KAPTON v. OHIO CASUALTY INSURANCE COMPANY, INC. et al

Filing 15

MEMORANDUM OPINION & ORDER GRANTING re 10 MOTION to Remand filed by WILLIAM KAPTON. This action is remanded to the Court of Common Pleas of Beaver County, Pennsylvania forthwith, each party to bear its own costs. The clerk shall send a certified copy of this Order to the Court of Common Pleas of Beaver County Pennsylvania in accordance with 28 U.S.C. § 1447(c) and docket this case CLOSED. Signed by Magistrate Judge Robert C. Mitchell on 4/17/2014. (ajt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

WILLIAM KAPTON,
Plaintiff,
vs.
OHIO CASUALTY INS. CO., INC.,
MICHAEL J. RADLE and JULIE
CLERKIN,
Defendants.

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Civil Action No. 2:14-69

MEMORANDUM OPINION
ROBERT C. MITCHELL, United States Magistrate Judge.
I. INTRODUCTION
Presently for disposition is Plaintiff’s, William Kapton’s, Motion to Remand [ECF No.
10]. For the following reasons, Plaintiff’s motion is hereby granted and the case will be
remanded back to state court in accordance with 28 U.S.C. § 1447(c).1
II. BACKGROUND
This case was originally commenced in the court of common pleas of Beaver County,
Pennsylvania and removed to this Court pursuant to 28 U.S.C. § 1441. Plaintiff, William
Kapton, is a citizen of Pennsylvania who was involved in a motor vehicle accident on May 5,
2011 on Pennsylvania Turnpike, State Highway 43. On May 5, 2011, Plaintiff was operating a
bucket truck for his employer on the west berm of the southbound lane of Highway 43. He was
struck by a Ford Explorer that travelled partially off of the travel lane and struck the rear of the
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All parties have consented to jurisdiction before a United States Magistrate Judge;
therefore, the Court has authority to decide dispositive motions, and to eventually enter final
judgment. See 28 U.S.C. § 636 et seq.; Consent to Trial/Jurisdiction by United States Magistrate
Judge by William Kapton [ECF No. 8]; Consent to Trial/Jurisdiction by United States Magistrate
Judge by Julie Clerkin, Ohio Casualty Insurance Company, Inc. and Michael J. Radle [ECF No.
9].
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bucket truck occupied by Plaintiff, resulting in substantially serious and permanent injuries to
Plaintiff.
Defendant, Ohio Casualty Insurance Company (“Ohio Casualty”), is an insurance
company licensed in Pennsylvania, and is a New Hampshire Corporation with its principal place
of business located in Massachusetts in which Plaintiff’s company holds a commercial fleet
automobile insurance policy with. Defendants Michael J. Radle and Julie Clerkin were claims
representatives employed by Ohio Casualty to handle underinsured motorist claims, and were
charged with handling plaintiff’s motor vehicle accident.2 Apparently, while the handling of
Plaintiff’s claim was originally within Defendant Radle’s responsibility, Plaintiff’s claim was
later delegated to Defendant Clerkin.
Plaintiff seeks damages in connection with an underinsured motorist claim for his injuries
sustained. At the time of the accident, the tortfeasor was insured with a bodily injury limitation
of $100,000.00 and Plaintiff was paid the applicable policy limits by the tortfeasor’s insurance
company. Plaintiff argues that the tortfeasor’s bodily injury policy limits were inadequate to
compensate Plaintiff for his injuries and he seeks to invoke coverage under Ohio Casualty’s
underinsured motorist provision.
Plaintiff claims that Ohio Casualty failed to pay any underinsured motorist benefits, and
failed to do so in bad faith. He also claims that
Defendants Radle and Clerkin ignored Plaintiff’s documented
damages, did not evaluate the claim or make any offer of
settlement, did not communicate with the Plaintiff, conducted an
inadequate, unfair, nonobjective and unreasonable investigation of
the claim, refused to provide the Plaintiff a copy of his policy, and
forced the Plaintiff to litigate his UIM claim despite the fact that
Ohio Casualty’s obligation to pay UIM benefits was reasonably
clear. [Plaintiff also alleges] that Defendant Clerkin intentionally
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The term “Defendants” used in this opinion refers to only Defendants Radle and Clerkin, as they are the
only subjects of the instant motion for remand.

