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Scipar Inc. v. Chubb Corp.

September 30, 2010

SCIPAR INC., PLAINTIFF,
v.
CHUBB CORPORATION D/B/A CHUBB GROUP OF INSURANCE COMPANIES, FEDERAL INSURANCE COMPANY, AND CHUBB & SON, DEFENDANTS.



The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court

DECISION AND ORDER

I. INTRODUCTION

Plaintiff Scipar Inc. commenced this action on November 18, 2008, by filing a summons and complaint in the New York State Supreme Court, County of Erie. On February 9, 2009, Defendants Chubb Corporation d/b/a Chubb Group of Insurance Companies ("Chubb Corporation") and Federal Insurance Company ("Federal Insurance") filed a Notice of Removal to this Court. On February 25, 2009, Plaintiff filed an amended complaint, adding Chubb & Son as a defendant.

Presently before this Court are Plaintiff's Motion to Remand*fn1 and Defendants' Cross Motion to Dismiss.*fn2 For the reasons stated below, this Court will grant Plaintiff's motion and remand this case to state court. Defendants' motion will be denied as moot.

II. BACKGROUND

Plaintiff filed a summons and complaint on November 18, 2008, in New York State Supreme Court. (Docket No. 1, Exh. B.) Plaintiff, a United States government contractor, initially brought this action against its insurer, Chubb Corporation, and Federal Insurance, which Plaintiff believed to be a subsidiary of Chubb Corporation. Plaintiff alleged that Defendants improperly denied its insurance claims.

Plaintiff is a New York corporation with its principal place of business in New York. (Amended Compl. at ¶ 1.) In its original complaint, Plaintiff asserted, upon information and belief, that Defendant Chubb Corporation is a New Jersey corporation using the trade name Chubb Group of Insurance Companies, with its principal place of business in New Jersey. Plaintiff further alleged that Defendant Federal Insurance is a company "duly licensed by the Insurance Department of the State of New York" to issue insurance policies, with its principal place of business in New Jersey. (Compl. at ¶¶ 2, 3.)

Defendants filed a notice of removal on February 9, 2009. (Docket No. 1.) Contrary to the allegations in Plaintiff's original complaint, Defendants assert that Defendant Federal Insurance is an Indiana corporation, with its principal place of business in New Jersey, and Defendant Chubb Corporation is merely a division of Federal Insurance. (Docket No. 1, ¶ 3.) Thus, Defendants removed the case on the basis of federal diversity jurisdiction, pursuant to 28 U.S.C. § 1332. (Docket No. 1, ¶ 4.)

On February 25, 2009, Plaintiff filed an amended complaint naming a new defendant who Plaintiff identified in the caption as Chubb & Son (Docket No. 5.) Plaintiff simultaneously filed a motion to remand, alleging that joinder of Chubb & Son, a New York Corporation, destroyed diversity of citizenship between the parties and this Court therefore lacks subject-matter jurisdiction. (Docket No. 6.)

Thereafter, Defendants filed a motion to dismiss the claims against Defendant Chubb Corporation pursuant to Federal Rule of Civil Procedure 12(b) for failure to state a cause of action. (Docket No. 13.) Defendants argue that Defendant Chubb Corporation was not involved with any matters at issue in this litigation. Further, Defendants seek to have Defendant Chubb & Son stricken from the caption, asserting that Chubb & Son, as named in the caption of the amended complaint, is merely a division of Defendant Federal Insurance and not a proper party to this litigation. (Docket No. 14, ¶ 4; Docket No. 21, ¶ 4.) Moreover, Defendants argue that even if Plaintiff intended to name Chubb & Son Inc.-which Defendants admit is a New York corporation-Plaintiff still has not added a proper party because, like Defendant Chubb Corporation, Chubb & Son Inc. lacks involvement with the claims of this litigation. (Docket No. 14, ¶ 6.)

III. DISCUSSION

A. Legal Standards

A civil action brought in state court may be removed by a defendant to a federal district court of original jurisdiction. 28 U.S.C. § 1441. District courts have original jurisdiction over claims involving the Constitution, treaties, or laws of the United States, and over claims between citizens of different states if the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). For purposes of diversity jurisdiction, "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. § 1332(c)(1) (emphasis added).

Section 1332(c)(1) is intended to restrict the scope of federal jurisdiction in diversity cases and should be construed narrowly. Somlyo v. J. Lu-Rob Enterprises, Inc., 932 F.2d 1043, 1047 (2d Cir. 1991) ...


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