United States District Court, S.D. Mississippi, Northern Division
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
T. WINGATE UNITED STATES DISTRICT COURT JUDGE
THIS COURT is State Auto Property and Casualty Company's
(hereinafter referred to as “State Auto”) Motion
for Summary Judgment. [Docket no. 92]. The consolidated
lawsuits sub judice present the interrogatory
whether the insurance policy (hereinafter referred to as the
“Policy”) purchased by El Shaddai Christian
Ministries, Inc., (hereinafter referred to as “El
Shaddai”) from State Auto, provides coverage for storm
water damage to the roof of El Shaddai's church building,
located at 3120 Robinson Street, Jackson, Mississippi
(hereinafter referred to as the “Subject
Auto's motion for summary judgment is premised on Rule 56
of the Federal Rules of Civil Procedure[1" name="FN1" id="FN1">1]. By its motion,
State Auto asks this court to grant summary judgment in its
favor and to dismiss the claims of El Shaddai against it.
State Auto's argument is that the damage to the roof of
the Subject Property was not due to a storm event, but caused
by a long-term lack of maintenance and neglect. This court is
not persuaded to grant State Auto's motion under the
jurisprudence of Rule 56, and will DENY its motion for
summary judgment. [Docket no. 92].
court first must determine whether it has subject matter
jurisdiction. The complaint filed by State Farm alleges that
this court possesses federal subject matter jurisdiction by
way of diversity jurisdiction as codified under 28 U.S.C.
§ 1332. [Docket no. 1, ¶ 5]. The parties to
this matter are: State Auto which is an insurance company
organized under the laws of the State of Iowa, with its
principle place of business in the State of Ohio; and El
Shaddai, a non-profit corporation incorporated in the State
of Mississippi with its principle place of business in the
State of Mississippi [Docket no. 1, ¶¶2-3].
consolidated case (state civil action number
25CI1:15-cv-148-JAW), which was originally filed in the
Circuit Court of Hinds County, Mississippi, named Boyles Moak
& Stone, Inc. (hereinafter referred to as
“Boyles”), as a second defendant. Boyles is a
corporation doing business in the State of Mississippi.
[3:15-CV-229-HTW-LRA, Docket no. 1-1, PP. 3');">P. 3-4]. El Shaddai
filed its state court lawsuit on March 16, 2015.
[3:15-CV-229-HTW-LRA, Docket no. 1-1](hereinafter referred to
as “state lawsuit”).
March 26, 2015, State Farm filed a notice of removal with
this federal forum alleging Boyles had “been
fraudulently and/or improperly joined in this action solely
for the purpose of defeating diversity of citizenship
jurisdiction in this matter.” [3:15-CV-229-HTW-LRA,
Docket no. 1]. Neither Boyles nor El Shaddai moved the
federal court to remand the state lawsuit to Hinds County
Circuit Court; instead, on April 14, 2015, United States
District Court Judge Tom S. Lee entered an order dismissing
Boyles by the agreement of the parties. In this court's
eye, that agreement of the parties to dismiss Boyles was akin
to an admission of fraudulent joinder of Boyles, which would
have resulted in this court dismissing Boyles from this
action. That same day, on April 14, 2015, that case was
consolidated with case number 3:15-CV-112-HTW-LRA, the lead
case in this consolidated action (hereinafter referred to as
the “lead case”).
court alternatively finds that District Court Judge Lee could
have remanded 3:15-CV-229-HTW-LRA if persuaded the El Shaddai
has a viable claim against Boyles. On removal questions, the
federal court takes a snapshot of the pleadings at the time
of removal. Then, 3:15-CV-229-HTW-LRA would not have
featured diverse parties, as El Shaddai and Boyles are both
Mississippi citizens. Still, has the court remanded the
matter, the defendant therein, State Auto, simply would have
removed again and the court would have lost time, a wasteful
the United States Supreme Court, in facing situations
somewhat similar to that facing this court, has found,
“[where the] jurisdictional defect was cured, i.e.,
complete diversity was established before the trial
commenced[, ]” “‘the District Court [had]
jurisdiction of the parties at the time it entered
judgment.'” Caterpillar Inc. v. Lewis, 519
U.S. 61, 73, 117 S.Ct. 467');">117 S.Ct. 467, 475, 136 L.Ed.2d 437
(1996)(Quoting Grubbs v. General Elec. Credit Corp.,
405 U.S. 669');">405 U.S. 669, 700, 1344');">92 S.Ct. 1344, 31 L.Ed.2d 612 (1972)).
Therefore, this court is not convinced it would be an
efficient use of judicial resources to sever and remand the
state case because the jurisdictional defect has been
the jurisdictional amount: “[t]he amount in
controversy, in an action for declaratory or injunctive
relief, is the value of the right to be protected or the
extent of the injury to be prevented.” Webb v.
