Falcone et al v. Underwriters at Lloyd's London et al
Filing
8
MEMORANDUM & ORDER. For the reasons outlined in the M&O, the claim of Joanne Peterson is sua sponte SEVERED and DISMISSED WITHOUT PREJUDICE to commencing a separate action. If Ms. Peterson wishes to commence a separate action, she must do so within 3 0 days of the date of this Order. Additionally, the statute(s) of limitations for any claim asserted herein is tolled for a period of 30 days from the date of this Order. Party Joanne Peterson is TERMINATED from this action. Ordered by Judge Joanna Seybert on 12/17/2013. (Nohs, Bonnie)
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
ROBERT FALCONE and JOANNE PETERSON,
Plaintiffs,
-against-
MEMORANDUM & ORDER
13-CV-5950(JS)(AKT)
UNDERWRITERS AT LLOYD’S, LONDON
(LLOYD’S LONDON) and NATIONAL
CATASTROPHE INSURANCE PROGRAM,
Defendants.
---------------------------------------X
APPEARANCES
For Plaintiff:
Sean Greenwood, Esq.
Gauthier Houghtaling & Williams
52 Duane Street, 7th Floor
New York, NY 10007
For Defendants:
No appearances.
SEYBERT, District Judge:
On
October
28,
2013,
plaintiffs
Robert
Falcone
and
Joanne Peterson (collectively, “Plaintiffs”) commenced this action
against
defendants
Underwriters
at
Lloyd’s,
London
(Lloyd’s
London) and National Catastrophe Insurance Program (collectively,
“Defendants”).
claims
against
Plaintiffs assert their own breach of contract
Defendants
based
on
Defendants’
denial
of
Plaintiffs’ individual insurance claims for property damage caused
by Superstorm Sandy.
For the following reasons, the claim of the
second-named plaintiff, Joanne Peterson, is sua sponte SEVERED
from this action pursuant to Rules 20 and 21 of the Federal Rules
of Civil Procedure and DISMISSED WITHOUT PREJUDICE to commencing
a separate action for claims related to her individual insurance
claim.
BACKGROUND1
Plaintiffs separately own real property in this judicial
district and separately purchased from Defendants flood insurance
policies to cover their respective properties.
9.)
Defendants
are
“Write
Your
Own”
(Compl. ¶¶ 1, 4,
insurance
carriers
participating in the National Flood Insurance Program pursuant to
the National Flood Insurance Act.
(Compl. ¶¶ 3-4.)
Plaintiffs both allege damage to their properties due to
flood caused by Superstorm Sandy, which struck the New York
metropolitan
area
on
October
29,
2012.
(Compl.
¶
11-12.)
Plaintiffs claim that they submitted valid insurance claims to
Defendants but that Defendants “wrongfully denied or unfairly
limited
payment
(Compl. ¶ 13-14.)
on
the
claims
of
each
[sic]
Plaintiff.”
Accordingly, Plaintiffs separately assert a
breach of contract claim against Defendants based on Defendants’
alleged failure or refusal to pay Plaintiffs’ individual insurance
claims.
(Compl. ¶¶ 16-21.)
Based on the allegations of the Complaint, Plaintiffs’
claims share very little in common.
that
Defendants
issued
Plaintiffs
Although Plaintiffs allege
“Standard
Flood
Insurance
The following facts are drawn from the Complaint and are presumed
to be true for the purposes of this Memorandum and Order.
1
2
Policies” (Compl. ¶ 3), they do not state whether the policies are
identical
Plaintiffs
or
if
they
generally
even
contain
similar
allege
that
Superstorm
terms.
Sandy
Although
“severely
damag[ed]” their properties (Compl. ¶ 11), they do not explain the
nature and extent of the damage to their distinct properties.
Plaintiffs do not explain why Defendants denied their claims, or
even whether Defendants did so for the same reasons.
Moreover,
Plaintiffs respective properties are in different locations in two
different New York counties.
(Compl. ¶ 1.)
DISCUSSION
Plaintiffs allege that their claims are properly joined
under Rule 20(a) of the Federal Rules of Civil Procedure “because
they present similar claims against common Defendants and involve
questions of fact or law that are common to all Plaintiffs.”
(Compl. ¶ 7.)
The Court disagrees.
As explained below, the facts
alleged in the Complaint do not satisfy the first precondition to
joinder under Rule 20(a), i.e., that Plaintiffs’ claims arise out
of the same “transaction” or “occurrence.”
I.
