Summary
finding plaintiffs asserted a colorable UTPCPL claim against non-diverse insurance agents and remanding case to state court
Summary of this case from Cirocco v. Nw. Mut. Life Ins. Co.Opinion
No. 3:05cv908.
May 18, 2005
MEMORANDUM
Presently before the court for disposition is a notice of removal filed by Defendants Nationwide Mutual Insurance Company ("Nationwide"), Patrice McLaughlin, Abigail Rivera, Priscilla Rodriguez, and Kristina Baker (collectively "the insurance agents"). Therein, they seek to remove to this Court the instant complaint filed by Plaintiffs Leon Fenkner, Anne Marie Fenkner, and Shawn Fenkner (collectively "the plaintiffs") in the Court of Common Pleas of Luzerne County. For the reasons that follow, we will sua sponte remand this case because we lack jurisdiction over the matter.
The following background facts are derived from the notice of removal and the complaint.
The plaintiffs filed the instant complaint in state court on April 1, 2005. They allege that on July 11, 2002, Plaintiff Leon Felkner was operating a motor vehicle in which his minor son, Plaintiff Shawn Felkner, was a passenger, when it was struck by another motorist. When this accident occurred, the plaintiffs were covered by an insurance policy issued by Nationwide. The plaintiffs allege that Nationwide and its agents violated numerous laws in various ways in the course of processing the plaintiffs' claims. The plaintiffs put forth the following ten counts: 1) a breach of contract claim against Nationwide; 2) a breach of contract/violation of the Pennsylvania Motor Vehicle Responsibility Law § 1798 claim against Nationwide; 3) a claim for violation of 42 PA.C.S.A. § 8371 against Nationwide; 4) a claim for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 75 PA.C.S.A. § 201-1 et seq. ("UTPCPL") against Nationwide and its agents; 5) a breach of good faith and fair dealing claim against Nationwide and its agents; 6) a breach of fiduciary duty claim against Nationwide and its agents; 7) a negligence claim against Nationwide and its agents; 8) a fraudulent misrepresentation claim against Nationwide and its agents; 9) an abuse of process claim against Nationwide and its agents; and 10) a vicarious liability claim against Nationwide and its agents.
Defendants filed the instant notice of removal on May 4, 2005, arguing that we have diversity jurisdiction over the complaint pursuant to 28 U.S.C. § 1332.
Discussion
Federal courts, being courts of limited jurisdiction, have a continuing duty to satisfy themselves of jurisdiction before addressing the merits of a case. Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1049 (3d Cir. 1993). Moreover, federal courts have the obligation to address the question of subject matter jurisdiction sua sponte. Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 217 (3d Cir. 1999); see generally Nelson v. Keefer, 451 F.2d 289, 293-95 (3d Cir. 1971) (finding that the federal judiciary has been too cautious in addressing the large number of cases which do not belong in federal courts). In addition, removal statutes are to be strictly construed against removal, and all doubts should be resolved in favor of remand. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990).
Generally, a defendant can remove a civil action that was filed in state court if the federal court would have original jurisdiction to address the matter. 28 U.S.C. § 1441. In the petition for removal, the defendants indicate that this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332.
"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between — (1) citizens of different States." 28 U.S.C. § 1332. In order to satisfy this provision, the parties must be completely diverse, that is, no defendant can be from the same state as any plaintiff. Singh v. Daimler-Benz AG, 9 F.3d 303, 305 (3d Cir. 1993).
The plaintiffs are citizens of Pennsylvania. Nationwide is a citizen of Ohio. The insurance agents, however, are also residents of Pennsylvania. Thus, the parties are not completely diverse. The defendants argue that we should disregard the citizenship of the insurance agents because the plaintiffs fraudulently joined them to preclude federal diversity jurisdiction. For the following reasons, we disagree.
When a non-diverse party is joined as a defendant, the defendants carry a "heavy burden of persuasion" to demonstrate that the non-diverse party was fraudulently joined. Batoff v. State Farm Insurance Co., 977 F.2d 848, 851 (3d Cir. 1992) (citing Steel Valley Author. v. Union Switch Signal Div., 809 F.2d 1006, 1012 n. 6 (3d Cir. 1987)).
Joinder is fraudulent `where there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendants or seek a joint judgment. . . .' But, `[i]f there is even a possibility that a state court would find that the complaint states a cause of action against any one of the resident defendants, the federal court must find that joinder was proper and remand the case to state court.'Id. (citations within quote omitted).
To determine whether the plaintiffs have a colorable basis for their claims against the insurance agents, we must focus on the complaint and take all factual assertions therein as true. Id. (citing Steel Valley, 809 F.2d at 1010). Furthermore, we must "resolve any uncertainties as to the current state of controlling substantive law in favor of the plaintiff." Id. (citingBoyer, 913 F.2d at 111).
After a careful review, we find that the complaint advances a least one colorable claim against the insurance agents, and therefore we will consider their citizenship for the purposes of analyzing diversity jurisdiction. The plaintiffs have asserted UTPCPL, breach of good faith, breach of fiduciary duty, negligence, fraudulent misrepresentation, abuse of process, and vicarious liability claims against the insurance agents. We find it a possibility that a state court would find that the UTPCPL claims states a viable cause of action, and thus it is unnecessary to address the remaining claims.
Defendants argue that Plaintiff's UTPCPL fails to state a cause of action against the insurance agents because they are not "sellers" within the meaning of the UTPCPL. The UTPCPL contains no requirement that the defendant be a seller. The case on which Defendants rely, Defazio v. Gregory, 836 A.2d 935 (Pa.Super.Ct. 2003), is inapposite. In Defazio, the court addressed whether a landowner who sold timber on his property to a logging company was a "purchaser" within the meaning of the UTPCPL. The court noted that the UTPCPL provides a cause of action for "any person who purchases or leases goods or services," or for a "buyer" or "consumer." Id. at 938 (citing 73 P.S. §§ 201-8, 201-9.2). The court found that the plaintiff was a seller of timber, and thus could not maintain a cause of action under the UTPCPL because he was not a purchaser, consumer, or buyer. Id. The court made no decision limiting the scope of potential defendants, and instead held that a plaintiff must be a "buyer." Id. The defendants cite no other authority for the proposition that the insurance agents are improper defendants under the UTPCPL.
In the instant case, Plaintiff alleges that he purchased an insurance contract. Therefore, he is a buyer within the meaning of the UTPCPL and a state court may potentially find that his complaint presents a cause of action. Furthermore, the Pennsylvania Superior Court has found that a plaintiff may maintain an UTPCPL action against an insurance agent. Pekular v. Eich, 513 A.2d 427, 434 (Pa.Super.Ct. 1986) (holding the plaintiff could maintain an action under the UTPCPL because the Unfair Insurance Practices Act does "not represent the sole and exclusive deterrent to alleged unfair or deceptive acts of insurers and their agents" (emphasis added)); see also Toy v. Metropolitan Life Insurance Co., 863 A.2d 1 (Pa.Super.Ct. 2004) (addressing a UTPCPL claim against an insurance agent).
Therefore, we find that the plaintiffs assert a colorable claim pursuant to the UTPCPL against the non-diverse insurance agents. The agents have not been fraudulently joined, the parties in the present case are not diverse, and we have no jurisdiction. Accordingly, we will remand the case to the Court of Common Pleas of Luzerne County. An appropriate order follows.
ORDER
AND NOW, to wit, this 18th day of May 2005, this case is hereby REMANDED to the Court of Common Pleas of Luzerne County. The Clerk of Courts is directed to close this case in this district.