United States District Court, N.D. Alabama, Eastern Division
MEMORANDUM OPINION AND ORDER
VIRGINIA EMERSON HOPKINS United States District Judge
John Brown (“Mr. Brown”) initiated this insurance
action against Defendants State Farm Fire & Casualty
Company (“State Farm”) and Donald Taylor, a/k/a
Donald Taylor Agency (hereinafter, “Mr. Taylor”)
(together, “Defendants”) in the Circuit Court of
Jefferson County on July 20, 2016. (Doc. 1-2). Mr. Brown's
Complaint asserts claims of Negligent Procurement of
Insurance, Breach of Contract, Bad Faith Refusal To
Investigate and/or Pay a Valid Claim, Bad Faith Failure To
Pay a Valid Claim, Breach of Contract To Procure Adequate
Insurance Coverage, and Negligent Hiring/Supervision.
Id. On August 24, 2016, State Farm and Mr. Taylor
removed Mr. Brown's lawsuit to federal court on the basis
of diversity jurisdiction, pursuant to 28 U.S.C. § 1332
and in conjunction with the fraudulent joinder of Mr. Taylor.
(Doc. 1 at 4, ¶ 8-10). Defendants argue in their notice
of removal that Mr. Taylor was fraudulently joined because
none of Mr. Brown's claims against him are colorable
under Alabama law.
before the court is Mr. Taylor's Motion To Dismiss, which
was filed on August 24, 2016. (Doc. 3). As Mr. Brown did not
file either a Motion To Remand or a response to Mr.
Taylor's Motion To Dismiss, the court ordered Mr. Brown
to respond to Mr. Taylor's Motion and to address
Defendants' fraudulent joinder arguments on October 24,
2016. (Doc. 12). Mr. Brown filed a Response on November 4,
2016 (doc. 13), and Defendants filed a Reply on November 21,
2016 (doc. 14). The Motion To Dismiss and underlying
fraudulent joinder arguments are now ripe for disposition.
following reasons, the court finds that Mr. Brown is not able
to maintain a colorable cause of action against Mr. Taylor.
Accordingly, as Mr. Taylor has been fraudulently joined,
there is complete diversity in this case. This court retains
jurisdiction to determine Mr. Taylor's Motion To Dismiss,
which is due to be GRANTED.
Brown purchased an insurance policy known as a
“Homeowners Policy” from Defendant State Farm.
(Doc. 1-2 at 9, ¶ 6). The policy was issued effective
from August 12, 2014, to August 12, 2015, and insured a
single family dwelling, providing coverage for the dwelling,
other structures, personal property, and loss of use.
Id. at 9-10, ¶7. The policy was underwritten,
marketed, sold, and issued to Mr. Brown by State Farm, which
acted through and/or in conjunction with Mr. Taylor and his
company, Don Taylor Agency. Id. ¶8.
Brown is a citizen of the state of Alabama. Id.
¶ 1. State Farm is an Illinois corporation, with its
principal place of business in the state of Illinois, that is
licensed to conduct business within the state of Alabama.
Id. ¶2; (Doc. 1 at ¶9). Mr. Taylor is also
a citizen of Alabama. (Doc. 1-2 at ¶ 3); (Doc. 1 at
October 2, 2014, lightning struck a tree located adjacent to
Mr. Brown's home. Id. ¶11. The mechanism of
the electrical strike and resultant concussion caused damage
to the foundation wall of the structure, which allowed water
to enter the dwelling and caused significant damage.
Id. Almost immediately thereafter, and in accordance
with the subject policy provisions, Mr. Brown notified State
Farm of the damages to and losses sustained on the property.
Id. at 11, ¶ 14. Mr. Brown was contacted by
State Farm through its adjuster, but State Farm did not make
any effort to determine the amounts of loss or to make any
payment to Mr. Brown. Id. at ¶15.
about November 21, 2014, Mr. Brown was notified by letter
from Amy King, a Fire Claim Representative with State Farm,
that the insurance policy did not cover the loss because the
lightning strike did not result in the damages to the home.
Id. at ¶16. State Farm denied Mr.
Brown's claim in its entirety. Id. Mr. Brown
claims that he has expended large sums for the work necessary
to determine the cause of the damage, he has undertaken
temporary repairs in order to mitigate the damage, and he has
lost the use and value of his property. Id. at
is by now axiomatic that the inferior courts are courts of
limited jurisdiction. They are ‘empowered to hear only
those cases within the judicial power of the United States as
defined by Article III of the Constitution, ' and which
have been entrusted to them by a jurisdictional grant
authorized by Congress.” Univ. of S. Ala. v. Am.
Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting
Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir.
necessary corollary to the concept that a federal court is
powerless to act without jurisdiction is the equally
unremarkable principle that a court should inquire into
whether it has subject matter jurisdiction at the earliest
possible stage in the proceedings.” Univ. of S.
Ala., 168 F.3d at 410. “Indeed, it is well settled
that a federal court is obligated to inquire into subject
matter jurisdiction sua sponte whenever it may be
lacking.” Id. (citing Fitzgerald v.
