Elvira Ljuljdjuraj v. State Farm Mutual Auto. Ins. Co.
2014 U.S. App. LEXIS 24108
6th Cir.2014Background
- Ljuljdjuraj sued State Farm in federal court seeking no-fault benefits under Mullalli's Michigan policy; Mullalli is Michigan citizen, Ljuljdjuraj is Michigan citizen, State Farm is Illinois citizen, triggering potential diversity only if no direct action imputation applies.
- The district court held the case a direct action under 28 U.S.C. § 1332(c)(1) and imputed Mullalli’s Michigan citizenship to State Farm, destroying complete diversity.
- Two related actions (Ljuljdjuraj and her aunt Drana Lulgjuraj) were filed; the district court dismissed Ljuljdjuraj’s action after transferring and consolidating considerations, relying on Ford Motor Co. v. Insurance Co. of North America.
- Ljuljdjuraj’s injury arose from a no-fault claim rather than a liability claim; she sought benefits as an occupant of Mullalli’s vehicle, not from Mullalli’s liability to her.
- The Michigan no-fault statute requires personal protection coverage (PIP) for occupants of a vehicle, and Mullalli’s policy allegedly provides such coverage; the policy identifies occupants as insured.
- The court ultimately held that Ljuljdjuraj’s suit is not a direct action against the insurer and reversed the district court’s dismissal, remanding for proceedings consistent with this opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1332(c)(1) direct action proviso applies to insureds suing own insurer under no-fault. | Ljuljdjuraj argues the proviso does not apply to suits against a plaintiff’s own insurer. | State Farm contends the proviso applies because it is a direct action against an insurer. | No; proviso does not apply to insureds suing their own insurer. |
| Whether Ljuljdjuraj is an insured under Mullalli’s policy for PIP purposes. | Ljuljdjuraj was an occupant and covered by Mullalli’s policy. | State Farm disputes coverage alignment under the policy. | Yes; Ljuljdjuraj is covered as an occupant, not a direct action against insurer. |
| Whether Ford governs this case or is distinguishable. | Ford supports imputation destroying diversity in no-fault direct actions. | Ford applies only to property protection benefits, not personal protection benefits here. | Ford does not control; this case concerns personal protection benefits, not property protection. |
Key Cases Cited
- Ford Motor Co. v. Insurance Co. of North America, 669 F.2d 421 (6th Cir. 1982) (direct action proviso applicable to property protection; distinguishable from personal protection here)
- Lee-Lipstreu v. Chubb Group of Ins. Cos., 329 F.3d 898 (6th Cir. 2003) (insured sues own insurer; direct action not applicable; Scott-Ponzer rationale)
- Rosa v. Allstate Ins. Co., 981 F.2d 669 (2d Cir. 1992) (insurer coverage considerations; direct action not broad to all insureds)
- White v. United States Fidelity & Guar. Co., 356 F.2d 746 (1st Cir. 1966) (perspective on insureds against insurer outside liability context)
- Bowers v. Cont’l Ins. Co., 753 F.2d 1574 (11th Cir. 1985) (direct action scope limitations)
- McGlinchey v. Hartford Acc. & Indem. Co., 866 F.2d 651 (3d Cir. 1989) (insureds against insurer outside liability context)
- Northbrook Nat’l Ins. Co. v. Brewer, 493 U.S. 6 (1989) (supreme court on direct action and diversity)