Hartford Fire Insurance Company v. Harleysville Mutual Insurance Company
2013 U.S. App. LEXIS 23095
4th Cir.2013Background
- Hammonds, a North Carolina contractor, carried multiple liability policies from Hartford (1995–2002) and other insurers for overlapping years.
- Concord West Project in Charleston, SC involved Hammonds' allegedly defective roofing work settled in 2011 for $1,000,000; Hartford and other insurers paid one-third each, with allocation later disputed.
- Harleysville filed a declaratory judgment action in NC to resolve insurers' rights and duties regarding the Concord West settlement and other projects.
- Hartford then filed a SC declaratory judgment action seeking each insurer's share of the settlement and potential equitable contribution from others.
- Harleysville removed the SC action to federal court; Hammonds neither consented nor objected to removal at that time.
- The district court held Hammonds was a nominal party for the purposes of the nominal party exception to the unanimity rule and dismissed the case under first-to-file considerations; Hartford appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hammonds is a nominal party for removal purposes | Hartford argues Hammonds has a non-nominal, tangible stake in allocation of the settlement. | Hammonds lacks a palpable stake and is a nominal party; consent unnecessary for removal. | Hammonds is a nominal party; removal proper without Hammonds' consent. |
| Whether the nominal party exception applies to prevent unanimity requirement from blocking removal | Hartford contends the exception should not apply because Hammonds risks future liability and potential whipsaw. | Hammonds has no present or reasonably foreseeable impact on the judgment; whipsaw speculative. | Nominal party exception applies; removal valid without Hammonds' consent. |
| Whether the district court's analysis complied with the rule of unanimity and related removal standards | Hartford asserts the action involves insurance-defendant interplay and should require Hammonds' consent. | Hammonds is nominal; unanimity requirement satisfied without its consent. | District court correctly applied nominal party exception and dismissed for removal purposes. |
Key Cases Cited
- Mayo v. Bd. of Educ. of Prince George's Cnty., 713 F.3d 735 (4th Cir. 2013) (reaffirms rule of unanimity for removal unless nominal party.)
- Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613 (U.S. 2002) (permits removal when all properly served defendants join or consent.)
- Maryland Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255 (4th Cir. 2005) (strict construction of removal jurisdiction due to federalism concerns.)
- Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (U.S. 1941) (premises of unanimity and removal principles.)
- Tri-Cities Newspapers, Inc. v. Tri-Cities Printing Pressmen & Assistants' Local 349, Int'l Printing Pressmen & Assistants' Union of N. Am., 427 F.2d 325 (5th Cir. 1970) (nominal or incidental parties; guidance on when absence affects final judgment.)
- Schlumberger Industries, Inc. v. National Surety Corp., 36 F.3d 1274 (4th Cir. 1994) (joinder of insurers under Rule 19; not controlling for nominal party issue here.)
- Flast v. Cohen, 392 U.S. 83 (U.S. 1968) (principles on standing and adverseness in statutory context.)
- Shenandoah Valley Network v. Capka, 669 F.3d 194 (4th Cir. 2012) (relevant to standing and pragmatic approach to jurisdiction.)
- Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel., Barez, 458 U.S. 592 (U.S. 1982) (nominal party concept: party without a real interest.)
- Commodity Futures Trading Comm'n v. Kimberlyn Creek Ranch, Inc., 276 F.3d 187 (4th Cir. 2002) (nominal defendant lacks ownership interest in subject matter.)
- Blue Mako, Inc. v. Minidis, 472 F. Supp. 2d 690 (M.D.N.C. 2007) (illustrates final-judgment considerations in nominal context.)