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delayed, dissuaded, obstructed or otherwise improperly handled
the Plaintiff’s UIM claim.
Mot. for Remand [ECF No. 10] at ¶ 13.
The complaint was removed to this court on January 16, 2014 alleging four claims: (1) a
breach of contract against Ohio Casualty Insurance Company, (2) a violation of the Pennsylvania
bad faith statute, 42 Pa.C.S.A. § 8371, et al. against Ohio Casualty Insurance Company, (3) a
violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. §
201-1 et seq. against Michael J. Radle, and (4) a violation of the Pennsylvania Unfair Trade
Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. § 201-1 et seq. against Julie
Clerkin. See Compl. [ECF No. 1-2] at 5, 10, 18, 20.
Defendants removed this action pursuant to 28 U.S.C. § 1332 and allege that Defendants
Radle and Clerkin were fraudulently joined and that all other parties are diverse for jurisdictional
purposes because Plaintiff cannot state a claim against Defendants Radle and Clerkin. Plaintiff
claims that removal was improper because this court does not have jurisdiction over the matter
and the matter should be remanded to state court.

Specifically, Plaintiff alleges that the

following constitutes misfeasance under the UTPCPL on behalf of Defendant Radle:
Ignored documentation of Plaintiff’s damages provided on August
3, 2012; [f]ailed to evaluate Plaintiff’s claim for underinsured
motorist benefits; [f]ailed to communicate with Plaintiff
concerning his claim for underinsured motorist benefits;
[c]onducted an inadequate, unfair, dilatory, nonobjective, and
unreasonable investigation of the Plaintiff’s underinsured motorist
claim; [f]ailed and refused to provide a copy of the insurance
policy in effect on the date of the accident to the insured . . . after
request for same; and [f]orced the Plaintiff to litigate his
underinsured motorist claim when the insurer’s liability to pay
underinsured motorist benefits under the policy had become
reasonably clear.
Id. at ¶ 61. Additionally, Plaintiff alleges that the following constitutes misfeasance under the

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UTPCPL on behalf of Defendant Clerkin:
Ignored and refused to consider documentation of Plaintiff’s
damages provided on August 3, 2012 and May 31, 2013; [f]ailed to
evaluate Plaintiff’s claim for underinsured motorist benefits and
did not make any offer of settlement; [f]ailed to communicate with
the Plaintiff concerning his claim for underinsured motorist
benefits; [c]onducted an inadequate, unfair, dilatory, nonobjective,
and unreasonable investigation of the Plaintiff’s underinsured
motorist claim; [f]ailed and refused to provide a copy of the
insurance policy in effect on the date of the accident to the insured
. . . after multiple requests to do so; [f]orced the Plaintiff to litigate
his underinsured motorist claim when the insurer’s liability to pay
underinsured motorist benefits under the policy had become
reasonably clear[;] and [i]n intentionally delaying, dissuading,
obstructing or otherwise improperly handling Plaintiff’s
underinsured motorist claim.
Id. at ¶ 69.
Defendants argue that a remand is inappropriate because the conduct complained of does
not give rise to misfeasance, but rather constitutes nonfeasance which is not actionable under the
UTPCPL.
III. ANALYSIS
A. Diversity Jurisdiction, 28 U.S.C. § 1332
A defendant has a statutory right to remove a civil action from state court if the claims
brought by plaintiff could have been originally brought in federal court. See 28 U.S.C. § 1441(a).
Under the statutory scheme, if the defendant removes to federal court based upon diversity of
citizenship, “a proper exercise of federal jurisdiction requires satisfaction of the amount in
controversy requirement as well as complete diversity between the parties, that is, every plaintiff
must be of diverse state citizenship from every defendant.” In re Briscoe, 448 F.3d 201, 215 (3d
Cir. 2006). Here, Plaintiff and Defendants Radle and Clerkin are all citizens of Pennsylvania,
therefore the court only has jurisdiction over this case if they were fraudulently joined.

