Landry et al v. Circle K Stores, Inc. et al, No. 2:2016cv15705 - Document 16 (E.D. La. 2017)
Court Description: ORDER AND REASONS denying 9 Motion for Leave to File Amended Complaint. Signed by Judge Sarah S. Vance on 7/19/2017. (cg)
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Landry et al v. Circle K Stores, Inc. et al Doc. 16 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA SHERRY LANDRY AND ROLAND WATSON VERSUS CIVIL ACTION NO. 16-1570 5 CIRCLE K STORES, INC, ET AL. SECTION “R” (5) ORD ER AN D REASON S Before the Court is plaintiffs’ m otion to am end their com plaint.1 For the following reasons, the Court denies the m otion. I. BACKGROU N D This case arises out of a single-vehicle autom obile accident that allegedly occurred on August 20 , 20 15.2 Plaintiffs Sherry Landry and Roland Watson allege that they were leaving a Circle K gas station when their vehicle ran over an unsecured gas m anhole cover, causing the vehicle’s tire to fall 1 2 R. Doc. 9. R. Doc. 1-2 at 4-5. Dockets.Justia.com into the m anhole.3 This accident allegedly caused severe injuries to the plaintiffs and dam age to the vehicle.4 On August 16, 20 16, plaintiffs filed a petition for dam ages in Louisiana state court against defendants Circle K Stores, Inc. (“Circle K”), Shell Oil Products Com pany, LLC (“Shell Oil”), and Affirm ative Casualty Insurance Com pany.5 The Affirm ative Casualty Insurance Com pany, a non-diverse defendant, was under a perm anent order of liquidation at the tim e of plaintiffs’ petition.6 Under the term s of the liquidation order, all insurance policies issued by the Affirm ative Casualty Insurance Com pany were cancelled as of May 11, 20 16.7 On October 19, 20 16, Shell Oil rem oved the lawsuit to this Court on the basis of diversity of citizenship.8 Plaintiffs are Louisiana dom iciliaries 9 and defendants Circle K and Shell Oil are not Louisiana citizens.10 Shell Oil argued in its notice of rem oval that defendant Affirm ative Casualty Insurance Com pany, a Louisiana com pany, should be treated as fraudulently 3 4 5 6 7 8 9 10 Id. Id. at 5. Id. at 3-4. R. Doc. 1-4. Id. at 1. R. Doc. 1. R. Doc. 1-2 at 3. R. Doc. 1 at 3. 2 joined because the com pany was in liquidation proceedings.11 Plaintiffs did not file a m otion to rem and. On March 30 , 20 17, the Court ordered plaintiffs to show cause why the Affirm ative Casualty Insurance Com pany should not be dism issed for failure to prosecute.12 Two weeks after the Court’s order, plaintiffs filed this m otion for leave to file an am ended com plaint.13 Plaintiffs’ proposed am ended com plain t would add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in this m atter and substitute LIGA for the Affirm ative Casualty Insurance Com pany.14 The Court ordered the parties to subm it m em oranda of law addressing LIGA’s citizenship for diversity purposes, the effect of joining LIGA on the Court’s subject m atter jurisdiction, and whether the Court should perm it joinder. 15 Defendants Shell Oil and Circle K each filed m em oranda opposing the joinder of LIGA. 16 11 12 13 14 15 16 Id. at 4-5. R. Doc. 8. R. Doc. 9. R. Doc. 9-1 at 1-2. R. Doc. 10 at 2. R. Doc. 12; R. Doc. 13. 3 II. D ISCU SSION All parties agree that LIGA is a Louisiana citizen and that joining LIGA as a defendant would destroy the Court’s diversity jurisdiction.17 The Fifth Circuit has held that “LIGA has the citizenship for diversity purposes of each of its constituent m em ber insurers.” Tem ple Drilling Co. v. Louisiana Ins. Guar. Ass’n, 946 F.2d 390 , 394 (5th Cir. 1991). It is undisputed that LIGA has m em ber insurers who are citizens of Louisiana.18 When an am ended com plaint would destroy diversity jurisdiction, the Court m ay either deny joinder of the non-diverse party or perm it joinder and rem and the m atter to state court. 28 U.S.C. § 1447(e). Plaintiffs contend that LIGA should be joined because it “stand[s] in the shoes of the insolvent Affirm ative Casualty Insurance Com pany and [is] a necessary party to these proceedings.”19 Plaintiffs, however, provide no explanation or support for the conclusion that LIGA is a necessary party. Defendants argue that joinder should be denied because the purpose of plaintiffs’ am endm ent is to defeat federal diversity jurisdiction.20 17 18 19 20 R. Doc. 11 at 2; R. Doc. 12 at 4; R. Doc. 13 at 3. R. Doc. 11 at 2; R. Doc. 12 at 4; R. Doc. 13 at 2. R. Doc. 9-2. R. Doc. 12 at 6; R. Doc. 13 at 4. 