United States District Court, S.D. Mississippi, Northern Division
TYLER S. KING PLAINTIFF
JON HAMMET; JON HAMMET, INC.; and ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY. DEFENDANTS
T. WINGATE UNITED STATES DISTRICT COURT JUDGE
THIS COURT is plaintiff's Motion to Remand
[Docket no. 14]. Plaintiff Tyler S. King
asks this court to enter an order remanding this lawsuit to
the Madison County, Mississippi, Circuit Court from which it
originated. Plaintiff's lawsuit urges claims against the
defendants herein for: bad faith refusal to pay claims by
Allstate Property and Casualty Insurance Company; gross
negligence by all defendants; negligence by all defendants;
and fraud by all defendants.
addition to Allstate Property and Casualty Insurance Company,
plaintiff is suing Jon Hammet and Jon Hammet, Inc., who are
the insurance agent and insurance agency that sold plaintiff
the contested homeowner's insurance policy. Filed in
state court on August 31, 2018, this lawsuit was removed from
there by defendant Allstate Property and Casualty Insurance
Company on ground of diversity of citizenship, Title 28
U.S.C. § 1332[1" name="FN1" id=
"FN1">1]. All parties herein acknowledge that
plaintiff Tyler S. King and Allstate Property and Casualty
Insurance Company are diverse in citizenship, while the other
two defendants, as plaintiff, are citizens of the State of
Mississippi. This circumstance prompts plaintiff to contend
that this court lacks subject matter jurisdiction because
complete diversity of citizenship between all of the parties
in opposing the remand motion, responds that plaintiff has
fraudulently joined the two (2) Mississippi resident
defendants in an effort to defeat diversity of citizenship
jurisdiction. Once the court reaches this finding, say the
defendants, the court will have to dismiss the two
non-diverse parties from this action and proceed only with
plaintiff and Allstate Property and Casualty Insurance
court has studied the arguments, for the reasons following,
this court finds that plaintiff's motion to remand must
Tyler King filed his lawsuit in the Circuit Court of Madison
County, Mississippi on August 31, 2018. Plaintiff's
complaint lists the following parties: plaintiff, an adult
resident of the State of Mississippi; defendant Allstate
Property and Casualty Insurance Company (hereinafter referred
to as “APCIC”), an insurance company incorporated
under the laws of the State of Illinois; defendant Jon
Hammet, an adult resident of the State of Mississippi; and
Jon Hammet, Inc., a corporation incorporated under the laws
of the State of Mississippi.
filed its notice of removal on September 27, 2018, alleging
that complete diversity of citizenship exists between the
proper parties. APCIC says this court should disregard the
citizenship of the Hammet defendants - Jon Hammet and Jon
Hammet, Inc. (hereinafter referred to as the “Hammet
defendants”) - because they were fraudulently joined.
The Hammet defendants do not appear to have consented to
removal, but under a theory of fraudulent joinder, are not
required to do so. See Rico v. Flores, 1 F.3d 234');">481 F.3d 234,
239 (5th Cir. 2007) (Citing Jernigan v.
Ashland Oil Inc., 12');">989 F.2d 812, 815 (5th Cir.
complaint alleges the following causes of action: bad faith
refusal to pay claims by APCIC; gross negligence by all
defendants; negligence by all defendants; and fraud by all
to May, 2018, plaintiff had bought several policies from the
Hammet defendants in May, 2011, which included
homeowners' insurance. The Hammet defendants allegedly
told plaintiff that plaintiff should buy the Deluxe Plus
Homeowner's Insurance policy because that policy would
cover “actual, and full, ‘replacement
complaint herein arises out of an insurance claim relating to
water damage he allegedly discovered in his personal
residence on May 27, 2018. According to plaintiff, on May 27,
2018, plaintiff returned home after a holiday weekend and
noticed water standing in two (2) bedrooms of his home -
located at 209 Northshore Boulevard, Madison, Mississippi
(hereinafter referred to as the “covered
property”). Plaintiff says he contacted the Hammet
defendants and informed them of the issue and that,
meanwhile, plaintiff would be contacting a contractor to
determine the source of the water.
various demolitions to the walls of the covered property, the
contractor determined that the water leak was coming from
water pipes in the middle of the room adjacent to the walls
the contractor had demolished. The contractor billed
plaintiff $970.00 for the work. Plaintiff next contacted the
Hammet defendants to inform them what the contractor had done
and what he had found. The Hammet defendants instructed
plaintiff to contact Wright Plumbing to inspect the damage.
