United States District Court, W.D. Oklahoma
MM PROPERTY HOLDINGS, LLC, and OKLAHOMA PAIN MANAGEMENT, LLC, Plaintiffs,
CONTINENTAL CASUALTY COMPANY, THE TINES GROUP, INC., and C.L. FRATES AND COMPANY, Defendants.
MEMORANDUM OPINION AND ORDER
J. CAUTHRON, UNITED STATES DISTRICT JUDGE
filed this action in the District Court of Oklahoma County,
asserting claims of breach of contract, bad faith, and other
torts arising from Defendant Continental Casualty
Company's (“Continental”) handling of alleged
hail damage to Plaintiffs' building. Continental removed
this matter, asserting diversity of citizenship. Plaintiffs
filed a Motion to Remand, arguing that Defendant C.L. Frates
and Company (“Frates”) is an Oklahoma corporation
and therefore there is not complete diversity of citizenship.
The Notice of Removal noted that Frates was an Oklahoma
entity but argued that that entity was improperly joined, as
it had no connection to the claims in this matter. In their
Motion to Remand, Plaintiffs argue that Defendants have
failed to meet their burden of establishing that Frates was
basis for Plaintiffs' claims against Frates is a single
letter sent from an employee of Continental outlining the
basis for its denial of Plaintiffs' claim. That letter
indicates a copy was sent to C.L. Frates and Company. On this
basis Plaintiffs argue that there are questions of fact about
what involvement Frates may have had with their claim and
therefore Frates is a necessary party. Plaintiffs argue that
because Frates must remain in the action, diversity is not
present and this matter should be remanded.
response, Continental provides an affidavit from Ms. Cantu
who wrote the letter. Therein, she attests that the inclusion
of Frates as a copy recipient was incorrect; that the proper
recipient of the letter and the entity who actually received
the letter was a company known as Acrisure LLC. Ms. Cantu
further avers that as it relates to Plaintiffs' claims,
she never had any contact with anyone at Frates, nor did any
other employee of Continental, and that Frates had no
connection and played no role in the decisions to deny
Plaintiffs note, Defendant has the burden of establishing
that removal jurisdiction is proper. See Port City Props.
v. Union Pac. Ry. Co., 518 F.3d 1186, 1189 (10th Cir.
2008). Proof of jurisdiction must by established by a
preponderance of the evidence. Southway v. Cent. Bank of
Nigeria, 328 F.3d 1267, 1274 (10th Cir. 2003). Whether
or not Frates was improperly joined is considered from two
perspectives: 1) whether Plaintiffs may state a cause of
action against the non-diverse party in state court or 2)
whether or not there is factual fraud in the pleading of the
jurisdictional facts. Defendant does not suggest any fraud,
but rather argues that Plaintiffs cannot state a claim
against Frates. To establish improper joinder, a defendant
must establish there is no possibility of recovery by the
plaintiff against the in-state defendant or that there is no
reasonable basis for the district court to predict that the
plaintiff might be able to recover against the in-state
defendant. Bristow First Assembly of God v. BP
P.L.C., 210 F.Supp.3d 1284, 1289 (N.D. Okla. 2016)
(citing Monsanto v. Allstate Indem., No. 99-2225,
2000 WL 525592 at *10 (10th Cir. Apr. 14, 2000)).
review of Plaintiffs' state court petition and the
arguments of the parties set forth herein, the Court finds
that C.L. Frates was improperly joined. As noted above,
Defendant Continental has provided an affidavit from Ms.
Cantu outlining how Frates was included on the letter and her
sworn testimony that that entity had no connection to
Plaintiffs' claims. Plaintiffs have offered no evidence
or argument beyond conclusory assertions to counter that
affidavit. Even if there were some suggestion that Frates had
played a role as an adjustor in the claim, Plaintiffs'
claims could not be pursued against it. The Oklahoma Supreme
Court in Trinity Baptist Church v. Brotherhood Mutual
Insurance Services, LLC, 2014 OK 106, ¶ 17, 341
P.3d 75, 81-82, held that an adjustor cannot be held liable
for bad faith. To the extent Plaintiffs attempted to state a
claim for fraud, conspiracy, or collusion against Frates, the
Oklahoma Supreme Court likewise rejected the ability to
pursue tort claims against an adjustor. Trinity Baptist
Church, 2014 OK 106, ¶ 31, 341 P.3d at 86.
the Court finds that C.L. Frates was improperly joined as a
Defendant in this matter. It will be dismissed. As the
remaining Defendants are all of diverse citizenship from
Plaintiffs, and there is no dispute that the amount in
controversy exceeds the jurisdictional requisite,
Plaintiffs' Motion to Remand will be denied.
also names as a Defendant The Tines Group, Inc.
(“Tines”). Tines has filed a Motion to Dismiss
pursuant to Fed.R.Civ.P. 12(b)(6). As with C.L. Frates, the
only role Tines played in this matter was as the adjustor on
the claim. Plaintiffs agree that because Tines was not a
party to the insurance contract, they cannot pursue a claim
for bad faith or negligence against it. However, Plaintiffs
argue that because Tines wrote false reports, Plaintiffs
should be permitted to pursue a fraud or civil conspiracy
action. As noted above, the Oklahoma Supreme Court has
rejected any claims of tort liability against an independent
adjustor when a plaintiff has a viable claim against the
insurance company. See Trinity Baptist Church, 2014
OK 106, ¶ 31, 341 P.3d at 86. Accordingly, the Court
finds that Plaintiffs cannot recover on their fraud or civil
conspiracy claim against Defendant Tine and that party is
entitled to dismissal with prejudice.
reasons set forth herein, Defendant The Tines Group,
Inc.'s Motion to Dismiss (Dkt. No. 9) is GRANTED.
Plaintiffs' claims against this Defendant are dismissed
with prejudice. The Motion to Remand by Plaintiffs (Dkt. No.
14) is DENIED. Plaintiffs' claims against Defendant C.L.
Frates and Company ...