Opinion
No: 02-CV-916 J (JAH)
September 3, 2002
ORDER DENYING PLAINTIFF'S MOTION TO REMAND; ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
This matter comes before the Court on Plaintiff's motion to remand, and Defendant Brian G. Konishi's motion to dismiss Plaintiff's third claim. The Court set the matter for hearing on March 4, 2002, but after a thorough review of the papers submitted found the matter suitable for decision without oral argument, and now decides the matter on the papers submitted and without oral argument pursuant to Civil Local Rule 7.14.1. For the reasons set forth below, the Court finds that Defendant Brian G. Konishi was fraudulently joined to this action. The Court therefore DENIES Plaintiff's motion to remand and GRANTS Defendant's motion to dismiss Plaintiff's third claim.
BACKGROUND
Plaintiff Robert Stoll was insured by Defendant Allstate Insurance. Plaintiff paid his premium payments in person at the office of his Allstate Insurance agent, Defendant Brian C. Konishi. (Motion to Remand at 1). Plaintiff alleges that Defendant Konishi falsely represented the amount owed on Plaintiff's policy in February 2001; Plaintiff paid the amount and believed that he was fully covered by Allstate. (Id.) Plaintiff was involved in an automobile accident on April 8, 2001. He submitted a claim to Allstate and was denied due to nonpayment of his premium. (Id. at 2.)
On March 27, 2002, Plaintiff brought suit in state court against Defendants Allstate Insurance and Brian G. Konishi, alleging breach of contract, breach of implied covenant of good faith and fair dealing, and fraud. Defendants removed the case to this Court on May 10, 2002.
DISCUSSION
I. Motion to Remand
A. Legal Standard
Under 28 U.S.C. § 1447(c), the court may remand a case to state court only (1) if
there was a defect in the removal procedure and the motion to remand is made within thirty (30) days after the filing of the notice of removal under section 1446(a); or (2) if at any time before final judgment it appears that the district court lacks subject matter jurisdiction. In interpreting this section, the Ninth Circuit has held that if jurisdiction exists and is properly invoked, the district court has no discretion to remand the case to state court. See Grote v. Trans World Airlines, Inc., 905 F.2d 1307, 1310 (9th Cir. 1990).
B. Fraudulent Joinder
A defendant may remove a case with a non-diverse defendant to federal court on the basis of diversity jurisdiction, and seek to persuade the district court that this defendant was fraudulently joined. Good v. Prudential insurance Company of America, 5 F. Supp.2d 804, 806 (N.D. Cal. 1998); see also Charlin v. Allstate Insurance Co., 19 F. Supp.2d 1137, 1140 (C.D. Cal. 1998). In the Ninth Circuit, "if a plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to the settled rules of the state, the joinder of the resident defendant is fraudulent." McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987); see also Gasnik v. State Farm Ins, Co., 825 F. Supp. 245, 249 (E.D. Cal. 1992). If the court finds that a defendant was fraudulently joined, the court "may disregard the joinder and retain jurisdiction." Lewis v. Time Inc., 83 F.R.D. 455, 460 (E.D. Cal. 1979), aff'd, 710 F.2d 549 (9th Cir. 1983).
C. Analysis
Despite the presence of a non-diverse defendant, Defendants removed this case to federal court based on diversity grounds, pursuant to 28 U.S.C. § 1332 and § 1441(b). Defendants contend that Defendant Brian G. Konishi, a non-diverse citizen of California, has been brought into this action as a "sham defendant, fraudulently joined to destroy diversity." (Defendant's Notice of Removal at 4.) In response, Plaintiff argues that Mr. Konishi is an agent of Allstate insurance, and should be held "independently liable for his actions in the course of his duties." (Motion to Remand at 3.)
However, it is "well settled" under California law that "an insurance agent acting within the course and scope of his employment cannot be held liable for damages resulting from a negligent failure to insure." Gasnik, 825 F. Supp. at 249, citing Lippert v. Bailey 241 Cal.App.2d 376, 382 (1966); see also Good, 5 F. Supp.2d at 807. Accordingly, courts in the Ninth Circuit find insurance agents to be "improper defendants" in fraud and negligent representation cases. Good, 5 F. Supp.2d at 806; Campbell v. Allstate Ins. Co., 1995 WL 376926 (C.D. Cal. 1995). Plaintiff's attempt to sue Defendant Konishi, an agent of Allstate Insurance, for actions performed within the scope of his duties for Allstate, is therefore improper under California law. Accordingly, the Court finds that Defendant Plaintiff has failed to state a cause of action against Defendant Konishi, and joinder of this defendant was fraudulent. Charlin, 19 F. Supp.2d at 1140. Plaintiff's motion to remand is DENIED.
II. Motion to Dismiss
The Court, in its evaluation of a dismissal for failure to state a claim upon which relief can be granted, must (1) construe the complaint in the light most favorable to the plaintiff, (2) accept all well-pled factual allegations as true, and (3) determine whether plaintiff can prove any set of facts to support a claim that would merit relief. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir. 1996). Following a consideration of this established rule, dismissal is proper only where there is either a "lack of cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). As discussed above, Plaintiff has failed to state a cause of action against Defendant Konishi. Because the Court finds that Defendant Konishi was fraudulently joined, Defendant's motion to dismiss Plaintiff's third claim is GRANTED.
CONCLUSION
For the foregoing reasons, the Court finds that Defendant Konishi was fraudulently joined. Plaintiff's motion to remand is DENIED. Defendant's motion to dismiss Plaintiff's third claim is GRANTED.