4 The Court will “freely give leave [to am end] when justice so requires.” Fed. R. Civ. P. 15(a). Leave to am en d, however, “is by no m eans autom atic.” Halbert v. City of Sherm an, 33 F.3d 526, 529 (5th Cir. 1994). When an am ended pleading would destroy diversity jurisdiction, the Court will “scrutinize that am endm ent m ore closely than an ordinary am endm ent” and “consider the extent to which the purpose of the am endm ent is to defeat federal jurisdiction, whether plaintiff has been dilatory in asking for am endm ent, whether plaintiff will be significantly injured if am endm ent is not allowed, and any other factors bearing on the equities.” Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 198 7). After consideration of these factors, the Court finds that joinder m ust be denied. Plaintiffs do not offer a convincing explanation for why joining LIGA serves any purpose other than to defeat federal jurisdiction. Plaintiffs’ original petition alleges that the Affirm ative Casualty Insurance Com pany provided plaintiffs with a policy of uninsured and underinsured m otorist liability coverage and that this policy covers the dam ages requested in the petition.21 Shell Oil argues that plaintiffs likely do not have a claim under their uninsured m otorist policy because such policies typically cover only 21 See R. Doc. 1-2 at 4, 7. 5 dam ages that arise out of the use of an uninsured m otor vehicle.22 Plaintiffs do not offer any facts in their original petition or subsequent pleadings to support the conclusion that their single-car accident qualified for coverage under their uninsured/ underinsured m otorist policy. The Court therefore finds that plaintiffs have not shown a valid reason to join LIGA in this action. See Moore v. Manns, 732 F.3d 454, 457 (5th Cir. 20 13) (agreeing that am endm ent served only to destroy diversity jurisdiction where plaintiff offered no evidence of proposed defendant’s liability). Additionally, plaintiffs’ am endm ent is dilatory. This m atter was rem oved on October 19, 20 16.23 The notice of rem oval m ade clear that the Affirm ative Casualty Insurance Com pany was in liquidation proceedings.24 Yet plaintiffs did not m ove for leave to am end until April 13, 20 17.25 Plaintiffs provide no explanation for their delay and instead assert that “[f]rom day one of this case, LIGA is the proper party defendant in place of the insolvent Affirm ative Casualty Insurance Com pany.”26 The Court finds that plaintiffs were dilatory in waiting alm ost six m onths after rem oval to am end their com plaint. See Villareal v. W ells Fargo Bank, N.A., 814 F.3d 763, 768 (5th 22 23 24 25 26 R. Doc. 12 at 9. R. Doc. 1. Id. at 4. R. Doc. 9. R. Doc. 11 at 3-4. 6 Cir. 20 16) (affirm ing denial of leave to am end, where district court found that plaintiff was dilatory in attem pting to join defendant over two m onths after filing original com plaint). Finally, there is no indication that plaintiffs will be injured if joinder is denied. Even if plaintiffs had a valid claim against the Affirm ative Casualty Insurance Com pany and could recover dam ages on that claim from LIGA, LIGA’s presence is not necessary to provide plaintiffs with com plete relief. Plaintiffs’ petition for dam ages alleges that all defendants are jointly liable, and plaintiffs do not argue that they will be unable to recover from the current defendants.27 Circle K represents to the Court that it possesses liability insurance to cover plaintiffs’ dam ages in this m atter, and Shell Oil likewise represents that there is virtually no possibility that uninsured m otorist coverage would be im plicated given its presence, along with Circle K, as a defendant in this action.28 The Court finds that denying leave to am end will not injure plaintiffs, and no other equitable factors favor perm itting joinder of LIGA. 27 28 R. Doc. 1-2 at 7. R. Doc. 13 at 7; R. Doc. 12 at 9. 7 III. CON CLU SION For the foregoing reasons, the Court DENIES plaintiffs’ m otion for leave to am end. New Orleans, Louisiana, this _ 19th _ day of J uly, 20 17. ___ _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 8
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