United States District Court, N.D. Alabama, Jasper Division
DAVID PROCTOR UNITED STATES DISTRICT JUDGE
case is before the court on Plaintiffs' Motion to Remand.
(Doc. # 15). Defendants American General Life and Accident
Insurance Company ("American General Life") and
Globe Life and Accident Insurance Company ("Globe
Life") have responded to the motion and it is under
submission. (Doc. # 19). Plaintiffs filed this suit in state
court against three insurance companies for the alleged
denial of death benefits from five life insurance policies.
Defendants American General Life and Globe Life removed the
suit to this court. They conceded that the third Defendant,
Protective Life Insurance Company ("Protective
Life"), is a citizen of Alabama. (Doc. # 1 at 3). But,
they insisted that diversity jurisdiction exists for the
claims against American General Life and Globe Life because
Plaintiffs fraudulently joined a claim against Protective
Life to avoid removal.
have contested the charge of fraudulent joinder and seek to
remand this action to state court. After careful review, and
for the reasons explained below, the court agrees with
Plaintiffs. Although the court finds that Plaintiffs'
individual claims are misjoined with each other,
Plaintiffs' incorrect use of joinder falls far short of
fraudulent joinder. Thus, Plaintiffs' Motion to Remand is
due to be granted.
Factual and Procedural Background
Billy Driver, Lisa Driver, and the Estate of Pearlie Driver
commenced this suit in the Circuit Court of Walker County
against Defendants, three life insurance companies. (See
generally Doc. # 1-1 at 10-16) (hereinafter
"Complaint"). Plaintiffs alleged that Pearlie
Driver obtained two life insurance policies from American
General Life in 1992 and 1994. (Complaint at ¶¶
10-11). Pearlie Driver was the insured life for those
policies, and Lisa Driver was the beneficiary of those
policies. (Id.). Pearlie Driver sent monthly premium
payments to American General Life, and American General Life
allegedly accepted and cashed those premium payments.
(Id. at¶ 12).
2002, Pearlie Driver obtained another life insurance policy
on her own life, and Billy Driver was the named beneficiary
of that policy. (Id. at ¶ 14). She obtained two
more insurance policies in 2003 on her own life; the
beneficiary for those policies was her own estate.
(Id. at ¶ 15). Protective Life acquired those
three insurance policies. (Id. at ¶¶
14-15). Pearlie Driver sent monthly premium payments to
Protective Life for the policies. (Id. at ¶
16). Protective Life allegedly accepted and cashed those
premium payments. (Id.).
August 2011, Billy Driver obtained a life insurance policy
from Globe Life. (Id. at ¶ 18). Pearlie Driver
was the insured life, and Billy Driver was the beneficiary.
(Id.). Billy Driver made monthly premium payments to
Globe Life for the policy, and Globe Life allegedly accepted
and cashed those payments. (Id. at ¶ 19).
Driver died in January 2013. (Doc. # 1-3 at 2). After her
death, Plaintiff Lisa Driver filed a claim with Defendant
American General Life for benefits from the two life
insurance policies Pearlie Driver had purchased from that
company. (Complaint at ¶ 13). Defendant American General
Life refused her claim and denied her benefits.
(Id.). Plaintiff Billy Driver filed a claim with
Defendant Protective Life for benefits from the three
insurance policies purchased by Pearlie Driver from that
company, but Protective Life refused the claim and denied the
Estate of Pearlie Driver the benefits it allegedly was
entitled to. (Id. at ¶ 17). Finally, Plaintiff
Billy Driver filed a claim for benefits with Defendant Globe
Life, but Globe Life refused to pay benefits. (Id.
at ¶ 20). Plaintiffs' Complaint contains one breach
of contract claim against each of the three Defendant
insurers: (1) a claim by Plaintiff Lisa Driver against
Defendant American General Life; (2) a claim by Plaintiff
Estate of Pearlie Driver against Defendant Protective Life;
and (3) a claim by Plaintiff Billy Driver against Defendant
Globe Life. (Id. at¶¶21-32).
American General Life and Global Life filed some documentary
evidence with their Notice of Removal. In November 2011,
Defendant American General Life informed Pearlie Driver that
one of the life insurance policies had been terminated in
August 2010 because the balance of loans taken from the life
insurance policy and the interest due on the loans exceeded
the cash value of the policy. (Doc. # 1-2 at 2-3). The second
policy she had obtained from American General Life lapsed in
October 2010 because the monthly premiums paid by Pearlie
Driver did not cover the monthly cost of insurance due to
yearly increases in the premiums owed. (Id. at 4-5).
Pearlie Driver continued to make premium payments to American
General Life in 2010 and 2011, but American General Life
refunded the payments to her on a regular basis. (See
Id. at 2-5). Defendant Globe Life denied Billy
Driver's claim for benefits in May 2013 because he had
failed to disclose some of his mother's medical
conditions in the life insurance application. (Doc. # 1-3 at
2-3). II. Standard of Review Pursuant to 28
U.S.C. § 1332, the court has subject matter jurisdiction
over a case involving state law claims where there is both
complete diversity of citizenship among the parties, and the
amount in controversy exceeds $75, 000.00. A removing party
bears the burden of establishing subject matter jurisdiction
over a case removed to this court. Pretka v. Kolter City
Plaza II, Inc., 608 F.3d 744, 752 (11th Cir. 2010).