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B. Fraudulent Joinder
Fraudulent joinder is an exception to the requirement that removal be “predicated solely
upon complete diversity.” Briscoe, 448 F.3d at 215. Where, on the face of the state court
complaint, the parties are not diverse, the defendant may still remove the case to federal court if
it can show that the non-diverse defendant was added to the action solely for the purposes of
defeating diversity jurisdiction. Id. If the court finds that the defendant was fraudulently joined,
it can “disregard, for jurisdictional purposes, the citizenship of certain non-diverse defendants,
and thereby retain jurisdiction.” Id. (quoting Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir.
1999) (citations omitted)).

The removing party carries a heavy burden of proof to show

fraudulent joinder. Batoff v. State Farm Ins. Co., 977 F.2d 848, 851-52 (3d Cir. 1992).
Contrarily, if the district court determines that it does not have subject matter jurisdiction
because joinder of the defendant in question was not fraudulent, the district court must remand
the case to state court. 28 U.S.C. 1447(c). [R]emoval statutes are to be strictly construed against
removal and all doubts should be resolved in favor of remand.” Batoff, 977 F.2d at 851-52.
Additionally, where a case is remanded for failure to find fraudulent joinder, the district court
may require the “payment of just costs and any actual expenses, including attorney’s fees
incurred as a result of the removal.” Id.
In considering a motion for remand, the district court must adhere to certain guidelines:
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. But, if there is
even a possibility that a state court would find that the complaint
states a cause of action against any one of the resident defendants,
the federal court must find that joinder was proper and remand
the case to state court. . . . In evaluating the alleged fraud, the
district court must focus on the plaintiff’s complaint at the time the
petition for removal was filed. In so ruling, the district court must
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assume as true all factual allegations of the complaint. It also must
resolve any uncertainties as to the current state of controlling
substantive law in favor of plaintiff.
Batoff, 977 F.2d at 851-52 (emphasis added) (citations omitted). Importantly, a district court
must refrain from conducting a merits analysis because such a determination “must be left to the
state court” to determine. Briscoe, 448 F.3d at 218. A district court must not find that a
defendant’s joinder is fraudulent “[s]imply because [the district court has] come to believe that,
at the end of the day, a state court could dismiss the allegations against a defendant for failure to
state a cause of action.” Lyall v. Airtran Airlines, Inc., 109 F.Supp.2d 365, 367-68 (E.D.Pa.
2000). Fraudulent joinder is found only where the plaintiff’s claims are “wholly insubstantial
and frivolous,” Batoff, 977 F.2d at 852 (citations omitted), and is “reserved for situations where
recovery from the nondiverse defendant is a clear legal impossibility.” West v. Marriot Hotel
Servs., Inc., 2010 WL 4343540, at *3 (E.D.Pa. Nov. 2, 2010)
The contention between the parties is simple: Plaintiff argues that Defendant acted with
misfeasance in improperly handling his underinsured motorist claim, and states a claim under the
UTPCPL,3 while Defendants argue that their conduct in allegedly mishandling of Plaintiff’s
claim may rise to the level of nonfeasance, not misfeasance, and nonfeasance is not actionable
under the UTPCPL. Defendants therefore argue that their joinder was fraudulent because the
UTPCPL claims against them are not colorable, and are frivolous.
The Pennsylvania UTPCPL prohibits “unfair or deceptive acts or practices in the conduct
of any trade or commerce.” 73 P.S. § 201-3. “Any person who purchases or leases goods or
services primarily for personal, family or household purposes and thereby suffers an
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Plaintiff cites the following cases for this proposition: Ozanne v. State Farm Mutual, 2011 WL 1743683
(W.D.Pa. May 5, 2011); Grossi v. Travelers Ins. Co., 2010 WL 483797 (W.D.Pa. Feb. 5, 2010); Kenia v.
Nationwide Mutual Ins. Co., 2008 WL 220421 (M.D.Pa. Jan. 25, 2008); Thomas v. Nationwide Mutual Ins. Co.,
2005 WL 2021132 (M.D.Pa. Aug. 15, 2005); Fenkner v. Nationwide Mutual Ins. Co., 2005 WL 1172642 (M.D.Pa.
May 18, 2005).

