Morris v. Simsol Ins. Servs.
| Decision Date | 16 December 2013 |
| Docket Number | DOCKET NO. 2:13-cv-02514 |
| Parties | PATRICIA MORRIS v. SIMSOL INSURANCE SERVICES, ET AL |
| Court | U.S. District Court — Western District of Louisiana |
MEMORANDUM ORDER
Before the court is the motion to remand, [doc. 12] filed by plaintiff Patricia Morris (hereafter, "plaintiff"). Defendants in this matter are Simsol Insurance Services (hereafter, "Simsol"), Colonial Claims Corporation (hereafter, "Colonial"), and Simultaneous Solutions Inc. (hereafter "Simultaneous Solutions") (hereafter, collectively, "defendants").
Plaintiff argues that removal was untimely and that this court lacks subject matter jurisdiction. Defendants respond that removal was timely because federal question jurisdiction only became apparent upon receipt of plaintiff's second amended petition, which asserted a claim under a Standard Flood Insurance Policy. Defendants argue that this court has original and exclusive jurisdiction over such claims pursuant to 42 U.S.C. § 4072, 28 U.S.C. § 1331, and 28 U.S.C. § 1337. Doc. 20, p. 1. Defendants finally argue that this court may exercise supplemental jurisdiction under 28 U.S.C. § 1367 over plaintiff's other claims. Id.
For the reasons that follow we conclude that subject matter jurisdiction is present and that removal was procedurally proper. Accordingly, IT IS ORDERED that the motion to remand is DENIED.
This matter concerns the handling of plaintiff's insurance claim following Hurricane Ike in 2008. Doc. 1, att. 1, p. 5. Defendants Colonial and Simsol are adjusting companies hired by insurers to assist with the adjustment of property claims. Simultaneous Solutions is a software company that provides computer programs for claim adjustment and estimation. Plaintiff claims that, after she submitted her insurance claim, her insurer retained Colonial and Simsol to adjust the claim and that both companies used the Simultaneous Solutions software. Id. at 5.
On February 20, 2013, Plaintiff sued Colonial and Simsol in the 38th Judicial District Court in and for Cameron Parish, Louisiana. Id. at 4. She later added Simultaneous Solutions as a defendant. Id. at 25. Plaintiff alleged that her home in Cameron, Louisiana sustained damage "as a result of wind, rain, and flood" associated with Hurricane Ike. Id. She further alleged that, at all relevant times, her home "was insured under a policy of homeowners insurance by Assurant Specialty Property by and through American Bankers Insurance Company of Florida." Id. Plaintiff did not name her insurer as a defendant.
Plaintiff's petition alleged that defendants caused her claim to be underpaid by failing to include sales taxes on repair materials in the estimate. Doc. 12, att. 3, p. 2. Plaintiff claimed that defendants misrepresented the inclusion of sales tax, and are therefore liable under Louisiana Civil Code article 2324 and the Louisiana Racketeering Act. Id.; see also La. Civ. Code art. 2324; La. R.S. § 15:1351 et. seq.
On June 24, 2013, Colonial and Simultaneous Solutions jointly filed a dilatory exception of vagueness and ambiguity. Doc. 1, att. 2, pp. 56-62. Simsol filed a nearly identical exception shortly thereafter. Id. at 77-82. Defendants requested that plaintiff specify whether her underlying insurance claim was for a flood loss or a wind loss. Id. at 60. Furthermore,defendants requested that plaintiff provide the specific policy and claim numbers connected to the alleged adjustments. Id. at 60, 81.
On July 31, 2013, after hearing oral argument, the state court ordered plaintiff to amend her complaint to include the policy and claim numbers. Doc. 1, att. 2, p. 121. On August 7, 2013, plaintiff filed her second amended petition, which identified: (1) a wind damage claim under a homeowner's policy; and (2) a flood damage claim under a Standard Flood Insurance Policy (hereafter, "SFIP") issued pursuant to the National Flood Insurance Program (hereafter, "NFIP"). Doc. 1, att. 2, p. 116.
On August 20, 2013, defendants removed the case to this court. Doc. 1. Defendants assert that this court has original and exclusive subject matter jurisdiction over all NFIP-related claims, including claims against adjusters based upon state law. Doc. 1, pp. 4-10. Defendants also argue that removal was timely under 28 U.S.C. § 1446(b)(3), because federal jurisdiction was not apparent until the receipt of plaintiff's second amended petition. Id. at 10-11.
