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Parker v. Morton

United States District Court, S.D. Alabama, Southern Division

April 16, 2019

BERNA E. PARKER, et al., Plaintiffs,
v.
RANDY LEE MORTON, Defendant.

          ORDER

          KRISTI K. DuBOSE CHIEF UNITED STATES DISTRICT JUDGE.

         This action is before the Court on Georgia Farm Bureau Mutual Insurance Company (“Georgia Farm”) and State Farm Mutual Automobile Insurance Company's (“State Farm”) Motions to Intervene. (Docs. 41 & 44). Plaintiffs Berna Parker and Beverly Wall (“Plaintiffs”) have responded to the motions, and they have no objections to either motions to intervene. (Docs. 41 & 44).

         Diversity jurisdiction (28 U.S.C. § 1332) is the basis for this case's federal jurisdiction.[1]However, Plaintiffs and Georgia Farm are not diverse because, for purposes of diversity jurisdiction analysis, both Plaintiffs and Georgia Farm are citizens of Georgia.[2] As the Court will explain, Georgia Farm's Motion to Intervene will be denied because its intervention would destroy diversity jurisdiction. State Farm's Motion to Intervene will be granted if and when State Farm complies with Federal Rule of Civil Procedure 24(c), which requires the motion be “accompanied by a pleading that sets out the claim or defense for which intervention is sought.”

         I. PROCEDURAL BACKGROUND

         Plaintiffs allege Defendant Randy Lee Morton negligently operated a motor vehicle and collided with Plaintiffs on or about May 21, 2016. (Doc. 1). Plaintiffs allege a negligence claim against the Defendant. Plaintiffs filed a complaint in federal court on May 18, 2018. In that first complaint, Plaintiffs sued (1) Randy Lee Morton; (2) Georgia Farm; and (3) State Farm. (Id.). Plaintiffs alleged diversity jurisdiction was present. (Id.).

         Plaintiffs later moved to dismiss Georgia Farm and State Farm without prejudice. (Doc. 29). In that motion, Plaintiffs noted that the Magistrate Judge had expressed concerns regarding the parties' lack of diversity and ordered Plaintiffs to show cause why the case should not be dismissed for lack of jurisdiction. (Id. at 1). Instead of filing a show cause response, Plaintiffs moved for leave to dismiss Georgia Farm and State Farm. Plaintiffs noted that Georgia Farm is a “nondiverse [d]efendant.” (Id.). They further requested that State Farm be dismissed because State Farm is Wall's excess underinsured motorist insurance carrier. Plaintiffs stated that “State Farm is not responsible for the payment of any damages until the Georgia Farm . . . policy is exhausted.” (Id. at 2). At the same time, Plaintiffs submitted a memorandum in support of their motion to dismiss.

         The memorandum Plaintiffs submitted acknowledged “[c]omplete diversity of citizenship [was] lacking as both Plaintiffs and one (1) Defendant, Georgia Farm Bureau, are citizens of the State of Georgia . . . .” (Doc. 30 at 2). Nevertheless, Plaintiffs argued that this problem could be remedied. Plaintiffs argued that, “It is well settled that a jurisdictional defect may be ‘cured by the dismissal of the party that . . . destroyed diversity.'” Landmark Equity Fund II, LLC v. Residential Fund 76, LLC, 631 Fed.Appx. 882, 884 (11th Cir. 2015) (quoting Grupo Dataflux v. Atlas Glob. Grp., LP, 541 U.S. 567, 572 (2004). However, Plaintiffs noted that before dismissing the nondiverse party, courts must determine whether the party to be dismissed is dispensable. If the nondiverse party is dispensable, “the court may dismiss that party and the claims against it, and retain jurisdiction over any remaining diverse parties.” Landmark Equity Fund II, LLC, 631 Fed.Appx. at 884-85.

         The Magistrate Judge entered a Report and Recommendation recommending Plaintiffs' motion be granted. (Doc. 35). The Report and Recommendation found that because Alabama law does not require an uninsured/underinsured motorist carrier be joined in the insured's primary case against an alleged tortfeasor, Georgia Farm and State Farm were not required parties under Fed.R.Civ.P. 19(a). (Id. at 6). It additionally found that even if Georgia Farm and State farm were required parties, their presence was dispensable. The Report and Recommendation observed that if Georgia Farm was not dismissed, Plaintiffs' would have no available remedy because the two-year statute of limitations has expired on their tort claims. (Id. at 7). Accordingly, the Report and Recommendation concluded that Fed.R.Civ.P. 19(b)'s factors strongly favored Georgia Farm and State Farm's dismissal. (Id. at 8).

         Notably, Georgia Farm did not object to the Report and Recommendation. Instead, it merely responded to the Report and Recommendation. (Doc. 36). It stated that it had no position on Plaintiffs' motion because, in Georgia Farm's view, Georgia Farm still had the right to subsequently intervene. (Id. at 1). It stated that if the Court granted Plaintiffs' motion, it would “intervene back into this litigation.” (Id.). Specifically, Georgia Farm “believes that it is consistent with Alabama law for an underinsured carrier to have limited participation at the outset of any such litigation to adequately determine if it is appropriate to ‘opt out' and that such determination cannot be made until some initial discovery takes place.” (Id. at 4).

         This Court adopted the Magistrate Judge's Report and Recommendation and granted Plaintiffs' motion for voluntary dismissal without prejudice. (Doc. 37). In the Order, the Court noted that “should Defendant successfully intervene, the issue of diversity will have to be revisited.” (Id. at 1 n.1). It is now time to revisit diversity.

         II. DISCUSSION

         Although neither Georgia Farm nor State Farm identifies whether intervention is sought as a matter of right, pursuant to Rule 24(a), or instead permissively, pursuant to Rule 24(b), the Court presumes they intend to intervene permissively. This assumption is based on two facts. First, Georgia Farm and State Farm make no argument that their interest is not adequately represented by the existing defendant. And this Court will not make the argument for them. See Davis v. Butts, 290 F.3d 1297, 1300 (11th Cir. 2002) (holding that to intervene as a matter of right, a party must establish that “(1) his application to intervene is timely; (2) he has an interest relating to the property or transaction which is the subject of the action; (3) he is so situated that disposition of the action, as a practical matter, may impede or impair his ability to protect that interest; and (4) his interest is represented inadequately by the existing parties to the suit.”) (quoting Purcell v. BankAtlantic Fin. Corp., 85 F.3d 1508, 1512 (11th Cir.1996)). Second, neither Georgia Farm nor State Farm objected to the Magistrate Judge's conclusion that they are not required parties under Rule 19(a). And since Rule 19(a)(1)(B) mirrors Rule 24(a)(2), if Georgia Farm and State Farm are not required parties, they do not have a right to intervene.

         A partying seeking to permissively intervene need only show that it “has a claim or defense that shares with the main action a common question of law or fact . . . .” Fed.R.Civ.P. 24(b)(1)(B). Generally, two elements must be addressed: Whether “(1) the application to intervene was timely; and (2) [whether] the intervenor's claim or defense and the main ...


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