Thursday, May 8, 2014

Federal Court Remands Post-Koken Case Back to State Court Where PA Resident Claims Reps Also Named as Defendants

In a recent Memorandum Opinion by United States Magistrate Judge Robert C. Mitchell of the United States District Court for the Western District of Pennsylvania in the case of Kapton v. Ohio Cas. Ins. Co., Civil Action No. 2:14-69 (W.D. Pa. April 17, 2014 Mitchell, M.J.), the court granted a Plaintiff’s Motion for Remand in a post-Koken case and sent this litigation back to the state court in this lawsuit for underinsured motorist benefits.

In this matter, the Plaintiff not only sued the carrier but two of the carrier’s claims professionals.   This was a breach of contract and bad faith action relative to a UIM claim. 

After suit was filed, the Defendants removed the action from the Beaver County Court of Common Pleas of the Western District of Pennsylvania.  The Plaintiff responded with a Motion to Remand.  

The court granted the Motion to Remand after noting that the Plaintiff and the two claims representative Defendants were all citizens of Pennsylvania. 

The federal court ruled that it would only have jurisdiction over this case if the individual Defendants were fraudulently joined in the matter by the Plaintiff's to avoid a potential removal of the case to federal court.  

After finding no fraudulent joinder, the Federal District Magistrate Judge granted the Plaintiff’s Motion to Remand.   The court accepted the Plaintiff’s argument that the claims representative Defendants allegedly acted with misfeasance by improperly handling the underinsured motorist claims and thereby creating a claim under the Unfair Trade Practices and Consumer Protection Law.   The court rejected the Defendant’s argument that their conduct in allegedly mishandling the Plaintiff’s claim only possibly rose to the level of nonfeasance and not misfeasance (with the argument being that nonfeasance was not actionable under the UTPCPL).  

Accordingly, the Federal District Court found that the Defendants had not demonstrated that the Plaintiff had fraudulently joined the individual Defendants in an effort to destroy diversity of citizenship among the parties.   As such, the Motion for Remand was granted and the case was sent back to state court.

Anyone wishing to see a copy of this Opinion may click this LINK.

I send thanks to Attorney Timothy D. McNair of the McNair Law Offices in Erie, Pennsylvania for bringing this case to my attention.  

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