Fraudulent Joinder Found, No Remand to State Court

Fraudulent Joinder Found, No Remand to State Court

            Debra Walker sued Northwestern Mutual Life Insurance Company for its alleged failure to pay on a disability insurance policy she had purchased.  She also sued Executive Benefits Specialists of Kentucky, LLC, of which Hugh Hines was apparently the sole member.  Northwestern, whose citizenship is Wisconsin, removed the case to federal court, asserting that Executive had been named as a party fraudulently in an effort to defeat diversity jurisdiction.  Walker v. Northwestern Mutual Life Insurance Co., Civ. Case No. 5:15-cv-79-JMH, 2015 WL 4373362 (E.D. Ky. July 14, 2015).

 

            A party has been “fraudulently joined” if “it is clear that there can be no recovery under the law of the state on the cause alleged or on the facts in view of the law.  Id., quoting Casias v. Wal-Mart Stores, Inc., 695 F.3d 428, 432-33 (6^th Cir. 2012).

 

            In this case it was determined that Hines’ actions were undertaken in his capacity as an agent of Northwestern and not on behalf of Executive.  Further, it was determined that Executive (i) had no involvement in Walker’s purchase of the Northwestern disability insurance policy and (ii) Executive was focused solely on a different type of insurance that is not sold to individuals.  On that basis it was determined that Executive was fraudulently joined. The claims against Executive were dismissed, and the motion to remand was denied.