Permissive Joinder of Parties
Rule 20(a)(1) permits the joinder of multiple plaintiffs
in an action if: “(A) they assert any right to relief jointly,
severally, or in the alternative with respect to or arising out of
the same transaction, occurrence, or series of transactions or
occurrences; and (B) any question of law or fact common to all
3
plaintiffs will arise in the action.”
FED. R. CIV. P. 20(a)(1).
These elements are preconditions and both must be met for joinder
to be proper.
Deskovic v. City of Peekskill, 673 F. Supp. 2d 154,
159 (S.D.N.Y. 2009) (“As is clear from the plain language of [the
Rule], both criteria must be met for joinder to be proper.”).
While “[t]he requirements of Fed. R. Civ. P. 20(a) are to be
interpreted liberally to enable the court to promote judicial
economy by permitting all reasonably related claims for relief by
or against different parties to be tried in a single proceeding,
the requirements of the rule still must be met and constrain the
Court's discretion.”
Kalie v. Bank of Am. Corp., --- F.R.D. ----
, 2013 WL 4044951, at *3 (S.D.N.Y. Aug. 9, 2013) (alteration in
original) (internal quotation marks and citation omitted).
“If a
court concludes that [parties] have been improperly joined under
Rule 20, it has broad discretion under Rule 21 to sever [those]
parties . . . from the action.”
Id.
In determining whether claims arise out of the same
“transaction” or “occurrence” under Rule 20(a), “courts are to
look to the logical relationship between the claims and determine
‘whether the essential facts of the various claims are so logically
connected that considerations of judicial economy and fairness
dictate that all the issues be resolved in one lawsuit.’”
Id.
(quoting United States v. Aquavella, 615 F.2d 12, 22 (2d Cir.
4
1979)).
Plaintiffs bear the burden of demonstrating that joinder
is proper under Rule 20(a).
Deskovic, 673 F. Supp. 2d at 159.
Here, Plaintiffs’ claims do not arise out of the same
transaction or occurrence.
Courts in this District have recently
applied the standards set forth above to almost identical lawsuits
seeking
insurance
coverage
for
property
damage
caused
by
Superstorm Sandy and have summarily held that joinder is not
appropriate.
See, e.g., Dante v. Nat’l Flood Ins. Program, No.
13-CV-6207, 2013 WL 6157182, at *2 (E.D.N.Y. Nov. 22, 2013)
(collecting similar cases from the Eastern District of Louisiana
and
the
Southern
District
of
Mississippi
denying
joinder
of
insurance claims related to property damage caused by Hurricane
Katrina); Baiardi v. The Standard Fire Ins. Co., No. 13-CV-5912,
2013 WL 6157231, at *2-3 (E.D.N.Y. Nov. 21, 2013). As these courts
recognized, despite the fact that a single natural disaster,
Superstorm Sandy, caused the damage to Plaintiffs’ properties,
Plaintiffs’ claims do not arise out of the same transaction or
occurrence
because
“[t]he
claims
involve
entirely
different
factual and legal issues, including each property's respective
condition
and
location
before
the
storm,
the
properties, and the extent of damage sustained.”
value
of
the
Dante, 2013 WL
6157182, at *2 (quoting Sucherman v. Metro. Prop. & Cas. Ins. Co.,
Nos. 06–CV-8765, 05–CV-6456, 2007 WL 1484067, at *2 (E.D. La. May
21, 2007)).
Thus, with respect to damages, Plaintiffs’ individual
5
claims undoubtedly will require different evidence relating to the
cause of and the extent of the loss. Plaintiffs’ individual claims
also may require particularized evidence on the issue of whether
the policies actually provide coverage for Plaintiffs’ claims
because
Plaintiffs
purchased
separate
insurance
policies
and
Defendants may have different reasons for denying and/or limiting
payment for Plaintiffs’ individual claims.
As far as the Court can tell from the Complaint here,
the only material commonalities between Plaintiffs’ claims are
that Plaintiffs’ properties suffered damages caused by the same
storm and that Plaintiffs present similar legal theories against
common defendants. However, the mere presence of common defendants
and “common questions of law or fact does not satisfy the same
transaction or occurrence requirement.”
