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Farmer v. Progressive Northern Insurance Co.

United States District Court, S.D. Illinois

November 10, 2016



          NANCY J. ROSENSTENGET United States District Judge.

         This matter comes before the Court on the Motion to Remand (Doc. 16) filed by Plaintiffs Brian Farmer and Connie Farmer.


         Progressive Northern Insurance Co. issued a policy of insurance to Plaintiffs covering property damage to Plaintiffs' motorhome (Doc. 1-1). On November 2, 2014, the motorhome's front left tire burst, causing the motorhome to run off the road and into a ditch (Id.). Plaintiffs reported the claim to Progressive, and the motorhome eventually was sent to Duncan RV Repair, LLC, a Progressive-authorized repair center, to be repaired. Plaintiffs allege that Duncan RV repaired their motorhome in a negligent, careless, and unworkmanlike manner and used inferior parts that were wholly inadequate for the normal operation of the motorhome (Id., p. 5). Specifically, Plaintiffs claim that-after the motorhome was supposedly repaired -it still had issues with its batteries, wiring, tires, wipers, king pin, delaminated siding, frame, ladder, exhaust system, and skid plate fasteners (Id.). Plaintiffs further allege that Defendants concealed facts, switched or removed components, jerry-rigged repairs, destroyed or secreted evidence, and misrepresented facts about the motorhome's preexisting conditions, the storage conditions of the motorhome, and the availability of other qualified RV repair shops (Id. at 7). Plaintiffs were unable to recover their motorhome until March 21, 2016 -more than a year and four months after the accident occurred (Id., p. 4).

         Plaintiffs filed a Complaint in the Circuit Court of Madison County, Illinois, on May 26, 2016, naming Progressive, Progressive employees Jeffrey Clark, Mathew Owen, and Collette Crowder, and Duncan RV as defendants (Doc. 1-1). Plaintiffs allege claims for breach of contract against Progressive (Count I), negligence against Progressive (Count II), negligence against Duncan RV (Count III), negligence against Clark, Owen, and Crowder (Count VI), in concert activity against all defendants (Count V), fraud against Progressive, Clark, Owen, and Crowder (Count VI), civil conspiracy against Progressive and Duncan RV (Count VII), and breach of contract against Duncan RV (Count VIII).

         On August 1, 2016, Progressive, Clark, and Owen ("the Progressive Defendants") removed the case to this district court. The Progressive Defendants assert that removal is proper because complete diversity of citizenship exists between the parties, giving the Court original subject matter jurisdiction pursuant to 28 U.S.C. § 1332 (Doc. 13). Plaintiffs are citizens of Illinois. Progressive is a Wisconsin corporation with its principal place of business in Ohio (Doc. 13, p. 2). Duncan RV is an LLC whose sole member is a citizen of Indiana. Duncan RV, therefore, is a citizen of Indiana. Collette Crowder is also a citizen of Indiana. Jeffrey Clark and Matthew Owen ("the Progressive employees"), however, are citizens of Illinois. Although their Illinois citizenship would normally destroy diversity jurisdiction, the Progressive Defendants assert that Plaintiffs fraudulently joined the Progressive employees in an effort to defeat diversity jurisdiction. The Progressive Defendants also note the amount in controversy requirement (in excess of $75, 000, exclusive of interest and costs) is satisfied, as Plaintiffs seek compensatory damages in excess of $50, 000 for each of their claims, in addition to punitive damages and attorney fees.

         On August 10, 2016, Plaintiffs filed a Motion to Remand asserting the Progressive employees were not fraudulently joined (Doc. 16). On September 9, 2016, Progressive and the Progressive employees filed a memorandum in opposition to Plaintiffs' Motion to Remand (Doc. 28). Plaintiffs filed a reply brief on September 23, 2016. (Doc. 30).

         Legal Standard

         Removal is governed by 28 U.S.C. § 1441, which provides, in pertinent part, that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a); see also Pooter v. Janus Inv. Fund, 483 F.Supp.2d 692, 694-95 (S.D. 111. 2007). In other words, "[a] defendant may remove a case to federal court only if the federal district court would have original subject matter jurisdiction over the action." Kitson v. Bank of Edwardsville, No. 06-528, 2006 WL 3392752, at *1 (S.D. 111. Nov. 22, 2006). The party seeking removal, as the proponent of federal subject matter jurisdiction, has the burden of proof as to the existence of jurisdiction. See Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540 (7th Cir. 2006); see also Anglin v. Bristol-Myers Squibb Co., No. 12-60, 2012 WL1268143, at *1 (S.D. 111. April 13, 2012).

         "'Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum/ Put another way, there is a strong presumption in favor of remand." Fuller v. BNSF Ry. Co., 472 F.Supp.2d 1088, 1091 (S.D. 111. 2007) (quoting Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)); Kalbfleisch ex rel. Kalbfleisch v. Columbia Community Unit School Dist. Unit No. 4, 644 F.Supp.2d 1084, 1087 (S.D. 111. 2009). "Doubts concerning removal must be resolved in favor of remand to the state court." Alsup v. 3-Day Blinds, Inc., 435 F.Supp.2d 838, 841 (S.D. 111. 2006).


         In their Motion to Remand, Plaintiffs argue that the Progressive employees, who are citizens of Illinois, were not fraudulently joined. Thus, there is no complete diversity of citizenship, and the case must be remanded to state court.

         A plaintiff may not join a non-diverse defendant in an action simply to destroy diversity jurisdiction. Schwartz v. State Farm Mut. Auto. Ins. Co., 174 F.3d 875, 878 (7th Cir. 1999); Gottlieb v. Westin Hotel Co., 990 F.2d 323, 327 (7th Cir. 1993). The "fraudulent joinder" doctrine, therefore, permits a district court considering removal "to disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants, assume jurisdiction over a case, dismiss the nondiverse defendants, and thereby retain jurisdiction." Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752, 763 (7th Cir. 2009).

         "To establish fraudulent joinder, a removing defendant must show that, after resolving all issues of fact and law in favor of the plaintiff, the plaintiff cannot establish a cause of action against the in-state defendant." Morris v. Nuzzo,718 F.3d 660, 666 (7th Cir. 2013). Put differently, the defendant has the "heavy burden" of showing that the plaintiff's claim has "no chance of success" against the non-diverse defendant. Poulos v. Naas Foods, Inc.,959 F.2d 69, 73 (7th Cir. 1992). The Court's role in evaluating allegations of fraudulent joinder is "to determine whether Plaintiff's complaint provides a reasonable basis for predicting that the plaintiff might be able to recover against an instate defendant... not to ascertain the merits of [the] claim." Asperger v. Shop Vac Corp.,524 F.Supp.2d 1088, 1096 (S.D. 111. 2007). Even if a state court might ultimately find that a plaintiff has failed to state a claim against a defendant, joinder of the claim is not "fraudulent" for purposes of this court's jurisdiction so long as the issue of state law is subject to reasonable ...

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