Hallums v. Infinity Insurance Company et al, No. 1:2016cv24507 - Document 75 (S.D. Fla. 2018)
Court Description: ORDER denying 47 Motion to Dismiss and Granting Motion to Join Plaintiff Castillo's Lessor Under Rule 19. Signed by Judge Federico A. Moreno on 2/20/2018. (lfs)
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Hallums v. Infinity Insurance Company et al Doc. 75 UN ITED STA TES D ISTRICT C OU RT FO R TH E SO UTH ERN D ISTRICT O F FLO RID A M iam iDivision Case N um ber:16-24507-C lV -M O R EN O SIIEI-ITl-IEA HA LLU M S, Plaintiff, IN FIN ITY IN SUR AN CE CO M PA N Y and IN FIN ITY A UTO IN SU RAN CE COM PAN Y S Defendants. O RD ER G RA NT IN G M O TIO N TO JO IN PLA IN T IFF CA STILLO 'S L ESSO R U N DER R UL E 19 Backaround This case presents the follow ing question' . w hether a Lessor Liability Endorsem ent in Plaintiffs-autom obile insurance policies provides insurance atall,or whether they are illusory. Plaintift-smaintainthattheGravesAmendment,29 U.S.C.j30106,foreclosesthepossibilityof lessor liability and therefore, the Endorsem ent constitutes no insurance coverage. D efendant vehem ently disagrees. The Court previously denied Defendants' M otion to D ism iss because Plaintiff I-lallum s's w ell-pleaded factual allegations plausibly stated an entitlem ent to relief. Defendants now seek to dism iss the Com plaint pursuant to Federal Rule of Civil Procedure l2(b)(7)oralternatively,tojoin PlaintiffCastillo'slessorunderFederalRuleofCivilProcedure 19.PlaintiffCastillo's lessor should bejoined as a party pursuantto FederalRule of Civil Procedure l9 becausetheyhavealegally protected interestinthisaction andjoining the lessor willnotdefcattheCourt'ssubjectmatterjurisdiction. Dockets.Justia.com ll. A nalysis Rule12(b)(7)M otion toDismiss Defendantsfirstargue thatthe Com plaintshould be dism issed,pursuantto FederalRule of Civil Procedure 12(b)(7),for failure to join an indispensable party Plaintiff Castillo's lessor. 1 DismissalunderRule 12(b)(7)isatûtwo-step inquiry.''StateFarm Mut.Auto Ins.Co.v. Peçjbrmance Orthopaedics t: o Neurosurgery,LLC,No. l7-20028,20l7 W L 4270620,at *l8 (S.l).Fla.Sep.25,2017)(quoting Molinos Valle DeICibao,C.porA.v.Lama,633F.3d 1330, 1344 (1lth Cir.2011)).First,Defendants mustestablish thatCastillo's lessoris a ltrequired'' party asdefined by FederalRuleofCivilProcedure 19(a).ld.An absentparty isgenerallynot required because itwould beconvenientforthe resolution ofthe dispute,Clay v.AIG Aerospace Ins.. %erv. %.,Inc.,61F.Supp.3d 1255,l266(M .D.Fla.20I4),insteadanabsentparty isrequired whcre (1)the Courtcannotaccord complete reliefamong the existing parties;(2) prejudice would resultto the absent party's ability to protect itself in the instant action' ,or (3) the nonparty's absence w ould create a substantialrisk thatthe existing parties would incurconsistent or duplicative obligations.Raim beaultv.Accurate M ach.t: t Tool,LLC ,302 F.R .D .675,682-83 (S.1).I7Ia.20l4). Second,iftheabsentpal'ty isrequired,theCourtmustorderthatpartyjoined iffeasible, i.e.,il-joinderwould notdeprivetheCourtofsubjectmatterJ'urisdiction.ld at682, .seealsoFed. R.Civ.P.19(a)(2).Ifthenonpartycannotbejoined,theCourtmustanalyzethefactorsinRule 19(b)to determine whetherksin equity and good conscience the action should proceed am ong the parties before it, or should be dism issed, the absent person thus regarded as indispensable.'' 'Defendantssubm itthatPlaintiffCastillo's lessoris Land RoverofNorth Dade,LLC and the Iease isassigned to J.P.M organ Chase Bank.,N.A.See D.E.6 1Ex.A . (.klmpania Chilena De N avegacion lnteroceanica,<%.A.v.D .H .C. Trucking.lnc.,N o. 15-22494, 2016W I-l7224255at*3(S.D.Fla.Apr.29,2016). Rule19(a)(1)(b) 'l'o requirejoinderofCastillo'slessorunderRule 19,Defendantsmustestablish thatthe lessorclaimsaninterestrelatingtothesubjectofthisaction,andisso situatedthatdisposing of theaction in itsabsence may,(i)impairorimpedeitsabilityto protectitsinterestor(ii)leave llefendantssubjectto a substantialrisk ofincuning double,multiple,orotherwiseinconsistent obligations because of the lessor-s interest. Fed. R .Civ. P. 19(a)(l)(b).The Courtfinds that Ilefendants have m ettheirburden. 