Sullivan et al v. The Travelers Indemnity Company of Connecticut et al, No. 2:2016cv15461 - Document 18 (E.D. La. 2016)

Court Description: ORDER AND REASONS denying 7 Motion to Remand to State Court. IT IS ORDERED that Plaintiffs' motion to remand this case to state court is DENIED.IT IS FURTHER ORDERED that Defendant Michelle Broome is DISMISSED from this action as a defendant. Signed by Judge Susie Morgan on 11/30/2016. (cg)

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Sullivan et al v. The Travelers Indemnity Company of Connecticut et al Doc. 18 U N ITED S TATES D ISTRICT COU RT EASTERN D ISTRICT OF LOU ISIAN A SH AN TEL SU LLIVAN , ET AL. Plain tiffs CIVIL ACTION VERSU S N O. 16 -154 6 1 TRAVELERS IN D EMN ITY COMPAN Y OF CON N ECTICU T, ET AL. D e fe n d an ts SECTION : “E”( 5 ) ORD ER AN D REAS ON S Before the Court is a m otion to rem and filed by Plaintiffs. 1 Defendants oppose this m otion. 2 For the reasons that follow, Plaintiffs’ m otion to rem and 3 is D EN IED . FACTU AL & PROCED U RAL BACKGROU N D On Septem ber 12, 20 16, Plaintiff Shantel Sullivan, individually and on behalf of her m inor child, Kyle Sullivan, and on behalf of the Deceden t, J erem y Sullivan, com m enced this action by filing a petition in the 24th J udicial District Court for the Parish of J efferson. 4 In their petition, Plaintiffs assert causes of action for wrongful death and survival and vicarious liability against Defendants, Travelers Indem nity Com pany of Connecticut, Travelers Indem nity Com pany of Am erica (collectively “the Travelers Defendants”) and Michelle Broom e. 5 According to the petition, the claim relates to an injury sustained by the Decedent on or about J une 15, 20 14, in the course and scope of his em ploym ent as a m anager at Le’ Creole Restaurant. 6 The petition alleges that Defendants arbitrarily denied workers’ com pensation benefits, particularly m edical treatm ent, to the Decedent, J erem y Sullivan, with the knowledge a significant and life- 1 R. Doc. 7. R. Doc. 8. 3 R. Doc. 7. 4 R. Doc. 1-1. 5 Id. at 12-13. 6 Id. at 3. 2 1 Dockets.Justia.com threatening worsening of a condition was certain to follow the denial. 7 The petition alleges Ms. Broom e, the adjuster assigned to handle Mr. Sullivan’s workers’ com pensation claim , was notified in writin g by Mr. Sullivan’s treating physicians that Mr. Sullivan had developed a pain m edication depen dency while being treated for the injury sustained in the course and scope of his em ploym ent. 8 The petition alleges that, despite knowledge of Mr. Sullivan’s pain m edication dependency, Ms. Broom e and the Travelers Defendants arbitrarily denied Mr. Sullivan’s request for continued m edical care, treatm ent, and benefits. 9 On October 12, 20 16, the Travelers Defendants rem oved this to action to federal court. 10 In the notice of rem oval, the Travelers Defendants assert Plaintiffs im properly joined Michelle Broom e as a defendant, even though Plaintiffs have no arguable claim for recovery against her under Louisiana law, to defeat diversity jurisdiction and keep this m atter in state court. 11 According to the Travelers Defendants, “Because Broom e was the workers’ com pensation claim s adjustm ent professional assigned to Mr. Sullivan’s com pensation claim , Louisiana law . . . precludes a claim against her under the circum stances as alleged in Plaintiff’s Petition.”12 On October 21, 20 16, Plaintiffs filed a m otion to rem and this action to state court, arguing that the Court lacks subject-m atter jurisdiction because they have a viable claim against Defen dant Michelle Broom e. 13 On Novem ber 7, 20 16, the Travelers Defendants filed an opposition to the Plaintiffs’ m otion to rem and. 14 7 Id. at 12. Id. at 5. 9 Id. at 11. 10 R. Doc. 1. 11 Id. at 5. 12 Id. at 6. 13 R. Doc. 7-1, at 6-8 . 14 R. Doc. 8. 