United States District Court, W.D. Oklahoma
TIMOTHY D. DeGIUSTI Chief United States District Judge
the Court is Plaintiff's Motion to Remand [Doc. No. 7],
in which Plaintiff argues that diversity jurisdiction is
lacking. Defendant Liberty Insurance Corporation
(“Liberty”) has timely opposed the motion [Doc.
No. 8]. The matter is fully briefed and at issue.
March 21, 2019, Plaintiff filed breach of contract and bad
faith claims against Liberty Mutual Insurance Company
(“Liberty Mutual”) in state court. [Doc. No.
1-2]. Liberty Mutual removed the case to this Court on May
20, 2019, based on diversity of citizenship under 28 U.S.C.
§ 1332. [Doc. No. 1]. Following removal, Liberty Mutual
moved to dismiss Plaintiff's Petition [Doc. No. 5],
arguing that Liberty was the proper defendant in this action.
During the pendency of that motion, Plaintiff filed an
Amended Complaint [Doc. No. 6], naming Liberty and
Engineering, Inc. (“Engineering”) as defendants.
Plaintiff asserts that Engineering, like Plaintiff, is a
citizen of Oklahoma; thus, the parties to the Amended
Complaint lack complete diversity of citizenship. Liberty
asserts that diversity jurisdiction does exist because
Engineering has been fraudulently joined, and Plaintiff has
no possibility of recovery against Engineering.
matter jurisdiction over this case turns on the doctrine of
fraudulent joinder. “To establish fraudulent joinder,
the removing party must demonstrate either: 1) actual fraud
in the pleading of jurisdictional facts, ¶ 2) inability
of the plaintiff to establish a cause of action against the
non-diverse party in state court.” Dutcher v.
Matheson, 733 F.3d 980, 988 (10th Cir. 2013)
(internal quotation omitted). Liberty relies on the second
basis. Liberty bears the burden to establish that its removal
of Plaintiff's case to federal court was proper. See
Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072,
1079 (10thCir. 1999).
defendant seeking removal bears a heavy burden of proving
fraudulent joinder, and all factual and legal issues must be
resolved in favor of the plaintiff.” Dutcher,
733 F.3d at 988 (internal quotation omitted). Under the
circumstances of this case, Liberty must show there is no
possibility that Plaintiff would be able to establish a cause
of action against the resident defendant, Engineering. The
non-liability of the defendant alleged to be fraudulently
joined must be established with “complete
certainty.” Smoot v. Chicago, Rock Island &
Pac. R.R. Co., 378 F.2d 879, 882 (10th Cir.
1967); Dodd v. Fawcett Publ'n, Inc.,
329 F.2d 82, 85 (10th Cir. 1964). “But upon
specific allegations of fraudulent joinder the court may
pierce the pleadings, consider the entire record, and
determine the basis of joinder by any means available.”
Smoot, 378 F.2d at 882 (internal citations omitted).
asserts claims of breach of contract, bad faith, negligence,
and fraud against Engineering. Plaintiff alleges that
Engineering is an agent of Liberty, and that Liberty issued
Plaintiff an insurance policy in March 2013 for
homeowners' insurance coverage. On April 4, 2017,
Plaintiff allegedly discovered severe wind and hail damage to
his roof and accompanying water intrusion. Plaintiff alleges
that the policy was in effect at the time, all premiums had
been paid, and all conditions precedent for coverage had been
met by Plaintiff.
informed Liberty of the alleged damage and requested that
Liberty evaluate Plaintiff's losses and pay the claim.
Plaintiff alleges that Liberty denied the claim without
conducting a meaningful investigation. After Plaintiff
disputed the claim, Liberty retained Engineering to
investigate and evaluate the damage to Plaintiff's home.
Plaintiff alleges that Liberty and Engineering conducted an
unfair, incomplete, and inadequate investigation, and as a
result, Liberty incorrectly concluded that Plaintiff's
loss was not an insured event.
contends that following receipt of Plaintiff's claim, its
employee inspected the home and concluded that the roof
damage was not storm-related and that the interior damage did
not exceed Plaintiff's deductible. When Plaintiff
disagreed with these conclusions, Liberty retained a
third-party consultant, Shawn Thompson with Engineering, to
re-inspect Plaintiff's home. On May 31, 2017, Thompson
issued a report, concurring with Liberty that there was no
storm damage to the home's roof. Liberty shared
Thompson's report with Plaintiff. On March 1, 2019, a
second engineer with Engineering, Robert Chynoweth, completed
a report in which he concurred with Thompson's prior
conclusions. On March 11, 2019, Liberty reiterated its
partial denial in a letter to Plaintiff's counsel.
March 21, 2019, Plaintiff sued Liberty Mutual in state court.
[Doc. No. 1-2]. Plaintiff asserted claims against Liberty
Mutual for breach of contract and bad faith. Id.
Plaintiff alleged that Liberty Mutual and its agents
conducted an unfair and inadequate investigation and
evaluation of his claim. Id. Plaintiff did not name
any other defendants in his Petition.
20, 2019, Liberty Mutual removed the action to this Court
based on diversity jurisdiction, and filed a motion to
dismiss on May 28, 2019, alleging that Plaintiff had sued the
wrong entity. [Doc. Nos. 1, 5]. Liberty Mutual alleged that
Liberty issued the policy, not Liberty Mutual. Plaintiff
subsequently filed an Amended Complaint, naming Liberty and
Engineering as defendants. [Doc. No. 6]. Plaintiff asserts in
his motion to remand, that upon receiving Liberty
Mutual's motion to dismiss, Plaintiff “was forced
to reevaluate his potential claims against [Liberty Mutual]
and other parties, including [Liberty].” [Doc. No. 7 at
asserts that Plaintiff added Engineering as a defendant,
following Liberty Mutual's removal of the case, solely to
defeat diversity jurisdiction. Further, Liberty asserts that
Plaintiff has been in possession of the facts underlying his
alleged claims against Engineering for more than two years.
Moreover, Liberty asserts that Plaintiff's claims against
Engineering fail to state a ...