765 F.Supp.3d 1244
W.D. Okla.2025Background
- Plaintiffs James and Amanda Oliver sued State Farm and its agents (the Custers) after a denied claim for wind/hail damage to their home, alleging breach of contract and other state-law claims.
- The Custers, insurance agents for State Farm, are non-diverse (Oklahoma citizens, like the Olivers), thus typically defeating federal diversity jurisdiction.
- State Farm removed the case to federal court, claiming the Custers were fraudulently joined just to destroy diversity jurisdiction.
- Plaintiffs moved to remand the case, arguing that they had valid claims against the Custers under Oklahoma law.
- The court considered whether Plaintiffs could potentially state claims against the Custers sufficient to prevent removal, and whether State Farm met the heavy burden to prove fraudulent joinder.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there fraudulent joinder of the Custers? | Plausible state-law claims exist under Oklahoma law against agent defendants | No possibility of recovery against Custers, so their citizenship should be ignored | No fraudulent joinder |
| Should supplemental facts in motion be considered? | Court should consider new facts to determine plausibility of state claims | Only pleadings at time of removal should matter | Court may consider supplemental facts |
| Is actual fraud in jurisdictional facts shown? | State Farm has not shown actual fraud by the Olivers | Supplemental representations are false, per Custer declaration | No actual fraud shown |
| Should the case be remanded to state court? | No federal jurisdiction due to lack of complete diversity | Federal court should retain jurisdiction | Remand to state court required |
| Are the plaintiffs entitled to attorneys' fees? | State Farm lacked an objectively reasonable removal basis; fees should be awarded | Good faith basis for removal exists | No fees; objectively reasonable removal |
Key Cases Cited
- Becker v. Ute Indian Tribe of the Uintah and Ouray Reservation, 770 F.3d 944 (10th Cir. 2014) (party removing bears burden of showing federal jurisdiction)
- Dutcher v. Matheson, 733 F.3d 980 (10th Cir. 2013) (sets standard for fraudulent joinder in diversity context)
- Thrifty Rent-A-Car Sys., Inc. v. Brown Flight Rental One Corp., 24 F.3d 1190 (10th Cir. 1994) (partial disclosure creates duty to speak)
- Uptegraft v. Dome Petroleum Corp., 764 P.2d 1350 (Okla. 1988) (duty to fully disclose when partial disclosure made)