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Glazer v. Unum Life Insurance Co. of America

United States District Court, E.D. Missouri, Eastern Division

July 13, 2018

KEVIN GLAZER, Plaintiff,



         This matter is before the Court on Plaintiff's Motion to Remand, filed April 16, 2018. (ECF No. 28). The motion is fully briefed and ready for disposition.


         On or about January 11, 2018, Plaintiff filed a cause of action in the Circuit Court of St. Louis County, Missouri, against Defendants Unum Life Insurance Company of America (“Unum Life”) and The Cornerstone Insurance Group, LLC (“Cornerstone”). In Count I of his State court cause of action, Plaintiff asserted a claim for “Action On The Policy-Non-ERISA Plan” against Unum Life. (See Petition, ECF No. 6, ¶¶ 7-11). In Count II, Plaintiff asserted a claim for negligence against Cornerstone, claiming Cornerstone “took it upon itself to prepare the appeals of [Unum Life's] denial of benefits on behalf of Plaintiff”, but “was negligent in preparing [those] appeals by failing to include necessary information.” (Id., ¶¶ 13, 15).

         On March 9, 2018, Cornerstone (with the consent of Unum Life) removed Plaintiff's cause of action to the United States District Court for the Eastern District of Missouri on the basis of diversity jurisdiction, 28 U.S.C. § 1332. (Notice of Removal, ECF No. 1). The Notice of Removal stated that complete diversity existed between Plaintiff and Unum Life[1], and that Cornerstone's citizenship must be disregarded as it was fraudulently joined in this action.[2] (Id., ¶¶ 5-33). Specifically, Cornerstone asserted Plaintiff's negligence claim against it was unsustainable, because Plaintiff failed to allege that Cornerstone had a duty to him relative to his appeal of Unum Life's denial of benefits under the policy, and because any alleged breach of Cornerstone's duty was not the proximate cause of any damages sustained by Plaintiff.

         On March 12, 2018, Cornerstone filed a Motion to Dismiss Count II of Plaintiff's Complaint, in which it raised the same arguments in support of the alleged fraudulent joinder of Cornerstone that it made in its Notice of Removal. (ECF No. 8). Plaintiff responded to the motion on March 16, 2018, and further filed a Motion to Remand on March 30, 2018. (ECF Nos. 12, 19).

         On April 11, 2018, while both motions were still pending, Plaintiff filed a Motion to File First Amended Complaint (ECF No. 22), which the Court granted on April 16, 2018 (ECF No. 25). With respect to Cornerstone, Plaintiff expanded upon his claim of negligence in his First Amended Complaint, as follows: “After the denial of the claim, Cornerstone took it upon itself to prepare the appeals of the denial of benefits on behalf of Plaintiff, with Cornerstone acting as the agent of Plaintiff. Alternatively, Plaintiff and Defendant Cornerstone had an agreement whereby Defendant Cornerstone served as the agent for Plaintiff in representing Plaintiff in the appeal. Plaintiff relied on Defendant Cornerstone to his detriment that Defendant Cornerstone would prepare his appeal.” (First Amended Complaint, ECF No. 26, ¶ 13). Plaintiff further added a claim for breach of fiduciary duty against Cornerstone. (Id., ¶¶ 18-23).

         On April 16, 2018, Plaintiff filed the instant Motion to Remand. (ECF No. 28). In support of the Motion to Remand, Plaintiff argues that because he has stated a cause of action against Cornerstone there was no fraudulent joinder, and therefore the Court lacks diversity jurisdiction over this action.[3]


         “Removal statutes are strictly construed, and any doubts about the propriety of removal are resolved in favor of state court jurisdiction and remand.” Manning v. Wal-Mart Stores East, Inc., 304 F.Supp.2d 1146, 1148 (E.D. Mo. 2004) (citing Transit Cas. Co. v. Certain Underwriters at Lloyd's of London, 119 F.3d 619, 625 (8th Cir. 1997), cert. denied, 522 U.S. 1075, 118 S.Ct. 852, 139 L.Ed.2d 753 (1998)). The party invoking federal jurisdiction and seeking removal has the burden of establishing jurisdiction by a preponderance of the evidence. Central Iowa Power Co-op. v. Midwest Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 912 (8th Cir. 2009); see also Nicely v. Wyeth, Inc., 2011 WL 2462060 at *2 (E.D. Mo. Jun. 17, 2011).

         A civil action brought in state court may be removed to the proper district court if the district court has original jurisdiction of the action. 28 U.S.C. § 1441(a). “Federal district courts have original jurisdiction in all civil actions between citizens of different states if the amount in controversy exceeds $75, 000.00, exclusive of interest and costs.”[4] Manning, 304 F.Supp.2d at 1148 (citing 28 U.S.C. § 1332(a)(1)). Actions where jurisdiction is predicated solely on diversity “may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b)(2).

         As stated above, Cornerstone asserts that diversity jurisdiction exists because Cornerstone, the only non-diverse party, was fraudulently joined. “When a court is assessing whether diversity jurisdiction exists over a particular case, it may ignore the citizenship of parties fraudulently joined.” Moss v. Defender Servs. Inc., 2009 WL 90136 at *2 (E.D. Mo. Jan. 14, 2009) (citing Anderson v. Home Ins. Co., 724 F.2d 82, 84 (8th Cir. 1983); 28 U.S.C. § 1441(b)). Joinder is fraudulent and removal is proper “when a plaintiff files a frivolous or illegitimate claim against a non-diverse defendant solely to prevent removal.” Junk v. Terminix Intern. Co., 628 F.3d 439, 445 (8th Cir. 2010) (internal quotations and citation omitted), cert. denied, 132 S.Ct. 94 (2011). However, “joinder is fraudulent only when there exists no reasonable basis in fact and law supporting a claim against the resident defendant[].” Wilkinson v. Shackelford, 478 F.3d 957, 964 (8th Cir. 2007) (internal quotations and citations omitted) (emphasizing that the fraudulent joinder inquiry does not focus on the “artfulness of the pleadings”, but rather on the ability of the plaintiff to state a colorable claim). The Eighth Circuit has described the fraudulent joinder standard as follows:

[A] proper review should give paramount consideration to the reasonableness of the basis underlying the state claim. Where applicable state precedent precludes the existence of a cause of action against a defendant, joinder is fraudulent. “[I]t is well established that if it is clear under governing state law that the complaint does not state a cause of action against the non-diverse defendant, the joinder is fraudulent and federal jurisdiction of the case should be retained.” However, if there is a “colorable” cause of action-that is, if the state law might impose liability on the resident defendant under the facts alleged-then there is no fraudulent joinder.

Filla v. Norfolk Southern Railway Co., 336 F.3d 806, 810 (8th Cir. 2003) (internal citations and footnote omitted; emphasis in original).[5] This reasonableness standard requires “the defendant to do more than merely prove that the plaintiff's claim should be dismissed pursuant to a Rule 12(b)(6) motion.” Knudson, 634 F.3d at 980 (citing Junk, 628 F.3d at 445 (noting that the Rule 12(b)(6) standard is “more demanding” than the Filla standard)). Furthermore, in making a prediction as to whether state law might impose liability based on the facts alleged, “the district court should resolve all facts and ambiguities in the current controlling substantive law in the plaintiff's favor, ” and ...

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