDON) and NATIONAL
CATASTROPHE INSURANCE PROGRAM,

Defendants.
---------------------------------------X
APPEARANCES
For Plaintiff:
Sean Greenwood, Esq.
Gauthier Houghtaling & Williams
52 Duane Street, 7th Floor
New York, NY 10007
For Defendants:

No appearances.

SEYBERT, District Judge:
On

October

28,

2013,

plaintiffs

Robert

Falcone

and

Joanne Peterson (collectively, “Plaintiffs”) commenced this action
against

defendants

Underwriters

at

Lloyd’s,

London

(Lloyd’s

London) and National Catastrophe Insurance Program (collectively,
“Defendants”).
claims

against

Plaintiffs assert their own breach of contract
Defendants

based

on

Defendants’

denial

of

Plaintiffs’ individual insurance claims for property damage caused
by Superstorm Sandy.

For the following reasons, the claim of the

second-named plaintiff, Joanne Peterson, is sua sponte SEVERED
from this action pursuant to Rules 20 and 21 of the Federal Rules
of Civil Procedure and DISMISSED WITHOUT PREJUDICE to commencing

a separate action for claims related to her individual insurance
claim.
BACKGROUND1
Plaintiffs separately own real property in this judicial
district and separately purchased from Defendants flood insurance
policies to cover their respective properties.
9.)

Defendants

are

“Write

Your

Own”

(Compl. ¶¶ 1, 4,

insurance

carriers

participating in the National Flood Insurance Program pursuant to
the National Flood Insurance Act.

(Compl. ¶¶ 3-4.)

Plaintiffs both allege damage to their properties due to
flood caused by Superstorm Sandy, which struck the New York
metropolitan

area

on

October

29,

2012.

(Compl.

¶

11-12.)

Plaintiffs claim that they submitted valid insurance claims to
Defendants but that Defendants “wrongfully denied or unfairly
limited

payment

(Compl. ¶ 13-14.)

on

the

claims

of

each

[sic]

Plaintiff.”

Accordingly, Plaintiffs separately assert a

breach of contract claim against Defendants based on Defendants’
alleged failure or refusal to pay Plaintiffs’ individual insurance
claims.

(Compl. ¶¶ 16-21.)
Based on the allegations of the Complaint, Plaintiffs’

claims share very little in common.
that

Defendants

issued

Plaintiffs

Although Plaintiffs allege
“Standard

Flood

Insurance

The following facts are drawn from the Complaint and are presumed
to be true for the purposes of this Memorandum and Order.
1

2

Policies” (Compl. ¶ 3), they do not state whether the policies are
identical
Plaintiffs

or

if

they

generally

even

contain

similar

allege

that

Superstorm

terms.
Sandy

Although
“severely

damag[ed]” their properties (Compl. ¶ 11), they do not explain the
nature and extent of the damage to their distinct properties.
Plaintiffs do not explain why Defendants denied their claims, or
even whether Defendants did so for the same reasons.

Moreover,

Plaintiffs respective properties are in different locations in two
different New York counties.

(Compl. ¶ 1.)

DISCUSSION
Plaintiffs allege that their claims are properly joined
under Rule 20(a) of the Federal Rules of Civil Procedure “because
they present similar claims against common Defendants and involve
questions of fact or law that are common to all Plaintiffs.”
(Compl. ¶ 7.)

The Court disagrees.

As explained below, the facts

alleged in the Complaint do not satisfy the first precondition to
joinder under Rule 20(a), i.e., that Plaintiffs’ claims arise out
of the same “transaction” or “occurrence.”
I.

Permissive Joinder of Parties
Rule 20(a)(1) 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
3

plaintiffs will arise in the action.”

FED. R. CIV. P. 20(a)(1).

These elements are preconditions and both must be met for joinder
to be proper.

Deskovic v. City of Peekskill, 673 F. Supp. 2d 154,

159 (S.D.N.Y. 2009) (“As is clear from the plain language of [the
Rule], both criteria must be met for joinder to be proper.”).
While “[t]he requirements of Fed. R. Civ. P. 20(a) are to be
interpreted liberally to enable the court to promote judicial
economy by permitting all reasonably related claims for relief by
or against different parties to be tried in a single proceeding,
the requirements of the rule still must be met and constrain the
Court's discretion.”

Kalie v. Bank of Am. Corp., --- F.R.D. ----

, 2013 WL 4044951, at *3 (S.D.N.Y. Aug. 9, 2013) (alteration in
original) (internal quotation marks and citation omitted).

“If 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.”

Id.

In determining whether claims 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.’”

Id.

(quoting United States v. Aquavella, 615 F.2d 12, 22 (2d Cir.

4

1979)).

Plaintiffs bear the burden of demonstrating that joinder

is proper under Rule 20(a).

Deskovic, 673 F. Supp. 2d at 159.

Here, Plaintiffs’ claims do not arise out of the same
transaction or occurrence.

Courts in this District have recently

applied the standards set forth above to almost identical lawsuits
seeking

insurance

coverage

for

property

damage

caused

by

Superstorm Sandy and have summarily held that joinder is not
appropriate.

See, e.g., Dante v. Nat’l Flood Ins. Program, No.

