Hutton Construction, Inc. v. Continental Western Insurance Company

2021 DNH 167

• Court: District Court, D. New Hampshire
• Decided: October 20, 2021
• Docket: 21-cv-706-PB
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Hutton Construction, Inc.

v. Case No. 21-cv-706-PB Opinion No. 2021 DNH 167 Continental Western Insurance Company

ORDER

Hutton Construction, Inc. (“Hutton”) alleges in an amended

complaint that Frederick A. Meyer III & Sons, Inc. (“Meyer”)

performed defective masonry work for Hutton. Meyer was insured

at the time by Continental Western Insurance Company

(“Continental”). Hutton brought the current action against

Continental after settling with Meyer and obtaining an

assignment of its rights under the Continental policy.

Continental later removed the case to this court and invokes the

court’s diversity jurisdiction. Hutton and Meyer are New

Hampshire companies and Continental is a citizen of Iowa.

Hutton has filed a motion to remand based on 28 U.S.C.

§ 1332(c)(1)(A), which provides in pertinent part that “in any

direct action against the insurer of a policy or contract of

liability insurance . . . to which action the insured is not

joined as a party-defendant, such insurer shall be deemed a

citizen of . . . every State and foreign state of which the

insured shall be deemed a citizen.” Hutton contends that the case must be remanded under this provision because its claim is

a “direct action” against Continental and, therefore,

Continental must be deemed to be a citizen of New Hampshire

where its insured is based. Because Hutton is also a citizen of

New Hampshire, its thinking goes, diversity is lacking and the

case must be remanded to state court.

I agree with Continental that Hutton’s motion must be

denied. Hutton is asserting rights against Continental that it

acquired by assignment from Meyer. Thus, the case is not a

“direct action” against Continental within the meaning of the

diversity statute. See, e.g., Gateway Residences at Exch., LLC

v. Ill. Union Ins. Co., 917 F.3d 269, 273 (4th Cir. 2019);

Hyland v. Liberty Mut. Fire Ins. Co., 885 F.3d 482, 485 (7th

Cir. 2018); Kong v. Allied Prof’l Ins. Co., 750 F.3d 1295, 1299-

1301 (11th Cir. 2014). Because Hutton and Continental are

citizens of different states and the amount in controversy

exceeds $75,000, the court has diversity jurisdiction over the

case.

Hutton’s motion to remand (Doc. No. 7) is denied.

SO ORDERED.

/s/ Paul J. Barbadoro Paul J. Barbadoro United States District Judge

October 20, 2021

cc: James C. Wheat, Esq. Michael G. Eaton, Esq. Doreen F. Connor, Esq.