United States District Court, W.D. Missouri, Western Division
DOUGLAS HARPOOL, District Judge.
Before the Court is Defendants' Motion to Sever (Doc. 8) and Plaintiff's Motion to Remand (Doc. 10). Upon careful consideration of the issues presented and arguments provided by the parties, the Court hereby GRANTS Plaintiff's motion to remand and DENIES AS MOOT Defendants' motion to sever.
On October 9, 2010, Plaintiff was involved in a motor vehicle accident and suffered serious injuries while riding as a passenger in a car driven by her husband, Calvin Bloomer. At the time of the accident, Calvin Bloomer had two automobile insurance policies in effect through Viking Insurance Company of Wisconsin ("Viking"). Each policy provided a $25, 000 limit on liability for "bodily injury" caused by a "car accident" for which the "insured person" is found legally liable. The policies agreed to pay, in addition to the stated limits on liability, "[n]ecessary expenses incurred for first aid for others at the time of the car accident because of bodily injury covered by this Part." (emphasis removed).
On December 22, 2014, Plaintiff, Viking, and Calvin Bloomer entered into a settlement agreement. Under the terms of that agreement, Viking agreed to pay Plaintiff a sum of $50, 000 representing the combined limit on liability under the two policies in exchange for a complete release of liability for Calvin Bloomer under Mo. Rev. Stat. § 537.065. The agreement specified that "[i]n settling this case Calvin Bloomer does not admit liability or fault nor does his insurance carrier... admit that Calvin Bloomer has liability or fault." The settlement agreement further specified that "although Amber Bloomer is providing Calvin Bloomer with a complete Release, by this Agreement, she is expressly reserving her right to pursue a direct claim against [Viking] as a Third Party Beneficiary for benefits provided under the First Aid Provision' of the policy" and "[Viking] expressly agrees that... [it] will not contest Amber Bloomer's standing to bring such an action[.]"
On February 10, 2015, Plaintiff filed suit in the Circuit Court of Jackson County. Plaintiff's petition asserts three counts. Count One is a contractual cause of action against Viking for first aid benefits under Calvin Bloomer's policies of liability insurance; it is brought by Plaintiff as a third party beneficiary and does not name Calvin Bloomer as a party defendant. Counts Two and Three assert causes of action against the Missouri Department of Social Services pursuant to Mo. Rev. Stat. § 208.215 and seek to reduce the Department's lien(s) over Plaintiff's prior settlement and anticipated future settlement/judgment with or against Viking.
Defendant Viking filed a notice of removal arguing federal jurisdiction exists on the basis of diversity of citizenship under 28 U.S.C. § 1332. Viking states Plaintiff is a citizen of Missouri, Viking is a citizen of Wisconsin, and the Missouri Department of Social Services is a citizen of Missouri but was improperly joined "in a transparent attempt to defeat diversity jurisdiction" such that the claims against it should be severed and its citizenship should be disregarded for diversity purposes. Plaintiff filed a motion to remand, arguing the Department was not fraudulently misjoined and that Viking is a citizen of Missouri under 28 U.S.C. § 1332(c) such that complete diversity does not exist. Defendant's motion to sever and Plaintiff's motion to remand are now fully briefed and ripe for review.
"In every federal case the court must be satisfied that it has jurisdiction before it turns to the merits of other legal arguments." Carlson v. Arrowhead Concrete Works, Inc., 445 F.3d 1046, 1050 (8th Cir. 2006). Plaintiff's motion to remand challenges the Court's jurisdiction; therefore, the Court will address that issue first. See Warner v. Chase Home Fin. LLC, 530 F.Appx. 614, 615 (8th Cir. 2013). The Court acknowledges that Defendant's motion to sever is related to its jurisdictional argument concerning fraudulent misjoinder; however, the Court finds remand appropriate based on the citizenship of Defendant Viking such that it is unnecessary to address the issue of fraudulent misjoinder.
An action may be removed from state court to federal district court if the case falls within the original jurisdiction of the district court. 28 U.S.C. § 1441(a). If the case is not within the original jurisdiction of the district court, the court must remand the case to the state court from which it was removed. 28 U.S.C. § 1447(c). A defendant seeking removal "bears the burden of establishing that the district court ha[s] original jurisdiction by a preponderance of the evidence." Knudson v. Sys. Painters, Inc., 634 F.3d 968, 975 (8th Cir. 2011). "All doubts about federal jurisdiction should be resolved in favor of remand to state court." Junk v. Terminix Int'l Co., 628 F.3d 439, 446 (8th Cir. 2010).
Diversity jurisdiction under 28 U.S.C. § 1332 requires complete diversity of citizenship among the litigants. In re Prempro Products Liab. Litig., 591 F.3d 613, 619-20 (8th Cir. 2010). "Complete diversity of citizenship exists where no defendant holds citizenship in the same state where any plaintiff holds citizenship." Id. at 620 (quoting OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007)). A corporation is deemed to be a citizen of all states in which it is incorporated and the state in which it operates its principal place of business. 28 U.S.C. § 1332(c). Additionally, if the case involves a "direct action against the insurer of a policy or contract of liability insurance" and "the insured is not joined as a party-defendant" then the insurer is also deemed a citizen of any state in which the insured is a citizen. Id.
Here, Plaintiff argues Defendant Viking is a citizen of Missouri under 28 U.S.C. § 1332(c) because the insured, Calvin Bloomer, is a citizen of Missouri and because her suit is as a direct action against Viking as an ...