13-CV-6207, 2013 WL 6157182, at *2 (E.D.N.Y. Nov. 22, 2013)
(collecting similar cases from the Eastern District of Louisiana
and

the

Southern

District

of

Mississippi

denying

joinder

of

insurance claims related to property damage caused by Hurricane
Katrina); Baiardi v. The Standard Fire Ins. Co., No. 13-CV-5912,
2013 WL 6157231, at *2-3 (E.D.N.Y. Nov. 21, 2013). As these courts
recognized, despite the fact that a single natural disaster,
Superstorm Sandy, caused the damage to Plaintiffs’ properties,
Plaintiffs’ claims do not arise out of the same transaction or
occurrence

because

“[t]he

claims

involve

entirely

different

factual and legal issues, including each property's respective
condition

and

location

before

the

storm,

the

properties, and the extent of damage sustained.”

value

of

the

Dante, 2013 WL

6157182, at *2 (quoting Sucherman v. Metro. Prop. & Cas. Ins. Co.,
Nos. 06–CV-8765, 05–CV-6456, 2007 WL 1484067, at *2 (E.D. La. May
21, 2007)).

Thus, with respect to damages, Plaintiffs’ individual
5

claims undoubtedly will require different evidence relating to the
cause of and the extent of the loss. Plaintiffs’ individual claims
also may require particularized evidence on the issue of whether
the policies actually provide coverage for Plaintiffs’ claims
because

Plaintiffs

purchased

separate

insurance

policies

and

Defendants may have different reasons for denying and/or limiting
payment for Plaintiffs’ individual claims.
As far as the Court can tell from the Complaint here,
the only material commonalities between Plaintiffs’ claims are
that Plaintiffs’ properties suffered damages caused by the same
storm and that Plaintiffs present similar legal theories against
common defendants. However, the mere presence of common defendants
and “common questions of law or fact does not satisfy the same
transaction or occurrence requirement.”

Id. at *3 (holding that

plaintiffs’

for

separate

insurance

claims

damages

caused

by

Superstorm Sandy did not arise out of the same transaction or
occurrence

because

plaintiffs

“failed

to

explain

why

their

individual claims should be joined other than that they share two
common facts––that they were brought about by Hurricane Sandy and
brought

against

[the

same

defendant]––and

may

raise

similar

theories of law”) (quoting McNaughton v. Merck & Co., No. 04-CV8297, 2004 WL 5180726, at *2 (S.D.N.Y. Dec. 17, 2004)); see Abraham
v. Am. Home Mortg. Servicing, Inc., --- F. Supp. 2d ----, 2013 WL
2285205, at *4 (E.D.N.Y. May 23, 2013) (holding that plaintiffs’
6

“separate mortgage transactions d[id] not constitute a single
transaction

or

occurrence”

and

stating

that

“even

claims

by

plaintiffs who engaged in separate loan transactions by the same
lender cannot be joined in a single action”).
With

no

common

transaction

or

occurrence

among

Plaintiffs’ claims, the Court therefore finds that Plaintiffs’
claims are not properly joined under Rule 20(a).

Accordingly, the

claim of the second-named plaintiff, Joanne Peterson, is sua sponte
SEVERED from this action pursuant to Rule 20 and DISMISSED WITHOUT
PREJUDICE to commencing a separate action related to her insurance
policy.

See Kalie, 2013 WL 4044951, at *6 (holding that where

there is “no common transaction or occurrence, severance and
dismissal of the misjoined claims is mandatory”).
II.

Severance Under Rule 21
Finally, the Court notes that, even if the presence of

common defendants or a single natural disaster were sufficient to
satisfy Rule 20(a), the Court would reach the same result in
exercising its discretion under Rule 21 of the Federal Rules of
Civil Procedure.

Rule 21 provides, in relevant part, that “[o]n

motion or on its own, the court may at any time, on just terms,
add or drop a party . . . [and] sever any claim against any party.”
FED. R. CIV. P. 21.
In deciding whether to sever a claim under Rule 21,
courts generally consider, in addition to the preconditions set
7

forth in Rule 20(a), “[1] whether settlement of the claims or
judicial economy would be facilitated; [2] whether prejudice would
be avoided if severance were granted; and [3] 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).
Here, joinder of Plaintiffs’ claims involving separate
insurance policies does not serve the interest of judicial economy.
There will be little, if any, overlapping discovery and Plaintiffs’
individual

breach

of

contract

claims

will

require

distinct

witnesses and documentary proof. See Boston Post Rd. Med. Imaging,
P.C. v. Allstate Ins. Co., No 03-CV-3923, 2004 WL 1586429, at *2
(S.D.N.Y. July 15, 2004) (severing breach of insurance policy
claims even though policies were identical because joinder would
not

serve

the

interests

of

judicial

economy

or

efficiency).

Furthermore, settlement of the claims is likely to be facilitated
8

if the claims relating to separate insurance policies are litigated
separately.

See Adams v U.S. Bank, NA, No. 12-CV-4640, 2013 WL

5437060, at * 4 (E.D.N.Y. Sept. 27, 2013). In addition, “[a] joint
trial could lead to confusion of the jury and thereby prejudice
defendants.”

Kalie, 2013 WL 4044951, at * 6 (internal quotation

marks and citation omitted).

Thus, for these reasons, the Court

also finds that the Rule 21 factors require severance of the
second-named plaintiff’s claims.
CONCLUSION
For the foregoing reasons, the claim of Plaintiff Joanne
Peterson,

the

second-named

plaintiff,

is

sua

sponte

SEVERED

pursuant to Rules 20 and 21 of the Federal Rules of Civil Procedure
and DISMISSED WITHOUT PREJUDICE to commencing a separate action
for her insurance policy issued by Defendants.

If Ms. Peterson

wishes to commence a separate action, she must do so within thirty
(30) days of the date of this Memorandum and Order.
Additionally, the statute(s) of limitations for any
claim asserted herein is tolled for a period of thirty (30) days
from the date of this Order.
SO ORDERED.

/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

December
17 , 2013
Central Islip, NY
9