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5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 MARK SZTROIN, CASE NO. C22-5608 BHS 8 Plaintiff, ORDER 9 v. 10 THOMAS A. DITURI, et al., 11 Defendants. 12
13 This matter comes before the Court on Plaintiff Mark Sztroin’s Motion to Remand 14 Case to State Court, Dkt. 5, and Defendant American Alternative Insurance Corporation’s 15 Motion to Sever, Dkt. 6, and Motion for Partial Summary Judgment, Dkt. 8. Because 16 American Alternative fails to establish that removal is proper, the motion to remand is 17 granted. Additionally, because remand is proper, the motion to sever and motion for 18 partial summary judgment are denied without prejudice with leave to refile in state court. 19 I. BACKGROUND 20 Sztroin alleges that he sustained injuries when Thomas Dituri struck him with a 21 pickup truck just after Sztroin exited his own vehicle. Dkt. 1-1, ¶ 3.1. Sztroin was on his 22 way to a physical therapy appointment with one of his patients. Id. ¶¶ 4.5–4.6. The 1 truck’s owner, Joseph Hall, provided Dituri with express or implied consent to drive the 2 truck. Id. ¶¶ 3.2–3.3. At the time of the collision, Dituri was operating within the scope of 3 his work for Thomas Dituri Construction LLC or John Doe Construction. Id. ¶ 3.6.
4 Sztroin’s employer, Harbors Home Health & Hospice, had an American 5 Alternative insurance policy that provided underinsured motorist (UIM) coverage. Id. 6 ¶¶ 1.5, 4.8, 4.11. American Alternative, through its agent Glatfelter Claims Management, 7 Inc., ultimately denied coverage to Sztroin under this policy, reasoning that Sztroin was 8 neither “occupying a covered auto” nor “using” his automobile when Dituri struck him.
9 Id. ¶¶ 4.9, 4.26–4.27. 10 Sztroin sued Dituri, Hall, Dituri Construction, John Doe Construction, and 11 American Alternative in Grays Harbor County Superior Court. Id. at 2. Sztroin alleged 12 that Dituri negligently caused his injuries; that Hall was vicariously liable for Dituri’s 13 negligence under the family car doctrine; that Hall was liable under a theory of negligent
14 entrustment; and that Dituri Construction and John Doe Construction were vicariously 15 liable for Dituri’s negligence. Id. ¶¶ 3.6, 5.1–5.4. Sztroin also claimed that American 16 Alternative was liable for bad faith, breach of contract, and violating the Consumer 17 Protection Act. Id. ¶¶ 6.1–7.5. Finally, Sztroin sought a declaratory judgment that he is 18 entitled to the full benefits under the insurance policy between Harbors Home and
19 American Alternative. Id. ¶ 6.3. 20 American Alternative removed the case to federal court on the ground of diversity 21 jurisdiction. Dkt. 1. American Alternative avers that it is a citizen of Delaware and New 22 Jersey, that Sztroin is a citizen of Washington, and that the amount in controversy 1 exceeds $75,000. Id. ¶¶ 6–8, 17–19. It also recognizes that Sztroin is not diverse from 2 Dituri, Hall, Dituri Construction, and John Doe Construction, who are also citizens of 3 Washington. Id. ¶ 9. However, American Alternative asserts that the Court should
4 disregard the citizenship of the nondiverse defendants based on “fraudulent joinder.” Id. 5 ¶¶ 16, 20. According to American Alternative, Sztroin “had no valid procedural basis to 6 name them in the same lawsuit as” American Alternative. Id. ¶ 9. 7 Sztroin moves to remand, contending that American Alternative’s removal was 8 improper because it was based on the doctrine of “fraudulent misjoinder” and the Ninth
9 Circuit has not adopted this doctrine. Dkt. 5 at 1, 5–6. He also asserts that, even if the 10 Court were to apply this doctrine, removal was improper because the claims against the 11 nondiverse defendants involve overlapping issues of fact and law with the claims against 12 American Alternative. Id. at 6–7. 13 American Alternative agrees that its removal was based on the doctrine of
14 fraudulent misjoinder and that the Ninth Circuit has not adopted this doctrine. See Dkt. 11 15 at 3, 7. Nevertheless, it asserts that fraudulent misjoinder is a valid basis for removal. Id. 16 at 7–12. It contends that, because it was improperly joined in the same lawsuit against the 17 nondiverse defendants, the Court should sever Sztroin’s claims against those defendants, 18 remand that portion of the case, and retain jurisdiction over the claims against American
19 20 21 22 1 Alternative.1 Id. at 12–15; Dkt. 6 at 1, 8. It also moves for partial summary judgment on 2 both the breach of contract claim and the request for a declaratory judgment. Dkt. 8. 3 II. DISCUSSION
4 Defendants may remove any action filed in state court over which federal district 5 courts have original jurisdiction. 28 U.S.C. § 1441(a). District courts have diversity 6 jurisdiction over actions in which the amount in controversy exceeds $75,000 and 7 complete diversity exists between the parties. 28 U.S.C. § 1332(a). 8 The removal statute is strictly construed against removal jurisdiction. Conrad
9 Assocs. v. Hartford Accident & Indem. Co., 994 F. Supp. 1196, 1198 (N.D. Cal. 1998). 10 As such, “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of 11 removal in the first instance.” Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992). The 12 strong presumption against removal jurisdiction means that the party asserting federal 13 jurisdiction has the burden of establishing that removal is proper. Id.