Id. at *3 (holding that
plaintiffs’
for
separate
insurance
claims
damages
caused
by
Superstorm Sandy did not arise out of the same transaction or
occurrence
because
plaintiffs
“failed
to
explain
why
their
individual claims should be joined other than that they share two
common facts––that they were brought about by Hurricane Sandy and
brought
against
[the
same
defendant]––and
may
raise
similar
theories of law”) (quoting McNaughton v. Merck & Co., No. 04-CV8297, 2004 WL 5180726, at *2 (S.D.N.Y. Dec. 17, 2004)); see Abraham
v. Am. Home Mortg. Servicing, Inc., --- F. Supp. 2d ----, 2013 WL
2285205, at *4 (E.D.N.Y. May 23, 2013) (holding that plaintiffs’
6
“separate mortgage transactions d[id] not constitute a single
transaction
or
occurrence”
and
stating
that
“even
claims
by
plaintiffs who engaged in separate loan transactions by the same
lender cannot be joined in a single action”).
With
no
common
transaction
or
occurrence
among
Plaintiffs’ claims, the Court therefore finds that Plaintiffs’
claims are not properly joined under Rule 20(a).
Accordingly, the
claim of the second-named plaintiff, Joanne Peterson, is sua sponte
SEVERED from this action pursuant to Rule 20 and DISMISSED WITHOUT
PREJUDICE to commencing a separate action related to her insurance
policy.
See Kalie, 2013 WL 4044951, at *6 (holding that where
there is “no common transaction or occurrence, severance and
dismissal of the misjoined claims is mandatory”).
II.
Severance Under Rule 21
Finally, the Court notes that, even if the presence of
common defendants or a single natural disaster were sufficient to
satisfy Rule 20(a), the Court would reach the same result in
exercising its discretion under Rule 21 of the Federal Rules of
Civil Procedure.
Rule 21 provides, in relevant part, that “[o]n
motion or on its own, the court may at any time, on just terms,
add or drop a party . . . [and] sever any claim against any party.”
FED. R. CIV. P. 21.
In deciding whether to sever a claim under Rule 21,
courts generally consider, in addition to the preconditions set
7
forth in Rule 20(a), “[1] whether settlement of the claims or
judicial economy would be facilitated; [2] whether prejudice would
be avoided if severance were granted; and [3] whether different
witnesses and documentary proof are required for the separate
claims.”
Crown Cork & Seal Co., Inc. Master Retirement Trust v.
Credit Suisse First Boston Corp., 288 F.R.D. 331, 333 (S.D.N.Y.
2013) (quoting Erausquin v. Notz, Stucki Mgmt. (Bermuda) Ltd., 806
F. Supp. 2d 712, 720 (S.D.N.Y. 2011)).
“A court should consider
whether severance will ‘serve the ends of justice and further the
prompt and efficient disposition of litigation.’”
Crown Cork, 288
F.R.D. at 332 (quoting T.S.I. 27, Inc. v. Berman Enters., Inc.,
115 F.R.D. 252, 254 (S.D.N.Y. 1987)); see also In re Ski Train
Fire in Kaprun, Austria, on November 11, 2004, 224 F.R.D. 543, 546
(S.D.N.Y. 2004).
Here, joinder of Plaintiffs’ claims involving separate
insurance policies does not serve the interest of judicial economy.
There will be little, if any, overlapping discovery and Plaintiffs’
individual
breach
of
contract
claims
will
require
distinct
witnesses and documentary proof. See Boston Post Rd. Med. Imaging,
P.C. v. Allstate Ins. Co., No 03-CV-3923, 2004 WL 1586429, at *2
(S.D.N.Y. July 15, 2004) (severing breach of insurance policy
claims even though policies were identical because joinder would
not
serve
the
interests
of
judicial
economy
or
efficiency).
Furthermore, settlement of the claims is likely to be facilitated
8
if the claims relating to separate insurance policies are litigated
separately.
See Adams v U.S. Bank, NA, No. 12-CV-4640, 2013 WL
5437060, at * 4 (E.D.N.Y. Sept. 27, 2013). In addition, “[a] joint
trial could lead to confusion of the jury and thereby prejudice
defendants.”
Kalie, 2013 WL 4044951, at * 6 (internal quotation
marks and citation omitted).
Thus, for these reasons, the Court
also finds that the Rule 21 factors require severance of the
second-named plaintiff’s claims.
CONCLUSION
For the foregoing reasons, the claim of Plaintiff Joanne
Peterson,
the
second-named
plaintiff,
is
sua
sponte
SEVERED
pursuant to Rules 20 and 21 of the Federal Rules of Civil Procedure
and DISMISSED WITHOUT PREJUDICE to commencing a separate action
for her insurance policy issued by Defendants.
If Ms. Peterson
wishes to commence a separate action, she must do so within thirty
(30) days of the date of this Memorandum and Order.
Additionally, the statute(s) of limitations for any
claim asserted herein is tolled for a period of thirty (30) days
from the date of this Order.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:
December
17 , 2013
Central Islip, NY
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