Opinion
CIVIL ACTION NO. 3:00CV-507-H
November, 2000
MEMORANDUM AND ORDER
The Court now considers Plaintiffs' motion to remand this case to Jefferson Circuit Court. The case was initially removed to federal court on August 22, 2000 on the basis of diversity jurisdiction. Defendants asserted that the citizenship of Kentucky Farm Bureau Mutual Insurance Company ("Farm Bureau") should be disregarded under the doctrine of fraudulent joinder.
Plaintiffs filed their complaint in state court alleging injuries as a result of negligence by Michael White, the driver of a GMC truck which struck the rear of a vehicle driven by Diane McReynolds, now deceased. The complaint also charges Picker International with negligently causing White to be the driver of the GMC truck and further alleges that White was acting on behalf of Picker International and/or Marconi Medical Systems, Inc. at the time of the accident. Presumably, Plaintiffs will claim either direct or derivative negligence as to Picker or Marconi.
Plaintiffs made no direct claim of negligence against Farm Bureau. The complaint does assert that Farm Bureau issued several insurance policies which contained underinsured motorists benefits payable to Plaintiffs. Presumably, should Plaintiffs obtain a verdict against White, Picker or Marconi which cannot be satisfied then Farm Bureau would be called upon to pay according to its policy. This possibility of potential liability, however, does not create a current colorable claim against Farm Bureau and the Court will therefore deny the motion to remand.
This Court only has jurisdiction if the parties are completely diverse. 28 U.S.C. § 1332(a). Farm Bureau's presence as a party would destroy complete diversity; however, they are only a proper defendant if they were not fraudulently joined. Coyne v. American Tobacco Co., 183 F.3d 488, 493-94 (6th Cir. 1999). To determine fraudulent joinder, this Court must determine whether the defendants "present sufficient evidence that a plaintiff could not have established a cause of action against non-diverse defendants under state law." Id. at 493. If no colorable claim exists, then Farm Bureau would be fraudulently joined, depriving this Court of jurisdiction.
Plaintiffs' only claim against Farm Bureau is a derivative one. That is, Farm Bureau will be liable to Plaintiffs in the event that the judgment recovered against the owner of the negligent vehicle exceeds the liability policy limits on that vehicle. Plaintiffs have no direct claim against Farm Bureau until those events occur. Philadelphia Indem. Ins. Co. v. Morris, Ky., 990 S.W.2d 621, 627 (1999). In Morris, the Kentucky Supreme Court held that the triggering event for coverage occurs when "the insured's damages exceed the tortfeasor's liability limits." Id. at 627. When damages remain disputed, the mere possibility that damages will exceed the tortfeasor's liability limits does not suffice to trigger underinsured motorists coverage. Prior to coverage being triggered, Plaintiffs have not stated a colorable claim against Farm Bureau. Coots v. Allstate Insurance Co., Ky., 853 S.W.2d 895 (1993), does not support Plaintiffs' claims since that case discussed proper parties after damages had been determined.
To be sure, Farm Bureau may have the right to appear and defend to the extent of its interest. However, that right does not mean that Plaintiffs have a direct action against Farm Bureau at this time. Consequently, Farm Bureau cannot be deemed a party for purposes of determining diversity.
The Court agrees with Defendants that their notice of removal was filed within the thirty-day period provided in 28 U.S.C. § 1446(b). The time within which to file a notice of removal begins upon receipt by defendant of the initial pleading, not upon receipt by the Secretary of State of such a pleading.
Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that Plaintiffs' motion to remand is DENIED.