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Wabby v. State Farm Mut. Auto. Ins. Co.

April 27, 2010

DONNA LEE WABBY AND EDWARD WABBY, PLAINTIFFS
v.
STATE FARM MUT. AUTO. INS. CO., DEFENDANT



The opinion of the court was delivered by: Judge James M. Munley United States District Court

(Judge Munley)

MEMORANDUM

Before the court is the plaintiffs' motion to join a party and to remand the case to state court. (Doc. 12). The motion has been briefed and is ripe for disposition.

BACKGROUND

This case is a contract action brought by the plaintiffs against their uninsured motorist insurance carrier, Defendant State Farm Mutual Insurance Company ("State Farm"), relating to a traffic accident. (Complaint at ¶¶ 7, 14 (Doc. 1-3)). On September 17, 2007, Plaintiff Donna Lee Wabby was driving her Ford Explorer, stopped in traffic. (Id. at ¶ 6). David Zerby struck Wabby from behind with his motorcycle. (Id. at ¶ 7). Zerby, who resided in Schuylkill County, Pennsylvania, died the following day. (Id. at ¶ 3). Plaintiff Donna Lee Wabby alleges various injuries, medical costs, and economic losses stemming from the accident. (Id. at ¶¶ 17 to 23). Plaintiff Edward Wabby alleges loss of consortium because of the accident. (Id. at ¶ 25).

The plaintiffs filed a negligence action against Zerby's estate in Schuylkill County Court of Common Pleas on May 29, 2008, No. S-1607-2008. (Id. at ¶ 13). Approximately sixteen months later, on September 28, 2009, the plaintiffs filed a civil writ in the instant action against State Farm in Schuylkill County Court of Common Pleas. (Id. at ¶ 14). The plaintiffs' complaint, filed on November 16, 2009, sought the proceeds of their uninsured motorist benefits under their policy as well as any damages permitted under Pennsylvania's "Bad Faith" statute, 42 PA. C.S.A. § 8371. (Compl. at ¶¶ A, B).

State Farm filed a notice of removal on December 11, 2009. (Doc. 1). State Farm answered the complaint on December 18, 2009. (Doc. 7). On December 21, 2009, this court approved the parties' stipulation dismissing plaintiffs' "allegations of Section 8371 Bad Faith, contractual allegations of bad faith, and all allegations of breach of duty of good faith and fair dealing," without prejudice. (Doc. 8). The plaintiffs filed the instant motion to join the estate of David Zerby and remand on January 7, 2010, bringing the case to its present posture. (Doc. 12).

LEGAL STANDARD

The court has removal jurisdiction over this case based on diversity. A defendant can generally remove a state court civil action to federal court if the federal court would have had original jurisdiction to address the matter. 28 U.S.C. § 1441(b) . Pursuant to the diversity jurisdiction statute "district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States[.]" 28 U.S.C. § 1332. In this case, there is diversity of citizenship between the parties where the plaintiffs are citizens of Pennsylvania and State Farm is an Illinois corporation with a principal place of business in Illinois. (Notice of Removal at ¶¶ 2, 13). In addition, the amount in controversy exceeds the jurisdictional amount of $75,000.00. (Id. at ¶ 16).

The plaintiffs seek joinder of the estate of David Zerby, a non-diverse defendant, therefore we must analyze their motion under 28 U.S.C. § 1447(e) ("If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court."). Thus, if we join the non-diverse defendant, we must remand the case to the state court. If we deny the motion to join, we retain jurisdiction over the case.

The United States Court of Appeals for the Third Circuit has not established how a district court should apply section 1447(e). Other districts of this court, however, have applied the Fifth Circuit's analysis in Hensgens v. Deere, Co., 833 F.2d 1179, 1182 (5th Cir. 1987), which balances "the defendant's interests in maintaining the federal forum with the competing interests of not having parallel lawsuits." See e.g., Estate of Horvath v. Ciocca, No. 07-2685, 2008 WL 938927, at *3 (E.D. Pa. Apr.4, 2008) (applying Hensgens in granting leave to amend complaint to add non-diverse party); Kahhan v. Mass. Cas. Ins. Co., No. 01-1128, 2001 WL 1454063, at *2 (E.D. Pa. Nov. 14, 2001) (applying Hensgens analysis in joining non-diverse party). Under this analysis, the district court should examine "[1] the extent to which the purpose of the amendment is to defeat federal jurisdiction, [2] whether plaintiff has been dilatory in asking for amendment, [3] whether plaintiff will be significantly injured if amendment is not allowed, and [4] any other factors bearing on the equities." Hensgens, 833 F.2d at 1182.

Finally, we note the general presumption in favor of state jurisdiction. Federal courts are courts of limited jurisdiction. Willy v. Coastal Corp., 503 U.S. 131, 136-37 (1992). In the removal context, by analogy, removal statutes are "strictly construed against removal and all doubts should be resolved in favor of remand." Steel Valley Auth. v. Union Switch and Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987).

DISCUSSION

We will adopt the Fifth Circuit's approach to section 1447(e) and analyze the plaintiffs' motion to join and remand according to the four factors described above. Because we find that the plaintiffs' intent in seeking joinder and remand is to reduce litigation costs and conserve judicial resources, rather than to ...


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