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Cherry v. Stallworth

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

September 5, 2017




         BEFORE THE COURT is the Motion [7] to Sever Claims and Partially Remand to State Court filed by Defendant Allstate Insurance Company. Plaintiff Jeremy Cherry did not file a response. Having considered the Motion [7], the record, and relevant legal authority, the Court is of the opinion that the Motion [7] should be granted and the claims against Defendant Tony Stallworth should be severed and remanded to the Circuit Court of Jackson County, Mississippi. The Court finds it has subject-matter jurisdiction over Plaintiff's claims against Allstate, and those claims will proceed in this Court.

         I. BACKGROUND

         Plaintiff Jeremy Cherry (“Plaintiff”) initiated this action by filing a Complaint [7-1] on June 28, 2017, in the Circuit Court of Jackson County, Mississippi, naming as Defendants Tony Stallworth (“Stallworth”) and Allstate Insurance Company (“Allstate”). See Compl. [7-1]. According to the Complaint [7- 1], Plaintiff sustained injuries to his neck and back in a motor vehicle collision that took place on April 5, 2017, in Moss Point, Mississippi. Id. at 2-3. Plaintiff asserts that the collision was proximately caused by Stallworth, who was operating the vehicle that struck Plaintiff's vehicle. Id.

         The Complaint [7-1] further alleges that at the time of the accident, although both Stallworth and Plaintiff were uninsured, Plaintiff was residing with his grandmother, Michelle Simpson (“Simpson”), who was insured by Allstate with a policy providing $25, 000.00 per person and $50, 000.00 per accident in uninsured motorist coverage. Id. at 3. Plaintiff contends that, pursuant to Miss. Code Ann § 33-11-103(b), he was an “insured” under the uninsured motorist portion of the Allstate policy as Simpson's grandson who resided with her at the time of the accident. Id. at 5. On June 2, 2017, Allstate denied Plaintiff's uninsured motorist claim for property damage on grounds that Plaintiff's vehicle did not meet the definition of an “insured auto” under the policy. Id. at 6.

         The Complaint [7-1] alleges that Allstate's denial constitutes bad faith and breached the implied covenant of good faith and fair dealing. Id. at 10. Plaintiff seeks to recover from Allstate for bodily injury and property damages up to the limits of the uninsured motorist policy, as well as punitive damages for bad faith. Id. at 5, 10. The Complaint [7-1] also raises state-law negligence claims against Stallworth, seeking to recover damages including property damage, medical treatment, pain and suffering, mental and emotional distress, lost income, and permanent disability. Id. at 3. The Complaint [7-1] does not contain a demand for a specific sum of damages.

         On August 2, 2017, Allstate removed the case to this Court, invoking diversity jurisdiction pursuant to 28 U.S.C. § 1332. Notice of Removal [1] at 1. Allstate contends that, although complete diversity of citizenship is lacking on the face of the Complaint [7-1], complete diversity nevertheless exists because Plaintiff is a citizen of Mississippi and Allstate is a Delaware corporation with its principal place of business in Illinois. Id. at 3. Although Plaintiff and Stallworth are both Mississippi citizens, Allstate asserts that the Court should disregard Stallworth's citizenship under the principles of fraudulent misjoinder. Id. Allstate further claims that the amount in controversy is met because it is in excess of $75, 000.00, exclusive of interest and costs, given the nature and extent of Plaintiff's allegations. Id. at 4-5.

         Plaintiff did not file a motion to remand the case within the required thirty-day time limit. On August 4, 2017, Allstate filed the present Motion [7] to Sever Claims and Partially Remand to State Court. Plaintiff did not file a response, and the time to do so has passed.


         A. The misjoined claims against Defendant Stallworth will be severed and remanded.

         Allstate maintains that Plaintiff's breach of contract and bad faith claims against it arise from distinct litigable events which do not present common questions of law with Plaintiff's tort claims against the non-diverse Defendant Stallworth for allegedly negligently causing the motor vehicle accident. See Def.'s Mem. Supp. Mot. [8] at 3-4. According to Allstate, application of Mississippi Rule of Civil Procedure 20 requires the Court to sever and remand the claims against Stallworth to the state court. Id. at 3-4.

         For this Court to have subject-matter jurisdiction over this matter based on 28 U.S.C. § 1332(a), complete diversity must exist among the parties. McLaughlin v. Miss. Power Co., 376 F.3d 344, 353 (5th Cir. 2004). “The concept of complete diversity requires that all persons on one side of the controversy be citizens of different states than all persons on the other side.” Id. (quoting Harrison v. Prather, 404 F.2d 267, 272 (5th Cir. 1968)).

         “Fraudulent misjoinder of defendants is not permissible to circumvent diversity jurisdiction.” Cartwright v. Allstate Mut. Auto. Ins. Co., No. 4:14-CV-00057-GHD, 2014 WL 6959045, at *6 (N.D. Miss. Dec. 8, 2014). “The concept of ‘fraudulent misjoinder' or ‘egregious misjoinder' was first recognized by the United States Court of Appeals for the Eleventh Circuit in Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir. 1996).”[1] Allen v. Kuhlman Corp., No. 3:08-CV-669-DPJ-JCS, 2009 WL 2382196, at *1 (S.D.Miss. July 31, 2009). “The theory has been adopted in the federal courts for the Northern and Southern Districts of Mississippi.” Id. (citing In re Benjamin Moore & Co., 309 F.3d 296, 298 (5th Cir. 2002); Nsight Tech., LLC v. Fed. Ins. Co., No. 3:09-CV-6-WHB-LRA, 2009 WL 1106868, at *2 (S.D.Miss. Apr. 23, 2009); Cooper v. AIG Claim Servs., Inc., No. 1:08-CV-168-SA-JAD, 2009 WL 279101, at *2 (N.D. Miss. Feb. 5, 2009); Palermo v. Letourneau Tech., Inc., 542 F.Supp.2d 499, 515 (S.D.Miss. 2008)).

         “Under the doctrine, the Court will not retain jurisdiction unless the removing party demonstrates that joinder is ‘egregious' or ‘grossly improper.'” Id. (quoting Cooper, 2009 WL 279101 at *2). The question is whether the misjoinder of defendants was “so egregious as to constitute fraudulent joinder.” Tapscott, 77 F.3d at 1360; see also Sullivan v. Direct Gen. Ins. Co. of Miss., No. 4:12-CV-97-SA-JMV, 2013 WL 5427992, at *3 (N.D. Miss. Sept. 27, 2013) (“[M]ere misjoinder will not suffice for purposes of overlooking a non-diverse party's presence in the action.”). “Where the joinder of defendants constitutes an ‘improper and fraudulent joinder, ...

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