United States District Court, C.D. Illinois
JASON E. BEEKS, and J.B., a minor, Plaintiffs,
AMERICAN FAMILY INSURANCE COMPANY, and MICHAEL ORTH, Defendants.
ORDER AND OPINION
E. SHADID, CHIEF UNITED STATES DISTRICT JUDGE
before the Court is a Motion to Remand (Doc. 16) by
Plaintiffs Beeks and J.B. For the reasons set forth below,
Plaintiff's Motion to Remand (Doc. 16) is GRANTED and
this action is remanded to the Circuit Court of the
Fourteenth Judicial Circuit in Rock Island County for further
originally filed this action pro se in the Circuit Court of
the Fourteenth Judicial Circuit in Rock Island County on
August 1, 2017, naming as Defendants American Family
Insurance Company (“AFIC”) and Michael Orth.
Shortly thereafter, Plaintiffs obtained counsel. The essence
of Plaintiffs' complaint is that AFIC wrongfully denied
their claim under a homeowner's insurance policy issued
by AFIC to Plaintiffs. On November 14, 2017, AFIC removed
this action to the United States District Court for the
Northern District of Illinois on the basis of diversity
jurisdiction. Defendant Orth is an Illinois citizen, but
Defendants asserted in their Notice of Removal that Orth was
fraudulently joined to destroy diversity jurisdiction. Doc.
the transfer to this District, Defendants filed a Motion to
Dismiss for failure to state a claim under Federal Rule of
Civil Procedure 12(b)(6). Doc. 13. Thereafter, Plaintiffs
filed a Motion to Remand, wherein they argue that removal was
improper because diversity of citizenship is not present.
Doc. 16. Specifically, Plaintiffs assert that Orth, an
Illinois citizen, issued the declaration page of the
insurance policy central to this dispute. According to
Plaintiffs, Orth may be liable to them because he actually
issued two declaration pages-one for the real estate closing,
and the second, with a more limited amount of coverage, that
was actually delivered.
then filed an amended complaint. Doc. 20. As it relates to
Defendant Orth, Plaintiffs' amended complaint states as
The closing on the purchase of the home … took place
in Moline, Illinois. To close on the loan Beeks obtained to
purchase the property, Beeks was required to produce evidence
of insurance on the property. To that end, Orth issued a
declaration page which listed several Options/Endorsements.
The Fungi or Bacteria Exclusion (END 595 ED 6/02) was not
listed on the declaration page as issued. Subsequently and
unknown to Beeks, Orth changed the policy and did add the
Fungi or Bacteria Exclusion (END 595 ED 6/02). The effect of
this was to try [to] eliminate coverage for personal injury/
medical expense coverage for the members of the household who
were injured as a result of the occurrence in question. This
was a failure to exercise ordinary skill and reasonable care
towards Beeks and was an affirmative role in American
Family's wrongful denial of coverage. When Beeks realized
that the damage to the home was a result of the wind/hail
storm of August 2, 2015, he contacted Orth and requested that
he reopen that claim. Orth refused stating that the American
Family's adjusters were correct and that American
Family's denial of that claim will stand Orth and thereby
[sic] played an affirmative role in American
Family's wrongful denial of the claim. Additionally,
Beeks communicated with American Family through Orth and Orth
played an affirmative role in American Family's decision
to deny coverage.
Doc. 20, at 5-6 (so in original).
filed a Response to Plaintiffs' Motion to Remand, arguing
that (1) Plaintiffs' Motion to Remand should be limited
to the facts asserted in the original complaint, and (2)
Defendant Orth was fraudulently joined because Plaintiffs
fail to allege a cause of action against him. Doc. 21.
courts are courts of limited jurisdiction. Section 1332(a)(1)
confers upon district courts jurisdiction to hear state law
claims when complete diversity of citizenship exists between
the parties: “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 . . . citizens of
different States.” 28 U.S.C. § 1332(a)(1). Thus,
“§ 1332 allows plaintiffs to invoke the federal
courts' diversity jurisdiction.” Lincoln Prop.
Co. v. Roche, 546 U.S. 81, 89 (2005). When a plaintiff
files a civil action in state court, “§ 1441 gives
defendants a corresponding opportunity.” Id.
Section 1441(a) provides:
Except as otherwise expressly provided by Act of Congress,
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.
both § 1332 and § 1441 allow parties to invoke a
federal court's diversity jurisdiction, “[t]he
scales are not evenly balanced.” Id. at 89-90.
This is so because an in-state plaintiff may use § 1332
to establish diversity jurisdiction, but § 1441(b) bars
defendants from removing an action to federal court on the
basis of diversity if they are citizens of the state in which
the action is ...