Opinion
Civil No. 3:02-CV-751-H
August 13, 2002
MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff's Motion for Leave to File Amended Complaint, filed May 13, 2002; Defendant's Response thereto, field May 23, 2002; Plaintiff's Reply, filed June 18, 2002; and Defendant's Sur-reply, filed June 28, 2002. Also before the Court is Plaintiff's Motion to Remand, filed May 13, 2002 and Defendant's Response thereto, filed June 3, 2002. Upon review of the pleadings, briefs, and relevant authorities, the Court is of the opinion for the reasons stated below that Plaintiff's Motion for Leave should be DENIED and Plaintiff's Motion to Remand DENIED AS MOOT.
I. BACKGROUND
Plaintiff, Dal-Tile Corporation, sued the Defendant, Zurich American Insurance Company, in state Court on February 20, 2002 and Defendant removed the action to this Court on April 11, 2002. Plaintiff claims that the Defendant breached its insurance contract with Plaintiff when it denied coverage and refused to represent the Plaintiff in litigation before the Chancery Circuit Court of the City of Norfolk. Although the Parties that asserted claims against Plaintiff in the Norfolk action eventually non-suited Plaintiff, Plaintiff claims it suffered damages in the form of attorneys' fees, defense costs, and court costs associated with its defense.
The Parties to the instant case agree that Defendant properly invoked this Court's jurisdiction on removal, pursuant to 28 U.S.C. § 1332, in that there is complete diversity between Plaintiff and Defendant and the amount in controversy exceeds the jurisdictional minimum of this Court. Plaintiff, however, seeks to amend its Complaint to join AON Risk Services of Texas, Inc. ("AON"), a non-diverse party, and to assert a negligent misrepresentation claim against both AON and the Defendant. The Parties agree that this amendment would destroy this Court's jurisdiction and lead to a remand of this case. Plaintiff argues that because AON was the broker that negotiated the insurance contract with Plaintiff, it is appropriate to permit joinder of AON at this time. Defendant, however, asserts that Plaintiff is merely attempting to joint AON in an attempt to defeat diversity jurisdiction.
II. ANALYSIS
Although FED. R. Civ. P. 15(a) provides that leave to amend a pleading "shall be freely given when justice so requires," an amendment that would affect this Court's jurisdiction requires a more extensive analysis than a motion to amend would otherwise require. Hensgens v. Deere Co., 833 F.2d 1179, 1182 (5th Cir. 1987). Section 28 U.S.C. § 1447(e) states "If after removal the plaintiff seeks to join additional Defendants whose joinder would destroy subject matter jurisdiction, the Court may deny joinder, or permit joinder and remand the action to the State court." The Fifth Circuit provides a four-step test to determine whether a non-diverse non-indispensable party should be joined:
(1) the extent to which the purpose of the amendment is to defeat federal jurisdiction; (2) whether the Plaintiff has been dilatory in asking for the amendment; (3) whether the Plaintiff will be significantly injured if the amendment is not allowed; and (4) any other factors bearing on the equities.
See Doleac v. Michalson, 264 F.3d 470, 473 (5th Cir. 2001); Hensgens, 833 F.2d at 1182. With reference to the first factor, because the Plaintiff knew of the existence of the broker at the time it filed its claim in state Court, the Court views Plaintiff's attempt at joinder at this stage of the litigation with "much suspicion." See O'Connor v. Automobile Ins. Co. of Hartford, 846 F. Supp. 39, 41 (E.D. Tex. 1994) (finding that an attempt to join the agency that sold an insurance policy after removal of the suit against the insurance company should be viewed with much suspicion). Second, in defending its delay in joining AON, Plaintiff argues that it was required to wait 60 days before asserting a Texas Deceptive Trade Practices Act ("DTPA") claim and violations of the Texas Insurance Code against the Defendant as required by statute. Plaintiff contends that these claims contained misrepresentation claims that it planned to assert against AON. Plaintiff's argument does not explain its delay, however. Plaintiff does not assert DTPA or Insurance Code violation claims against AON or Defendant in its First Amended Complaint. Furthermore, Plaintiff could have asserted misrepresentation claims against AON when it filed its Original Petition; the only applicable 60-day waiting period was for the DTPA claim. Thus, Plaintiff's argument is without merit. Furthermore, although the Court notes that the length of time between the filing of this suit in state Court and Plaintiff's Motion to Amend is not per se dilatory, this lawsuit does not exist in a vacuum. See Holcomb v. Brience, Inc., 3:01-CV-1715-M, 2001 WL 1480756 *2 (N.D. Tex. 2001) (finding that Plaintiff's motion to amend was not per se dilatory where the case was filed on July 24, 2001, removed on August 21, 2001, and Plaintiff's motion was filed on September 28, 2001). Plaintiff requested that Defendant provide it with a defense to the Norfolk case on June 28, 2001 and Defendant denied coverage on August 6, 2001. Plaintiff could have determined as early as August 6, 2001 that it had claims against both the Defendant and AON. Thus, under these circumstances, the Court finds Plaintiff's efforts to be dilatory.
Third, Plaintiff's only argument that it will suffer prejudice if its motion is denied is the risk of parallel federal and state court proceedings. AON, however, is neither the sole cause of injury nor is there any suggestion that Defendant will be unable to satisfy a judgment. See O'Connor, 846 F. Supp. at 41. In addition, the Court is skeptical as to whether Plaintiff will pursue a claim against AON in state Court given that there was no legitimate reason for failing to include them in the original complaint. Thus, the Court finds little prejudice against the Plaintiff.
Fourth, the Court finds there are no additional equities that weigh in favor of either party. Thus, this Court find that the factors support a denial of Plaintiff's Motion for Leave to Amend.
III. CONCLUSION
For the reasons stated above, the Court DENIES Plaintiff's Motion for Leave to Amend and DENIES AS MOOT Plaintiff's Motion for Remand.