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Capitol Body Shop, Inc. v. Allstate Insurance Co.

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

February 26, 2019




         BEFORE THIS COURT is Defendant Allstate Insurance Company's Motion to Dismiss Improperly Joined Defendant, namely in-state William Edward Permenter (hereinafter referred to as “Permenter”), whose presence in this litigation would destroy diversity subject matter jurisdiction under Title 28 U.S.C. § 1332[1] [Docket no. 3]. Also, before this Court is Plaintiff Capitol Body Shop, Inc.'s Motion to Remand [Docket no. 11], the other side of Defendant's argument, which asks this Court to return this litigation to state court where it originated. Plaintiff, Capitol Body Shop, Inc. (hereinafter referred to as “Plaintiff” or “Capitol Body Shop”) argues that Permenter, as a proper party, belongs in this lawsuit, which, with him included, would be antithetical to the jurisdictional strictures of 28 U.S.C. § 1332. For the reasons presented herein, this Court GRANTS Allstate's Motion to Dismiss Improperly Joined Defendant and, commensurately with this ruling, DENIES Plaintiff Capitol Body Shop's Motion to Remand.

         I. THE PARTIES

         Plaintiff, Capitol Body Shop, filed its action in Hinds County, Mississippi Circuit Court on April 26, 2018, against Allstate, Permenter, and John Does 1-5. Plaintiff is a Mississippi corporation with its principal place of business located in Jackson, Mississippi. Defendant Allstate is a foreign insurance company incorporated in the State of Delaware with its principal place of business located in the State of Illinois. Permenter, Allstate's employee, is an adult resident citizen of Lamar County, Mississippi. John Does 1-5 are unidentified individuals, whose respective citizenships purportedly are unknown. This Court, therefore, ignores their “presence” on the jurisdictional question. Title 28 U.S.C. § 1441(b)(1)[2] explains, “[i]n determining whether a civil action is removable on the basis of the jurisdiction under section 1332(a) ... the citizenship of defendants sued under fictitious names shall be disregarded.” Chapman v. Kroger Ltd. Partn., 3:11-CV-688 HTW-LRA, 2012 WL 775812, at *2 (S.D.Miss. Mar. 7, 2012).


         Plaintiff Capitol Body Shop, in its Complaint, alleges the following background facts: “8. On or about July 30, 2017, Kenyata Wells' 2007 Chevrolet Impala was damaged. The damages to the automobile were covered by Allstate Insurance Company (hereinafter “Allstate”) policy #995320445. Allstate opened claim #0469431324, and Defendant, William Edward Permenter, was the senior staff adjuster assigned to the claim. John Doe 1 was an adjuster working on the claims team which was supervised by Defendant, William Edward Permenter. The Allstate claims team operated as a single unit in the adjustment of this claim with oversight of the claim adjustment being performed by William Edward Permenter. [Docket no. 3-1, p. 2-3].

         9. Ms. Wells brought the vehicle to Capitol Body Shop, Inc. (hereinafter “Capitol”) for an estimate of repairs. In preparing its repair estimate, as per Allstate's request, Capitol removed the rear bumper cover, energy absorber, and tail lamp assemblies from the automobile, and it was quickly realized that the vehicle was a total loss. [Docket no. 3-1 at p. 3].

         10. Allstate agreed with Capitol and declared the vehicle a total loss. Id.

         11. After the vehicle was declared a total loss, Ms. Wells desired to buy back the automobile from Allstate. [Docket no. 3-1 at p. 3].

         12. When Ms. Wells decided to buy back the automobile, Capitol reassembled the vehicle so that the vehicle could be driven away. [Docket no. 3-1 at p. 3].

         13. In total, Capitol provided services in the amount of $953.10. These charges include labor, administrative fees, and storage charges. See Exhibit “A” attached hereto. [Docket no. 3-1 at p. 3].

         14. On or about August 7, 2017, John Doe 1, a member of the Allstate Claims unit contacted Frank McClure at Capitol, stating that the vehicle needed to be released to Ms. Wells as soon as possible. Following its usual procedures, Capitol did not want to release the vehicle until it was paid for its services. At that point, it was represented to Mr. McClure that a check for full payment of Capitol's bill was being sent via overnight delivery. Allstate asked that Capitol release the vehicle to Ms. Wells once the check was received. [Docket no. 3-1, pp. 3-4].

         15. The next day, Capitol received Allstate check #557289308 in the amount of $953.10. See Exhibit “B” attached hereto. Having no reason to believe that the check would be dishonored, Capitol released the vehicle to Ms. Wells. Capitol then deposited the subject check in the ordinary course of business. [Docket no. 3-1 at p. 4].

         16. On or about August 9, 2017, the check was returned, and Capitol was charged a $10.00 chargeback fee. Capitol was informed that Eddie Permenter, as senior staff adjuster assigned to the file, placed a stop payment order on the subject check. [Docket no. 3-1 at p. 4].

         17. After placing a stop payment order on the original check, Mr. Permenter on behalf of Allstate sent a purported replacement check (Allstate check #135432180) in the amount of $210.60 to Capitol without any explanation for the action taken. See Exhibit “C” attached hereto, Capitol did not negotiate the replacement check. [Docket no. 3-1 at p. 4].”

         In its Complaint, Plaintiff alleges the following causes of action against all defendants: breach of contract; bad faith breach of contract; breach of the duty of good faith and fair dealing; and constructive fraud. See generally [Docket no. 3-1]. Plaintiff's only direct allegation against Permenter is that he is liable for constructive fraud.

         On August 3, 2018, Allstate filed its Notice of Removal [Docket no.1] in this Court, which asserts that pursuant to 28 U.S.C. § 1332, this Court has original jurisdiction because complete diversity of citizenship exists between the properly joined parties, and the matter in controversy is in excess of $75, 000, exclusive of interest and costs. The Notice of Removal (hereinafter referred to as “Notice”) acknowledges that Permenter is a Mississippi citizen; however, the Notice asserts that Permenter is improperly joined due to lack of any specific cognizable claim against him in Plaintiff's Complaint.

         Allstate thereafter filed its motion to dismiss Permenter as an improperly joined defendant [Docket no. 4] and its memorandum in support thereof on August 6, 2018. On August 30, 2018, Plaintiff filed its Response in Opposition to Allstate's Motion to Dismiss [Docket no. 10], along with its Motion to Remand this matter to the Circuit Court of Hinds County, Mississippi [Docket no. 11].

         III. ...

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