Phila. Indem. Ins. Co. v. Yap

• Decision Date: 16 May 2022
• Docket Number: 3:21-CV-1236
• Parties: PHILADELPHIA INDEMNITY INSURANCE COMPANY, Plaintiff, v. TINA YAP, VIRGINIA CHAN, and ADVENTURE SPORTS, INC., Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

PHILADELPHIA INDEMNITY INSURANCE COMPANY, Plaintiff, v. TINA YAP, VIRGINIA CHAN, and ADVENTURE SPORTS, INC., Defendant.

No. 3:21-CV-1236

United States District Court, M.D. Pennsylvania

May 16, 2022

MEMORDANDUM OPINION

Robert D. Mariani, United States District Judge.

I. Introduction

Presently before the Court are three pending motions: Motion to Transfer Venue Pursuant to 28 U.S.C. §1404(a) or in the Alternative to Dismiss Pursuant to the Doctrine of Forum Non Conveniens (Doc. 2) by Defendant Virginia Chan Motion to Remand (Doc. 6) by Plaintiff Philadelphia Indemnity Insurance Company, and Motion to Transfer Venue Pursuant to 28 U.S.C. §1404(a) or in the Alternative to Dismiss Pursuant to the Doctrine of Forum Non Conveniens (Doc. 8) by Defendant Tina Yap, as Administratix Ad Prosequendum of the Estate of Cheeyan Yap. Although it appears that all parties contend that the Middle District of Pennsylvania is not the proper venue for this case, the Court will deny all three Motions and retain jurisdiction for the reasons set forth below.

II. Procedural History and Factual Background

Cheeyan Yap and Virginia Chan rented a canoe from Adventure Sports, Inc. on May 25, 2018, in Marshall Creek, Monroe County, Pennsylvania. (Doc. 6-1 at 12). While canoeing on the Delaware River, Ms. Chan and Mr. Yap's canoe capsized, and both Ms. Chan and Mr. Yap fell into the water on the New Jersey side of the Delaware River. (Id. at 17). Ms. Chan was rescued, but Mr. Yap drowned in the Delaware River and his body was not recovered until June 2, 2018. (Id.).

The underlying action to which the above-captioned action is related was filed in the United States District Court for the District of New Jersey on February 26, 2019. (Doc. 6-1 at 16). In that case, Tina Yap, Mr. Yap's wife, individually and as Administratix Ad Prosequendum of the Estate of Cheeyan Yap (hereinafter referred to as “Yap”) filed a civil complaint against Adventure Sports seeking damages for the drowning death of her husband, Mr. Yap. (Id. at 16). The complaint was later amended to assert a negligence claim against Ms. Chan. (Id.).

The above-captioned action was originally filed in the Court of Common Pleas of Monroe County, Pennsylvania on June 21, 2021. (Doc. 1 at ¶ 1). Plaintiff Philadelphia asserts 4 claims: declaratory relief against Yap (Count I); declaratory relief against Chan (Count II); breach of contract against Yap (Count III); and breach of contract against Chan (Count IV). (Doc. 6-1 at 22-31). Although no claims are asserted against it, Philadelphia named Adventure Sports as a defendant in this action. On July 14, 2021, Chan removed this matter to the United States District Court for the Middle District of Pennsylvania based on diversity jurisdiction. (See Doc. 1).

The above-captioned matter relates to the contractual indemnity obligations that Philadelphia alleges Chan and Yap both entered into with Adventure Sports when they rented canoes from Adventure Sports on May 25, 2018. (Doc. 6-1 at 12-13). Among other things, the “Acknowledgement of Risks & Acceptance of Responsibility Release of Liability” section of the contract signed by Chan and Yap provides:

I, for myself and on behalf of my heirs, assigns, personal representatives and the next of kin, HEREBY RELEASE, INDEMNIFY, AND HOLD HARMLESS, ADVENTURE SPORTS, their officers, officials, agents and/or employees, other participants, sponsoring agencies, sponsors, advertisers, and if applicable, owner and lessor of premises used for this activity (“releases"), WITH RESPECT TO ANY AND ALL INJURY, DISABILITY, DEATH, or loss or damage to person or property associated with my presence or participation, WHETHER ARISING FROM THE NEGLIGENCE OF THE RELEASEES OR OTHERWISE, to the fullest extent permitted by law.

(Doc. 6-1 at 36).

Philadelphia issued a Commercial General Liability Policy to Adventure Sports with a $1, 000, 000 per occurrence limit. (See Doc. 6-1 at 64-229). Philadelphia has provided Adventure Sports with a defense in the underlying action. (Doc. 6 at ¶ 14). Philadelphia filed the instant action due to Chan and Yap's alleged “failure to assume the defense of Adventure Sports in connection with the Underlying Action, ” which has allegedly caused Philadelphia to have “incurred significant costs, expenses, and legal fees in connection with the defense of Adventure Sports in that Underlying Action.” (Doc. 6-1 at 21). According to Philadelphia, Chan and the Yap's “failure to acknowledge and assume the complete indemnity obligation in favor of Adventure Sports in connection with the Underlying Action” has created a possibility in which Plaintiff “may be called upon to indemnify Adventure Sports under the Philadelphia Policy relative to any adverse judgment or agreed settlement of the Underlying Action.” (Id. at 21-22).

