United States District Court, E.D. Kentucky, Southern Division, Pikeville
KYLE J. HALL, et al., Plaintiffs,
UPS GROUND FREIGHT, INC., Defendants.
OPINION AND ORDER
K. CALDWELL, UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff's motion to
remand. (DE 9, Motion.) For the following reasons, the Court
will grant the motion.
plaintiffs, Kyle J. Hall and Chris C. Gilley, filed this
action in Pike Circuit Court. In their complaint, they allege
that Hall was driving an ambulance with Gilley as a passenger
on U.S. 23 in Pike County, Kentucky. They allege that, at the
same time, defendant Timmy L. Miller was driving a commercial
truck owned by defendant UPS Ground Freight, Inc. The
plaintiffs allege that Miller negligently blocked the
roadway, causing a collision with the ambulance, and that
they suffered bodily injuries as a result. They allege that
Miller was a UPS employee at the time of the collision. The
plaintiffs assert negligence claims against Miller and UPS.
relevant to this motion, however, plaintiff Gilley also
asserts a claim against his own insurer, Kentucky Farm Bureau
Mutual Insurance Company. Gilley asserts that his Kentucky
Farm Bureau policy provides him with uninsured/underinsured
motorist (“UIM”) coverage and that the truck
operated by Miller was uninsured or underinsured at the time
of the accident. Gilley asserts that, pursuant to the policy,
he is “entitled to recover from Defendant, Kentucky
Farm Bureau Mutual Insurance Company, for his injuries to the
extent of the liabilty of the uninsured and/or underinsured
Defendants.” (DE 1-1, Complaint, ¶25.)
23, 2009, defendants UPS and Miller removed the action to
this Court. The federal removal statute grants defendants in
civil suits the right to remove cases from state courts to
federal district courts when the latter would have had
original jurisdiction. 28 U.S.C. § 1441(a);
Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d
904, 907 (6th Cir. 1999). This Court has original
jurisdiction of all civil actions where the matter in
controversy exceeds $75, 000 and is between citizens of
different states. 28 U.S.C. § 1332 (a)(1). In order for
a defendant to remove a case to federal court based upon
diversity jurisdiction, there must be complete diversity of
citizenship both at the time the case is commenced and at the
time the notice of removal is filed. Jerome-Duncan,
Inc., 176 F.3d at 907.
are both Kentucky citizens. Defendants UPS and Miller are
Virginia citizens. Thus, if the Court were looking only to
the citizenship of these parties, complete diversity would
exist in this case. Defendant Kentucky Farm Bureau, however,
is, like the plaintiffs, a Kentucky citizen. Thus, if its
citizenship is considered in the diversity analysis, removal
was not proper, and this matter must be remanded to state
their notice of removal, however, UPS and Miller argue that
the citizenship of Kentucky Farm Bureau should be ignored
because it was “fraudulently joined.” “When
a non-diverse party has been joined as a defendant, then in
the absence of a substantial federal question the removing
defendant may avoid remand only by demonstrating that the
non-diverse party was fraudulently joined.”
Id. (quoting Batoff v. State Farm Ins. Co.,
977 F.2d 848, 851 (3d Cir. 1992)).
burden of proving fraudulent joinder of a non-diverse
defendant is on the removing party. Alexander v.
Electronic Data Systems Corp., 13 F.3d 940, 948-949 (6th
Cir. 1994). “To prove fraudulent joinder, the removing
party must present sufficient evidence that a plaintiff could
not have established a cause of action against non-diverse
defendants under state law.” Coyne v. American
Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999).
“[I]f there is a colorable basis for predicting that a
plaintiff may recover against a non-diverse defendant, this
Court must remand the action to state court. Id. The
test is not whether the defendants were added to defeat
removal but “whether there is arguably a reasonable
basis for predicting that the state law might impose
liability on the facts involved.” Alexander,
13 F.3d at 949 (citation and quotations omitted). All
disputed questions of fact and all ambiguities in the
controlling state law should be resolved in favor of the
Miller argue that Gilley cannot assert a claim against
Kentucky Farm Bureau for UIM coverage until he receives a
judgment against Miller or UPS that exceeds the insurance
liability limits of UPS and Miller. (DE 14, Response at 3.)
The Kentucky Supreme Court has made clear, however, that
“this is simply not true.” State Farm Mut.
Auto. Ins. Co. v. Riggs, 484 S.W.3d 724, 729 (Ky. 2016).
“A judgment is not a prerequisite, it is simply a
material element to a claim for UIM coverage. In other words,
an insured must prove the extent of the tortfeasor's
liability in order to claim UIM benefits.” Id.
court further explained, “[t]he bottom line is this: an
insured's UIM claim does not spring to life only after a
judgment against the tortfeasor. The insured is always in
possession of the UIM claim because his contractual rights
are independent of the tort judgment.” Id.
fact, the Kentucky Supreme Court stated that the procedure
Gilley is employing here - suing both the tortfeasor and his
UIM carrier in the same action - is “the overwhelmingly
more likely and popular option. . . Our case law, in fact, is
replete with examples of this.” Id. at 729-30
(footnotes omitted). “In fact, as our case law
indicates rather plainly, the vast majority of insureds file
a single suit naming both the tortfeasor and UIM insurer as
defendants.” Id. at 730.
their Notice of Removal, UPS and Miller also argued that
“Gilley has no colorable cause of action against
[Kentucky Farm Bureau] because UPS and Miller are insured and
have sufficient liability insurance to cover all of
Gilley's personal injury claims.” (DE 1, Notice of
Removal, ¶ 13.) These facts, however, goes to the merits
of Gilley's claim and are not propertly considered by the
Court on a fraudulent joinder analysis. “[I]t is worth
noting the limited nature of the Court's examination of
the merits of the plaintiffs' claims against [the
defendant]. The question is not whether the plaintiffs will
recover from [the defendant]. Rather, it is whether the
plaintiffs could recover from [the defendant] under Kentucky
law.” Winburn v. Liberty Mutual Insurance Co.,
933 F.Supp. 664, 666 (E.D. Ky. 1996). See also Terry v.
Jackson, 19 Fed.Appx. 377, 379 (6th Cir.
2001)(“district court should not have addressed the
merits of plaintiffs underlying claims” on fraudulent
these reasons, the Court ...