United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
KINKEADE UNITED STATES DISTRICT JUDGE.
the Court is Plaintiffs' Renewed Opposed Motion to Remand
(Doc. No. 34). The Court has carefully considered the motion,
the responses, the applicable law, and the relevant portions
of the record. Based on Plaintiffs' Second Amended
Complaint, there is not complete diversity of the parties
and, therefore, the Court does not have diversity
jurisdiction. Accordingly, the Court GRANTS
the renewed motion to remand under 28 U.S.C. § 1447(c).
(It is unclear to the Court, but to the extent
Plaintiffs' renewed motion seeks reconsideration of the
Court's prior order denying remand, the Court
denies that relief. See Fed. R.
Civ. P. 54(b).)
Court finds it unnecessary to again recite the factual
background as it is unchanged from that in the Court's
previous order (Doc. No. 22). However, the Court will turn to
the procedural history as that has changed. After the Court
entered its order denying remand, Plaintiffs filed their
Second Amended Complaint (“Amended Complaint”)
(Doc. No. 26) as a matter of course in response to
non-diverse Defendants Insurance Connection USA and Garrison
& Associations' (“Insurance Agent
Defendants”) motion to dismiss (Doc. No. 21). In their
Amended Complaint, Plaintiffs pleaded additional factual
allegations concerning Insurance Agent Defendants as well as
new state law claims against them for negligent procurement
of an insurance policy, violations of Texas Insurance Code
§ 541.051, and Texas Deceptive Trade Practices Act
(“DTPA”). Plaintiffs then filed their
“renewed” motion to remand.
party seeking removal bears the burden of establishing
federal jurisdiction. Guillory v. PPG Indus., Inc.,
434 F.3d 303, 308 (5th Cir. 2005). Removal jurisdiction is
strictly construed “and any doubt about the propriety
of removal must be resolved in favor of remand.”
Gasch v. Hartford Acc. & Indem. Co., 491 F.3d
278, 281-82 (5th Cir. 2007). The court must “resolve
all contested factual issues and ambiguities of state law in
favor of the plaintiff.” Id. at 281. As
“removal raises significant federalism concerns,
” the court must strictly construe the removal statute,
“and any doubt about the propriety of removal must be
resolved in favor of remand.” Id.
Agent Defendants removed this case asserting diversity
jurisdiction as the basis for this Court's jurisdiction.
Although they share the same citizenship as Plaintiffs,
Insurance Agent Defendants argue they were improperly joined
because Plaintiffs cannot establish a claim against them in
state court. Insurance Agent Defendants “bear a heavy
burden of proving” that their joinder as non-diverse
defendants was improper. Smallwood v. Ill. Cent. R.R.
Co., 385 F.3d 568, 574 (5th Cir. 2004)(en banc). To
prove improper joinder, Insurance Agent Defendants must
demonstrate there is no possibility of Plaintiffs recovering
against them in state court. Id. at 573. (Insurance
Agent Defendants do not allege actual fraud in
Plaintiffs' pleadings as the basis for improper joinder.)
To that end, the Court conducts a Rule 12(b)(6)-type analysis
in determining whether there is no reasonable basis for the
Court to predict that Plaintiffs may recover against
Insurance Agent Defendants on their state law claims, but
this analysis does not focus on the merits of Plaintiffs'
case. See Id. at 573-75.
Plaintiffs have asserted several claims against Insurance
Agent Defendants, the Court need only decide whether there is
a reasonable basis to predict whether Plaintiffs can possibly
recover against Insurance Agent Defendant on any one of these
claims, not each of them. See Smith-Manning v. State Farm
Lloyds, Civ. Action No. 3:13-CV-3056-M, 2013 WL 5637539,
at *2 (N.D. Tex. Oct. 14, 2013)(Lynn, J.). The Amended
Complaint, which is now the live pleading, sets forth
additional factual allegations and legal claims against
Insurance Agent Defendants. Taking the well-pleaded facts as
true, the Court concludes there is a reasonable basis to
predict that Plaintiffs may recover against Insurance Agent
Defendants on their claim for negligent procurement of an
law recognizes negligent procurement of an insurance policy
as a legally cognizable claim against an insurance agent.
See May v. United Servs. Ass'n. of Am., 844
S.W.2d 666 (Tex. 1992). The Texas Supreme Court held that an
insurance agent “owes a duty to a client to use
reasonable diligence in attempting to place the requested
insurance and to inform the client promptly if unable to do
so.” Id. at 669. Here, Plaintiffs allege they
informed Insurance Agent Defendants of Plaintiff Steve
Malone's specific cancer diagnosis and his ongoing care
and treatment. More explicitly, Plaintiffs allege they made
known to Insurance Agent Defendants that Plaintiffs'
health insurance policy under Humana (which was being
discontinued) covered Mr. Malone's ongoing cancer
treatments and they “specifically requested”
Insurance Agent Defendants furnish them with a health
insurance policy that would “provide the same or better
coverage as Humana, especially as it relates to Mr.