Plaintiff now moves to remand. Doc. 12. Plaintiff argues that subject matter jurisdiction is not present as her claims are "entirely grounded in Louisiana state law" and do not involve the NFIP. Doc. 23, p. 4. Plaintiff further argues that removal was untimely because defendants "were aware and/or had the capability to ascertain that a flood claim was one of several claims adjusted by Defendants by virtue of information provided in Plaintiff's original petition." Doc. 12, att. 3, p. 3. In support of the untimeliness argument, plaintiff points to two allegations in her original petition: (1) the allegation in paragraph 6 that her home sustained "wind, rain, and flood" damage; and (2) the allegation in paragraph 8 that defendants retained "NFIP Services" as a third-party adjuster. Doc. 12, att. 3, p. 4.
Alternatively, plaintiff claims that she provided her insurance policy numbers via an email to Colonial on March 5, 2013. Doc. 23, p. 3; see also doc. 23, att. 1. According to plaintiff, the information contained in the email triggered the 30-day removal clock, and not the second amended petition, which simply contained the same information.
Two questions are before the court: (A) whether subject matter jurisdiction is present; and (B) whether defendant's removal was timely. For the following reasons, we answer both questions in the affirmative.
Any civil action brought in a State court of which the United States district courts have original jurisdiction may be removed to the proper district court. 28 U.S.C. § 1441(a) (2013). District courts have original jurisdiction over cases "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. "[A] cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). The removing party bears the burden of showing that removal was procedurally proper and that federal jurisdiction exists. See De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). "If the right to remove is doubtful, the case should be remanded." Case v. ANPAC Louisiana Ins. Co., 466 F. Supp. 2d 781, 784 (E.D. La. 2006); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) (); Perkins v. State of Miss., 455 F.2d 7 (5th Cir. 1972) (same).
Plaintiff's second amended petition made clear that her claim involves an SFIP issued pursuant to the NFIP. Under the NFIP, the director of the Federal Emergency Management Agency (hereafter, "FEMA") is authorized to retain private insurance companies, referred to as Write-Your-Own companies (hereafter, "WYO companies"), to help administer the program. Moore & Moore Trucking, LLC v. Beard, 2013 WL 828344 at *3 (E.D. La. 3/6/2013). The WYO companies then directly issue federally underwritten SFIPs to the public. Id. Additionally, WYO companies may retain private insurance adjusters companies to handle claims made under the SFIP. Id. C.E.R. 1988, Inc. v. Aetna Cas. & Sur. Co., 386 F.3d 263, 267 (3d Cir. 2004).
An SFIP, such as the one at issue in this case, is a codified federal law. 44 C.F.R. pt. 61, App. A(1). Neither the WYO companies nor the private adjusters they hire have the authority to alter, vary, or amend any provision of an SFIP. See 44 C.F.R. §61.13(d). An insurance adjuster is not authorized to approve or disapprove NFIP claims, or to tell an insured whether the claim will ultimately be approved. 44 C.F.R. pt. 61, App. A(1), Art. VII(J)(7),(8).
The NFIP grants original and exclusive jurisdiction to the United States District Courts over all lawsuits against FEMA or a WYO insurer regarding an NFIP claim. 42 U.S.C. § 4072; see also Palmieri v. Allstate Ins. Co., 445 F.3d 179, 185-86 (3d. Cir. 2008). Furthermore, all SFIPs contain the following provision:
This policy and all disputes arising from the handling of any claim under the policy are governed exclusively by the flood insurance regulations issued by FEMA, the National Flood Insurance Act of 1968 . . . , and Federal common law.
44 C.F.R. pt. 61, app. (A)(1), art. IX (emphasis added).
Federal law preempts all state law causes of action that arise from the handling of SFIP claims by a WYO insurance company. See Campo v. Allstate Ins. Co., 562 F.3d 751, 754 (5th Cir. 2009) (citing Wright v. Allstate Ins. Co., 415 F.3d 384, 390 (5th Cir. 2005)). In Moore & Moore Trucking, LLC v. Beard, 2013 WL 828344 (E.D. La. 3/6/2013), the court held that federal preemption also applies to claims against private adjusters. The Moore & Moore court emphasized the provision of article IX of the SFIP mandating the application of federal law to "all disputes arising from the handling of any claim under the policy." Moore & Moore, 2013 WL 828344 at *4. The court noted that the plaintiff's state law-claims against the defendant insurance adjusters arose solely from the adjusters' conduct during the course of adjusting an SFIP claim, and that "the substance of plaintiff's petition contests the manner in which the . . . claim was handled." Id. at *6. Therefore, the court held that federal jurisdiction existed over plaintiff's NFIP-related claim under 42 U.S.C. § 4072, or,...
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