Botach Management Group v. Landmark American Insurance Company
2:12-cv-06326
C.D. Cal.Aug 15, 2012Background
- Case: Botach Management Group v. Landmark American Insurance Company et al.; removed from Los Angeles County Superior Court to federal court.
- Removing Defendants: First Specialty Insurance Corporation; Swiss Re Life and Health America, Inc.; Landmark American Insurance Company.
- Plaintiff is a California partnership; removal relies on diversity of citizenship and amount in controversy.
- Court focuses on whether Gurash is a California citizen and thus destroys complete diversity.
- Removing Defendants contend Gurash is fraudulently joined to defeat diversity; plaintiff claims Gurash could be a party to an insurance contract.
- Court orders remand for lack of subject matter jurisdiction due to failure to establish complete diversity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complete diversity exists | Gurash is not a California citizen, preserving diversity. | Gurash is a California citizen and fraudulently joined, destroying diversity. | Remanded for lack of subject matter jurisdiction; failure to prove complete diversity. |
| Whether Gurash is fraudulently joined | Gurash may be a party to an insurance contract; joinder not fraudulent. | Gurash cannot be liable on the pleaded claims. | Fraudulent joinder not established; cannot defeat diversity on this basis. |
| Whether the case should be remanded | Remand proper if federal jurisdiction lacking. | Removal should be maintained if jurisdiction exists. | Remanded for lack of subject matter jurisdiction. |
Key Cases Cited
- Ethridge v. Harbor House Rest., 861 F.2d 1389 (9th Cir. 1988) (removal strict against; burden on defendant)
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (burden on removing party; complete diversity rules)
- Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709 (9th Cir. 1990) (burden of proof for removal)
- In re Ford Motor Co./Citibank (South Dakota), N.A., 264 F.3d 952 (9th Cir. 2001) (federal jurisdiction burden on party asserting jurisdiction)
- Ritchey v. Upjohn Drug Co., 139 F.3d 1313 (9th Cir. 1998) (fraudulent joinder considerations when non-diverse party alleged)
- McCabe v. Gen. Foods Corp., 811 F.2d 1336 (9th Cir. 1987) (quoting standard for fraudulent joinder)
- Padilla v. AT&T Corp., 697 F. Supp. 2d 1156 (C.D. Cal. 2009) (leave to amend as cure for deficiencies in joinder)