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Gunnarson v. Transamerica Life Insurance Co.

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

November 6, 2014



MARSHA J. PECHMAN, Chief District Judge.

THIS MATTER comes before the Court on Plaintiff's Motion for Remand. (Dkt. No. 14.) Having reviewed the Parties' briefing and all related papers, the Court GRANTS the motion and REMANDS this action to King County Superior Court.


Plaintiff Vera Gunnarson, in her individual capacity and as guardian ad litem for Daniel Gunnarson, filed this action in King County Superior Court against Defendants Transamerica Life Insurance Company and Nicole Rita Taylor, sole proprietor of Sterling Estate Planning Services. (Dkt. No. 6.) Plaintiff alleges breach of contract, violation of the Insurance Fair Conduct Act and Consumer Protection Act, bad faith, intentional and negligent misrepresentation, and other claims, stemming from her dispute with Transamerica over coverage for Daniel Gunnarson's dementia care under his long-term-care insurance policy. (Id.)

Defendants removed the action to this Court, alleging that Ms. Taylor was fraudulently joined in order to defeat diversity jurisdiction in federal court, and that Plaintiff could not state a plausible claim against her. (Dkt. Nos. 1, 2, 26.) Defendants argue, inter alia, that Ms. Taylor was an agent of a disclosed principal acting within the scope of her agency, and thus cannot be personally liable; that Plaintiff cannot state a plausible misrepresentation claim against Ms. Taylor; and that any claims against Ms. Taylor are time-barred. (Id.) Plaintiff contests these allegations and now moves for remand. (Dkt. No. 14.)


I. Legal Standard

A. Removal and remand

"A defendant may remove an action to federal court based on federal question jurisdiction or diversity jurisdiction. 28 U.S.C. § 1441. However, [i]t is to be presumed that a cause lies outside [the] limited jurisdiction [of the federal courts] and the burden of establishing the contrary rests upon the party asserting jurisdiction. The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper, and that the court resolves all ambiguity in favor of remand to state court." Hunter v. Philip Morris USA , 582 F.3d 1039, 1042 (9th Cir. 2009) (internal quotation marks and citations omitted).

Although an action may be removed to federal court only where there is complete diversity of citizenship, 28 U.S.C. §§ 1332(a), 1441(b), "one exception to the requirement for complete diversity is where a non-diverse defendant has been fraudulently joined.'" Morris v. Princess Cruises, Inc. , 236 F.3d 1061, 1067 (9th Cir. 2001). Fraudulent joinder "is a term of art." McCabe v. General Foods Corp. , 811 F.2d 1336, 1339 (9th Cir.1987). Joinder of a non-diverse defendant is deemed fraudulent, and the defendant's presence in the lawsuit is ignored for purposes of determining diversity, "[i]f the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to the settled rules of the state." Id . Further, the defendant "is entitled to present the facts showing the joinder to be fraudulent." Id .; see also Morris , 236 F.3d at 1068 (quoting Cavallini v. State Farm Mutual Auto Ins. Co. , 44 F.3d 256, 263 (5th Cir.1995), for the proposition that "fraudulent joinder claims may be resolved by piercing the pleadings' and considering summary judgment-type evidence such as affidavits and deposition testimony").

"Fraudulent joinder must be proven by clear and convincing evidence." Hamilton Materials, Inc. v. Dow Chem. Corp. , 494 F.3d 1203, 1206 (9th Cir. 2007). "[T]here is a general presumption against fraudulent joinder." Id.

II. Failure to State a Claim Against Taylor

A. Agency bar to personal liability

Defendants argue that Ms. Taylor sold the Gunnarsons insurance as an agent for Bankers United, Transamerica's predecessor, and that, as an agent acting within the scope of her agency and not for her own personal advantage, Ms. Taylor cannot be individually liable. (Dkt. No. 26 at 4-5.) Plaintiff argues that Ms. Taylor is jointly and severally liable because she was acting as an agent for an undisclosed principal, (Dkt. No. 14 at 13), and also appears to assert what is essentially an estoppel argument: Ms. Taylor represented to the Gunnarsons that she was an independent sole proprietor conducting business under the name Sterling Estate Planning Services, did not disclose any agency ...

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