Caballero v. Safeco Insurance Company of America Inc et al

Filing 35

ORDER granting 11 plaintiff's Motion to Remand and remanding this action to the District Court of Cleveland County, State of Oklahoma (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 4/14/2015. (ks)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
EILEEN CABALLERO,
Plaintiff,
vs.
SAFECO INSURANCE COMPANY
OF AMERICA, INC. and
INSURANCE SOLUTIONS BY IRWIN,
Defendants.

)
)
)
)
)
)
)
)
)
)
)

Case No. CIV-14-1336-M

ORDER
Before the Court is plaintiff’s Motion to Remand, filed December 22, 2014. On January 8,
2015, defendant Irwin Independent Insurance Agency, Inc., d/b/a Insurance Solutions (“Insurance
Solutions”) filed its response, and on January 12, 2015, defendant Safeco Insurance Company of
America, Inc. (“Safeco”) filed its response. On January 14, 2015, plaintiff filed her reply. Based
upon the parties’ submissions, the Court makes its determination.
The instant action arises out of a claim plaintiff made under her insurance policy for alleged
damage to her property caused by a tornado on May 20, 2013. On May 20, 2014, plaintiff filed this
action in the District Court of Cleveland County, State of Oklahoma, alleging claims against Safeco
for breach of contract, bad faith, negligence in the procurement of insurance, constructive fraud and
negligent misrepresentation, negligence, and breach of fiduciary duty and claims against Insurance
Solutions, an agent for Safeco, for negligence in the procurement of insurance, constructive fraud
and negligent misrepresentation, negligence, and breach of fiduciary duty.1

1

On December 22, 2014, plaintiff filed a First Amended Complaint. Plaintiff does not assert
claims for negligence or breach of fiduciary duty in her First Amended Complaint.

On December 3, 2014, Safeco removed this action to this Court, asserting that this Court has
diversity jurisdiction because Insurance Solutions has been fraudulently joined in this case in order
to defeat federal diversity jurisdiction. Plaintiff contends that Insurance Solutions is not fraudulently
joined and, therefore, complete diversity of the parties does not exist. Plaintiff, thus, moves this
Court to remand this action to state court.
Removal statutes are strictly construed and all doubts about the correctness of removal are
resolved in favor of remand. Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982).
When a non-diverse party has been joined as a defendant, then in the absence of a federal question,
the removing defendant may avoid remand only by demonstrating fraudulent joinder. Batoff v. State
Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992). The party asserting fraudulent joinder carries a
heavy burden in making this showing. Batoff, 977 F.2d at 851; Montano v. Allstate Indem., No. 992225, 2000 WL 525592, at *1 (10th Cir. April 14, 2000) (unpublished opinion).
“Joinder is fraudulent where there is no reasonable basis in fact or colorable ground
supporting the claim against the joined defendant, or no real intention in good faith to prosecute the
action against the defendants or seek a joint judgment.” Batoff, 977 F.2d at 851 (internal quotations
and citations omitted). If there is even a possibility that a state court would find the complaint states
a cause of action against the non-diverse defendant, the federal court must find joinder was proper
and remand the case to state court. Batoff, 977 F.2d at 851; Montano, 2000 WL 525592, at *1. In
determining fraudulent joinder claims, the court must resolve all disputed questions of fact and any
uncertainties as to the current state of controlling substantive law in favor of the non-removing party.
Batoff, 977 F.2d at 852; Montano, 2000 WL 525592, at *1.

2

In the instant action, plaintiff alleges a claim against Insurance Solutions for negligence in
the procurement of insurance. Generally, under Oklahoma law, “[a]n agent has the duty to act in
good faith and use reasonable care, skill and diligence in the procurement of insurance and an agent
is liable to the insured if, by the agent’s fault, insurance is not procured as promised and the insured
suffers a loss.” Swickey v. Silvey Co., 979 P.2d 266, 269 (Okla. Civ. App. 2009) (citations omitted).
In her Petition, plaintiff alleges that through the fault of Insurance Solutions, the insurance
requested by plaintiff was not procured as promised and plaintiff suffered a loss. See Petition at ¶
33. Additionally, plaintiff alleges:
Defendant Insurance Solutions breached its duty owed to Plaintiff by:
a.
Representing to Plaintiff that the replacement cost policy she
was being sold would serve to replace her home and personal
property without any deduction for depreciation knowing
such a statement was untrue;
b.
Failing to disclose to Plaintiff at the time Insurance Solutions
sold her her policy that the only way she could actually
recover the replacement costs benefits was to first use a
portion of her own money to replace the property first. And
if she could not do so, she would never receive the
replacement cost benefits she had paid extra for;
c.
Procuring an insurance policy which did not actually serve to
return her home and personal property to its pre-loss
condition each were severely damaged by a covered loss;
d.
Procuring a policy which did not accurately reflect the
replacement cost of Plaintiffs’ dwelling.
Petition at ¶ 34.2
Having carefully reviewed the parties’ submissions and the Petition, the Court finds that
there is a possibility that an Oklahoma court would find plaintiff’s Petition states a cause of action
for negligence in the procurement of insurance against Insurance Solutions. Specifically, the Court

2

Plaintiff’s allegations in her First Amended Complaint are substantially similarly to those
made in her Petition.
3

finds that there is a reasonable basis in fact and a colorable ground supporting plaintiff’s negligence
in the procurement of insurance claim against Insurance Solutions. Because this Court must resolve
all disputed questions of fact in favor of plaintiff, the Court finds that there is a possibility that
plaintiff could establish that Insurance Solutions agreed to procure specific insurance coverage and
then failed to do so.
Insurance Solutions further contends there is fraudulent joinder because dismissal of
plaintiff’s claims against Insurance Solutions is mandatory because plaintiff failed to attach an
affidavit of expert consultation as required by Okla. Stat. tit. 12, § 19.1. Having carefully reviewed
the parties’ submissions, the Court finds that there is a possibility that an Oklahoma court would find
that plaintiff’s claims should not be dismissed based upon § 19.1. Specifically, the Court finds that
a court could find that no expert is necessary for plaintiff’s claims and, therefore, no affidavit was
required under § 19.1. A court could also find that § 19.1 does not apply to plaintiff’s claims
because it was enacted after plaintiff’s claims arose. Further, in light of the Oklahoma Supreme
Court’s rulings on the prior version of § 19.1, the Court finds a court could find § 19.1 is
unconstitutional as it violates the Oklahoma Constitution’s prohibition against “special laws” and
financial barriers on access to courts. See Wall v. Marouk, 302 P.3d 775 (Okla. 2013). Accordingly,
the Court finds that Insurance Solutions has failed to show that there is no possibility that plaintiff’s
claims would not be dismissed for failure to attach an affidavit of expert consultation.
Accordingly, because this Court finds that there is a possibility that plaintiff could establish
a negligence in the procurement of insurance claim against Insurance Solutions and that there is a
possibility that this claim would not be dismissed for failure to attach an affidavit of expert
consultation, the Court finds that Insurance Solutions is not fraudulently joined. Therefore, the

4

Court GRANTS plaintiff’s Motion to Remand [docket no. 11] and REMANDS this action to the
District Court of Cleveland County, State of Oklahoma.
IT IS SO ORDERED this 14th day of April, 2015.

5