Plaintiff contacted Wright Plumbing and arranged for an
Plumbing arrived the next day, Monday, May 28, 2018, Memorial
Day, and conducted its inspection. “CJ”, the
Wright Plumbing inspector, determined that the water leak
source was a water pipe inside the concrete in the middle of
the room. According to plaintiff, CJ informed him that the
most cost-effective repair would involve terminating the
leaking pipe and installing a new pipe through the attic.
Wright Plumbing gave plaintiff an estimate of $2, 551.95 to
complete the repairs.
then contacted the Hammet defendants to inform them of the
estimate. The Hammet defendants approved said estimate and
told plaintiff that a different contractor - Rainbow
International - would place dehumidifiers throughout the
house to assist with the flood damage.
returned to the covered property on May 29, 2018, and, while
at the property, completed the repair. Plaintiff paid the
invoice from CJ who recommended another contractor, Ken
Simmons, to repair the flood damage. Plaintiff sent the
invoice to the Hammet defendants on the same date. Plaintiff
also informed the Hammet defendants that he would be calling
other contractors to complete the flood damage repairs.
Allegedly, the Hammet defendants informed plaintiff that he
needed to start the repair process and that effort would
begin the claims process under his homeowner's policy.
called Ken Simmons (hereinafter referred to as
“Simmons”) on Tuesday, May 29, 2018, who informed
plaintiff that Simmons would conduct an inspection on the
following day, Wednesday, May 30, 2018.
Akin (hereinafter referred to as “Aiken”), an
employee of Rainbow International, came to the covered
property on May 29, 2018, to set up dehumidifiers throughout
the house. While at the covered property, Aiken tested the
sheetrock and baseboards. Aiken's inspection revealed
flood damages in various areas of the covered property. Aiken
returned on May 30, 2019, and discovered that one of the
dehumidifiers had failed and leaked water which had caused
further damage to the floors and baseboards of the home.
Before he left the residence, Aiken removed the broken
dehumidifier and replaced it with a new dehumidifier. He left
at the house all the dehumidifiers for an additional night to
assist in the repairs.
29, 2018, the Hammet defendants submitted plaintiff's
claim to APCIC.
30, 2018, Simmons arrived at the covered property to conduct
an inspection of the flood damage. On that same date, Simmons
provided plaintiff with an estimate to perform the repair
work. According to plaintiff, Simmons stated that damage to
the covered property included: demolished concrete;
demolished brick work; demolished landscaping; damaged
baseboards; damaged sheetrock; damaged paint; damaged wall
studs; damaged baseplates; and damaged floor stains.
Plaintiff forwarded Simmons' estimate to the Hammet
defendants who approved the estimate and told plaintiff to
commence the repairs. Simmons told plaintiff he would begin
repairs on June 4, 2018.
same date, May 30, 2018, APCIC informed plaintiff that it
would send an insurance adjuster to the residence on June 1,
2018. On that same date, Bill Raphael (hereinafter referred
to as “Raphael”), APCIC's insurance adjuster,
came and toured the residence. After Raphael had left,
plaintiff sent an email to Raphael with the estimate provided
by Simmons. Raphael responded with a telephone call to
plaintiff saying that APCIC would place the money in
plaintiff's bank account that evening if plaintiff would
sign some forms which offered an amount less than the alleged
“replacement costs of the damages incurred”.
Plaintiff refused to sign the forms and then forwarded the
offer of settlement to the Hammet defendants.
began repairs at the home on June 4, 2018, and completed them
that week. After Simmons had completed the repairs, plaintiff
met with Simmons to inspect and approve the workmanship.