14 The Ninth Circuit has explained that “[t]here are two ways to establish fraudulent 15 joinder: ‘(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the 16 plaintiff to establish a cause of action against the non-diverse party in state court.’” 17 Grancare, LLC v. Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018) 18 (quoting Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009)). American
19 Alternative does not allege, and the Court does not conclude, that either of these two 20
21 1 American Alternative requests oral argument on the motion to remand. Dkt. 11 at 1. Because the briefing in support of and in opposition to this motion adequately addresses the issue 22 of fraudulent misjoinder, this request is DENIED. 1 means of establishing fraudulent joinder apply. Instead, American Alternative contends 2 that removal is properly based on the doctrine of fraudulent “misjoinder.” Dkt. 11 at 7. 3 This doctrine provides that fraudulent joinder also occurs when the plaintiff joins
4 both diverse and nondiverse defendants and the claim against the diverse defendant has 5 “no real connection” to any claim against a nondiverse defendant. Tapscott v. MS Dealer 6 Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996), abrogated on other grounds by Cohen 7 v. Off. Depot, Inc., 204 F.3d 1069, 1072–73 (11th Cir. 2000). Under this doctrine, such 8 egregious “misjoinder” of parties allows courts to ignore the citizenship of the nondiverse
9 parties upon removal. Id. 10 The parties agree that the Ninth Circuit has not adopted the doctrine of fraudulent 11 misjoinder. See Dkt. 5 at 1, 5; Dkt. 11 at 3. In fact, most district courts within the Ninth 12 Circuit have expressly declined to adopt it. See Peterson v. Kennewick, No.
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5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 MARK SZTROIN, CASE NO. C22-5608 BHS 8 Plaintiff, ORDER 9 v. 10 THOMAS A. DITURI, et al., 11 Defendants. 12
13 This matter comes before the Court on Plaintiff Mark Sztroin’s Motion to Remand 14 Case to State Court, Dkt. 5, and Defendant American Alternative Insurance Corporation’s 15 Motion to Sever, Dkt. 6, and Motion for Partial Summary Judgment, Dkt. 8. Because 16 American Alternative fails to establish that removal is proper, the motion to remand is 17 granted. Additionally, because remand is proper, the motion to sever and motion for 18 partial summary judgment are denied without prejudice with leave to refile in state court. 19 I. BACKGROUND 20 Sztroin alleges that he sustained injuries when Thomas Dituri struck him with a 21 pickup truck just after Sztroin exited his own vehicle. Dkt. 1-1, ¶ 3.1. Sztroin was on his 22 way to a physical therapy appointment with one of his patients. Id. ¶¶ 4.5–4.6. The 1 truck’s owner, Joseph Hall, provided Dituri with express or implied consent to drive the 2 truck. Id. ¶¶ 3.2–3.3. At the time of the collision, Dituri was operating within the scope of 3 his work for Thomas Dituri Construction LLC or John Doe Construction. Id. ¶ 3.6.
4 Sztroin’s employer, Harbors Home Health & Hospice, had an American 5 Alternative insurance policy that provided underinsured motorist (UIM) coverage. Id. 6 ¶¶ 1.5, 4.8, 4.11. American Alternative, through its agent Glatfelter Claims Management, 7 Inc., ultimately denied coverage to Sztroin under this policy, reasoning that Sztroin was 8 neither “occupying a covered auto” nor “using” his automobile when Dituri struck him.
