United States District Court, W.D. New York
ALEXANDER ROMANO, KIM ROMANO, and TRAVELERS PERSONAL INSURANCE COMPANY, Plaintiffs,
AMERICAN STATES INSURANCE COMPANY, JESSE W. PARKER, GARY W. PARKER, and AMY PARKER, Defendants.
DECISION AND ORDER
ELIZABETH A. WOLFORD UNITED STATES DISTRICT JUDGE
litigation arises out of a single-car accident on August 8,
2015, where plaintiff Alexander Romano
("Alexander") was allegedly injured as the
passenger in a vehicle driven by defendant Jesse W. Parker
("Jesse"). On or about April 21, 2017, plaintiffs
Alexander, Kim Romano ("Kim"), and Travelers
Personal Insurance Company ("Travelers")
(collectively, "Plaintiffs") filed a complaint in
New York State Supreme Court, Monroe County, against American
States Insurance Company ("ASIC"), Jesse, Gary W.
Parker ("Gary"), and Amy Parker ("Amy")
(collectively, "Defendants"), seeking a declaratory
judgment. (Dkt. 1 at 9-12). Specifically, Plaintiffs seek an
order declaring that: (1) ASIC's disclaimer of liability
coverage for Jesse is invalid; (2) ASIC cannot further
disclaim liability coverage for Jesse; and (3) ASIC is
required to indemnify Jesse for his liabilities associated
with the alleged personal injuries caused to Alexander
arising out of the single-car accident. (Id. at 12).
6, 2017, ASIC removed this action to federal court by filing
a notice of removal. (Dkt. 1). Presently before the Court is
Plaintiffs' motion to remand. (Dkt. 5). For the reasons
set forth below, Plaintiffs' motion is denied.
about August 8, 2015, Jesse was operating a 2005 Ford
automobile-owned by Gary and/or Jesse-with Alexander riding
as a passenger. (Dkt. 1 at 10-11). While operating the
vehicle in the Town of Irondequoit, Monroe County, New York,
Jesse and Alexander suffered a single-car accident, resulting
in allegedly "serious injuries" to Alexander under
section 5102(d) of the New York Insurance Law. (Id.
about the same day, ASIC issued one or more insurance
policies to Gary and Amy, which were effective from June 20,
2015, through June 20, 2016. (Id. at 11). Jesse was
designated as an "insured" under one or more of
these policies. (Id.). On February 19, 2016, ASIC
disclaimed liability coverage for Jesse regarding
Alexander's injuries arising from the accident.
about April 21, 2017, Plaintiffs filed a complaint in New
York State Supreme Court, Monroe County, seeking an order
declaring that: (1) ASIC's disclaimer of liability
coverage is invalid; (2) ASIC cannot further disclaim
liability coverage for Jesse; and (3) ASIC is required to
indemnify Jesse for his liabilities related to
Alexander's injuries arising out of the automobile
accident. (Id. at 12). On June 6, 2017, ASIC removed
this action to federal court by filing a notice of removal.
(Dkt. 1). On June 30, 2017, Plaintiffs filed a motion to
remand the case to state court, arguing that the
jurisdictional requirement for complete diversity has not
been satisfied. (Dkt. 5-1). ASIC opposed remand, arguing that
diversity of citizenship exists because: (1) Defendants Gary,
Amy, and Jesse have been fraudulently joined in this action;
(2) Gary and Amy are only nominal parties; and (3) in the
event the Court determines that Jesse has not been
fraudulently joined, Jesse should be realigned as a
plaintiff. (Dkt. 9).
Subject Matter Jurisdiction
jurisdiction exists where the parties are citizens of
different states and the amount in controversy exceeds $75,
000." Ceglia v. Zuckerberg, 772 F.Supp.2d 453,
455 (W.D.N.Y.2011). '"[C]itizens of different
States' means that there must be complete diversity,
i.e., that each plaintiffs citizenship must be different from
the citizenship of each defendant." Hallingby v.
