United States District Court, S.D. Mississippi, Western Division
LEROY RANKIN, JR. PLAINTIFF
SHELTER INSURANCE; HELEN BURKS AGENCY, LLC; AND ANY AND ALL UNKNOWN SHELTER INSURANCE REPRESENTATIVES, ADJUSTERS AND AGENTS DEFENDANTS
MEMORANDUM OPINION AND ORDER
BRAMLETTE UNITED STATES DISTRICT JUDGE.
cause is before the Court on defendant Helen Burks Agency,
LLC's Rule 12(b)(1) Motion to Dismiss for Fraudulent
Joinder (docket entry 5); on the plaintiff
Leroy Rankin, Jr.'s Motion to Remand (docket
entry 7); and on defendant Helen Burks Agency,
LLC's Second Rule 12(b)(1) Motion to Dismiss for
Fraudulent Joinder (docket entry 17).
action was originally filed in the Circuit Court of Jefferson
County, Mississippi, against “Shelter Insurance; Helen
Burkes Agency, LLC; and Any and All Unknown Shelter Insurance
Representatives, Adjusters and Agents.” Docket Entry
1-1. The Complaint alleges Breach of Contract, Negligent
Misrepresentation, Specific Performance, Unjust Enrichment,
and Bad Faith. Id.
Helen Burks Agency, LLC (“Burks Agency”) moves to
dismiss all claims against it without prejudice, alleging
that the plaintiff has fraudulently joined Burks Agency in
order to defeat diversity jurisdiction (docket entry 5).
plaintiff, Leroy Rankin, Jr., has filed a motion to remand
(docket entry 7), contending that there is a possibility that
the state court would find a cause of action against the
named in-state defendant on the facts alleged by the
plaintiff, and that the federal court must find that the
in-state defendant has been properly joined, that there is
incomplete diversity, and that the case must be remanded to
the state court. Id.
In support of his motion, the plaintiff argues that Helen
Burks Agency, LLC explained the policy to Mr. Rankin. Helen
Burks Agency, LLC sold the policy to Mr. Rankin. It was
through Helen Burks Agency, LLC that the policy was issued to
Mr. Rankin. Helen Burks Agency, LLC received premium payments
and/or profits from Mr. Rankin. Helen Burks Agency, LLC was
listed on every document the Plaintiff received regarding his
fire claim. These undisputed facts alone show that making
Helen Burks Agency, LLC a party to this case was not
fraudulent, and that there is a possibility that a state
court could find that a cause of action exists against Helen
Burks Agency, LLC.
response to the plaintiff's argument, Burks Agency refers
the Court to the defendants' Notice of Removal, in which
the defendants assert that Burks Agency has been fraudulently
joined to defeat diversity jurisdiction.
Complaint alleges that his home was destroyed by fire on
September 30, 2016, during which time the home was insured by
Shelter Insurance (“Shelter”). Rankin further
alleges that Shelter failed to pay policy benefits allegedly
owed under his homeowner's policy.
is a Mississippi resident citizen. Shelter is a Missouri
insurance company and has its principal place of business in
that state. Burks Agency is Mississippi limited liability
company with a resident member. However, the defendants
allege that Burks Agency's citizenship should be
disregarded because Rankin has fraudulently joined it to
defeat diversity jurisdiction.
28 U.S.C. § 1441(a), the citizenship of fictitious
defendants (“Any and All Unknown Shelter Insurance
Representatives, Adjusters and Agents”) is disregarded
for purposes of establishing diversity jurisdiction.
Therefore, according to 28 U.S.C. § 1332, complete
diversity of citizenship exists between Rankin and Shelter,
the only properly joined defendant.
plaintiff's inability to establish a cause of action
against a non-diverse defendant in state court establishes
fraudulent joinder. Burrell v. Ford Motor Co., 304
F.Supp.2d 883, 887 (S.D.Miss. 2004). A plaintiff is unable to
do so if there is no reasonable basis to predict that the
plaintiff might recover against the in-state defendant in
state court. Smallwood v. Ill. Cent. R.R. Co., 385
F.3d 568, 573 (5th Cir. 2004). Under a standard
similar to Rule 12(b)(6) dismissal with discretion to pierce
the pleadings and consider evidence appropriate for summary
judgment, if no reasonably possibility of recovery exists,
then the non-diverse defendant has been fraudulently joined.
Campbell v. Stone Ins., Inc., 509 F.3d 665, 669
(5th Cir. 2007). A mere hypothetical possibility
of recovery fails to alter that conclusion. Griggs v.
State Farm Lloyds, 181 F.3d 694, 701 (5th
Complaint alleges breach of contract, negligent
misrepresentation, specific performance, unjust enrichment,
and bad faith against all “Defendants” generally
(docket entry 1). But Rankin cannot rely on collective
allegations of wrongdoing to circumvent fraudulent joinder.
Donald v. Arrowood Indem. Co., 2010 U.S. Dist. LEXIS
128005 at *18 (S.D.Miss. Nov. 23, 2010). The focus must be on
factual allegations specific to Burks Agency. Id. at
*19. Rankin's Complaint, however, fails to allege such.
Rankin's Complaint does not distinguish claims against
Shelter from claims against Burks Agency. It makes conclusory
assertions that Burks Agency is somehow liable to Rankin for
the same reasons that Shelter is allegedly liable to Rankin.
As with the improper collective allegations against all
defendants generally, conclusory assertions that Burks Agency
is somehow liable to Rankin on the same basis as Shelter are
also insufficient. Id. at 5.
addition, Burks Agency, as a matter of law, cannot be liable
to Rankin on the same basis as Shelter. All of Rankin's
claims center on an alleged failure to pay policy benefits
supposedly owed to him because of the fire. Yet, as the
Complaint alleges, Burks Agency is an insurance
“agent.” Shelter is the insurance company that
issued Rankin's policy. Burks Agency is not a party to
that contract and, as a matter of law, cannot be held liable
for breach of contract, negligent misrepresentation, specific
performance, unjust enrichment, or bad faith on a theory that
Shelter allegedly failed to pay policy proceeds.
See, e.g., Th ...