Roth et al v. Hartford Insurance Company of the Midwest
Filing
6
MEMORANDUM & ORDER. All claims by Plaintiffs other than GARY ROTH are sua sponte SEVERED and are DISMISSED WITHOUT PREJUDICE. Any plaintiff wishing to commence a separate action must do so within 30 days of the date of this Order. Additionally, the s tatute(s) of limitations for any claim asserted herein is tolled for a period of 30 days from the date of this Order. Parties Liam Fazekas, Francis Harvey, Marylyn Harvey, Sol Leiner, Jude Ozuzu, Nicole White Rayner, William Rayner, Larry Wade, Leary Wade, Cathlena Casimano and Marjorie Donnelly are TERMINATED from this action. Ordered by Judge Joanna Seybert on 12/13/2013. (Nohs, Bonnie)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------X
GARY ROTH, CATHLENA CASIMANO,
LIAM FAZEKAS, WILLIAM RAYNER,
NICOLE WHITE RAYNER, MARJORIE
DONNELLY, FRANCIS HARVEY,
MARYLYN HARVEY, JUDE OZUZU,
SOL LEINER, LARRY WADE, and
LEARY WADE,
Plaintiffs,
- against-
MEMORANDUM & ORDER
13-CV-5993(JS)(WDW)
HARTFORD INSURANCE COMPANY OF
THE MIDWEST,
Defendant.
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APPEARANCES
For Plaintiffs:
Sean Greenwood, Esq.
Gauthier Houghtaling and Williams
52 Duane Street, 7th Floor
New York, NY 10007
For Defendant:
No appearances.
SEYBERT, District Judge:
On October 29, 2013, twelve plaintiffs (collectively
“Plaintiffs”) commenced this action against defendant Hartford
Insurance Company of the Midwest (“Defendant”) pursuant to, inter
alia, the National Flood Insurance Act (“NFIA”), 42 U.S.C. §§ 4001,
et seq., seeking to recover damages regarding eight different
properties 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.
For the reasons set forth below, the claims of all
Plaintiffs except the first-named plaintiff, Gary Roth (“Roth”),
are sua sponte SEVERED from this action pursuant to Rules 20 and 21
of the Federal Rules of Civil Procedure and are DISMISSED WITHOUT
PREJUDICE to commencing separate actions for each insurance policy
issued by Defendant.
BACKGROUND1
Plaintiffs separately own real property in this judicial
district and separately purchased from Defendant a flood insurance
policy to cover their respective properties.
(Compl. ¶¶ 1, 4, 9.)
Defendant is a “Write Your Own” insurance carrier participating in
the National Flood Insurance Program pursuant to the National Flood
Insurance Act.
(Compl. ¶¶ 3-4.)
Plaintiffs allege damage to their properties due to
flooding 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
Defendant but that Defendant “wrongfully denied or unfairly limited
payment on the claims of each Plaintiff.”
(Compl. ¶¶ 13-14.)
Accordingly, Plaintiffs separately assert a breach of contract
claim against Defendant based on Defendant’s alleged failure and/or
refusal to pay Plaintiffs’ individual insurance claim.
(Compl.
¶¶ 16-21.)
Based on the allegations of the Complaint, the only
1
The following facts are drawn from the Complaint and are
presumed to be true for the purposes of this Memorandum and
Order.
2
things Plaintiffs’ claims share in common are that (1) Plaintiffs
purchased a flood insurance policy from Defendant (Compl. ¶ 9); and
(2) Plaintiffs submitted insurance claims for damage caused by the
same storm, which Defendant ultimately “wrongfully denied or [for
which Defendant] unfairly limited payment.”
(Compl. ¶ 13-14.)
Plaintiffs allege that Defendant issued Plaintiffs “Standard Flood
Insurance
Policies”
but
Plaintiffs
do
not
state
whether
the
policies are identical or if they even contain similar terms.
(Compl. ¶ 3.)
Plaintiffs also allege that Superstorm Sandy
“severely damag[ed]” their properties but Plaintiffs do not explain
the nature and extent of the damage to these distinct properties.
(Compl. ¶ 11.) Plaintiffs do not allege that the properties are in
the same location.
Moreover, Plaintiffs do not explain why
Defendant denied and/or unfairly limited payment for their claims,
or even whether Defendant did so for the same reason.2
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 a common Defendant 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
2
Besides identifying the locations of the properties, the
Complaint actually does not include a single factual allegation
linked specifically to each Plaintiff.
3
joinder under Rule 20(a), i.e., that Plaintiffs’ claims arise out
of the same “transaction” or “occurrence.”
I.
Permissive Joinder of Plaintiffs
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
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) (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
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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.
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
value of the properties, and the extent of damage sustained.”
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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 claims undoubtedly will require different
evidence
relating
to
the
cause,
and
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 a common
defendant.
“common
However, the mere presence of a common defendant and
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-CV6
8297, 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’
“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
remaining claims of all Plaintiffs except the first-named Plaintiff
Gary Roth are sua sponte SEVERED from this action and are DISMISSED
WITHOUT PREJUDICE to commencing a separate action for claims
related to his or 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
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a party . . . [and] severe any claim against any party.”
CIV. P. 21.
FED. R.
In deciding whether to sever a claim under Rule 21,
courts generally consider, in addition to the preconditions set
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
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not
serve
the
interests
of
judicial
economy
or
efficiency).
Furthermore, settlement of the claims is likely to be facilitated
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.
CONCLUSION
For the reasons stated herein, all claims by Plaintiffs
other than Roth are sua sponte SEVERED pursuant to Rules 20 and 21
of the Federal Rules of Civil Procedure and are DISMISSED WITHOUT
PREJUDICE to commencing separate actions for each insurance policy
issued by Defendant.
Any plaintiff wishing to commence a separate
action 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 Memorandum and Order.
SO ORDERED.
/s/ JOANNA SEYBERT
JOANNA SEYBERT, U.S.D.J.
Dated: December
13 , 2013
Central Islip, New York
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