Opinion
CIVIL ACTION NO: 02-2807, SECTION: "J"(1)
November 18, 2002
ORDER AND REASONS
Before the Court is plaintiff's Motion to Remand (Rec. Doc. 5). Plaintiff's motion was set for an October 23, 2002 hearing on the briefs. Defendant, Underwriters Insurance Company ("Underwriters"), has submitted an opposition brief (Rec. Doc. 7). Upon consideration of the briefs submitted by counsel, the Notice of Removal (Rec. Doc. 1), Plaintiff's state court petition, and the applicable law, the Court concludes that Plaintiff's motion should be DENIED.
BACKGROUND
According to the petition, on or about August 14, 2001, Plaintiff was driving north on U.S. Highway 51 near its intersection with U.S. Highway 190 in Tangipahoa Parish, Louisiana. Plaintiff was driving a vehicle with the consent of its owner, Robin Brooks ("Brooks"). Debra Rivet ("Rivet"), a defendant in this action, was driving an 18-wheeler tractor truck directly behind Plaintiff. Rivet was driving the truck with the consent and permission of JLT, Inc. ("JLT"), the registered owner and separate defendant in this action. The petition alleges that Rivet was in the course and scope of her employment with JLT. Plaintiff claims that she was stopped on Highway 51 when the rear of her vehicle was struck by the truck operated by Rivet.Plaintiff contends that she suffered numerous physical and emotional injuries due to the accident. On August 8, 2002, Plaintiff filed suit, both individually and on behalf of her daughter, in 21st Judicial District Court for the Parish of Tangipahoa, State of Louisiana. Joined as defendants to the lawsuit are the following: Debra Rivet; JLT; Underwriters, the insurer of JLT; and American Central Insurance Company ("American Central"), the underinsured/uninsured motorist insurer of the vehicle operated by Plaintiff. Plaintiff's petition asserts claims arising solely under Louisiana state law.
On September 12, 2002, Underwriters filed a Notice of Removal (Rec. Doc. 1), pursuant to 28 U.S.C. § 1441, which removed the action to this Court. Underwriters argues that the Court has original jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship and the amount in controversy exceeds $75,000.00. According to the petition and the notice of removal, Plaintiff, and her daughter, are citizens of Louisiana. Underwriters claims that it is incorporated in Nebraska and has its principal place of business in Wisconsin or California. JLT allegedly is incorporated and has its principal place of business in Alabama. Both the petition and the notice of removal assert that Rivet is a citizen of Tennessee. American Central allegedly is incorporated in Missouri and has its principal place of business in Massachusetts.
In the notice of removal, Underwriters claims that the petition improperly names a Louisiana corporation named JLT, Inc. as a defendant. The proper defendant to this action should be JLT, Inc., an Alabama corporation. See Rec. Doc.1, at 4 6.
Plaintiff contests that there is complete diversity. Plaintiff argues that she filed a direct action against American Central as provided for in La. R.S. § 22:655, and thus the insurance company must adopt the citizenship of its insured, Brooks. Since Brooks is alleged to be a Louisiana citizen, complete diversity is destroyed.
Underwriters opposes this analysis and argues that Plaintiff's action against American Central is not a direct action under 28 U.S.C. § 1332 (c)(1), but a demand made specifically pursuant to the underinsured/uninsured motorist provisions of Brooks' policy. Thus, under § 1332(c)(1), American Central does not adopt the Louisiana citizenship of its insured. As a result, there is complete diversity between the parties under § 1332(a)(1).
DISCUSSION
The party seeking removal of the action bears the burden of showing that removal is proper. Frank v. Bear Stearns Co., 128 F.3d 919, 921-22 (5th Cir. 1997). Under 28 U.S.C. § 1441 (a), a state court action may be removed if the federal court would have original jurisdiction over the matter. A federal district court has original jurisdiction over a civil action where the matter in controversy exceeds $75,000.00 and is between citizens of different states. 28 U.S.C. § 1332 (a)(1) . Complete diversity of citizenship must be present under § 1332(a)(1). Whalen v. Carter, 954 F.2d 1087, 1094 (5th Cir. 1992).
Neither side contends that the amount in controversy does not exceed $75,000.00.
Federal, not state, law dictates whether complete diversity of citizenship is present. Gonzalez v. Government Employees Ins. Group, 2000 WL 235236, at *2 (E.D. La. 2000). For purposes of § 1332 and § 1441, a corporation is "deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. § 1332 (c)(1).
Additionally, in a direct action against an insurer of a policy or contract of liability insurance, to which the insured is not joined as a defendant, the insurer is also deemed to be a citizen of the state of which its insured is a citizen. Id. However, an underinsured/uninsured motorist policy is not considered to be a "policy or contract of liability insurance." Hernandez v. Travelers Ins. Co., 489 F.2d 721, 725 (5th Cir. 1974); Gonzalez, 2000 WL 235236, at *3. This is so even where the underinsured/uninsured motorist provision is included within a primary liability policy. Gonzalez, 2000 WL 235236, at *5.
A plaintiff's action is not a "direct action" for purposes of § 1332(c), where the claim seeks to recover underinsured/uninsured motorist benefits from the insurer. Poynot v. Hicks, 2002 WL 31040174, at *2 (E.D. La. 2002); Gonzalez, 2000 WL 235236, at *4. But see Rayburn v. Colonial Penn Franklin Ins. Co., 1998 WL 883321, at *1-2 (E.D. La. 1998) (applying state, not federal, law in determining whether diversity of citizenship exists). This is so because the "direct action" provision under § 1332(c)(1) "applies only to actions in which an injured party is permitted to sue directly the tortfeasor's liability insurer, when the tortfeasor himself was not joined as a defendant." Gonzalez, 2002 WL 235236, at *4. This provision is applicable only to actions where "the liability sought to be imposed against the insurer could be imposed against the insured." Id. The same is true whether or not the plaintiff is a named insured under the automobile insurance policy. Myers v. State Farm Ins. Co., 842 F.2d 705, 706-07 (3d Cir. 1988), abrogation on other grounds recognized by McAlister v. Sentry Ins. Co., 958 F.2d 550, 553 (3d Cir. 1992); see also Fortson v. St. Paul Fire and Marine Ins. Co., 751 F.2d 1157, 1159 (11th Cir. 1985) (stating that "where the suit brought either by the insured or by an injured party is based not on the primary liability covered by the liability insurance policy . . . the section 1332(c) direct action proviso does not preclude diversity jurisdiction.").
Plaintiff seeks to recover against American Central under the underinsured/uninsured motorist provision of Brooks' automobile insurance policy. Plaintiff is not asserting that American Central's insured, Brooks, is an alleged tortfeasor or is liable in any way. Thus, the "direct action" provision under § 1332(c)(1) is inapplicable to the instant case. Consequently, American Central does not adopt the citizenship of its insured, Brooks. Accordingly, complete diversity exists between the parties. The Court has original jurisdiction over this matter under 28 U.S.C. § 1332 (a)(1).
Therefore;
It is HEREBY ORDERED that Plaintiff's Motion to Remand (Rec. Doc. 5) is DENIED.