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Creekmore v. State Farm Mutual Automobile Insurance Co.

United States District Court, W.D. Washington, Tacoma

June 3, 2014

JOHN CREEKMORE and LARRILEE WILLIAMS, Plaintiffs,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and DEBRA DANIELS INSURANCE COMPANY, Defendants.

ORDER GRANTING PLAINTIFFS' MOTION TO REMAND

BENJAMIN H. SETTLE, District Judge.

This matter comes before the Court on Plaintiffs John Creekmore and Larrilee Williams' ("Plaintiffs") motion to remand (Dkt. 8). The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby grants the motion for the reasons stated herein.

I. PROCEDURAL HISTORY

On February 25, 2014, Plaintiffs filed a complaint against Defendants State Farm Mutual Automobile Insurance Company ("State Farm") and Debra Daniels Insurance Agency in Mason County Superior Court for the State of Washington. Dkt. 1. Although Plaintiffs only explicitly assert a cause of action for violations of the Washington Insurance Fair Conduct Act, RCW Chapter 48.30 ("IFCA") ( Id., Exh. B, ¶¶ 3.1-3.4), it appears that they also assert causes of action for bad faith, negligence, and breach of contract ( id., ¶¶ 4.3, 4.6).

On April 3, 2013, State Farm removed the matter to this Court. Dkt. 1.

On May 1, 2014, Plaintiffs filed a motion to remand. Dkt. 8. On May 19, 2014, State Farm responded. Dkt. 9. On May 23, 2014, Plaintiffs replied. Dkt. 14.

II. DISCUSSION

In this case, Plaintiffs request remand based on the lack of the jurisdictional minimum in dispute and the lack of complete diversity between the parties. Dkt. 8. The latter issue is dispositive. "Fraudulent joinder is a term of art" and does not require an ill motive. McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). Joinder will be deemed fraudulent where the plaintiff fails to state a cause of action against the resident defendant, and the failure is obvious according to the settled rules of the state. Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). The defendant alleging the fraudulent joinder carries the heavy burden of demonstrating the improper joinder by clear and convincing evidence. Hamilton Materials, Inc. v. Dow Chem. Co., 494 F.3d 1203, 1206 (9th Cir. 2007).

State Farm has failed to show that the joinder of Debra Daniels Insurance Agency should be deemed fraudulent. Although State Farm appears to concede that a policy was in effect when the accident occurred, this is not clear and convincing evidence that Plaintiffs can state no possible claim against the agency for negligence. For example, if the policy limit is $100, 000, as the parties seem to agree, and Plaintiffs seek $300, 000 in damages, the agent may be negligent in failing to secure a policy in the amount Plaintiffs originally requested. It may be that no such claim exists, but until this issue is resolved in state court, this Court does not have jurisdiction. Therefore, the Court grants Plaintiffs' motion because there is a lack of complete diversity.

III. ORDER

Therefore, it is hereby ORDERED that Plaintiffs' motion to remand (Dkt. 8) is GRANTED.


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