III. Analysis

Pending before the Court are three motions: Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) or in the Alternative, to Dismiss Pursuant to the Doctrine of Forum Non Conveniens by Defendant Chan (Doc. 2), Motion to Remand by Plaintiff Philadelphia (Doc. 6), and Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) or in the Alternative, to Dismiss Pursuant to the Doctrine of Forum Non Conveniens by Defendant Yap (Doc. 8). Yap's Motion to Transfer “incorporates by reference... the facts and legal arguments set forth in the Motion to Transfer Venue Pursuant to 28 U.S.C. 1404([a]) or in the Alternative to Dismiss Pursuant to the Doctrine of Forum Non Conveniens filed on behalf of Defendant, Virginia Chan.” (Doc. 8 at 1-2; Doc. 9 at 1). As such, the Court will consider Chan and Yap's Motions to Transfer together. The Court will first address Plaintiff Philadelphia's Motion to Remand.

a. Motion to Remand

Philadelphia makes two arguments in its Motion to Remand: (1) Adventure Sports' Pennsylvania citizenship defeats complete diversity and, because “Chan's removal is predicated entirely on diversity jurisdiction, ” this case should be remanded for lack of subject matter jurisdiction; and (2) “this Court should decline to exercise jurisdiction over this declaratory judgment proceeding because it exclusively addresses state law issues and matters of local concern.” (Doc. 7 at 1). Adventure Sports, a named defendant, filed a brief in support of Plaintiffs Motion to Remand (Doc. 27) in which it “incorporates by reference herein the Motion [to Remand] and supporting Memorandum of Law to Remand filed by Philadelphia Indemnity Insurance Company in connection with the above-captioned matter.” (Doc. 27 at 1).

“Removal statutes are to be strictly construed, with all doubts to be resolved in favor of remand.” Brown v. Jevic, 575 F.3d 322, 326 (3d Cir. 2009) (citing Batoffv. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992)); see also Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 219 (3d Cir. 2005) (“The statute governing removal, 28 U.S.C. § 1441, must be strictly construed against removal.”). “It is now settled in this Court that the party asserting federal jurisdiction in a removal case bears the burden of showing, at all stages of litigation, that the case is properly before the federal court.” Frederico v. Home Depot, 507 F.3d 188, 193 (3d Cir. 2007) (citing Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392 (3d Cir. 2004)). The “removing party bears the burden of establishing federal jurisdiction.” A.S. Blue, Inc. v. One Beacon Ins. Co., 2013 WL 2317792, at *1 (citing Mallalieu-Golder Ins. Agency, Inc. v. Executive Risk Indem., Inc., 254 F.Supp.2d 521, 523 (M.D.Pa. 2003)).

In removing the above-captioned matter to this court, Defendant Chan alleged jurisdiction is proper pursuant to 28 U.S.C. 1332 because there exists complete diversity and the amount in controversy is greater than $75, 000. (Doc. 1 at 2). In its Motion to Remand, Plaintiff Philadelphia argues that complete diversity does not exist because both Plaintiff and Defendant Adventure Sports are citizens of Pennsylvania. (See generally Doc. 6). Defendant Chan asserts that Defendant Adventure Sports is a “nominal” party and its citizenship should not destroy diversity, while Plaintiff Philadelphia argues that Defendant Adventure Sports is an indispensable party and has an active interest in this action.

i. Alignment of the Parties

Philadelphia argues that Adventure Sports' “presence as a party defendant in this matter is vital to this litigation" and, because both Philadelphia and Adventure Sports are citizens of Pennsylvania, complete diversity does not exist and this matter should be remanded. (Doc. 6 at 1). In opposition, Chan and Yap invite the Court to realign Defendant Adventure Sports as a party plaintiff because the interests of Adventure are more properly aligned with that of Philadelphia. (Doc. 17 at 11). If Adventure Sports is realigned as a party plaintiff, there will be complete diversity among the parties. Philadelphia opposes realignment on the grounds that, because Defendant Chan did not raise realignment as a ground for removal in the Notice of Removal, she cannot “assert new grounds as a basis of removal that were not pled in the Notice of Removal.” (Doc. 20 at 3).

For purposes of diversity, the parties' positioning “must be ascertained from the ‘principal purpose of the suit, '... ‘and the primary and controlling matter in dispute.'” Indianapolis v. Chase Nat'l Bank, 314 U.S. 63, 68 (1941) (citations omitted); see also Yakitori Boy, Inc. v. Starr Indem & Liab., Co., 2019 WL 199904, at *3 (E.D.Pa. January 14, 2019) (noting that “where party designations have jurisdictional consequences, a court must align the parties before determining jurisdiction.” (internal citations and quotations omitted)). “In determining whether there is the necessary ‘collision of interests,' the court...