Courts strictly construe removal statutes. City of
Vestavia Hills v. Gen. Fidelity Ins. Co., 676 F.3d 1310,
1313 (11th Cir. 2012) (citing Univ. o/S Ala. v. Am.
Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999)).
"[A]ll doubts about jurisdiction should be resolved in
favor of remand to state court." Vestavia
Hills, 676 F.3d at 1313 (quoting Univ. o/S.
Ala., 168 F.3d at 411). In particular, a party seeking
to remove a case on the basis of fraudulent joinder faces a
heavy burden of proof. Crowe v. Coleman, 113 F.3d
1536, 1538 (11th Cir. 1997). A defendant must establish
fraudulent joinder by clear and convincing evidence.
Henderson v. Washington Nat'l Ins. Co., 454 F.3d
1278, 1281 (11th Cir. 2006). The court's analysis of
fraudulent joinder is analogous to Rule 56 review insofar as
the court may consider evidentiary submissions by the
parties, such as affidavits and deposition transcripts, so
long as it resolves issues of fact in favor of the plaintiff.
Legg v. Wyeth, 428 F.3d 1317, 1322-23 (11th Cir.
hang their removal hat on the fraudulent joinder of
Plaintiffs' claims against them with the Estate's
claim against Defendant Protective Life. (Doc. # 1 at 4,
6-11). Absent an application of fraudulent joinder doctrine,
it is undisputed that federal diversity jurisdiction is
inappropriate because, at a minimum, Plaintiff Billie Driver
and Defendant Protective Life are both residents of Alabama.
(Docs. # 1 at 3; 15 at 3). "Fraudulent 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.
1998). A defendant can show fraudulent joinder in three
circumstances. "The first is when there is no
possibility that the plaintiff can prove a cause of action
against the resident (non-diverse) defendant."
Id. "The second is when there is outright fraud
in the plaintiffs pleading of jurisdictional facts."
Id. The third is "where a diverse defendant is
joined with a nondiverse defendant as to whom there is no
joint, several or alternative liability and where the claim
against the diverse defendant has no real connection to the
claim against the nondiverse defendant." Id.
Defendants argue that Plaintiffs' joinder of their three
claims is fraudulent under the third ground.
court's analysis of fraudulent joinder begins with the
text of the relevant joinder rule. Federal Rule of Civil
Procedure 20(a)(2) provides that persons may be joined as
defendants in an action if (1) "any right to relief is
asserted against them jointly, severally, or in the
alternative with respect to or arising out of the same
transaction, occurrence, or series of transactions or
occurrences" and (2) "any question of law or fact
common to all defendants will arise in the
action." Under Rule 20(a)(2), it appears that
Defendants have a strong argument for misjoinder because no
right to relief is asserted jointly by any Plaintiff against
any combination of Defendants. Plaintiff Lisa Driver seeks
relief from Defendant American General Life. (Doc. # 1 at
¶¶ 21-24). Plaintiff Estate of Pearlie Driver seeks
relief from Defendant Protective Life. (Id. at
¶¶ 25-28). And, Plaintiff Billy Driver seeks relief
from Defendant Globe Life. (Id. at ¶¶
29-32). If a finding of misjoinder was sufficient for the
court to assert diversity jurisdiction over the claims in
this case between diverse parties, Plaintiffs' remand
motion would be denied.
"mere misjoinder" is not equivalent to
"fraudulent joinder." Tapscott v. MS Dealer
Serv. Corp., 77F.3d 1353, 1360 (11th Cir. 1996),
abrogated on other grounds by Cohen v. Office Depot,
Inc., 204 F.3d 1069 (11th Cir. 2000). To establish
fraudulent joinder under Tapscott, Defendants must
also show that there is no "real connection"
between the claims. Triggs, 154 F.3d at 1287. Here,
Plaintiffs' claims have an actual fact connection because
members of the same family purchased life insurance policies
with the same insured individual life, the insured's
estate and children were designated as beneficiaries of the
policies, many of the policies lapsed due to insufficient
cash value remaining in the policies, and the claims made by
the beneficiaries were all denied after the insured's
history of this litigation is distinguishable from the
Tapscott litigation in two important respects.
First, Plaintiffs filed all of their claims against all
Defendants in the first complaint, whereas the plaintiffs in
Tapscott added a set of class action claims against
a distinct group of defendants in their second amended
complaint. (See generally Complaint). See also
Tapscott, 77 F.3d at 1355 (explaining how the plaintiffs
added claims against extended service contracts for retail
products to an action involving extended service contracts
for automobiles). Second, the classes joined together in
Tapscott involved distinct product groups, whereas
Plaintiffs' claims all involve life insurance contracts.
Cf. Tapscott, 77 F.3d at 1355. Thus, the court
cannot say that Plaintiffs' misjoinder of Defendants was
as egregious as the misjoinder at issue in Tapscott.
Although Plaintiffs ...