Harleysville Insurance Company of New York et al. v. Mt. Hawley Insurance Company et al.

S.D. New York

Harleysville Insurance Company of New York et al. v. Mt. Hawley Insurance Company et al.

District Court, S.D. New York·Decided July 1, 2026·No. 1:26-cv-05456·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------------------------------X- : HARLEYSVILLE INSURANCE COMPANY OF : NEW YORK et al., : Plaintiffs, : 26 Civ. 5456 (LGS) : -against- : : ORDER MT. HAWLEY INSURANCE COMPANY et al., : Defendants. : : -------------------------------------------------------------X LORNA G. SCHOFIELD, District Judge: WHEREAS, on June 26, 2026, Defendant Mt. Hawley Insurance Company (“Mt. Hawley”) removed this action, pursuant to 28 U.S.C. § 1441, from the Supreme Court of the State of New York, New York County, to this court on the basis of diversity jurisdiction. (Dkt. No. 1 (“Notice of Removal”)). As explained below, the case is remanded back to state court because the Notice of Removal is procedurally defective. Legal Standard WHEREAS, “statutory procedures for removal are to be strictly construed,” and a court must “resolve any doubts against removability.” Link Motion Inc. v. DLA Piper LLP, 103 F.4th 905, 911 (2d Cir. 2024).1 “When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.” 28 U.S.C. § 1446(b)(2)(A). “A civil action otherwise removable solely on the basis of [diversity jurisdiction] 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.” Id. § 1441(b)(2).

1 Unless otherwise indicated, in quoting cases, all internal quotation marks, footnotes and citations are omitted, and all alterations are adopted. For purposes of diversity jurisdiction, a corporation is deemed to be a citizen of every state in which it is incorporated and the state in which the corporation has its principal place of business. 28 U.S.C. § 1332(c)(1). WHEREAS, when removal is based on diversity jurisdiction, “courts must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the

controversy.” Purdue Pharma L.P. v. Kentucky, 704 F.3d 208, 218 (2d Cir. 2013); accord Kupferberg v. Baez, No. 24 Civ. 8653, 2025 WL 2346060, at *4 (S.D.N.Y. Aug. 13, 2025). “Nominal parties are those that have no personal stake in the outcome of the litigation and who are not necessary to an ultimate resolution.” Keane v. Banks, No. 25 Civ. 5104, 2026 WL 851342, at *2 (S.D.N.Y. Mar. 27, 2026). Discussion WHEREAS, the Notice of Removal is procedurally defective in at least two respects.2 First, Defendant Tydown Contracting Corporation (“Tydown”) has neither joined in, nor consented to, removal as required by 28 U.S.C. § 1446(b)(2)(A). Second, removal is improper

under 28 U.S.C. § 1441(b)(2) because Tydown is a corporate citizen of the State of New York. WHEREAS, the Complaint names as Defendants Mt. Hawley and Tydown. The Complaint asserts that Tydown is a New York corporation, and the Notice of Removal alleges on information and belief that Tydown is a New York corporation with its principal place of

2 Removal also appears to be deficient as to Plaintiff Richter & Ratner LLC. For purposes of diversity jurisdiction, a limited liability company “takes the citizenship of all of its members.” Platinum-Montaur Life Scis., LLC v. Navidea Biopharmaceuticals, Inc., 943 F.3d 613, 615 (2d Cir. 2019). The Notice of Removal does not include information regarding Richter & Ratner LLC’s members. However, the Complaint alleges that Richter & Ratner LLC is a “domestic business corporation” incorporated in the State of New York -- not a limited liability company. It is unnecessary to address the citizenship of Richter & Ratner LLC in light of the disposition below. business in New York. The state court docket reflects that Plaintiffs filed a proof of service on Tydown on May 26, 2026. Tydown thus has been “properly joined and served” and “is a citizen of the State in which [the] action is brought.” 28 U.S.C. § 1441(b)(2). WHEREAS, the Notice of Removal does not state that Tydown joins or consents to removal and does not contest that Tydown is a corporate citizen of New York. Mt. Hawley