Seaboard Sys. R.R., 760 F.2d 1249, 1251 (11th Cir. 1985)
(per curiam)). Furthermore, “[b]ecause removal
jurisdiction raises significant federalism concerns, federal
courts are directed to construe removal statutes
strictly.” Univ. of S. Ala., 168 F.3d at 411
(citing Shamrock Oil & Gas Corp. v. Sheets, 313
U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941)).
Farm and Mr. Taylor premise their removal upon this
court's diversity jurisdiction. “Diversity
jurisdiction exists where the suit is between citizens of
different states and the amount in controversy exceeds the
statutorily prescribed amount, in this case $75, 000.”
Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th
Cir. 2001) (citing 28 U.S.C. § 1332(a)). Therefore,
removal jurisdiction based upon diversity requires: (1)
complete diversity of citizenship between the plaintiff(s)
and the defendant(s); and (2) satisfaction of the amount in
diversity requires that every “plaintiff must be
diverse from every defendant.” Palmer v. Hosp.
Auth., 22 F.3d 1559, 1564 (11th Cir. 1994).
“Citizenship, not residence, is the key fact that must
be alleged in the complaint to establish diversity for a
natural person.” Taylor v. Appleton, 30 F.3d
1365, 1367 (11th Cir. 1994).
Brown's state court complaint makes an unspecified demand
for damages, so the removing Defendants bear the burden of
demonstrating that the amount in controversy requirement has
been met. Roe v. Michelin N. Am., Inc., 613 F.3d
1058, 1060 (11th Cir. 2010). By alleging that they filed
their notice of removal within thirty days of service of the
complaint by Mr. Brown, Defendants have invoked Section
1446(b)'s first and less demanding removal mechanism.
See 28 U.S.C. § 1446(b)(1).A defendant's
notice of removal pursuant to Section 1446(b)(1) “need
include only a plausible allegation that the amount in
controversy exceeds the jurisdictional threshold. Evidence
establishing the amount is required by §1146(c)(2)(B)
only when the plaintiff contests, or the court questions, the
defendant's allegations.” Dart
Cherokee Basin Operating Co. v. Owens, 135 S.Ct.
547, 554, 190 L.Ed. 2D 495 (2014).
another district court in this Circuit has recently stated,
Where the plaintiff does not plead a specified amount of
damages in the complaint, a defendant's notice of removal
need include only a “plausible allegation” that
the amount in controversy meets the jurisdictional threshold.
See Dart Cherokee Basin Operating Co. v. Owens, 135
S.Ct. 547, 554 (2014) . . . [i]n assessing whether removal is
proper, the court must first look to the complaint.
Pretka, 608 F.3d at 754. If a defendant alleges that
federal jurisdiction is “facially apparent” from
the complaint, the court must evaluate whether the
“complaint itself satisfies the defendant's
jurisdictional burden.” Roe, 613 F.3d at 1061.
The law permits a district court to make
“‘reasonable deductions, reasonable inferences,
and other reasonable extrapolations'” to determine
whether federal jurisdiction exits from the face of the
complaint. Id. at 1061-62 (quoting Pretka,
608 F.3d at 754). “A district court need not
‘suspend reality or shelve common sense in determining
whether the face of the complaint . . . establishes the
jurisdictional amount.'. . . Instead, courts may use
their judicial experience and common sense in determining
whether the case stated in a complaint meets federal
jurisdictional requirements.” Roe, 613 F.3d at
1062 (citations omitted).
Johnson v. Blackburn, No. 2:16-CV-989, 2016 WL
5816114, at *1 (N.D. Ala. Oct. 5, 2016) (Bowdre, J.)
(analyzing the amount in controversy requirement in a notice
of removal made within the 30-day period in Section
their Notice of Removal, Defendants point to the policy of
insurance at the basis of this suit, which has dwelling
coverage limits of $270, 300, coverage limits of $27, 030 for
other structures, and personal property coverage limits of
$202, 725. (Doc. 1 at 17-18, ¶ 24). Defendants also
point to Mr. Brown's allegations in the complaint that he
had to “expend large sums” to determine the
cause of the damage and repair the damage; that he has
suffered, and continues to suffer, loss of value and damages
to his home and other property; and that the loss of the full
use and enjoyment of his home has resulted in
“emotional and mental distress.” Id.
(citing (Doc. 1-2) at ¶¶ 18, 36, 43). Mr. Brown
also seeks punitive damages in Counts I-VI of the Complaint.
Mr. Brown has not challenged the Defendants' assessment
of the amount in controversy. The court finds that Defendants
have satisfied their burden of demonstrating that the amount
in controversy meets the jurisdictional threshold.
Fraudulent Joinder Principles
dispute over satisfaction of the citizenship requirement in
this case has to do with whether Mr. Brown has fraudulently
joined Mr. Taylor as a defendant in the case. “[W]hen
there is no possibility that the plaintiff can prove a cause
of action against the resident (non-diverse) defendant[,
]” fraudulent joinder is established. Triggs v.
John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir.
1998). Relatedly, if fraudulent joinder is established, then
the resident defendant is subject to dismissal as a party and
its citizenship is disregarded for diversity requirement
purposes. See id.
Eleventh Circuit extensively addressed the issue of removal
based on diversity jurisdiction when a non-diverse defendant
has allegedly been fraudulently joined in Crowe v.