United States District Court, E.D. Texas, Sherman Division
HIDDEN COVE PARK AND MARINA, MARINE QUEST HIDDEN COVE LP, MQTXM LLC
LEXINGTON INSURANCE COMPANY, AIG CLAIMS, INC., GLENN HOLLMULLER, CHAMPION COMMERCIAL INSURANCE AGENCY LLC No. 4
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE
before the Court is Plaintiffs' Motion for Remand (Dkt. #
15). Having considered the pleadings, the Court finds the
motion should be denied.
and June 2015, severe storms caused damage to Plaintiff
Hidden Cove Park and Marina Marine Quest Hidden Cove, LP
(“Hidden Cove”) and Plaintiff MQTXM, LLC d/b/a
Texoma Park & Marina's (“Texoma”)
properties. Hidden Cove's property is located in Denton
County and Texoma's property is located in Grayson
County. The properties are insured under a single insurance
policy issued by Defendant Lexington Insurance Company
(“Lexington”). Plaintiffs allege they timely
filed their respective claims with Lexington. Lexington hired
Defendant AIG Claims, Inc. (“AIG”) to adjust
their claims. Defendant Glenn Hollmuller
(“Hollmuller”) is a property adjuster for AIG and
conducted an investigation and evaluation of Plaintiffs'
claim. Plaintiffs allege that Lexington, AIG, and Hollmuller
(collectively, “Defendants”) failed to properly
conduct an investigation into the cause of loss, failed to
issue timely payments, and wrongfully delayed or denied
August 12, 2016, Plaintiffs filed their Original Petition in
the 192nd Judicial District Court of Dallas County, Texas.
Plaintiffs brought claims against Lexington for breach of
contract, violations of the Texas Unfair Claims Practices
Act, non-compliance with Texas Insurance Code Chapter 542,
and breach of common law duty of good faith and fair dealing.
Plaintiffs brought claims against AIG and Hollmuller for
unfair settlement practices. Plaintiffs' Original
Petition also included claims against Champion Commercial
Insurance Agency, LLC (“Champion”) for violations
of the Texas Insurance Code and negligence. In March 2017,
Plaintiffs settled all claims with Champion.
are both Texas citizens. Texoma is a limited liability
company and Hidden Cove is a limited partnership.
Texoma's partners and Hidden Cove's members are
Marcel Bosworth and Dwight Bosworth. Both individuals are
is incorporated in Delaware and has its principal place of
business in Massachusetts. Lexington is thus a citizen of
Delaware and Massachusetts. AIG is incorporated in Delaware
and has its principal place of business in New York. AIG is a
citizen of Delaware and New York. Hollmuller is Texas
citizen. The parties state Champion is also a Texas
March 14, 2017, after Plaintiffs settled with Champion,
Defendants removed this action to the Northern District of
Texas (Dkt. #1). Defendants argue that diversity exists
between the parties because Plaintiffs are no longer pursuing
claims against Champion, a Texas citizen. Plaintiffs further
argue that diversity exists between the parties because
Hollmuller, also a Texas citizen, was improperly joined to
the suit. On March 22, 2017, the case was transferred to the
Court from the Northern District of Texas (Dkt. #7).
April 11, 2017, Plaintiffs filed a Motion for Remand (Dkt.
#15). On April 25, 2017, Defendants filed a response (Dkt.
#16). On May 2, 2017, Plaintiffs filed a reply (Dkt. #17). On
May 9, 2017, Defendants filed a sur-reply (Dkt. #20).
defendant may remove any civil action from state court to a
district court of the United States which has original
jurisdiction. 28 U.S.C. § 1441. District courts have
original jurisdiction over all civil actions that are between
citizens of different states and involve an amount in
controversy in excess of $75, 000, exclusive of interest and
costs. 28 U.S.C. § 1332. The party seeking removal
“bears the burden of establishing that federal
jurisdiction exists and that removal was proper.”
Manguno v. Prudential Prop. & Cas. Ins. Co., 276
F.3d 720, 723 (5th Cir. 2002); Weaver v. Zurich Am. Ins.
Co., No. Civ. A. H-10-1813, 2010 WL 3910053, at *1 (S.D.
Tex. Oct. 1, 2010). The removal statute must “be
strictly construed, and any doubt about the propriety of
removal must be resolved in favor of remand.” Gasch
v. Hartford Accident & Indem. Co., 491 F.3d 278,
281-82 (5th Cir. 2007). A district court is required to
remand the case to state court if, at any time before final
judgment, it determines that it lacks subject matter
jurisdiction. See 28 U.S.C. § 1447(c);
Groupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S.
567, 571 (2004).
assessing whether diversity jurisdiction exists, a court must
disregard non-diverse citizenship of an improperly joined
defendant.” Doucet v. State Farm Fire and Cas.
Co., No. 1:09-CV-142, 2009 WL 3157478, at *4 (E.D. Tex.
Sept. 25, 2009) (citing Smallwood v. Ill. Cent. R.R.
Co., 385 F.3d 568, 572-73 (5th Cir. 2004)). A defendant
who contends that a non-diverse party is improperly joined
has a “heavy” burden of proof. Green v.
Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir. 1983);
Great Plains Trust Co. v. Morgan Stanley Dean Witter
& Co., 313 F.3d 305, 312 (5th Cir. 2002) (citation
omitted). “In making its determination, the court must
ordinarily evaluate all of the factual allegations in the
plaintiff's state court pleadings in the light most
favorable to the plaintiff, resolving all contested issues of
substantive fact in favor of the plaintiff.”
Green, 707 F.2d at 205.
removing party must prove that there is absolutely no
possibility that the plaintiff will be able to establish a
cause of action against the in-state defendant in state
court, or that there has been outright fraud in the
plaintiff's pleading of jurisdictional facts.”
Great Plains Trust, 313 F.3d at 312 (quoting
Green, 707 F.2d at 205). After the Court resolves
all disputed questions of fact and all ambiguities in
controlling state law in favor of the plaintiff, the Court
determines whether the plaintiff has any possibility of
recovery against the party whose joinder is questioned.
Id. (citation omitted). If there is a reasonable
basis for predicting that the state law might impose
liability on the facts of the case, then there is no
fraudulent joinder. Id. (citation omitted). This
possibility must be reasonable and not just theoretical.
determination of improper joinder must be based on an
analysis of the causes of action alleged in the complaint at
the time of removal. See Cavallini v. State Farm Mut.
Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995).
“A district court should ordinarily resolve [claims of]
improper joinder by conducting a Rule 12(b)(6)-type
analysis.” McDonal v. Abbott Labs., 408 F.3d
177, 183 n.6 (5th Cir. 2005); see also Boone v.
Citigroup, Inc., 416 F.3d 382, 388 (5th Cir. 2005).
“[I]f a plaintiff can survive a Rule 12(b)(6)-type
challenge, there is generally no improper joinder.”
Guillory v. PPG Indus., Inc., 434 F.3d 303, 309 (5th
Cir. 2005) (citation omitted); Smallwood, 385 F.3d
at 573. The Court, however, must carefully ...