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Landers v. Midland National Life Insurance Company

United States District Court, N.D. Mississippi, Eastern Division
Oct 3, 2002
No. 1:02CV179-D-D (N.D. Miss. Oct. 3, 2002)

Opinion

No. 1:02CV179-D-D

October 3, 2002


OPINION DENYING MOTION TO REMAND


Presently before the court is the Plaintiff's motion to remand this cause to the Circuit Court of Lee County, Mississippi. Upon due consideration, the court finds that the motion should be denied because diversity jurisdiction exists pursuant to 28 U.S.C. § 1332 (a).

A. Factual Background

In December of 1999, the Defendant Midland National Life Insurance Company (Midland), through its agent Charles Barber, issued a life insurance policy to the Plaintiff's husband, Richard E. Landers; the Plaintiff was listed as the policy's sole beneficiary. Less than two years later, on August 20, 2001, Mr. Landers died of a gunshot wound to the head. Midland subsequently denied the Plaintiff's claim for benefits under the policy, stating that Mr. Landers had died as a result of a self-inflicted gunshot wound, and the policy specifically provided that "[i]f the Insured . . . dies by suicide within two years from the Contract Date, we will pay the sum of the premiums paid [and not the face amount of the policy]." In denying the Plaintiff's claim, Midland also apparently stated that Mr. Landers had misrepresented information on his application for insurance.

The Plaintiff filed suit in the Circuit Court of Lee County, Mississippi, on May 1, 2002, alleging that Midland's conduct in connection with the circumstances surrounding the subject insurance policy and denial of benefits renders it liable under various state law causes of action including bad faith breach of contract. Charles Barber, the Midland agent who sold Mr. Landers the life insurance policy, is also named as a Defendant. On May 25, 2002, the Defendants removed the action to this court on the basis of federal diversity jurisdiction as set forth in 28 U.S.C. § 1332 (a), asserting that the Plaintiff has fraudulently joined the individual Defendant Charles Barber in order to defeat this court's diversity jurisdiction. Thereafter, the Plaintiff requested that the court remand this matter to state court, contending that because Barber is properly joined, complete diversity does not exist and this court lacks jurisdiction over the case.

B. Standard for Remand

The Judiciary Act of 1789 provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441 (a). Original federal diversity jurisdiction exists "where the matter in controversy exceeds the sum or value of $75,000.00, exclusive of interest and costs, and is between . . . citizens of different States." 28 U.S.C. § 1332 (a); Sid Richardson Carbon Gasoline Co. v. Interenergy Res., Ltd., 99 F.3d 746, 751 (5th Cir. 1996). After removal of a case, the plaintiff may move for remand, and "[if] it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447 (c). In the case sub judice, there is no dispute that the amount in controversy exceeds $75,000. The Plaintiff, however, asserts that the court does not possess diversity jurisdiction because this action is not between citizens of different states, as is required by 28 U.S.C. § 1332.

The Plaintiff and the individual Defendant Charles Barber are indisputably resident citizens of Mississippi. This fact, however, will not destroy federal diversity jurisdiction if the Plaintiff fraudulently joined Barber in order to defeat diversity. Rodriguez v. Sabatino, 120 F.3d 589, 591 (5th Cir. 1997). But, if the court finds that Barber has not been fraudulently joined, then federal diversity jurisdiction is lacking, and the court must remand this matter to state court. See Whalen v. Carter, 954 F.2d 1087, 1094 (5th Cir. 1992) (federal diversity jurisdiction exists only if no plaintiff is a citizen of the same state as any defendant); Wright v. Combined Ins. Co. of America, 959 F. Supp. 356, 361 (N.D.Miss. 1997).

The party alleging fraudulent joinder bears the burden of persuasion, and that burden is quite stringent. See Hart v. Bayer Corp., 199 F.3d 239, 246 (5th Cir. 2000) ("The burden of persuasion placed upon those who cry `fraudulent joinder' is indeed a heavy one."). In order to prove that a non-diverse party has been fraudulently joined by a plaintiff hoping to defeat federal diversity jurisdiction, the removing party must demonstrate either "outright fraud in the plaintiff's recitation of jurisdictional facts," or that there is "absolutely no possibility that [the plaintiff] will be able to establish a cause of action against [the allegedly fraudulently joined in-state defendant] in state court." Hart, 199 F.3d at 246.

The Defendants here do not allege outright fraud, so the court must determine whether there is absolutely no possibility that the Plaintiff will be able to establish a cause of action against Barber in state court. In making this determination, the court evaluates all of the factual allegations in the Plaintiff's pleadings in the light most favorable to the Plaintiff, and the court examines relevant state law and resolves all uncertainties in favor of the Plaintiff. Hart, 199 F.3d at 246.

Likewise, in evaluating a claim of fraudulent joinder, the court does not focus on whether the Plaintiff will prevail on the merits of her claims. Instead, the court simply determines whether there is a possibility that the Plaintiff will be able to state a claim against the allegedly fraudulently joined individual Defendant. Rodriguez, 120 F.3d at 591; see B., Inc. v. Miller Brewing Co., 663 F.2d 545, 550 (5th Cir. Unit A 1981) (holding that, to successfully move for remand, plaintiff's burden is "much lighter" than that required to survive motion for summary judgment; instead, there need only be "a reasonable basis for predicting that the state law might impose liability on the facts involved" in order for case to be remanded). Further, it is axiomatic that federal courts are to construe removal statutes "strictly against removal and for remand." Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 106 (5th Cir. 1996); Shamrock Oil Gas Corp. v. Sheets, 313 U.S. 100, 108-109, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941).

