Salle et al v. Allstate Insurance Company
Filing
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OPINION and ORDER: SO ORDERED that all claims by plaintiffs other than Salle 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 deft. The statute of limitations for the cause of action asserted herein is tolled for a period of thirty (30) days from the date of this Order. Susan Mitchell, John Balinsky and Michael J. Mitchell terminated. Ordered by Judge Sandra J. Feuerstein on 12/3/2013. (Florio, Lisa)
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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LINDA SALLE, eta!.,
OPINION AND ORDER
13 CV 6020 (SJF)(GRB)
Plaintiffs,
FILE9
-againstALLSTATE INSURANCE COMPANY,
Defendant.
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FEUERSTEIN, J.
IN Clf;RK'S Ofi'Fif;i
U S DISTRICT COW~T F 0 N y
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U~Q 03 fD13
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LONG ISLAND OFFICE
On October 29,2013, four (4) plaintiffs commenced this action against defendant Allstate
Insurance Company ("defendant") pursuant to, inter alia, the National Flood Insurance Act
("NFIA"), 42 U.S.C. §§ 4001, et seq., 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
plaintiffs 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, Linda Salle
("Salle"), 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.
I.
Background
A.
Factual Background
The complaint alleges, inter alia: (1) that defendant is a "Write Your Own" insurance
carrier participating in the National Flood Insurance Program pursuant to the NFIA, (Complaint
["Compl."], '1[3); (2) that defendant issued an insurance policy to each plaintiff covering losses to
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his or her property and contents "against physical damage by or from flood," (Campi., ft 4, 9);
(3) that each plaintiff paid all ofthe premiums on his or her policy,
(Campi.,~
10); (4) that as a
result of"Superstorm Sandy" ("the Storm"), each plaintiffs property and contents were damaged
"by and from flood," (Campi., ~~ II, 12); (5) that each plaintiff reported and properly submitted
a claim under his or her policy to defendant, (Compl., ~ 13); (6) that defendant "wrongfully
denied or unfairly limited payment on the claims of each Plaintiff," (Campi.,~ 14); (7) that each
plaintiff retained an independent expert to evaluate the damages to his or her property and
contents,
(Campi.,~
15); and (8) that the independent expert of each plaintiff determined that
"the flood event critically damaged [that plaintiffs] covered propert[y ]," id.
B.
Procedural History
On October 29, 2013, four (4) plaintiffs commenced this action against defendant
pursuant to, inter alia, the NFIA. The complaint asserts one (I) claim 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., ~~ 16-21).
II.
Discussion
A.
Permissive Joinder of Plaintiffs
Rule 20(a)(l) 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
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transactions or occurrences; and (B) any question of law or fact common to all
plaintiffs will arise in the action."
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 Com.,- 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. American Home Mortgage Servicing, Inc.,- F. Supp. 2d - , 2013 WL 2285205, at
* 3 (E.D.N.Y. May 23, 2013) (Rule (20)(a)(l)); Peterson v. Regina, 935 F. Supp. 2d 628,638
(S.D.N.Y. 2013) (Rule 20(a)(2)); Deskovic v. Citv of Peekskill, 673 F. Supp. 2d 154, 166
(S.D.N.Y. 2009) (Rule 20(a)(2)); Barnhart v. Town of Parma, 252 F.R.D. 156, 160 (W.D.N.Y.
2008) (Rule 20(a)(l)). Plaintiffs bear the burden of demonstrating that joinder is proper under
Rule 20(a). Kalie, -F.R.D.-, 2013 WL 4044951, at *5; Deskovic, 673 F. Supp. 2d at 159.
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 four (4) 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
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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 flood which allegedly damaged his or her
property may have been occasioned by the Storm. Moreover, defendant will likely 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.
B.
Misjoinder
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, No. 12 CV
4640,2013 WL 5437060, at* 4 (E.D.N.Y. Sept. 27, 2013).
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In determining 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 Coro., 288 F.R.D. 331,333 (S.D.N.Y. 2013) (quoting Erausquin v. Notz. Stucki
Mgmt. CBermuda) Ltd., 806 F. Supp. 2d 712, 720 (S.D.N.Y. 201 1)). "A court should consider
whether severance will 'serve the ends of justice and further the prompt and efficient disposition
oflitigation. "'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 four (4) 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 Salle are sua
sponte severed pursuant to Rule 21 of the Federal Ru1es of Civil Procedure and dismissed
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without prejudice to commencing separate actions for each insurance policy issued by defendant.
The statute of limitations for the cause of action asserted herein is tolled for a period of thirty
(30) days from the date of this Order.
III.
Conclusion
For the reasons stated herein, all claims by plaintiffs other than Salle 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. The
statute of limitations for the cause of action asserted herein is tolled for a period of thirty (30)
days from the date of this Order.
SO ORDERED.
s/ Sandra J. Feuerstein
SANDRA J. FEUERSTEIN
United States District Judge
Dated: December 3, 2013
Central Islip, N.Y.
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