United States District Court, N.D. West Virginia
EZEKIEL BOUND; REX BOUND, individually and as parent of Ezekiel Bound; and WENDY BOUND, individually and as parent of Ezekiel Bound, Plaintiffs,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a foreign corporation; and JENNY GARTON INSURANCE AGENCY, INC., a West Virginia corporation, Defendants.
OPINION AND ORDER DENYING PLAINTIFFS' MOTION TO REMAND
[DKT. NO. 9], DISMISSING THE CLAIMS AGAINST DEFENDANT JENNY
GARTON INSURANCE AGENCY, INC. WITHOUT PREJUDICE, AND DENYING
AS MOOT PLAINTIFFS' MOTION TO STAY PROCEEDINGS AND
DEFENDANT GARTON'S MOTION TO DISMISS [DKT. NOS. 6,
M. KEELEY UNITED STATES DISTRICT JUDGE.
before the Court are motions to remand and stay proceedings
filed by the plaintiffs, Ezekiel Bound, Rex Bound, and Wendy
Bound (collectively, “the Bounds”) (Dkt. Nos. 8,
9), and a motion to dismiss filed by the defendant, Jenny
Garton Insurance Agency, Inc. (“Garton”) (Dkt.
No. 6). Because Garton was fraudulently joined, the Court
DENIES the Bounds' motion to remand (Dkt
No. 9) and DISMISSES their claims against
Garton WITHOUT PREJUDICE.
Further, it DENIES AS MOOT the Bounds'
motion to stay proceedings and Garton's motion to dismiss
(Dkt Nos. 6, 8).
at least September 1996, the Bounds have purchased automobile
insurance from State Farm Mutual Automobile Insurance Co.
(“State Farm”) through Garton, a local insurance
agency that provides insurance-related services exclusively
for State Farm. As of November 2016, the Bounds had six
active State Farm automobile insurance policies.
November 4, 2016, Ezekiel Bound was a passenger in a Ford
F250 pick-up truck owned and operated by Tyler M. Parker
(“Parker”) when Parker suddenly lost control of
his vehicle. As a consequence of the one-vehicle accident,
Ezekiel Bound sustained serious injuries and was life
flighted to a hospital in Morgantown, West Virginia. At the
time of this accident, Ezekiel Bound was a minor living with
his parents, Rex and Wendy Bound, who notified State Farm of
the accident and sought assistance with their automobile
the accident, State Farm adjusted a claim filed by Parker,
the driver, who was also insured by State Farm. In September
2017, State Farm sought to obtain a release of all claims
against Parker from the Bounds in exchange for his automobile
insurance policy limits. This release also sought to have the
Bounds release State Farm from any further claims.
of State Farm's motives, the Bounds retained private
counsel, who then negotiated a release of all claims against
Parker in exchange for policy limits of $25, 000.00. However,
because Ezekiel Bound's injuries and damages exceeded
Parker's $25, 000.00 policy limit, the Bounds reserved
their claims for underinsured motorists (“UIM”)
coverage against State Farm.
their Complaint, the Bounds allege that, although their six
policies included uninsured motorist (“UM”)
coverage, they did not include UIM coverage, and that State
Farm never advised them of the potential for UIM coverage
under their policies. Garton asserts that, although UIM
coverage was offered to them, the Bounds rejected that
coverage on multiple occasions.
November 2, 2018, the Bounds initiated this civil action in
the Circuit Court of Harrison County, West Virginia, seeking,
among others, a declaratory judgment that State Farm had
failed to make a commercially reasonable offer of UIM
coverage (Dkt. No. 1-1 at 2). After being served, State Farm
and Garton timely removed the case to this Court on March 15,
2019, contending that diversity jurisdiction existed because
Garton had been fraudulently joined (Dkt. No. 1). On March
22, 2019, State Farm answered the Complaint, and Garton moved
to dismiss the claims against it for failure to state a claim
(Dkt. Nos. 5, 6, 7). On April 2, 2019, the Bounds filed a
motion to stay proceedings based on their intent to file a
motion to remand (Dkt. No. 8). That motion was filed on April
8, 2019 (Dkt. No. 9) and asserts that Garton was not
fraudulently joined because their Complaint alleged three
independent tort claims against it (Dkt. No. 9).
STANDARD OF REVIEW
an action is removed from state court, a federal district
court must determine whether it has original jurisdiction
over the plaintiff's claims.” Dotson v. Elite
Oil Field Servs., Inc., 91 F.Supp.3d 865, 869
(N.D. W.Va. 2015) (citation omitted). “Federal courts
have original jurisdiction primarily over two types of cases,
(1) those involving federal questions under 28 U.S.C. §
1331, and (2) those involving diversity of citizenship under
28 U.S.C. § 1332.” Id. “When a
party seeks to remove a case based on diversity of
citizenship under 28 U.S.C. § 1332, that party bears the
burden of establishing ‘the amount in controversy
exceeds the sum or value of $75, 000, exclusive of interests
and costs, and is between citizens of different
states.'” Id. (quoting 28 U.S.C. 1332(a)).
“Courts should resolve any doubt “‘about
the propriety of removal in favor of retained state court
jurisdiction.'” Id. (quoting Marshall
v. Manville Sales Corp., 6 F.3d 229, 232-33 (4th Cir.
doctrine of fraudulent joinder is a narrow exception to the
complete diversity requirement.” Id. (citation
omitted). “The fraudulent joinder doctrine
‘effectively permits a district court to disregard, for
jurisdictional purposes, the citizenship of certain
non-diverse defendants, assume jurisdiction over a case,
dismiss the non-diverse defendants, and thereby retain
jurisdiction.'” Grubbs v. Westfield Ins.
Co., 430 F.Supp.2d 563, 566 (N.D. W.Va. 2006) (quoting
Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir.
prove fraudulent joinder, the removing party must show either
‘[t]hat there is no possibility that the plaintiff
would be able to establish a cause of action against the
in-state defendant in state court; or [t]hat there has been
outright fraud in the plaintiff's pleading of
jurisdictional facts.'” Id. (alterations
in original) (quoting Marshall, 6 F.3d at 232).
“The burden on the defendant claiming fraudulent
joinder is heavy: the defendant must show that the plaintiff
cannot establish a claim against the nondiverse defendant
even after resolving all issues of fact and law in the
plaintiff's favor.” Marshall, 6 F.3d at
232-33 (citation omitted). And this “standard is even
more favorable to the plaintiff than the standard for ruling
on a motion to dismiss under Fed.R.Civ.P. 12(b)(6).”
Hartley v. CSX ...