argues that Tydown’s consent is not required and Tydown’s citizenship should be disregarded because Tydown is a nominal party. Specifically, Mt. Hawley argues that “there are no claims against [Tydown] in this action and any potential claims against it are already the subject of the Third-Party Complaint in the” underlying action. WHEREAS, Mt. Hawley’s arguments lack merit. The instant action arises from an underlying personal injury action filed against several parties, including Richter & Ratner Contracting Corporation (which the Notice of Removal asserts should be named as Plaintiff in place of Richter & Ratner LLC). The Complaint in the instant action asserts a claim for a declaratory judgment that “Defendants are obligated to defend and indemnify [Richter & Ratner,

LLC] for the claims asserted in the underlying personal injury action.” Thus, Tydown’s indemnity obligation is at issue in this action and Tydown has a “personal stake in the outcome of the litigation.” Keane, 2026 WL 851342, at *2. The fact that Tydown’s indemnification obligation may be resolved by the third-party complaint in the underlying personal injury action does not render Tydown a nominal party in this action. Mt. Hawley does not establish that there is no “possibility, based on the pleadings, that the plaintiff can state a cause of action against the non-diverse defendant in state court.” Id. at *2 (holding that the standards for nominal party status and fraudulent joinder are the same and quoting Whitaker v. American Telecasting, Inc., 261 F.3d 196, 207 (2d Cir. 2001) for the latter). Remand WHEREAS, a district court may act sua sponte to remand a case to state court for a procedural defect with the Notice of Removal. Mitskovski v. Buffalo & Fort Erie Pub. Bridge Auth., 435 F.3d 127, 131 (2d Cir. 2006). It is hereby ORDERED that this case is remanded to state court. The Clerk of Court is respectfully directed to close the case and to mail a certified copy of this Order to the Supreme Court of the State of New York, New York County, pursuant to 28 U.S.C. § 1447(c). Dated: July 1, 2026 New York, New York

UNITED STATES DISTRICT JUDGE

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------------------------------X- : HARLEYSVILLE INSURANCE COMPANY OF : NEW YORK et al., : Plaintiffs, : 26 Civ. 5456 (LGS) : -against- : : ORDER MT. HAWLEY INSURANCE COMPANY et al., : Defendants. : : -------------------------------------------------------------X LORNA G. SCHOFIELD, District Judge: WHEREAS, on June 26, 2026, Defendant Mt. Hawley Insurance Company (“Mt. Hawley”) removed this action, pursuant to 28 U.S.C. § 1441, from the Supreme Court of the State of New York, New York County, to this court on the basis of diversity jurisdiction. (Dkt. No. 1 (“Notice of Removal”)). As explained below, the case is remanded back to state court because the Notice of Removal is procedurally defective. Legal Standard WHEREAS, “statutory procedures for removal are to be strictly construed,” and a court must “resolve any doubts against removability.” Link Motion Inc. v. DLA Piper LLP, 103 F.4th 905, 911 (2d Cir. 2024).1 “When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.” 28 U.S.C. § 1446(b)(2)(A). “A civil action otherwise removable solely on the basis of [diversity jurisdiction] 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.” Id. § 1441(b)(2).

1 Unless otherwise indicated, in quoting cases, all internal quotation marks, footnotes and citations are omitted, and all alterations are adopted. For purposes of diversity jurisdiction, a corporation is deemed to be a citizen of every state in which it is incorporated and the state in which the corporation has its principal place of business. 28 U.S.C. § 1332(c)(1). WHEREAS, when removal is based on diversity jurisdiction, “courts must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the

controversy.” Purdue Pharma L.P. v. Kentucky, 704 F.3d 208, 218 (2d Cir. 2013); accord Kupferberg v. Baez, No. 24 Civ. 8653, 2025 WL 2346060, at *4 (S.D.N.Y. Aug. 13, 2025). “Nominal parties are those that have no personal stake in the outcome of the litigation and who are not necessary to an ultimate resolution.” Keane v. Banks, No. 25 Civ. 5104, 2026 WL 851342, at *2 (S.D.N.Y. Mar. 27, 2026). Discussion WHEREAS, the Notice of Removal is procedurally defective in at least two respects.2 First, Defendant Tydown Contracting Corporation (“Tydown”) has neither joined in, nor consented to, removal as required by 28 U.S.C. § 1446(b)(2)(A). Second, removal is improper