Investacorp., Inc., 89 F.3d 252, 256 (5th
Cir. 1996). El Shaddai does not challenge the amount in
controversy as set forth in State Farm's Complaint - that
alleged amount being $658, 000.00. In fact, in filing its own
complaint, El Shaddai requested punitive damages as well as
compensatory damages. [3:15-cv-229-TSL-RHW, Docket no. 1-1,
P. 8]. Therefore, this court, which had an independent
obligation to confirm its subject matter
jurisdiction[4" name="FN4" id=
"FN4">4], finds the mandates of 28 U.S.C. §
1332 are satisfied: the parties are completely diverse and
the amount in controversy is satisfied.
as this court is exercising diversity of citizenship
subject-matter jurisdiction, this court, sitting in
Mississippi, will apply Mississippi's law to the
substantive issues in accordance with the Erie
Doctrine. Erie v. Tompkins, 4 U.S. 64');">304 U.S. 64, 78-79, 58
S.Ct. 817, 1188');">82 L.Ed. 1188 (1938). Under the Erie
Doctrine, federal courts sitting in diversity must apply
state substantive law and federal procedural law.
Foradori v. Harris, 477');">523 F.3d 477, 486 (5th Cir.
2008) (citing Gasperini v. Ctr. for Humanities,
Inc., 18 U.S. 415');">518 U.S. 415, 426-427 (1996)).
STATEMENT OF THE FACTS
Shaddai purchased the Subject Property on September 23, 2003.
[Docket no. 92-1]. On March 18, 2009, Gail Kayiwa
(hereinafter referred to as “Kayiwa”), the
president of El Shaddai, reported a roof leak due to storm
damage to Brotherhood Mutual Insurance Company (hereinafter
referred to as “Brotherhood”) and filed a claim
for such. [Docket no. 92-2]. Brotherhood retained an
independent adjuster, Central Adjustment Company (hereinafter
referred to as “Central”), to inspect the
premises and survey the damage. [Docket no. 92-3]. Central
visited the Subject Property on April 13, 2009, and prepared
a report, including photographs which purport to show water
pooling on the Subject Property's roof. [Docket no.
denied the claim on April 29, 2009, by sending a letter to El
Shaddai explaining: there was no storm damage to the roof;
the roof was “worn out and in need of
maintenance”; and the Brotherhood policy excluded
damage due to wear and tear. [Docket no. 92-4]. Brotherhood
cancelled its policy approximately eight (8) months later,
claiming that El Shaddai had failed to pay the premiums.
[Docket no. 92-5].
thereafter sought replacement insurance coverage for the
Subject Property. She looked to State Auto. On March 5, 2012,
El Shaddai signed a new Business Owners Application for
insurance with State Auto. [Docket no. 92-6]. Kayiwa
backdated a check issued to State Auto, which purported to be
issued on March 2, 2012. [Docket no. 92-7, P. 21, LL. 9-19].
State Auto issued the Policy, numbered BOP 2666518 on March
6, 2012 with a policy period of March 2, 2012 through March
2, 2013. [Docket nos. 91-8 & 91-9].
16, 2012, roughly a period slightly over four (4) months
after State Auto had issued the policy, El Shaddai filed a
claim with State Auto for a roof leak and water intrusion
which it claimed had occurred as a result of a sudden storm
event on March 2, 2012, the date the Policy became effective,
and three days before Kayiwa signed the insurance
application. [Docket no. 92-10]. State Auto inspected the
property on July 19, 2012. [Docket no. 92-11]. State Auto
denied the claim on July 23, 2012, stating there was no
evidence of storm damage, but, rather the roof presented
long-existing maintenance issues. [Docket no. 92-12].
Shaddai reported the same claim a second time on October 5,
2012. [Docket no. 92-13]. State Auto retained an independent
adjuster, Cunningham Lindsey (hereinafter referred to as
“Lindsey”) on October 11, 2012, to inspect the
property. [Docket no. 92-14]. Lindsey found the same
maintenance issues Central had found three (3) years prior.
[Docket no. 92-14]. After receiving Lindsey's report,
State Auto denied the second claim filed by El Shaddai with
State Auto on October 18, 2012. [Docket no. 92-15].
Auto terminated the policy on October 19, 2012, as a result
of non-payment of premiums by El Shaddai. [Docket no. 92-16].
Sammuel Honnold (hereinafter referred to as
“Honnold”), a roofing contractor, examined the
Subject Property on January 17-18, 2013, at the direction of
El Shaddai. [Docket no. 92-17]. Honnold contacted State Auto
and informed it he believed the damage to the roof was due to
settling as the result of a sinkhole. [Docket no. 92-17];
however, El Shaddai does not intend to, nor can it, rely on