Carter v. State Farm Fire & Casualty Co.

850 F. Supp. 2d 946, 2012 WL 423365, 2012 U.S. Dist. LEXIS 15511
CourtDistrict Court, S.D. Indiana
DecidedFebruary 8, 2012
DocketNo. 1:11-cv-1286-RLY-DKL
StatusPublished
Cited by8 cases

This text of 850 F. Supp. 2d 946 (Carter v. State Farm Fire & Casualty Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carter v. State Farm Fire & Casualty Co., 850 F. Supp. 2d 946, 2012 WL 423365, 2012 U.S. Dist. LEXIS 15511 (S.D. Ind. 2012).

Opinion

ORDER OF REMAND

RICHARD L. YOUNG, Chief Judge.

This lawsuit was removed to this court from Hamilton Superior Court on September 22, 2011, with Defendants claiming the presence of federal jurisdiction based upon diversity. Defendants claim diversity jurisdiction exists, despite the fact that there are non-diverse parties named as Defendants, because those non-diverse parties have been fraudulently joined. Plaintiffs have moved the court to remand this case, arguing that no party has been fraudulently joined.

Defendants bear the “heavy burden” of proving fraudulent joinder. Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir.1992). “The defendant must show that, after resolving all issues of fact and law in favor of the plaintiff, the plaintiff cannot establish a cause of action against the in-state defendant.” Id. (emphasis added). Plaintiffs’ claim against the allegedly fraudulently joined defendant is judged more generously than an examination under Rule 12(b)(6). Conk v. Richards, 77 F.Supp.2d 956, 960 (S.D.Ind.1999). As then District Judge David Hamilton opined, it is possible for a court to find that a party is not fraudulently joined, yet the claim is ultimately dismissed for failure to state a claim upon which relief may be granted. Id. (citing Batoff v. State Farm Insurance, 977 F.2d 848, 852 (3rd Cir. 1992)).

In this case, Defendants assert fraudulent joinder based on the lack of substantive viability of the claims and on the fact that those claims would clearly be time-barred by the applicable statute of limitations. No defendant has answered the complaint at this point. Three of the Defendants, State Farm Fire & Casualty (“State Farm”), Keeler Webb Associates, Inc. (“Keeler Webb”) and William Norman have filed motions to dismiss following removal of the case. The other two Defendants, American Structurepoint Consulting, Inc. (“Structurepoint”) and Donan Engineering Company, Inc. (“Donan Engineering”) have sought and been granted additional time in which to respond to the Complaint.

Factual Background1

Plaintiffs are married couples whose homes were insured by State Farm at the time a hailstorm rolled through the greater Indianapolis metropolitan area on April 14, 2006. Each couple filed a claim for roof damage with State Farm, the details of which are provided later in this section. State Farm denied each of the claims.

CPM Construction (“CPM”) was a roofing contractor owned by Joseph Radcliff, which State Farm was investigating as early as Spring of 2006. The insurer was looking closely at claims which involved the contractor because it believed he was engaged in the unsavory habit of helping homeowners qualify for new or repaired roofs by passing off intentionally inflicted damage to a roof as legitimate hail or wind damage. Each of the houses owned by the Plaintiffs was one which State Farm believed was involved in CPM’s and Rad-cliffs fraudulent scheme.

State Farm denied each of the Plaintiffs’ insurance claims in 2007. In May of 2008, the Carters, the Molls and the Pongratzs each filed petitions with the Marion Circuit [949]*949Court, seeking to invoke and enforce the appraisal process set forth in their insurance policies, which process is to be utilized when the insured and insurer are unable to agree on the amount of a loss. The three petitions were combined and on May 5, 2009, the Circuit Court granted summary judgment in favor of State Farm, finding that:

1. Petitioners are not entitled to appraisal under the terms and conditions of the policy of insurance because there is no appraisable dispute.
2. Petitioners’ claims involve coverage issues and therefore are not subject to appraisal under the terms and conditions of the policy of insurance.
3. The policy of insurance does not provide for appraisal after State Farm has denied the claim.
4. Petitioners’ Complaint is barred by the contractual limitation provision in the policy of insurance, which was extended, in writing, by State Farm.

Meanwhile, State Farm followed up on its investigation of CPM and Joseph Rad-cliff by suing them for engaging in widespread insurance fraud. Radcliff and CPM filed a counterclaim for defamation. A trial was held in May 2011 and most of the Plaintiffs in this case provided testimony at the trial, indicating they believed their respective roofs had suffered legitimate hail damage. Mr. Carter, Mrs. Moll and Mr. Pongratz each also testified at trial that State Farm had attempted to convince them to file a vandalism charge against CPM and Radcliff for intentionally damaging their roof, and in so doing offered them an opportunity to have their claims paid under some other policy provision in return for filing a criminal complaint. Radcliff prevailed at trial on his counterclaim against State Farm, and was awarded a significant amount in damages. As a result of the trial, Plaintiffs claim they learned that one of the engineers retained by State Farm to inspect roofs had tailored his written report of findings to the specific requests of State Farm.

Mr. & Mrs. Carter

The Carters retained Neff Construction to inspect their roof after the hailstorm. Neff found there to be sufficient damage to warrant a full roof replacement. Accordingly, the Carters filed their claim with State Farm on July 20, 2006. State Farm sent several inspectors to the Carters’ home, but none claimed to have found any hail damage to the roof. In April 2007, the Carters retained CPM to inspect their roof and, like Neff, it found there to be hail damage. After the Carters requested that State Farm inspect the roof again, the company sent out Defendant William Norman of Keeler Webb Associates. Norman looked at the roof briefly and informed the Carters that it had been vandalized and CPM was at fault. State Farm denied any further payment on the Carters’ claim, but the insurer informed them that it would replace the roof under the vandalism provisions of their homeowner’s policy if they would file a vandalism claim. The Carters refused and their roof was eventually repaired by a subsequent insurer following another hailstorm.

Mr. & Mrs. Horn

The Horns filed their hail damage claim with State Farm on July 12, 2006. On February 24, 2007, an inspector retained by State Farm inspected the roof while a representative of CPM was present. After the inspection, the inspector retained by State Farm informed the Horns that there was sufficient damage to warrant a complete roof replacement. However, the same inspector came back to the home with a State Farm adjuster less than 24 hours later and took another look at the roof. During that inspection the adjuster used a coin to demonstrate how a roof [950]*950could be intentionally damaged. The Horns were not at home at the time, and after the re-inspection of the roof, State Farm informed the Horns that the company would not replace the roof.

At State Farm’s request, in March 2007, Lyle Donan of Defendant Donan Engineering inspected the Horns’ roof and opined that the damage was the result of intentional actions. State Farm subsequently determined that it would neither repair or replace the Horns’ roof.

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Bluebook (online)
850 F. Supp. 2d 946, 2012 WL 423365, 2012 U.S. Dist. LEXIS 15511, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carter-v-state-farm-fire-casualty-co-insd-2012.