under 28 U.S.C. § 1441(b)(2) because Tydown is a corporate citizen of the State of New York. WHEREAS, the Complaint names as Defendants Mt. Hawley and Tydown. The Complaint asserts that Tydown is a New York corporation, and the Notice of Removal alleges on information and belief that Tydown is a New York corporation with its principal place of

2 Removal also appears to be deficient as to Plaintiff Richter & Ratner LLC. For purposes of diversity jurisdiction, a limited liability company “takes the citizenship of all of its members.” Platinum-Montaur Life Scis., LLC v. Navidea Biopharmaceuticals, Inc., 943 F.3d 613, 615 (2d Cir. 2019). The Notice of Removal does not include information regarding Richter & Ratner LLC’s members. However, the Complaint alleges that Richter & Ratner LLC is a “domestic business corporation” incorporated in the State of New York -- not a limited liability company. It is unnecessary to address the citizenship of Richter & Ratner LLC in light of the disposition below. business in New York. The state court docket reflects that Plaintiffs filed a proof of service on Tydown on May 26, 2026. Tydown thus has been “properly joined and served” and “is a citizen of the State in which [the] action is brought.” 28 U.S.C. § 1441(b)(2). WHEREAS, the Notice of Removal does not state that Tydown joins or consents to removal and does not contest that Tydown is a corporate citizen of New York. Mt. Hawley

argues that Tydown’s consent is not required and Tydown’s citizenship should be disregarded because Tydown is a nominal party. Specifically, Mt. Hawley argues that “there are no claims against [Tydown] in this action and any potential claims against it are already the subject of the Third-Party Complaint in the” underlying action. WHEREAS, Mt. Hawley’s arguments lack merit. The instant action arises from an underlying personal injury action filed against several parties, including Richter & Ratner Contracting Corporation (which the Notice of Removal asserts should be named as Plaintiff in place of Richter & Ratner LLC). The Complaint in the instant action asserts a claim for a declaratory judgment that “Defendants are obligated to defend and indemnify [Richter & Ratner,

LLC] for the claims asserted in the underlying personal injury action.” Thus, Tydown’s indemnity obligation is at issue in this action and Tydown has a “personal stake in the outcome of the litigation.” Keane, 2026 WL 851342, at *2. The fact that Tydown’s indemnification obligation may be resolved by the third-party complaint in the underlying personal injury action does not render Tydown a nominal party in this action. Mt. Hawley does not establish that there is no “possibility, based on the pleadings, that the plaintiff can state a cause of action against the non-diverse defendant in state court.” Id. at *2 (holding that the standards for nominal party status and fraudulent joinder are the same and quoting Whitaker v. American Telecasting, Inc., 261 F.3d 196, 207 (2d Cir. 2001) for the latter). Remand WHEREAS, a district court may act sua sponte to remand a case to state court for a procedural defect with the Notice of Removal. Mitskovski v. Buffalo & Fort Erie Pub. Bridge Auth., 435 F.3d 127, 131 (2d Cir. 2006). It is hereby ORDERED that this case is remanded to state court. The Clerk of Court is respectfully directed to close the case and to mail a certified copy of this Order to the Supreme Court of the State of New York, New York County, pursuant to 28 U.S.C. § 1447(c). Dated: July 1, 2026 New York, New York

UNITED STATES DISTRICT JUDGE

Harleysville Insurance Company of New York et al. v. Mt. Hawley Insurance Company et al., (S.D.N.Y. 2026).

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Harleysville Insurance Company of New York et al. v. Mt. Hawley Insurance Company et al. (Harleysville Insurance Company of New York et al. v. Mt. Hawley Insurance Company et al.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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