9 Id. ¶¶ 4.9, 4.26–4.27. 10 Sztroin sued Dituri, Hall, Dituri Construction, John Doe Construction, and 11 American Alternative in Grays Harbor County Superior Court. Id. at 2. Sztroin alleged 12 that Dituri negligently caused his injuries; that Hall was vicariously liable for Dituri’s 13 negligence under the family car doctrine; that Hall was liable under a theory of negligent
14 entrustment; and that Dituri Construction and John Doe Construction were vicariously 15 liable for Dituri’s negligence. Id. ¶¶ 3.6, 5.1–5.4. Sztroin also claimed that American 16 Alternative was liable for bad faith, breach of contract, and violating the Consumer 17 Protection Act. Id. ¶¶ 6.1–7.5. Finally, Sztroin sought a declaratory judgment that he is 18 entitled to the full benefits under the insurance policy between Harbors Home and
19 American Alternative. Id. ¶ 6.3. 20 American Alternative removed the case to federal court on the ground of diversity 21 jurisdiction. Dkt. 1. American Alternative avers that it is a citizen of Delaware and New 22 Jersey, that Sztroin is a citizen of Washington, and that the amount in controversy 1 exceeds $75,000. Id. ¶¶ 6–8, 17–19. It also recognizes that Sztroin is not diverse from 2 Dituri, Hall, Dituri Construction, and John Doe Construction, who are also citizens of 3 Washington. Id. ¶ 9. However, American Alternative asserts that the Court should
4 disregard the citizenship of the nondiverse defendants based on “fraudulent joinder.” Id. 5 ¶¶ 16, 20. According to American Alternative, Sztroin “had no valid procedural basis to 6 name them in the same lawsuit as” American Alternative. Id. ¶ 9. 7 Sztroin moves to remand, contending that American Alternative’s removal was 8 improper because it was based on the doctrine of “fraudulent misjoinder” and the Ninth
9 Circuit has not adopted this doctrine. Dkt. 5 at 1, 5–6. He also asserts that, even if the 10 Court were to apply this doctrine, removal was improper because the claims against the 11 nondiverse defendants involve overlapping issues of fact and law with the claims against 12 American Alternative. Id. at 6–7. 13 American Alternative agrees that its removal was based on the doctrine of
14 fraudulent misjoinder and that the Ninth Circuit has not adopted this doctrine. See Dkt. 11 15 at 3, 7. Nevertheless, it asserts that fraudulent misjoinder is a valid basis for removal. Id. 16 at 7–12. It contends that, because it was improperly joined in the same lawsuit against the 17 nondiverse defendants, the Court should sever Sztroin’s claims against those defendants, 18 remand that portion of the case, and retain jurisdiction over the claims against American
19 20 21 22 1 Alternative.1 Id. at 12–15; Dkt. 6 at 1, 8. It also moves for partial summary judgment on 2 both the breach of contract claim and the request for a declaratory judgment. Dkt. 8. 3 II. DISCUSSION
4 Defendants may remove any action filed in state court over which federal district 5 courts have original jurisdiction. 28 U.S.C. § 1441(a). District courts have diversity 6 jurisdiction over actions in which the amount in controversy exceeds $75,000 and 7 complete diversity exists between the parties. 28 U.S.C. § 1332(a). 8 The removal statute is strictly construed against removal jurisdiction. Conrad
9 Assocs. v. Hartford Accident & Indem. Co., 994 F. Supp. 1196, 1198 (N.D. Cal. 1998). 10 As such, “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of 11 removal in the first instance.” Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992). The 12 strong presumption against removal jurisdiction means that the party asserting federal 13 jurisdiction has the burden of establishing that removal is proper. Id.
14 The Ninth Circuit has explained that “[t]here are two ways to establish fraudulent 15 joinder: ‘(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the 16 plaintiff to establish a cause of action against the non-diverse party in state court.’” 17 Grancare, LLC v. Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018) 18 (quoting Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009)). American
19 Alternative does not allege, and the Court does not conclude, that either of these two 20
21 1 American Alternative requests oral argument on the motion to remand. Dkt. 11 at 1. Because the briefing in support of and in opposition to this motion adequately addresses the issue 22 of fraudulent misjoinder, this request is DENIED. 1 means of establishing fraudulent joinder apply. Instead, American Alternative contends 2 that removal is properly based on the doctrine of fraudulent “misjoinder.” Dkt. 11 at 7. 3 This doctrine provides that fraudulent joinder also occurs when the plaintiff joins
4 both diverse and nondiverse defendants and the claim against the diverse defendant has 5 “no real connection” to any claim against a nondiverse defendant. Tapscott v. MS Dealer 6 Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996), abrogated on other grounds by Cohen 7 v. Off. Depot, Inc., 204 F.3d 1069, 1072–73 (11th Cir. 2000). Under this doctrine, such 8 egregious “misjoinder” of parties allows courts to ignore the citizenship of the nondiverse
9 parties upon removal. Id. 10 The parties agree that the Ninth Circuit has not adopted the doctrine of fraudulent 11 misjoinder. See Dkt. 5 at 1, 5; Dkt. 11 at 3. In fact, most district courts within the Ninth 12 Circuit have expressly declined to adopt it. See Peterson v. Kennewick, No. 18-cv-1302- 13 BJR, 2018 WL 6573155, at *8 (W.D. Wash. Dec. 13, 2018) (collecting cases). In
14 criticizing the doctrine, courts and legal scholars have explained “that questions of 15 joinder under state law do not implicate federal subject matter jurisdiction, federal 16 jurisdiction is to be narrowly construed, and the fraudulent misjoinder doctrine has 17 created an unpredictable and complex jurisdictional rule.” In re Prempro Prods. Liab. 18 Litig., 591 F.3d 613, 621–22 (8th Cir. 2010) (citing Osborn v. Metro. Life Ins. Co., 341 F.
