United States District Court, N.D. Texas, Fort Worth Division
CHARLES C. GUMM, III, Plaintiff,
STATE FARM LLOYDS, Defendant.
MEMORANDUM OPINION AND ORDER
for consideration the motions of plaintiff, Charles C. Gumm,
III, for leave to file amended complaint, Doc. 7, and to remand,
Doc. 6. Defendant, State Farm Lloyds ("State
Farm"), has filed a response and plaintiff has filed a
reply. Having reviewed the motions, the response, the reply,
the record in the above-captioned action, and applicable
authorities, the court concludes that plaintiff's motions
should be denied.
26, 2017, plaintiff initiated this action by the filing of an
original petition in the 17th Judicial District Court of
Tarrant County, Texas. Plaintiff alleged that State
Farm's denial of his insurance claim gave rise to sundry
state- law causes of action, including breach of contract,
fraud/intentional misrepresentation, fraud/concealment or
failure to disclose, negligent misrepresentation, violations
of the Texas Deceptive Trade Practices Act
("DTPA"), bad faith, and late payment of claims, in
violation of Chapter 542 of the Texas Insurance Code.
Plaintiff alleged $206, 000 total in actual damages and
sought recovery of "exemplary, statutory, and/or
discretionary damages, " in addition to costs of court
and attorney's fees. Doc. 1, Ex. B.
30, 2017, State Farm filed its notice of removal, bringing
the action before this court. State Farm maintains that the
court has subject matter jurisdiction because the parties are
diverse in citizenship and the amount in controversy exceeds
$75, 000, exclusive of interest and costs. Plaintiff was
alleged to be a citizen of Texas. State Farm, a
"Lloyd's Plan" organized under Chapter 941 of
the Texas Insurance Code, was alleged to be a citizen of
Illinois. Doc. 1 at 2.
24, 2017, plaintiff filed a motion for leave to file an
amended complaint to join Trip Buchwald
("Buchwald") as a defendant. Buchwald is an
insurance agent for State Farm. Plaintiff simultaneously
filed a motion to remand because both he and Buchwald are
citizens of Texas, meaning that the addition of Buchwald to
this action would destroy diversity.
1447(e) of Title 28 of the United States Code gives the court
two options when a plaintiff seeks to join a
jurisdiction-destroying defendant after an action has been
removed: " [T]he court may deny joinder, or permit
joinder and remand the action to State court." 28 U.S.C.
§ 1447(e). In determining whether to permit post-removal
joinder of a jurisdiction-destroying defendant, the court
considers (1) the extent to which the purpose of the joinder
is to defeat federal jurisdiction; (2) whether plaintiff has
been dilatory in seeking joinder; (3) whether plaintiff would
be significantly injured if joinder is not allowed; and (4)
any other factors bearing on the equities. Hensgens v.
Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 19 87);
see also Hawthorne Land Co. v. Occidental Chem. Co.,
431 F.3d 221, 227 (5th Cir. 2005).
balance of the Hensgens factors militates against
joinder. The first factor cuts against plaintiff. It appears
that plaintiff seeks to join Buchwald merely to destroy
diversity jurisdiction. Plaintiff sought joinder within a
month after State Farm filed its notice of removal. The court
is suspicious of plaintiff's purpose in requesting to
join Buchwald now. See Rosa v. Aqualine Res., Inc.,
No. 3:04-CV-0915-B, 2004 WL 2479900, at *2 (N.D. Tex. Oct.
28, 2004) (citing Holcomb v. Brience, Inc., No.
3:01-CV-1715-M, 2001 WL 1480756, at *2 (N.D. Tex. Nov. 20,
the court is not persuaded by plaintiff's purported
excuse for waiting until now to join Buchwald. Plaintiff
contends that State Farm's April 6, 2017 denial of
coverage letter was ambiguous or misleading. The letter gives
the following reasons for denial of plaintiff's claim:
"The loss occurred after [plaintiff] had an insurable
interest in the property. Further, the policy states;
assignment of the policy should not be valid unless we give
our written consent, no consent was provided. Therefore, we
are unable to extend coverage for this loss." Doc. 9 at
Ex. 1. Plaintiff contends that he interpreted the letter to
mean that State Farm denied coverage solely because plaintiff
did not obtain consent for an assignment of rights under the
policy and that it was not until July 19, 2017, that
plaintiff realized that State Farm's position for denial
of coverage was that plaintiff did not have an insurable
interest in the property at issue. Anyone who read the letter
would have noticed the apparent error in describing
plaintiff's insurable interest. That is, a reasonable
person would have known that State Farm was contending that
plaintiff did not have an insurable interest in the property
at the time of the loss. At the very least, the recipient of
the letter would have sought clarification. But there is no
indication that plaintiff sought clarification from State
Farm between receipt of the letter and July 19, 2017.
second factor favors State Farm as well. Although only two
months separate the initiation of the action in state court
and plaintiff's filing of the instant motions, there is
no reason that plaintiff could not have named Buchwald as a
defendant when he originally filed suit. The allegations made
in the original petition could only go to the actions of
Buchwald, who allegedly sold plaintiff the policy.
the third Hensgens factor, plaintiff has not shown
that he will be significantly injured if the court denies
joinder. With the exception of a claim for breach of
fiduciary duty against Buchwald, plaintiff's proposed
first amended complaint merely adds Buchwald to many of the
same claims asserted against State Farm. There is no
indication that State Farm would not be able ...