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ascertainable loss of money or property, real or personal, as a result of the use or employment by
any person of a method, act or practice declared unlawful” by the statute, may bring a private
cause of action. 73 P.S. § 201-9.2(a).
Of the twenty-one deceptive acts and practices set forth in the UTPCPL, Plaintiff alleges
that Defendants engaged in the following four unfair or deceptive acts or practices under the
UTPCPL:
(ii) Causing likelihood of confusion or of misunderstanding as to
the source, sponsorship, approval or certification of goods or
services;
...
(v) Representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits or qualities
that they do not have or that a person has a sponsorship, approval,
status affiliation or connection that he does not have;
...
(xiv) Failing to comply with the terms of any written guarantee or
warranty given to the buyer at, prior to, or after a contract for the
purchase of goods or services is made;
...
[and]
(xxi) Engaging in any other fraudulent or deceptive conduct which
creates a likelihood of confusion or misunderstanding.
73 P.S. §§ 201-2 (ii), (v), (xiv), (xxi); Pl.’s Reply [ECF No. 14] at 2.
This court in Grossi v. Travelers Ins. Co., has noted that it is proper to remand a case
involving a UTPCPL claim against an insurance adjuster where the defendant argues that the
adjuster’s conduct amounted to nonfeasance, while the plaintiff argued the adjuster’s conduct
amounted to misfeasance:
“Misfeasance” is the improper performance of a contractual
obligation, and could include a “reckless mistake.” Misfeasance
may exist, for example, if an insurer conducted a post-loss
investigation in an unfair or unreasonable manner. To delve
further into this issue would require an assessment of the merits of
Plaintiff’s claim, or an analysis similar to that triggered by Rule
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23(b)(6) which applicable law precludes. “If there is even a
possibility that a state court would find that the complaint states a
cause of action against any one of the resident defendants, the
federal court must find that joinder was proper and remand the
case to state court.
Grossi v. Travelers Ins. Co., 2010 WL 483797, at *2 (W.D.Pa. Feb. 5, 2010) (internal citations
omitted).
The same reasoning applies here. Defendants argue that their conduct may give rise to
nonfeasance, but not misfeasance as Plaintiff suggests. For the court to make a determination
whether Defendants’ conduct rose to the level of misfeasance would be improperly be invoking
an assessment of the claim under Rule 12(b)(6), or a merits determination, which is prohibited by
applicable case law at this juncture. Because misfeasance, for purposes of the UTPCPL, may
exist where an adjuster conducts or fails to conduct a post-loss investigation in an unfair or
unreasonable manner, there is a possibility that the state court would find that Plaintiff’s
complaint states a cause of action against either of the insurance adjusters. The Defendants have
not met its substantial burden of persuading this court that they have been fraudulently joined for
the sole purpose of divesting this court of subject matter jurisdiction. Accordingly, the court
finds that the defendant insurance adjusters were not fraudulently joined in this action and no
diversity of citizenship exists.

Therefore, this case must be remanded to state court.

Additionally, the court finds that assessing costs on Defendants is inappropriate and each party is
to bear its own costs.
IV.

CONCLUSION
For the foregoing reasons, the court finds that Defendants have not demonstrated that

Plaintiff fraudulently joined Defendants Radle and Clerkin in an effort to destroy diversity of
citizenship among the parties.

Therefore, Plaintiff’s Motion for Remand is granted.

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An

appropriate Order follows.

By the Court,
s/Robert C. Mitchell
ROBERT C. MITCHELL
United States Magistrate Judge

cc:

Keith R. McMillen, Esq.
Kelly M. Tocci, Esq.
Patricia A. Monahan, Esq.
William C. Foster, Esq.
(via CM/ECF Electronic Mail)

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

WILLIAM KAPTON,
Plaintiff,
vs.
OHIO CASUALTY INS. CO., INC.,
MICHAEL J. RADLE and JULIE
CLERKIN,
Defendants.

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Civil Action No. 2:14-69

ORDER OF COURT
AND NOW, this 17th day of April, 2014, it is hereby ORDERED, ADJUDGED and
DECREED that Plaintiff’s, William Kapton’s, Motion for Remand [ECF No. 10] is GRANTED;
IT IS FURTHER ORDERED that this action is remanded to the Court of Common Pleas
of Beaver County, Pennsylvania forthwith, each party to bear its own costs. The clerk shall send
a certified copy of this Order to the Court of Common Pleas of Beaver County Pennsylvania in
accordance with 28 U.S.C. § 1447(c) and docket this case CLOSED.

s/Robert C. Mitchell
ROBERT C. MITCHELL
United States Magistrate Judge

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