Finding the work satisfactory, plaintiff paid Simmons $5,
the week that Simmons was completing the repairs, Raphael met
with Simmons, and then offered an adjusted settlement offer
to plaintiff which was “still below actual replacement
costs.” In an email to the Hammet defendants, plaintiff
asked them to call plaintiff about the settlement offer and
about Raphael. The Hammet defendants called later the same
evening and informed plaintiff that the Hammet defendants
would call APCIC to find out the status of the claim.
following week, around June 13, 2018, Raphael again called
plaintiff to discuss the claim. During that conversation,
Raphael urged plaintiff to settle for the adjusted amount,
which was still less than the amount plaintiff had paid to
Simmons. Plaintiff refused again and Raphael said he would
have someone come out to inspect the repairs to determine if
he could increase the amount of the settlement offer.
around June 19, 2018, Aikens called plaintiff and informed
plaintiff that Raphael had asked Aikens to inspect the damage
and provide an estimate. Plaintiff waited for a week and
contacted Aikens on June 26, 2018, asking when Aikens would
be coming to the home to conduct his inspection. Aikens then
agreed to come out on June 27, 2018. Aikens, though,
cancelled on June 27, 2018, and said he would come out the
next day. During the course of conversations, Aikens told
plaintiff that Aikens did not need to conduct an inspection
because the repairs already had been completed.
following week, Raphael contacted plaintiff and informed him
that APCIC had someone come to the residence and inspect the
property again. Additionally, Raphael said that APCIC would
not increase the amount of its settlement offer. Plaintiff
informed Raphael that no one had inspected the property a
second time. Raphael seemed surprised and said he would check
into the allegation. Again, Raphael urged plaintiff to take
the settlement offer, which plaintiff refused. Plaintiff then
informed Raphael that if APCIC would not pay the full repair
amount, then he would cancel his policies and pursue legal
action. Raphael said that APCIC would not pay the full amount
10, 2018, plaintiff emailed the Hammet defendants cancelling
his policies because of APCIC's alleged default, and
requesting payment of all funds under his home-owner's
Fraudulent Joinder/ Fraudulent Misjoinder
filed its Notice of Removal on September 27, 2018. [Docket
no. 1]. In its Notice of Removal, APCIC acknowledged that
complete diversity of citizenship does not exist between the
parties as the lawsuit presently read because of the presence
of the Hammet defendants, who as plaintiffs, are Mississippi
citizens. APCIC, though, asks this court to find that
plaintiff named the Hammet defendants as defendants only as
an effort to prevent removal from state court to this federal
forum - an effort deemed “fraudulent joinder”.
Alternatively, says APCIC, this court should find that the
Hammet defendants were “fraudulently misjoined”.
Joinder and Fraudulent Misjoinder are two related, but
slightly different doctrines which expand upon and explain
how courts should view lack of complete diversity of
citizenship when reviewing whether the court possesses
subject matter jurisdiction under § 1332. Fraudulent
joinder examines whether the plaintiff named a defendant in a
lawsuit to avoid removal from state court to federal court.
The district court, to which the action has been removed,
must look at the pleadings to determine if one of two
situations exist: “(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.” Smallwood v. Illinois Cent. R.
Co., 385 F.3d 568, 571 (5th Cir. 2004)(en
banc)(hereinafter referred to as “Smallwood
II”)(quoting Travis v. Irby, 326 F.3d
644, 646-47 (5th Cir. 2003)).
misjoinder, on the other hand, examines whether the
plaintiff has included causes of action which are not related
to each other in an effort to avoid diversity subject matter
jurisdiction. “[The court] considers whether, based on
the unique circumstances at issue, there is a reasonable
possibility that a Mississippi court would find that
Plaintiffs' claims against [some named non-diverse
defendants] were properly joined with their claims against [a
diverse defendant].” Feldman v. Rite Aid HDQTRS
Corp., No. 517CV00009DCBMTP, 2017 WL 1508184, at *2
(S.D.Miss. Apr. 26, 2017).
disagrees with APCIC and persists in asking this court to
remand this litigation to the state court from which it
originated, that is, the Circuit Court of Madison County,
Mississippi. According to plaintiff, his claims against the
Hammet defendants, the two (2) non-diverse defendants, are
viable and belong in this lawsuit, a circumstance which would
destroy diversity of citizenship in this court.
courts are courts of limited jurisdiction.” Save
the Bay, Inc. v. U.S. Army, 1100');">639 F.2d 1100, 1102 (5th
Cir. 1981) (citing Louisville & Nashville R.R. v.
Mottley, 11 U.S. 149');">211 U.S. 149, 29 S.Ct. 42, 126');">53 L.Ed. 126
(1908)). Removal of an action under diversity of citizenship
is permitted when the district court has subject matter
jurisdiction predicated on complete diversity of citizenship