Insured Succeeds on Remand by Adding Non-Diverse Agent

    The court granted the insured's motion for remand by finding a cognizable claim was asserted against the non-diverse agent. Kamovitch v. Am. Econ. Ins. Co., 2024 U.S. LEXIS 150295 (W.D. Pa. Aug. 22, 2024). 

    American Economy Insurance Company issued a homeowners policy to the insured. The insured alleged that he retained Gilbert Insurance Agency, Inc. to determine the appropriate coverage for the property and that Gilbert advised the insured as to the amount and types of coverage to acquire. Gilbert then sold the insured the American Economy policy. 

    The insured suffered loss to his property when a windstorm with hail caused substantial damage to his home. American Economy failed to reimburse the insured for the loss. The insured filed suit in state court against American Economy for breach of contract, bad faith, and vicarious liability, and for negligence against Gilbert. 

    American Economy filed a notice of removal and the insured moved to remand. The notice of removal asserted that there was diversity of citizenship as Gilbert was not a plausible defendant and that the insured fraudulently joined Gilbert in order to destroy diversity and bar this action from being tried in federal court.

    The undisputed recored showed that Gilbert was a Pennsylvania corporation. Defendants, however, alleged that Gilbert was not a proper party because the insured failed to assert a plausible cause of action against Gilbert. Defendants argued that the only cause of action against Gilbert was one for negligence and that the only factual allegations against Gilbert were that Gilbert obtained a policy from American Economy. 

    The insured alleged that he initially reported his claim to Gilbert and that Gilbert's aclions or inactions during the claim process may have contributed to American Economy's denial of the insured's claim. The insured further alleged that even if his claims were insufficient to support a negligence cause of action against Gilbert, he retained the right to amend his complaint to add further facts.

    The court found no indication that the insured acted in bad faith to fraudulently join Gilbert. A negligence cause of action was asserted against Gilbert based on Gilbert's advise concerning the appropriate amount and type of coverage the insured should acquire. Further, the insured alleged that Gilbert had a duty to act with reasonable care when procuring the coverage and ensure that all aspects of the property, including the roof, were covered under the policy. 

    Because Pennsylvania law permitted insureds to sue their insurance agents under a theory of negligence and because the insured clearly alleged that Gilbert made recommendations and gave assurances regarding coverage, the insured had alleged a colorable neglignce claim that was recognised by Pennsylvania law. Therefore, the insured's motion for remand was granted.