8 2 LAW AN D AN ALYSIS “Federal courts are courts of lim ited jurisdiction; without jurisdiction conferred by statute, they lack the power to adjudicate claim s.”15 Pursuant to 28 U.S.C. § 1332, federal district courts have original jurisdiction of all civil m atters where the parties are citizen s of different states and the am ount in controversy exceeds $ 75,0 0 0 . 16 If these requirem ents are m et, a defendant generally m ay rem ove the action originally filed in state court to federal court. 17 If a non-diverse defendant has been im properly joined, a defendant m ay nonetheless rem ove the action, and that defendant’s citizen ship is disregarded for purposes of determ ining whether the federal court has diversity jurisdiction. The presen ce of Michelle Broom e as a defendant in this case, if proper, defeats com plete diversity of citizen ship and requires rem and to state court. In this case, the Travelers Defendants, as the rem oving parties, bear the burden of showing subject-m atter jurisdiction exists and that rem oval was proper. 18 In cases rem oved based on diversity jurisdiction and im proper joinder, 19 the rem oving party m ust show either: “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.”20 The Travelers Defendants 15 In re FEMA Trailer Form aldehy de Products Liab. Litig. (Mississippi Plaintiffs), 668 F.3d 281, 286 (5th Cir. 20 12). 16 28 U.S.C. § 1332(a). 17 See 28 U.S.C. § 1441(a). An exception exists if any of the parties in interest properly joined and served as defendants is a citizen of the state in which the action was brought. See 28 U.S.C. § 1441(b)(2). In this case, Michelle Broom e is alleged to be a citizen of Louisiana, which would preclude rem oval. See id. 18 See Manguno v. Prudential Property and Cas. Ins. Co., 276 F.3d 720 , 723 (5th Cir. 20 0 2). 19 The Fifth Circuit has stated that there is no substantive difference between the term “im proper joinder” and “fraudulent joinder,” but “im proper joinder” is preferred. See Sm allw ood v. Illinois Cent. R. Co., 385 F.3d 568 , 571 n.1 (5th Cir. 20 0 4). 20 Travis v. Irby , 326 F.3d 644, 646– 47 (5th Cir. 20 0 3) (citing Griggs v. State Farm Lloy ds, 181 F.3d 694, 698 (5th Cir. 1999)). 3 do not dispute that both the Plaintiffs and Michelle Broom e are Louisiana citizens, so jurisdiction is based on there being no cause of action against Broom e. 21 “The test for im proper joinder where there is no allegation of actual fraud is whether the defendant has dem onstrated that there is no possibility of recovery by the plaintiff against an in-state defendant.”22 “In determ ining the validity of an allegation of im proper joinder, the district court m ust construe factual allegations, resolve contested factual issues, and resolve am biguities in the controlling state law in the plaintiff’s favor.”23 “The court m ay conduct a Rule 12(b)(6)-type analysis, looking initially at the allegations of the com plaint to determ ine whether the com plaint states a claim under state law against the in-state defendant.”24 “With regard to insurance adjusters, Louisiana courts have consisten tly held that, as a gen eral rule, an insurance adjuster owes no duty to an insured to properly investigate or handle claim s, or advise an insured of coverage issues.”25 “The duty to properly han dle claim s is im posed by [Louisiana Revised Statutes sections 22:1973 and 22:1892], not by Louisiana Civil Code article 2315.” 26 “Neither of these statutes provide[s] a rem edy against an insurance adjuster.” 27 The Motin court further explained, “These statutes, penal in nature, m ust be strictly construed [and] [n]othing in the statutes suggests the 21 R. Doc. 1, at 4. Rodrigue v. Continental Ins. Co., No. 14-1797, 20 14 WL 4999465, at *2 (E.D. La. Oct. 7, 20 14) (citing Sm allw ood, 385 F.3d a 573). 23 Rodrigue, 20 14 WL 4999465, at *2 (citin g Burden v. Gen. Dy nam ics Corp., 60 F.3d 213, 216 (5th Cir. 1995)). 24 Sm allw ood, 385 F.3d at 573. 