C. Discussion

Whether a plaintiff states a cognizable claim against a defendant is determined by reference to the allegations made in the plaintiff's original pleadings, although the court may "pierce" those pleadings in making its determination. B., Inc., 663 F.2d at 549; Wheeler v. Frito Lay, Inc., 743 F. Supp. 483, 485 (S.D.Miss. 1990). In the case at bar, the Plaintiff alleges, inter alia, that the individual Defendant Barber may have provided incorrect information to Midland in connection with the Plaintiff's husband's life insurance application.

Under Mississippi law, an agent for a disclosed principal can be held personally liable for his own tortious acts committed within the scope of his employment, and a tort claim can be maintained against that agent so long as the foundation of the agent's liability is his own individual wrongdoing. Hart, 199 F.3d at 247; Turner v. Wilson, 620 So.2d 545, 548 (Miss. 1993). In other words, the agent is subject to personal liability only when he "directly participates in or authorizes the commission of a tort." Hart, 199 F.3d at 247; see Mozingo v. Correct Mfg. Corp., 752 F.2d 168, 174 (5th Cir. 1985) (stating that agent does not incur liability unless he had more than simply "peripheral involvement" in alleged tortious conduct).

In piercing the pleadings to determine whether there is a possibility that a state court would find a cause of action stated on the facts alleged by the plaintiff, it is axiomatic that where a plaintiff's complaint is devoid of any factual allegations suggesting a basis for recovery against a particular defendant, there can be no ground for concluding that a claim has been stated. See, e.g., Henley v. Pioneer Credit Co., No. 1:01CV349-D-D, 2002 WL 1013110, at *3 (N.D.Miss. April 10, 2002); Addison v. Allstate Ins. Co., 58 F. Supp.2d 729, 732 (S.D. Miss. 1999). Failure to specify a factual basis for recovery against a nondiverse party, therefore, constitutes a fraudulent joinder of that party. Addison, 58 F. Supp.2d at 732.

Here, the Plaintiff merely alleges, in very general and conclusory terms, that the Defendant Barber engaged in tortious conduct. There are no specific factual allegations in the complaint concerning Barber's participation in any alleged tortious acts, much less any factual allegations that would tend to suggest that his involvement was anything other than merely peripheral. Instead, the Plaintiff simply alleges that Barber will face liability "in the event there is information contained on [Mr. Landers' life insurance] application which is incorrect," and that "[a]ny error contained on the application which would cause the policy to be void" is the responsibility and fault of Barber. See Complaint at 3. Those two statement are the extent of the Plaintiff's allegations concerning Barber; the entire remainder of the complaint concerns the conduct of Midland in connection with its denial of the Plaintiff's claim for benefits. Nowhere in the complaint does the Plaintiff identify the information that Barber may have wrongfully placed on the insurance application, or if that information played any role whatsoever in Midland's decision to deny benefits to the Plaintiff.

Allegations of this sort are simply insufficient. The Plaintiff does not allege that Barber directly participated in or authorized the commission of a tort; instead, the Plaintiff seemingly alleges that if a tort occurred, Barber may be liable. As the court has already noted, hypothetical allegations of this sort are plainly deficient. See, e.g., Addison, 58 F. Supp.2d at 732-33.

Accordingly, without a factual basis for concluding that Barber directly, personally, or actively participated in any alleged tortious conduct, the court finds that the Plaintiff has no possibility of establishing a cause of action against Barber in state court, and that he was fraudulently joined to defeat diversity. See, e.g., Addison, 58 F. Supp.2d at 733 (denying motion to remand where, "other than a bare allegation, plaintiffs have factually alleged nothing" that would satisfy required elements of claim against resident defendants); Christmon v. Allstate Ins. Co., 57 F. Supp.2d 380, 382 (S.D. Miss. 1999).

D. Conclusion

In sum, because the individual Defendant Charles Barber was fraudulently joined to defeat diversity, and the amount in controversy requirement has been satisfied, the court finds that federal subject matter jurisdiction pursuant to 28 U.S.C. § 1332 exists. The matter in controversy exceeds the sum of $75,000, and is between citizens of different states. As such, this court possesses subject matter jurisdiction to adjudicate this cause and the Plaintiff's motion to remand shall be denied.

A separate order in accordance with this opinion shall issue this day.

ORDER DENYING MOTION TO REMAND

Pursuant to an opinion issued this day, it is hereby ORDERED that:

(1) the Plaintiff's motion to remand this cause to the Circuit Court of Lee County, Mississippi (docket entry 11), is DENIED; and
(2) this cause of action remains in the jurisdiction of the United States District Court for the Northern District of Mississippi.


Summaries of

Landers v. Midland National Life Insurance Company

United States District Court, N.D. Mississippi, Eastern Division
Oct 3, 2002
No. 1:02CV179-D-D (N.D. Miss. Oct. 3, 2002)
Case details for

Landers v. Midland National Life Insurance Company

Case Details

Full title:LEIGH ANN LANDERS PLAINTIFF v. MIDLAND NATIONAL LIFE INSURANCE COMPANY…

Court:United States District Court, N.D. Mississippi, Eastern Division

Date published: Oct 3, 2002

Citations

No. 1:02CV179-D-D (N.D. Miss. Oct. 3, 2002)