19 Supp. 2d 1123, 1127 (E.D. Cal. 2004); Rutherford v. Merck & Co., 428 F. Supp. 2d 842, 20 851 (S.D. Ill. 2006); 14B Charles Alan Wright & Arthur Miller, Federal Practice and 21 Procedure § 3723 (4th ed. 2009)). Furthermore, in declining to apply the doctrine of 22 fraudulent misjoinder, at least one district court has explained that “the better rule would 1 require [the diverse defendant] to resolve the claimed misjoinder in state court, and then, 2 if that court severed the case and diversity then existed, it could seek removal of the 3 cause to federal court.” Osborn, 341 F. Supp. 2d at 1127.
4 Considering the great weight of authority both criticizing and declining to adopt 5 the fraudulent misjoinder doctrine, this Court also declines to adopt it. “This conclusion 6 is supported by the well-recognized doctrine that a removing party bears a heavy burden 7 of persuasion and that if there is any doubt as to whether removal was proper, remand is 8 required.” Id. at 1128 (citing Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996)).
9 But even if the Court were to recognize fraudulent misjoinder, American 10 Alternative has not established that it is entitled to relief. Again, fraudulent misjoinder 11 occurs when the claim against a diverse defendant has “no real connection” to any claim 12 against a nondiverse defendant. Tapscott, 77 F.3d at 1360. This does not mean that mere 13 misjoinder amounts to fraudulent misjoinder. Id. Instead, the misjoinder must be “so
14 egregious as to constitute fraudulent joinder.” Id.; accord Osborn, 341 F. Supp. 2d at 15 1127 (“[E]ven in the Eleventh Circuit not all procedural misjoinder rises to the level of 16 fraudulent joinder.”). Indeed, one district court has explained that a defendant must 17 establish not only that “the joinder is procedurally inappropriate,” but also that it 18 “accomplishes no other objective than the manipulation of the forum” and that “the rights
19 of the parties and interest of justice is best served by severance.” Greene v. Wyeth, 344 F. 20 Supp. 2d 674, 685 (D. Nev. 2004). 21 American Alternative does not establish that the claims against it have no real 22 connection to the claims against the nondiverse defendants. Sztroin’s claims against the 1 nondiverse defendants allege that they are liable for damages resulting from Dituri 2 striking Sztroin with a pickup truck while Sztroin was “mere steps” from his own vehicle. 3 See Dkt. 1-1, ¶¶ 3.1, 3.4–3.6, 4.7, 5.1–5.4. Sztroin’s complaint alleges that American
4 Alternative denied UIM coverage because Sztroin was neither “occupying a covered 5 auto” nor “using” his automobile when the collision occurred. Id. ¶¶ 4.26, 4.27. 6 In Washington, to establish that a person was “using” a vehicle for purposes of 7 UIM coverage “depends on the facts of each case.” Butzberger v. Foster, 151 Wn.2d 396, 8 410 (2004). And the plaintiff must show that (1) a causal relation or connection exists
9 between the injury and the use of the insured vehicle, (2) the person was in reasonably 10 close geographic proximity to the insured vehicle, although the person need not be 11 actually touching it, and (3) the person was engaged in a transaction essential to the use 12 of the vehicle. Id. 13 Considering these factors, the claims against American Alternative appear to
14 involve similar factual issues as the claims against the nondiverse defendants—namely, 15 the factual circumstances surrounding the collision itself. Moreover, Sztroin persuasively 16 argues that the amount in damages resulting from the collision is at issue in his claims 17 against both American Alternative and the nondiverse defendants. See Dkt. 5 at 6. 18 Accordingly, there is at least some connection between Sztroin’s claims against
19 American Alternative and his claims against the nondiverse defendants. 20 21 22 1 III. ORDER 2 Because American Alternative does not meet its heavy burden to establish that 3 removal was proper, Sztroin’s Motion to Remand Case to State Court, Dkt. 5, is
4 GRANTED. Furthermore, because remand is proper, American Alternative’s Motion to 5 Sever, Dkt. 6, and Motion for Partial Summary Judgment, Dkt. 8, are DENIED without 6 prejudice with leave to refile in state court. 7 Dated this 12th day of October, 2022. A 8 9 BENJAMIN H. SETTLE 10 United States District Judge
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