United States District Court, W.D. Kentucky, Bowling Green Division
LORETTA RAINWATER; and ALAN W. REED PLAINTIFFS
AMERICAN FIDELITY ASSURANCE COMPANY; and JEFF SNYDER DEFENDANTS
MEMORANDUM OPINION AND ORDER
N. Stivers, Judge
matter is before the Court on Defendant's Motion to
Dismiss (DN 5), Plaintiffs' Motion to Remand (DN 7), and
Defendant's Motion to Dismiss or Motion to Strike (DN 9).
The motions are ripe for decision. For the reasons stated
below, the Plaintiffs' Motion to Remand is GRANTED, and
Defendant's Motion to Dismiss or Motion to Strike is
DENIED AS MOOT.
STATEMENT OF FACTS AND CLAIMS
Loretta Rainwater (“Rainwater”) and Alan W. Reed
(“Reed”) were both employed by the Adair County
Board of Education. (Compl. ¶ 1, DN 1-1). In October
2010, Plaintiff applied for long-term care insurance policies
issued by Defendant American Fidelity Assurance Company
(“American Fidelity”). (Compl. ¶¶ 4-5).
As alleged by Plaintiffs, Defendant Jeff Snyder
(“Snyder”) was an agent of American Fidelity and
was involved in marketing that company's policies to
employees of the Adair County Board of Education. (Am. Compl.
¶ 3). After Plaintiffs obtained those policies, American
Fidelity allegedly raised the policy premiums even though
Plaintiffs alleged that they were told that the premiums
would not increase. (Comp. ¶¶ 6, 8).
filed this action in Adair Circuit Court against Defendants
asserting various claims including breach of contract claims
against American Fidelity and a fraud claim against Snyder.
Subsequently, Defendants removed this action on the basis of
diversity jurisdiction and alleged that Snyder was
fraudulently joined to destroy complete diversity between the
parties. (Notice Removal 2-4, DN 1). In the present motions,
Plaintiffs have moved to remand the case to Adair Circuit
Court, and American Fidelity has moved to dismiss claims
asserted in both the Complaint and the Amended Complaint.
Plaintiff's Motion to Remand
case has been filed in state court, a party may remove the
case to federal district court if “none of the parties
in interest properly joined and served as defendants is a
citizen of the State in which such action is brought”
and if the amount in controversy exceeds $75, 000.
See 28 U.S.C. § 1441(b); 28 U.S.C. §
1332(a). The defendant seeking to remove the case must file
and serve a notice of removal within thirty days of receiving
the initial pleading upon which the claim is based.
See 28 U.S.C. § 1446(b). If the case stated in
the initial pleading is not removable, a party has thirty
days from receiving information warranting removal to file a
notice of removal, with the caveat that removal based on
jurisdiction conferred by 28 U.S.C. § 1332 is barred
more than one year after the commencement of the action.
Claims Asserted Against Snyder
case, Defendants removed the action based upon diversity of
citizenship between Plaintiff and American Fidelity and
contenting that Snyder was fraudulently joined as a party.
(Notice Removal 1-2). Based on the Court's reading,
however, the Complaint does assert a colorable claim of fraud
against Snyder. Under Kentucky law, the elements of fraud
are: “(a) a material representation, (b) which is
false, (c) known to be false or made recklessly, (d) made
with inducement to be acted upon, (e) acted in reliance
thereon, and (f) causing injury.” St. Martin v. KFC
Corp., 935 F.Supp. 898, 909 (W.D. Ky. 1996) (internal
quotation marks omitted) (quoting Miller's Bottled
Gas, Inc. v. Borg-Warner Corp., 955 F.2d 1043, 1051 (6th
regard to the allegations against Snyder, the Complaint
satisfies the fraud requirements. Plaintiffs initially
asserted the following allegations involving Snyder:
6. Before applying and receiving the policy of insurance, the
Plaintiffs were each advised of the terms and conditions of
the policy by the Defendant, Jeff Snyder. Specifically, Jeff
Snyder represented to the Plaintiffs and each of them that
the policy had three significant features:
1. A defined amount that would be paid on a daily basis if
nursing home care was required; ...