'Fhe crux ofDefendants'argumentis thatjoining Castillo's lessoristhe only way to protectthe lessor's interestin the coverage provided by the Endorsem entin Castillo's insurance policy.Plaintiffs'counterthatthe Endorsementisnotan enforceable contractbecause itisûtnot insurance,''and therefore,a lessorshould notbe joined because they are nota party to an enlorceable contract.See D.E.51 at2 (iksimply,Defendantscannotestablish thatthere is an insured under the Rider w ithout first show ing that the Rider is insurance,a task in which they already failed.'').Plaintiffs'argumentpresupposesthatthe CourthasfoundtheEndorsementto be illusory. To date, the Court has m ade no such ruling. ln denying Defendants' M otion to Dism iss,the Courtsim ply ruled that,viewing the facts in the light m ost favorable to Plaintiff Hallum s,and taking allw ell-pleaded factualallegations as true,Plaintiffhad adequately pleaded a plausible entitlem entto relief, Defendants m aintain thatCastillo's lessor is a required party because they are the nam ed insured in the Endorsem ent, and therefore,they have a legally protected interest related to whether the lïndorsement should be enjoined or declared illusory.In addition,Defendants suggestthe lessorhasan interestin maintainingthe Endorsementsothat:(i)the leasetermsare honored' ,(ii)they are able to be defended in any action againstthem arising outofan accident involvingoneoftheirleasedvehicles' ,(iii)theycanbeindemnifiedagainstany lossarisingfrom an accident, 'and (iv)so thatthe leased vehicles are protected againstproperty dam age claim s. A ssum ing arguendo that the Endorsem ent was deem ed illusory,then Castillo's lessor w ould surely have a legally protected interestin exercising any contractualrights afforded to it under thc Endorsem ent,asw ellas taking othersteps to m itigate its liability. Furtherm ore,Castillo's lessor is a party to the Endorsem ent contract. See Raimbeault, 302F.R.D.at684($:lncaseschallengingtheenforceability orvalidityofacontract,joinderofal1 parties to that contrad w illtypically be required . . . because the absent contract party has a legally protected interest in the outcom e of the litigation.'' ).The presently absentlessor is a nam cd insurcd in thc Endorsem ent, a contract betw een Plaintiff Castillo and Defendants. A ruling on the Itndorsem ent's legality w illundoubtedly affectthe contract betw een C astillo and his lessor,and allotherPlaintiffs in thisputative class ad ion, and theirlessors. If,asPlaintiffssuggest,theCourtdeferred onjoining anonparty untilthemeritsofthe Endorsement'sviabilitywereadjudicated,theCourtwouldostensiblyneverjoinapartypursuant to Rule 19, because the nonparty's interest w ould only ripen once the case had been fully litigatcd.Atthatpoint,itw ould be too late and the nonparty's ability to protectitselfw ould have been substantially im paired.The question before thc Courtis w hether D efendants have m ettheir burden ofshowing that Castillo's lessorhas a legally protected interest in this action. For the foregoing reasons,the Courtbelieves they have. Accordingly,Castillo'slessorshould bejoined as a party pursuantto Rule 19. Rule19(a)(2) HavingfoundthatCastillo'slessormustbejoinedasaparty pursuanttoRule 19,thenext inquiry iswhetherjoinderisfeasible,orwilldeprivetheCourtofsubjectmatterjurisdiction.The Court'sjurisdiction isgrounded on the Class Action FairnessAct,which providesforsubject matterjurisdictionoverclassactionswhere (1)thereisminimaldiversity- i.e.,any memberof the plaintiff class is a citizen ofa state differentfrom the state of citizenship of any defendant; (2)thc amountin controversy exceeds$5,000,000.Evansv.Walter lndus.,Inc.,449 F.3d ll59, (11th Cir.2006)(citing 28 U.S.C.j 1332(d)(2)),ln thiscase,Plaintiffsexplicitly allege greater than $5,000,000 in controversy in the Amended Complaint. In addition,both of the nam ed Plaintiffs are allegedly dom iciled in Florida and neither Defendant is dom iciled in Florida,so minimaldiversity exists.Thus,the issueiswhetherjoining Castillo'slessorwould dcfeatthe Court'ssubjectmatterjurisdiction underthe ClassAction FairnessAct.The Court finds thatitw ould not.Joining any new party w illnotaffectthe am ountin controversy,norw ill itclim inatc thatatleastone Plaintiffw illbe diverse from atleastone D efendant. 111. C onclusion PlaintiffCastillo's lessorshould bejoined asa party pursuantto FederalRule ofCivil Procedure 19 becausethey havea legallyprotected interestin thisaction andjoiningthelessor willnotdefeattheCourt'ssubjectmatterjurisdiction.Accordingly,itis A DJU DG ED thatDefendant's M otion to Join PlaintiffCastillo's lessoris G RAN TED . I)()N lïAN D O RD ERED in Cham bersatM iam i,Florida,this G j<' ofFebruary 2018 .j+ A y: z, . FEDERICO A. ORMNO UN ITED STATES D ISTRICT JUD G E 5 . Copies furnished to: Counselofrecord 6
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