Hallingby, 574 F.3d 51, 56 (2d Cir. 2009); see
Doctor's Assocs., Inc. v. Distajo, 66 F.3d 438, 445
(2d Cir. 1995) ("It is a long-settled rule that in order
to invoke diversity jurisdiction, the petitioner must show
'complete diversity'-that is, that it does not share
citizenship with any defendant."). "A person's
citizenship for purposes of diversity is based upon his
domicile." Ceglia, 772 F.Supp.2d at 455.
"For purposes of determining diversity, 28 U.S.C. §
1332(c) provides that '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.'" Sty-Lite Co. v. Eminent Sportswear
Inc., 115 F.Supp.2d 394, 398 (S.D.N.Y. 2000). A court
will "generally evaluate a defendant's right to
remove a case to federal court at the time the removal notice
is filed." Vera v. Saks & Co., 335 F.3d
109, 119 n.2 (2d Cir. 2003).
notice of removal alleges that the amount in controversy
exceeds $75, 000. (Dkt. 1 at 2). ASIC further alleges that
plaintiffs Alexander and Kim are citizens of New York State
for purposes of diversity jurisdiction, and that Travelers is
incorporated under the laws of the State of Connecticut and
maintains its principal place of business in that state;
thus, Travelers is a citizen of the State of Connecticut for
purposes of diversity jurisdiction. (Dkt. 1 at 2-3). ASIC has
also alleged that it is incorporated under the laws of the
State of Indiana and maintains its principal place of
business in Massachusetts; thus, ASIC is a citizen of the
States of Indiana and Massachusetts for purposes of
diversity. (Id. at 3). Although Plaintiffs'
complaint alleges that defendants Jesse, Gary, and Amy all
reside in the State of New York, (id. at 10), ASIC
alleges that the domiciles of Jesse, Gary, and Amy are
immaterial because they are "nominal defendants, "
and their inclusion in this action violates the doctrine of
fraudulent joinder (id. at 3).
plaintiff may not defeat a federal court's diversity
jurisdiction and a defendant's right of removal by merely
joining as defendants parties with no real connection with
the controversy." Pampillonia v. RJR Nabisco,
Inc., 138 F.3d 459, 460-61 (2d Cir. 1998).
"Fraudulent joinder is a legal term of art [used] to
refer to the joinder of unnecessary or nominal parties in
order to defeat federal jurisdiction." Kuperstein v.
Hoffman-Laroche, Inc., 457 F.Supp.2d 467, 470 (S.D.N.Y.
In order to show that naming a non-diverse defendant is a
"fraudulent joinder" effected to defeat diversity,
the defendant must demonstrate, by clear and convincing
evidence, either that there has been outright fraud committed
in the plaintiffs pleadings, or that there is no possibility,
based on the pleadings, that a plaintiff can state a cause of
action against the non-diverse defendant in state court.
Pampillonia, 138 F.3d at 461. "The
question whether a non-diverse party has been joined
improperly is one of federal law." In re Rezulin
Prod. Liab. Litig.,133 F.Supp.2d 272, 279 (S.D.N.Y.
2001). "However, this only means that federal law
governs the question of a how a court should determine
whether joinder is fraudulent, but not that federal law
determines whether there has been fraudulent joinder."
Fed. Ins. Co. v. Tyco Int'l Ltd., 422
F.Supp." 2d 357, 381 (S.D.N.Y. 2006). "[T]he test
of whether or not there has been fraudulent joinder is
uniformly whether the plaintiff can establish a claim under
state, not federal law." MBIA Ins. Corp. v. Royal
Bank of Ca.,706 F.Supp.2d 380, 393 (S.D.N.Y. 2009)
(quotations and citations omitted); see Audi of
Smithtown, Inc. v. Volkswagen of Am., Inc., No.
08-CV-1773 (JFB) (AKT), 2009 WL 385541, at *5 n.2 (E.D.N.Y.
Feb. 11, 2009) ("[W]here the issue is fraudulent
joinder, the [c]ourt looks to state law in order to determine
the nature of [the defendant's] interest in this
litigation for jurisdictional purposes at the time of
removal."). "The issue is ...