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Thomas v. Allstate Vehicle & Property Insurance Co.

United States District Court, S.D. Mississippi, Southern Division

May 17, 2017

WALTER THOMAS, JR. PLAINTIFF
v.
ALLSTATE VEHICLE & PROPERTY INSURANCE COMPANY, DEFENDANTS

          ORDER DENYING MOTION TO STRIKE AND/OR REMAND

          LOUIS GUIROLA, JR. CHIEF U.S. DISTRICT JUDGE.

         BEFORE THE COURT is the [8] Motion to Strike and/or Remand filed by Plaintiff Walter Thomas, Jr., requesting that the Court strike certain defenses raised by Defendant Allstate Vehicle & Property Insurance Company in its Answer, or, in the alternative, remand this action to state court. Defendant Allstate has responded to the Motion, but Thomas has not filed a reply and the time for doing so has expired. Having considered the submission of the parties and the relevant law, the Court finds that neither remand nor striking Allstate's defenses is warranted.

         Background

         Plaintiff Thomas instituted this action in the Circuit Court of Jackson County, Mississippi, against Defendants Allstate, Virginia Conn d/b/a Ginny Conn Agency, Tyler Conn, [1] and multiple fictitious defendants arising out of a dispute over insurance coverage. According to the allegations of the Complaint and the exhibits thereto, Thomas owned certain property located in Mississippi, which property was insured by an Insurance Contract with Defendant Allstate.

         In January 2016, Thomas came to the property to mow the yard and discovered that there had been a fire at the property. He alleges that “[a]s a result of the fire, [he] incurred damage to the property in excess [of] $40, 000.00.” (Compl. 3 (¶13), ECF No. 13-1).

         However, Thomas contends that Defendants have “refused to make any payment to Plaintiff as required under the Insurance Contract” and that “Defendants' refusal to make adequate payment to Plaintiff was made without a reasonable basis in fact or law” and amounts to bad faith. (See Id. at 4-5 (¶¶ 20-22)). He requests that the Court “enter a declaratory judgment, that Defendants must pay policy limits to Plaintiff herein, in order to satisfy the damages sustained by Plaintiff in the underlying incident.” (Id. at 6 (¶28)). He also makes claims pursuant to Mississippi state law for breach of contract, breach of the implied covenant of good faith and fair dealing, and bad faith.

         Allstate timely removed the action to this Court on March 9, 2017, on the basis of diversity. See 28 U.S.C. §§ 1332, 1441, 1446. Allstate argues that the Court has jurisdiction because “there is complete diversity of citizenship between the proper parties” and the amount in controversy exceeds $75, 000. (See Notice of Removal 2, ECF No. 1). Thomas and the Conn Defendants are Mississippi citizens, and Allstate is an Illinois citizen. However, Allstate states that the Court should disregard the Conn Defendants' citizenship because Thomas improperly joined them in the state court action.[2] In response, Thomas filed the pending Motion to Strike and/or Remand. The Court discusses Thomas' arguments for remand and for striking Allstate's defenses in turn below.

         Discussion

         I. Motion to Remand

         “The improper joinder doctrine constitutes a narrow exception to the rule of complete diversity. The purpose underlying the improper joinder inquiry is to determine whether or not the in-state defendant was properly joined.” Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011) (citations, quotations marks, and brackets omitted). “To establish improper joinder, the removing party must demonstrate either: ‘(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.'” Id. (citation omitted).

         Only the second way is before the Court in this action. Thus, the Court must determine whether Allstate “has demonstrated that there is no possibility of recovery by [Thomas] against [the Conn Defendants], which stated differently means that there is no reasonable basis for th[is C]ourt to predict that [Thomas] might be able to recover against” those Defendants.[3] See Id. “‘[T]here must be a reasonable possibility of recovery, not merely a theoretical one.'” See Kling Realty Co. v. Chevron USA, Inc., 575 F.3d 510, 513 (5th Cir. 2009) (citation omitted) (emphasis in original). Conclusory and speculative allegations will not suffice to preclude a determination of improper joinder. See, e.g., Garcia v. Premier Home Furnishings, No. 2:12CV167-KS-MTP, 2013 WL 6001345, at *5 (S.D.Miss. Nov. 12, 2013).

         Initially, Allstate has not mis-characterized “the standard for improper joinder[, ]” (Thomas Mem. 7, ECF No. 9), but articulated the proper standard in its [1] Notice of Removal. (See Id. at 4). Thomas is also incorrect that Allstate is trying to improperly shift the burden of proof on a remand issue by arguing that Thomas' conclusory allegations are insufficient to state a claim against the Conn Defendants. If the Court were to accept Thomas' argument, any plaintiff could overcome a properly supported claim of fraudulent joinder with conclusory allegations against a non-diverse defendant in his complaint, which is not the law. See, e.g., Walden v. Am. Gen. Life, 244 F.Supp.2d 689, 692 (S.D.Miss. 2003); Garcia, 2013 WL 6001345, at *5; Rogers v. Shelter Mut. Ins. Co., No. 3:05 CV 57 WS, 2006 WL 839551, at *4 (S.D.Miss. Mar. 30, 2006).

         Having reviewed the Complaint, the Court agrees with Allstate that all of Thomas' causes of action stem from the denial of Thomas' insurance claim. The Court further agrees that there is an absence of facts to support a cognizable cause of action against the insurance agents, the Conn Defendants - as opposed to the insurance company, Allstate - based on that denial of claim, despite Thomas' attempt to lump all Defendants together. See, e.g., Donald v. Arrowood Indem. Co., No. 2:10CV227KS-MTP, 2010 WL 4853290, at *7 (S.D.Miss. Nov. 23, 2010) (“a plaintiff cannot rely upon general, conclusory, and/or collective allegations against defendants in opposing a claim of improper joinder”). Allstate has met its burden of proof in establishing fraudulent joinder.

         In any event, none of Thomas' claims against the Conn Defendants are cognizable under Mississippi law, even if Thomas had made non-conclusory allegations against those Defendants. There is no allegation that the Conn Defendants were parties to the insurance contract, and the policy attached to the Complaint establishes otherwise, eliminating the possibility of any breach of contract claim against the Conn Defendants. See, e.g., Rhodes v. State Farm Fire & Cas. Co., No. 108CV674-HSO-RHW, 2009 WL 563876, at *3-4 (S.D.Miss. Mar. 4, 2009); Smith v. Union Nat'l Life Ins. Co., 286 F.Supp.2d 782, 787 (S.D.Miss. 2003); Burchfield v. Foremost Ins. Grp., No. 4:16-CV-00172-DMB-JMV, 2017 WL 1167278, at *4 (N.D. Miss. Mar. 28, 2017). Likewise, Thomas has no claim for breach of the implied covenant of good faith and fair dealing or bad faith against the Conn Defendants. See, e.g., Rhodes, 2009 WL 563876, at *4; Smith, 286 ...


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