Opinion
No. 04 Civ. 7184 (TPG).
February 22, 2005
OPINION
On September 8, 2004 defendants CCC Insurance Company Limited ("CCC Ltd.") and CCC Insurance Corp. ("CCC Corp.") removed the action to this Court from Supreme Court, New York County, on the basis of diversity of citizenship jurisdiction. Defendant Combined Coordinating Council, Inc. ("CCC Inc.") consented to such removal.
Plaintiff The Brooklyn Hospital Center ("TBHC") moves to remand. The CCC defendants oppose the motion, and cross-move to dismiss the complaint against CCC Inc. for failure to state a claim, and further cross-move to dismiss defendants Frances Barbara Alston et al. from the case because of alleged fraudulent joinder, and in the alternative, to align these other defendants as plaintiffs and dismiss them for lack of standing.
The motion to remand is denied. The cross-motion to dismiss the complaint as to CCC Inc. and defendants Alston et al. is granted.
Voluminous papers have been submitted on the motion and cross-motion, which include a description of proceedings in other lawsuits between the parties in this Court and the state court. No attempt will be made in this opinion to recapitulate all of that. All that is necessary for the ruling on the motion before the Court is an analysis of the complaint in this action together with a few findings of fact and conclusions of law.
Plaintiff TBHC is a non-profit hospital formed in New York State, with its principal business in this State.
Defendant CCC Ltd. is a Bermuda corporation and defendant CCC Corp. is a Barbados corporation. Although there is a dispute about the following issue, the Court finds that their principal places of business are Bermuda and Barbados, respectively. Defendant CCC Inc. is a New York corporation, with its principal place of business in New York. The other defendants are individuals, who are residents of the State of New York.
The present action was originally brought in Supreme Court, New York County, and was commenced on August 23, 2004 (Index No. 04/602737). Since the removal was filed on September 8, 2004, it was within the 30 days provided for in 28 U.S.C. § 1446(b). There is the requisite diversity of citizenship between plaintiff TBHC and defendants CCC Ltd. and CCC Corp. within the meaning of 28 U.S.C. § 1332(a)(2), which provides for jurisdiction of actions between the "citizens of a State and citizens or subjects of a foreign state."
Plaintiff TBHC and defendant CCC Inc. are both citizens of the State of New York. This circumstance would defeat federal jurisdiction, except that the CCC defendants assert that CCC Inc. is improperly joined in this action and that there is no proper claim in the complaint against CCC Inc.
This issue requires an analysis of the complaint.
The complaint states that CCC Ltd. and CCC Corp. have issued professional liability insurance policies covering plaintiff TBHC (par. 301). It is alleged that CCC Inc. administered the policies, determined defense and indemnity obligations under the policy, and was responsible for providing TBHC with risk management, insurance advice, and legal defense of claims (par. 302). CCC Inc. is not an insurance company.
The gravaman of the complaint relates to whether the insurance companies — CCC Ltd. and CCC Corp. — are honoring their obligations with respect to the insurance coverage of TBHC. The problem with the complaint is that, after briefly defining the nature of the three companies, as described above, the complaint, in most of the material allegations, lumps the three companies together as "CCC" (par. 11). What are labeled the "Factual Allegations" of the complaint describe the insurance policies in question and the obligations which "CCC" had under those policies (pars. 303-311). The complaint then alleges that "CCC" took steps to wrongfully limit the insurance coverage, including entering into a "Standstill Agreement" in December 2002 (pars. 312-313). The complaint goes on to charge "CCC" with both reducing and finally terminating TBHC's insurance coverage (pars 314-323). In the final paragraph of this section it is alleged that "CCC" is bound by the terms and full limits of the policies insuring TBHC (par. 326).
The First Cause of Action is for declaratory judgment, and refers throughout to "CCC." The allegations are again about the refusal to honor obligations under the insurance policies (pars. 327-338). The request is for an order remedying "CCC's refusal to be bound by the terms of the policies" (par. 339).
The Second Cause of Action is for breach of fiduciary duty. The target of the claim is stated to be "CCC." Although this cause of action has language relevant to a fiduciary duty theory, it is essentially no different from the First Cause of Action. The claim is that "CCC" is not honoring the full obligations under the insurance policies. There is some brief, conclusory attempt to refer to the functions of the non-insurance company defendnt, CCC Inc. For instance, it is alleged that as "an insurer and risk consultant of TBHC, CCC was required to act with the utmost good faith in the defense and indemnity of TBHC" (par. 341). A little later it is alleged that as "an insurer, risk consultant, and insurance adviser, CCC owed TBHC a fiduciary duty of good faith" (par. 343). But the only alleged wrongdoing or breach of duty actually described in the Second Cause of Action is exactly what was claimed in the First Cause of Action — that is, the alleged attempt to limit or do away with coverage under the insurance policies.
The complaint is wholly improper in directing the allegations of wrongdoing against all three of the CCC companies, referred as to "CCC." This is surely true where the only alleged wrongdoing or breach of duty is the attempt to avoid providing coverage under the insurance policies issued by the two insurance company defendants — CCC Ltd. and CCC Corp. Although there are a few vague references in the complaint which might be construed as allegations about the third defendant — CCC Inc. — there is nothing that can reasonably be construed as charging something wrong perpetrated by this non-insurance company defendant, aside from simply being lumped in as part of "CCC."
Consequently, the complaint should be dismissed as to defendant CCC Inc. for failure to state a claim upon which relief can be granted.
The other defendants — Frances Barbara Alston et al. — are plaintiffs in medical malpractice actions against TBHC. No allegations of wrongdoing or breach of duty of any kind are made against these defendants. The complaint should be dismissed as against these defendants for failure to state a claim upon which relief can be granted.
The Court denies plaintiff TBHC's motion to remand the case to Supreme Court, New York County. The Court grants the cross-motion to dismiss the complaint as to CCC Inc. and as to defendants Alston et al. Plaintiff TBHC is directed to file and serve an amended complaint which gives effect to these rulings.
SO ORDERED.