United States District Court, W.D. Washington
ORDER GRANTING MOTION TO REMAND [Dkt. #s 14 and
B. Leighton United States District Judge
MATTER is before the Court on Plaintiff Zuniga's Motion
to Remand [Dkt. #15] Zuniga purchased a home in Tacoma in
2015. He apparently failed to obtain a homeowner's
insurance policy as required by his lender, Select Portfolio
Servicing. As a result, SPS purchased a “policy
/certificate” from Defendant Standard Guaranty
Insurance Company, and paid for it from Zuniga's escrow
account. SPS informed Zuniga that it had done so, and why,
and explained both that he was obliged to have insurance, and
that he had the right to obtain better insurance of his
choice; this particular insurance
“policy/certificate” was more expensive and had
less coverage than “normal” homeowner's
insurance policies. [Dkt. #14-1]
2016, the home was damaged by fire. Zuniga made a claim under
the Standard Guaranty policy. Standard Guaranty hired and
independent adjuster (Defendant Assurant Specialty Property)
to handle the claim. Assurant engaged one of its employees,
Defendant John Lewton, to actually do the adjusting. Like
Zuniga, Lewton lives in Washington. Standard and Assurant
reside in other states.
offered Zuniga $23, 000 to settle his claim. Zuniga claims
that is less than a third of the damage suffered. Zuniga also
claims that Lewton and Assurant and Standard failed to do
much of anything to secure or repair the home. Zuniga sued in
Pierce County superior Court, asserting nine claims including
breach of contract, bad faith, negligence, discrimination,
Washington Consumer Protection Act claims, and constructive
removed the case, invoking this Court's
diversity jurisdiction under 28 U.S.C. §§
1332 and 1441(b). They claimed that Lewton (the Washington
defendant) was fraudulently joined and that his citizenship
should be disregarded for diversity purposes. They argue that
Lewton was joined for the sole purpose of destroying
seeks Remand, arguing there is no diversity jurisdiction
because Lewton was not fraudulently joined. Meanwhile,
Defendants have moved to dismiss Lewton, arguing that
Zuniga's claims against him fail as a matter of law.
[Dkt. #] The Court will address the jurisdictional issue
Defendants argue that Zuniga fraudulently joined the
Washington resident, Lewton, to destroy diversity, and that
his citizenship should be disregarded for purposes of
ascertaining diversity jurisdiction.
Conrad Associates v. Hartford Accident & Indemnity
Co., 994 F.Supp. 1196 (N.D. Cal. 1998) and numerous
other authorities, the party asserting federal jurisdiction
has the burden of proof on a motion to remand to state court.
The removal statute is strictly construed against removal
jurisdiction. The strong presumption against removal
jurisdiction means that the defendant always has the burden
of establishing removal is proper. Conrad, 994
F.Supp. at 1198. It is obligated to do so by a preponderance
of the evidence. Id. at 1199; see also Gaus v.
Miles, 980 F.2d 564, 567 (9th Cir. 1992).
Federal jurisdiction must be rejected if there is any doubt
as to the right of removal in the first instance.
Id. at 566.
jurisdiction requires that each defendant be a citizen of a
different state than any plaintiff. Allstate Ins. Co. v.
Hughes, 358 F.3d 1089 (9th Cir. 2004) (citing Morris
v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir.
2001)). A non-diverse defendant that has been
“fraudulently joined, ” however, may be ignored
when the court determines the existence of diversity.
United Computer Systems, Inc. v. AT & T Corp.,
298 F.3d 756, 761 (9th Cir. 2002) (citing Morris v.
Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir.
joinder” is a term of art. Morris v. Princess
Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir.
2001)(citing McCabe v. General Foods Corp., 811 F.2d
1336, 1339 (9th Cir. 1987)). The non-diverse defendant has
been fraudulently joined if the plaintiff fails to state a
cause of action against that defendant, and that failure is
“obvious according to the settled laws of the
state.” McCabe, 811 F.2d at 1339. The removing
defendant is entitled to present facts outside of the
complaint to establish that a party has been fraudulently
joined. Id. Doubt concerning whether the complaint
states a cause of action is resolved in favor of remanding
the case to state court. Albi v. Street & Smith
Publications, 140 F.2d 310, 312 (9th Cir. 1944).
Zuniga's claims against Lewton.
argue that Lewton was fraudulently joined because Zuniga has
no legitimate, plausible claims against him; Lewton cannot be
liable to Zuniga on any theory. They argue that he was
instead named solely to destroy diversity.
arguments are based primarily on a Washington case they claim
holds that independent insurance adjusters owe no duties to
insured claimants, at least in the absence of a direct
contract between them. As a result, they argue, Zuniga's