25 St. Marie v. State Farm Fire & Cas. Co., No. CIV.A., 0 6-8725, 20 0 7 WL 10 1758 8, at *3 (E.D. La. Mar. 28, 20 0 7) (citing Pellerin v. Cash Pharm acy , 396 So. 2d 371 (La. Ct. App. 1981); Rosina, 20 0 6 WL 3141247, at *1; Rich v. Bud’s Boat Rentals, No. CIV.A. 96-3279, 1997 WL 785668 (E.D. La. Dec. 18, 1997)). 26 See Motin v. Travelers Ins. Co., No. CIV.A. 0 3-2487, 20 0 3 WL 22533673, at *4 (E.D. La. Nov. 4, 20 0 3) (describin g La. R.S. 22:1973 and 22:1892, form erly cited to as, respectively, La. R.S. 22:1220 and 22:658). 27 Id. (citing N ero v. La. Indep. Ins. Agencies, Inc., No. CIV.A. 0 2-3317, 20 0 3 WL 20 3145, at *2 (E.D. La. J an. 29, 20 0 3); Yates v . Sw . Life Ins. Co., No. CIV.A. 97-320 4, 1998 WL 610 33, at *4 (E.D. La. Feb. 12, 1998)). 22 4 Louisiana Legislature’s intent to im pose upon insurance adjusters the duties the statutes explicitly im pose upon the insurer.”28 There is, however, a n arrow exception to the rule whereby an insurance adjuster who assum es an independent tort duty to the insured or com m its fraud m ay be liable for breach of his or her duty. 29 “An insurance adjuster m ay be held liable under Louisian a law, however, ‘where [the adjuster] has engaged in fraud toward the claim ant or where [the adjuster] has provided the claim ant false inform ation regarding the potential success of the claim an d has reason to know that the claim ant will rely on that inform ation.”30 Having conducted a Rule 12(b)(6)-type analysis, looking to the allegations of the Plaintiffs’ state-court petition, the Court finds the Plaintiffs have not stated a claim for relief under Louisiana law against the non-diverse Defen dant, Michelle Broom e. The Plaintiffs do not allege Ms. Broom e has assum ed a duty under Pellerin and its progeny or that she engaged in any fraud or m isrepresentations. 31 At m ost, Plaintiffs allege Ms. Broom e im properly in vestigated/ adjusted the insurance claim , resulting in the ultim ate denial of Mr. Sullivan’s request for continued m edical care, treatm ent and ben efits. Plaintiffs’ disagreem ent with Ms. Broom e’s m ethod of adjusting claim s and ultim ate claim s decision cannot form the basis of a claim against her under Louisiana law. 32 As a 28 Id. (citing Yates, 1998 WL 610 33, at *4; Matter of Hanover Corp., 67 F.3d 70 (5th Cir. 1995)). See St. Marie, 20 0 7 WL 10 17588 , at *3 (citing Pellerin , 396 So. 2d at 373). 30 Hoffm an v . Ellender, No. CIV.A. 15-30 9-J WD, 20 15 WL 4873342, at *5 (M.D. La. J uly 23, 20 15) (citin g Southern Hotels Ltd. P’ship v. Lloy d’s Underw riters at London Cos., No. 95-2739, 1996 WL 480 0 1, at *1 (E.D. La. Aug. 7, 1996); Pellerin, 396 So. 2d at 373). 31 Instead, the Plaintiffs m aintain their cause of action against Broom e is under Louisiana Civil Code art. 2315. R. Doc. 12, 3. A claim against an insurance adjuster m ay not be brought under Louisiana Civil Code art 2315. See Motin, 20 0 3 WL 22533673, at *4. The Plaintiffs also rely on W eber v. State, 635 So. 2d 188 (La. 1994), and its progeny, but the cases cited by Plaintiffs do not apply to claim s against an insurance adjuster. 32 Hoffm an, 20 15 WL 4873342, at *6. 29 5 result, the Court finds Broom e was im properly joined and therefore the Plaintiffs’ m otion to rem and 33 m ust be denied. CON CLU SION IT IS ORD ERED that Plaintiffs’ m otion to rem and 34 this case to state court is D EN IED . IT IS FU RTH ER ORD ERED that Defen dant Michelle Broom e is D ISMISSED from this action as a defendant. 35 N e w Orle a n s , Lo u is ian a, th is 3 0 th d ay o f N o ve m be r, 2 0 16 . _____________ __________________ SU SIE MORGAN U N ITED S TATES D ISTRICT J U D GE 33 R. Doc. 7. R. Doc. 7. 35 See Robinson v. W al-Mart Stores, Inc., No. CV 15-6871, 20 16 WL 15720 78, at *4 n.35 (E.D. La. Apr. 19, 20 16) (“A finding of im proper joinder is tantam ount to dism issal of the defendant who was im properly joined.” (quotin g Butler v. La. State Univ. Health Sciences Ctr., No. 12-CV-1838, 20 12 WL 778440 2, at *4 (W.D. La. Nov. 19, 20 12))). 34 6

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