United States District Court, M.D. Alabama, Northern Division
MEMORANDUM OPINION AND ORDER
CHARLES S. COODY UNITED STATES MAGISTRATE JUDGE
Henry and Dana Mabry (“the Mabrys”) filed this
action in the Circuit Court of Montgomery County, Alabama on
July 19, 2016, alleging breach of contract, bad faith delay
and denial of insurance claim, negligent procurement of
insurance policy, and fraud, misrepresentation and
suppression against defendants Travelers Home and Marine
Insurance Company (“Travelers”), the Owen
Insurance Agency of Montgomery, Inc. (“the Owen
Agency”), and insurance agent Doug Poe
(“Poe”). On August 18, 2016, defendant Travelers
removed the case to this court solely on the basis of
diversity of citizenship jurisdiction. See 28 U.S.C.
§ 1441 and 28 U.S.C. § 1332. Defendants Poe and the
Owen Agency have joined the removal. (Docs. # 1 & 9).
defendant may remove to federal court any civil action over
which the court would have original jurisdiction. 28 U.S.C.
§ 1441(a). This court has jurisdiction over actions
involving citizens of different states provided that all
plaintiffs are diverse from all defendants, see
Strawbridge v. Curtiss, 7 U.S. 267 (1806), and the
amount in controversy exceeds $75, 000. 28 U.S.C. §
1332(b). Pursuant to 28 U.S.C. § 636(c)(1) and M.D. Ala.
LR 73.1, the parties have consented to the United States
Magistrate Judge conducting all proceedings in this case and
ordering the entry of final judgment.
pending before the court is the plaintiffs' timely motion
to remand in which they argue that there is not complete
diversity of the parties because the Owen Agency and Poe are
proper parties in this action, are Alabama citizens or
corporations, and their presence defeats diversity
jurisdiction. (Doc. # 15). Travelers contends that diversity
jurisdiction exists because Travelers is a foreign
corporation while the Mabrys are citizens of Alabama.
Travelers argues that while the Owen Agency is an Alabama
corporation and Poe is a citizen of Alabama, their presence
as named defendants does not defeat diversity jurisdiction
because both defendants were fraudulently joined for the very
purpose of destroying diversity jurisdiction. (Doc. # 3 at
2-10). Thus, Travelers argues that the court should disregard
the citizenship of Poe and the Owen Agency when determining
whether the case is properly removed on diversity
grounds. Upon consideration of the motion to
remand, the briefs filed in support of and in opposition to
the motion to remand, and for the reasons which follow, the
court concludes that the motion to remand is due to be
GRANTED, and this case remanded to the Circuit Court of
Montgomery County, Alabama.
STANDARD OF REVIEW
civil case filed in state court may be removed by the
defendant to federal court if the case could have been
brought originally in federal court.” Tapscott v.
MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir.
1996) (citing 28 U.S.C. § 1441(a)), abrogated on
other grounds by Cohen v. Office Depot, Inc., 204 F.3d
1069 (11th Cir. 2000). “When a defendant removes a case
to federal court on diversity grounds, a court must remand
the matter back to state court if any of the properly joined
parties in interest are citizens of the state in which the
suit was filed.” Henderson v. Washington National
Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006). When a
case is removed to federal court, a removing defendant's
burden to establish federal jurisdiction is “a heavy
one.” Pacheco de Perez v. AT&T Co., 139
F.3d 1368, 1380 (11th Cir. 1998). Any questions or doubts are
to be resolved in favor of returning the matter to state
court on a properly submitted motion to remand. Burns v.
Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994).
“[f]raudulent joinder is a judicially created doctrine
that provides an exception to the requirement of complete
diversity.” Triggs v. John Crump Toyota Inc.,
154 F.3d 1284, 1287 (11th Cir. 1996).
To establish fraudulent joinder of the non-diverse defendant,
the removing party must satisfy a “heavy” burden
of proving by clear and convincing evidence that: “(1)
there is no possibility the plaintiff can establish a cause
of action against the resident defendant; or (2) the
plaintiff has fraudulently pled jurisdictional facts to bring
the resident defendant into state court.”
Ullah v. BAC Home Loans Servicing LP, 538 F.
App'x 844, 845-46 (11th Cir. 2013) (footnote added).
See also Stillwell v. Allstate Ins. Co., 663 F.3d
1329, 1332 (11th Cir. 2011); Crespo v. Coldwell Banker
Mortg., 599 F. App'x 871 (11th Cir. 2014).
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 the joinder was proper and remand the case to the state
court.” Triggs, 154 F.3d at 1287 quoting
Coker v. Amoco Oil Co., 709 F.2d 1433, 1440-41 (11th
Cir. 1983). The plaintiffs “need not have a
winning case against the allegedly fraudulent defendant;
[they] need only have a possibility of stating a
valid cause of action in order for the joinder to be
legitimate.” Triggs, 154 F.3d at 1287. See
also Stillwell, 663 F.3d at 1333. The court must
“evaluate the factual allegations in the light most
favorable to the plaintiff[s] and must resolve any
uncertainties” in the plaintiffs' favor. Crowe
v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997).
Moreover, the court is “not to weigh the merits”
of the plaintiffs' claims “beyond determining
whether [the claim] is an arguable one under state
law.” Stillwell, 663 F.3d at 1333. Finally,
when considering a fraudulent joinder claim, the court
utilizes the state rather than federal pleadings standard.
Stillwell, 663 F.3d at 1334; Ullah, 538 F.
App'x at 846.
asserts that the citizenship of Poe and the Owen Agency
should be disregarded because the Mabrys cannot establish a
cause of action against either one of these defendants, and
thus, they were fraudulently joined. Travelers is traveling
under the “no cause of action” theory of
fraudulent joinder. The Mabrys, on the other hand, contend
that they have pled a claim of fraud in count four of the
complaint and a claim of negligent procurement in count three
of the complaint against Poe and the Owen Agency sufficient
to establish a cause of action against each defendant. The
question for the court is whether there is any possibility
that the Mabrys could maintain a fraudulent misrepresentation
or suppression claim or a negligent procurement claim against
the Owen Agency or Poe in state court. Because the court
concludes that there is a possibility that the state court
would find that the Mabrys have stated a cause of action for
negligence procurement against Poe and the Owen Agency, the
court need not address whether they have stated a cause of
action for fraudulent misrepresentation or suppression.
Facts as alleged in the complaint.
their complaint, the Mabrys allege the following facts. On
January 8, 2016, the Mabrys had a homeowners insurance policy
issued by Travelers that was in full force and effect on
their residence. (Doc. # 3, Ex. 7 at 2, ¶ 9). On January
8, 2016 and January 20, 2016, the Mabrys' residence was
burglarized. (Id. at 2-3, ¶ 12). The Mabrys
reported the thefts to the Montgomery Police Department and
timely notified Travelers of their losses under their
insurance policy. (Id. at 3, ¶ 13-14).
According to the Mabrys, Travelers has “employed a
series of delaying tactics that greatly protracted the
processing” of their claim and “imposed ...