Malone's cancer treatments.” Insurance Agent
Defendants allegedly agreed to procure the specific coverage
requested and, thereafter, provided the Blue Cross Blue
Shield (“BCBS”) Policy. Insurance Agent
Defendants allegedly told Plaintiffs the BCBS Policy would
provide the requested insurance coverage, specifically
including Mr. Malone's ongoing cancer treatments and the
Rituxan therapy. Insurance Agent Defendants also allegedly
represented to Plaintiffs that “the [BCBS] Policy was
as good as or better than the Humana plan, and would provide
the same or better coverage.” Plaintiffs then enrolled
in the BCBS Policy. However, shortly thereafter,
Plaintiffs' claim submitted for Mr. Malone's ongoing
Rituxan therapy “was denied on the basis that the
[BCBS] Policy does not provide coverage for the needed
medical care.” The repeated denial of coverage for this
cancer treatment claim spanned six months. Plaintiffs allege
they were irreparably harmed because Mr. Malone was taken out
of the Rituxan therapy during this time period and prevented
from re-entering, and any benefits he had received from it
Court finds Plaintiffs' allegations in their Amended
Complaint have shown at least the possibility of establishing
one claim against the non-diverse Insurance Agent Defendants
in state court and this defeats Insurance Agent
Defendants' improper joinder argument and, therefore,
complete diversity. See LC Farms, Inc. v. McGuffee,
Civ. Action No. 2:12-CV-165-SA, 2012 WL 5879433, at *4-5
(N.D. Miss. Nov. 21, 2012) (although plaintiff's state
court complaint did not allege viable claim against
non-diverse defendant, court found plaintiff's motion to
remand must be considered in light of plaintiff's amended
complaint which was filed as matter of course after removal,
and amended complaint did potentially allege state law claim
against non-diverse defendant which defeated complete
diversity and mandated remand). Again, the Court's
analysis for improper joinder of these defendants does not
focus on “whether the plaintiff will actually or even
probably prevail on the merits of the claim, ” but only
the “possibility that the plaintiff might do so.”
Burden v. Gen. Dynamics Corp., 60 F.3d 213, 216 (5th
Cir. 1995). Any doubt about the propriety of removal must be
resolved in favor of remand. Gasch, 491 F.3d at 281.
Taking the well-pleaded facts as true and resolving all
factual disputes and ambiguities in Plaintiffs' favor,
the Court concludes Plaintiffs have pleaded factual and legal
allegations in their Amended Complaint that permit the Court
to reasonably predict that they might be able to recover
against non-diverse Insurance Agent Defendants for the
alleged misconduct. See Smallwood, 385 F.3d at 573.
Because there is no improper joinder of non-diverse Insurance
Agent Defendants and, therefore, no diversity jurisdiction,
the sole basis for this Court's subject matter
jurisdiction, the Court finds remand is required. 28 U.S.C.
the Court is obligated to review its subject matter
jurisdiction sue sponte at any time. See FW/PBS,
Inc. v. City of Dallas, 493 U.S. 215, 230-31 (1990);
see also Ruhrgas AG v. Marathon Oil Co., 526 U.S.
574, 583 (1999)(“[S]ubject-matter delineations must be
policed by the courts on their own initiative even at the
highest level.”). Even in the absence of a motion to
remand, the Court would have examined its subject matter
jurisdiction on its own motion based on Plaintiffs'
Amended Complaint, and remand would nevertheless have
resulted under 28 U.S.C. § 1447(c). See Petree v.
Metro. Lloyds Ins. Co. of Tex., Civil Action No.
3:16-CV-0735-G, 2016 WL 4211764, at *2-3 (N.D. Tex. Aug. 9,
2016)(Fish, J.) (having previously denied plaintiffs'
motion to remand because of improper joinder, court remanded
case on its own motion after considering whether plaintiffs
“have successfully stated a claim against [non-diverse
defendant] in the plaintiffs' first amended
complaint.”); Mills Grp. Ltd. v. Oceanografia, S.A.
de C.V., Civ. Action No. H-08-3449, 2009 WL 3756931, at
*2 (S.D. Tex. Nov. 6, 2009) (court already denied
plaintiff's motion to remand based on improper joinder
but on court's own motion considered diversity
jurisdiction based upon filing of plaintiff's third
conducted a Rule 12(b)(6)-type analysis, the Court finds
Plaintiffs' Amended Complaint contains allegations
against the Insurance Agent Defendants sufficient enough for
the Court to predict that Plaintiffs may recover against them
on at least one state law claim. See Smallwood, 385
F.3d at 573-75. Because Insurance Agent Defendants
have failed to meet their heavy burden to establish improper
joinder, the Court finds there is not complete diversity and,
therefore, no diversity jurisdiction. See 28 U.S.C.
§ 1447(c). The Court must grant
Plaintiffs' renewed motion to remand. Because the Court
lacks subject matter jurisdiction under § 1332, this
case must be remanded pursuant to 28 U.S.C. § 1447(c).
reasons stated above, this case is REMANDED
to the 191 st Judicial District Court of Dallas County,
Texas. The clerk shall mail a certified copy of this
Memorandum Opinion and Order to the district clerk of Dallas
County, Texas. 28 U.S.C. § 1447(c).