Opinion
Civil Action No. 03-0685, SECTION "C" (5)
April 21, 2003
MINUTE ENTRY
Before the Court is plaintiffs' Motion to Remand on the grounds that Defendant, State Farm Fire and Casualty Company ("State Farm") is an "authorized insurer" in the State of Louisiana and as such, pursuant to La.R.S. 22:629(A)(2) is obligated to settle any dispute within the state court forum. Also, Plaintiffs contend that pursuant to La.R.S. 22:655(B)(1), commonly referred to as the Louisiana direct action statute, Defendant "is precluded from removing this matter to this court." (Rec. Doc. 9 at 2). For the following reasons Plaintiffs motion is DENIED.
Title 28 U.S.C. § 1441 provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant." Id. Pursuant to 28 U.S.C. § 1332, the Court has original jurisdiction over this civil action because "the matter in controversy exceeds the sum or value of $75,000, . . . and is between (1) citizens of different States." Id. Here, it is undisputed that Plaintiffs are citizens of Louisiana and pursuant to § 1332(c)(1) State Farm is a citizen of the State of Illinois. Additionally, it is "facially apparent" that the claims are likely to exceed $75,000. See Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880 (5th Cir. 2000).
As Defendant points out, although in certain situations the citizenship of an insurer is extended to that of the state of the insured's citizenship under 28 U.S.C. § 1332 (c)(1), this case does not present such a situation. Section 1332(c)(1) provides 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 the State of which the insured is a citizen. Id. However, this part of the statute is not applicable to the case at bar, because this lawsuit is neither a "direct action" nor a case concerning a policy of "liability insurance." See Hull v. Allstate Insurance Company, Inc., 682 F. Supp. 867; 868 (M.D.La. 1988) (dismissing plaintiff/homeowner's motion to remand and holding that "[t]he Louisiana Direct Action Statute, La. R.S. 22:655, applies only to liability actions and not to contract disputes."); see also Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d 992, 995 (5th Cir. 1985); and Rosa v. Allstate Ins. Co., 981 F.2d 669, 675 (2d Cir. 1992) (acknowledging Fifth Circuit's holding in Succession of Roy and limitations to § 1332(c) proviso).
"Liability insurance" has been interpreted "as meaning an indemnity agreement which protects the insured against his liability to others." Hull, 682 F. Supp. at 868, citing Aetna Casualty Sur. Ins. Co. v. Greene, 606 F.2d 123, 126 (6th Cir. 1979). Here, the dispute at issue is contractual in nature. In the Complaint, Plaintiffs seek the replacement of their home and its contents and additional living expenses allegedly due under a policy of homeowner's insurance with State Farm, as well as damages for physical and emotional injuries as a result of exposure to mold and denial of the claim. Thus, Plaintiffs' claim does not qualify as a "direct action," nor does it not concern a dispute over liability insurance. See Rosa, 981 F.2d at 674 ("[S]imply because an insurer is a direct party does not make the litigation a 'direct action.'") (citations omitted).
Finally, Plaintiffs' arguments concerning personal jurisdiction and venue under certain articles of the Louisiana Civil Code are misplaced. As State Farm correctly points out, "Louisiana jurisdiction does not work to defeat federal jurisdiction." (Rec. Doc. 10). "Federal law, not state law, governs whether federal jurisdiction exists." Poynot v. Hicks, Civ.A. No. 02-2068, 2002 WL 3104174 at *2 (E.D.La., Sept. 12, 2002) (Zainey, J.). As discussed above, in accord with federal jurisprudence, original federal jurisdiction under § 1441 is not limited by § 1332(c) and therefore, is appropriately exercised in this case.
Accordingly, IT IS ORDERED that Plaintiffs' Motion to Remand is DENIED.