Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-2_14-cv-00414/USCOURTS-alsd-2_14-cv-00414-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

NORTHERN DIVISION

STACYE HOSEA, )

)

Plaintiff, )

 )

vs. ) CIVIL ACTION NO. 14-00414-CG-B

)

LARRY JONES, et al., )

)

Defendants. ) 

REPORT AND RECOMMENDATION

This matter, which was referred to the undersigned 

Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B), is before 

the Court on Defendant Larry Jones’ Motion to Dismiss. (Doc. 3). 

Although Plaintiff was afforded an opportunity to respond, she 

has not done so. 1 Upon a careful review of Defendant’s motion, 

the pleadings, and the applicable case law, the undersigned 

RECOMMENDS that the motion be granted, and that Plaintiff’s 

claims against Jones be dismissed. 

I. Background

This case involves a dispute over insurance coverage. 

Plaintiff Stacye Hosea (hereinafter Plaintiff or Hosea) filed a 

Complaint in the Circuit Court of Marengo County on August 7, 

 

1 In the parties’ joint Rule 26(f) report (Doc. 10), Plaintiff 

reports that she does not oppose Defendant Jones’ motion. 

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2014 against Defendants Larry Jones and State Farm Fire &

Casualty Company (hereinafter “State Farm”). (Doc. 1-1) 

In the Complaint, Plaintiff alleges that prior to 2012, she

purchased a homeowner’s insurance policy with State Farm and 

that Larry Jones, a State Farm agent, assisted her in the 

purchase. (Id. at 2). According to Plaintiff, she relied upon 

representations made by Jones in procuring the insurance policy 

and in continuing to pay the premiums due under the policy. 

(Id.). On August 29, 2012, Plaintiff’s residence was damaged as 

a result of a fire, and following the fire, Jones told her that 

her home was fully covered and that State Farm would take care 

of all of the damage. (Id.). In Count One of her complaint, 

Plaintiff asserts a breach of contract claim against State Farm

for breach of the homeowner’s insurance policy. In Count Two of 

the complaint, Plaintiff alleges that State Farm has committed 

the tort of bad faith by wrongfully refusing to pay for the 

damages she sustained and has thereby not honored its contract 

with her. In Count Three, Plaintiff asserts that Jones made 

false and misleading representations to her, that she relied 

upon said misrepresentations, and that she was damaged as a 

result. (Id. at 3-4). In Count Four, Plaintiff asserts that 

Jones and State Farm made certain representations to her and 

that they should be estopped from denying the representations. 

(Id. at 4).

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On September 5, 2004, Defendants Jones and State Farm filed 

a Petition of Removal pursuant to 28 U.S.C. § 1332. 2 (Doc. 1) In 

the petition, Defendants assert that this Court has federal 

jurisdiction over Plaintiff’s claim based on diversity of 

citizenship. According to Defendants, although Defendant Jones 

and Plaintiff are both citizens of Alabama, Jones has been 

fraudulently joined as a defendant in this action in order to 

defeat diversity jurisdiction. Defendants further assert that 

the amount in controversy exceeds $75,000 as Plaintiff has 

submitted to State Farm a sworn statement for $158,000. (Doc. 1 

at 16, Doc. 1-3). 

As noted supra, pending before the Court is Defendant 

Jones’ Motion to Dismiss. (Doc. 3). In the motion, Jones argues 

that Plaintiff has failed to state a fraud claim against him 

because: 1) she has not pleaded fraud with the particularity 

required by Alabama law and Rule 9(b) of the Federal Rules of 

Civil Procedure, 2) she has failed to show that her reliance was 

reasonable, 3) she has failed to show that Jones’ alleged 

representations were independent from the promises in the 

 

2 Under 28 U.S.C. § 1332(a), federal courts have original 

jurisdiction over all civil actions between citizens of 

different states where the amount in controversy exceeds the sum 

or value of $75,000, exclusive of interest and costs. See Darden 

v. Ford Consumer Finance Co., 200 F.3d 753, 755 (llth Cir. 

2000)(to qualify for diversity jurisdiction, a complaint must 

establish “complete diversity of the parties’ citizenship and an 

amount in controversy exceeding $75,000");

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contract, and 4) the insurance contract is the best evidence of 

the terms of the contract. Defendant further contends that 

because he is not a party to the insurance contract, 

“[P]romissory or equitable estoppel cannot be utilized to create 

primary contractual liability where none would otherwise exist.” 

(Id. at 11). As noted supra, Plaintiff was afforded an 

opportunity to respond to Jones’ motion, but she did not do so. 

However, in the parties’ joint Rule 26(f) report, Plaintiff 

affirmatively states that she does not oppose Defendant Jones’ 

motion. Accordingly, the undersigned is treating Plaintiff’s 

affirmative statement as an acknowledgement that there is no 

possibility that she could state a claim against Jones.

“Fraudulent joinder is a judicially created doctrine that 

provides an exception to the requirement of complete diversity.” 

Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th

Cir. 1998). A fraudulently joined non-diverse defendant does not 

defeat diversity because his citizenship is not considered, and 

if fraudulent joinder is found, the court “must dismiss the nondiverse defendant and deny any motion to remand the matter back 

to state court.” Florence v. Crescent Resources, LLC, 484 F.3d 

1293, 1297 (11th Cir. 2007). A finding of fraudulent joinder is 

appropriate where “there is no possibility the plaintiff can 

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establish a cause of action against the resident defendant.” 3

Henderson v. Washington Nat’l Ins. Co., 454 F.3d 1278, 1281 

(llth Cir. 2006). The defendant must make the required showing 

by clear and convincing evidence. Id. The defendant’s burden to 

show fraudulent joinder has been described as a “heavy one.” 

Crowe v. Coleman, 113 F.3d 1536, 1538 (llth Cir. 1997); see also

Gonzalez v. J.C. Penney Corp., 209 Fed. Appx. 867, 869, 2006 

U.S. App. LEXIS 26178, *6-7, 2006 WL 2990086, *3 (llth Cir. Oct. 

20, 2006)(“The burden of establishing fraudulent joinder is a 

heavy one.”) 

The Eleventh Circuit has cautioned that “[i]f there is even 

a possibility that a state court would find that the complaint 

states a cause of action against any one of the resident 

defendants, the federal court must find that the joinder was 

proper and remand the case to state court.” Triggs, 154 F.3d at 

1287. Of course, “[t]he potential for legal liability must be 

reasonable, not merely theoretical”. Legg v. Wyeth, 428 F.3d 

 

3 The Eleventh Circuit employs a tripartite test for determining 

whether a defendant has been fraudulently joined. The removing 

party must show either of the following: (1) there is no 

possibility the plaintiff can establish a cause of action 

against the resident defendant in state court; (2) the plaintiff 

fraudulently pleaded jurisdictional facts, or (3) that a diverse 

defendant is joined with a non-diverse defendant as to whom 

there is no joint, several or alternative liability and the 

claim has no real connection to the claim against the nondiverse defendant. See Triggs, 154 F.3d at 1287.

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1317, 1355 n.5 (11th Cir. 2005). The Eleventh Circuit has 

explained that:

“If there is even a possibility that a state 

court would find that the complaint states a 

cause of action against any one of the resident 

defendants, the federal court must find that the 

joinder was proper and remand the case to the 

state court” . . . In other words, “[t]he 

plaintiff need not have a winning case against 

the allegedly fraudulent defendant; he need only 

have a possibility of stating a valid cause of 

action in order for the joinder to be 

legitimate.”

Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1332 (llth 

Cir. 2011).

The undersigned notes, as a preliminary matter, that 

Defendant Jones’ argument that Plaintiff’s complaint fails to 

meet the pleading standard outlined in Ashcroft v. Iqbal, 556 

U.S. 662, 129 S.Ct. 1937, 173, L. Ed. 2d 868 (2009) and the 

heightened pleading standard required by Alabama law and Rule 

9(b) of the Federal Rules of Civil Procedure is faulty because 

in the context of fraudulent joiner, this Court must look at 

whether there is a possible claim under state law pleading 

standards. Stillwell, 663 F.3d at 1334. ("To determine whether 

it is possible that a state court would find that the complaint 

states a cause of action, we must necessarily look to the 

pleading standards applicable in state court, not the 

plausibility standards prevailing in federal court."). Alabama 

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courts have not adopted the plausibility standard of pleading 

applied in the federal courts. Phillips v. R.R. Dawson Bridge 

Co., 2014 U.S. Dist. LEXIS 111087, 2014 WL 3970176 (N.D. Ala. 

Aug. 12, 2014)(citing Crum v. Johns Manville, Inc., 19 So. 3d 

208, 212 n.2 (Ala. Civ. App. 2009)). Further, while the Alabama 

Supreme Court has explained that Alabama’s Rule 9(b) 

particularity requirement means that "[t]he pleader must state 

the place, the time, the contents of the false 

misrepresentations, the fact misrepresented, and an 

identification of what has been obtained", Anderson v. Clark, 

775 So.2d 749, 752 n.5 (Ala. 1999) (citation omitted), it has 

generally been held that the remedy for failure to satisfy Rule 

9(b) is not dismissal on the merits, but rather is an 

opportunity for the plaintiff to replead. See generally Bryant v. 

Dupree, 252 F.3d 1161, 1163 (11th Cir. 2001). 

In her complaint, Plaintiff asserts that Defendant Jones, 

in his role as a State Farm insurance agent, made false 

representations upon which she relied to purchase the State Farm 

insurance policy, and to pay the premiums due under the policy. 

Plaintiff however does not provide Jones with any notice 

regarding the representations that he is alleged to have made 

during the insurance purchase process, nor is there anything in 

the complaint suggesting that Defendant Jones played any role in 

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investigating and processing her fire damage claim. 4 Plaintiff 

has not responded to Defendant’s motion, and has made no attempt 

to amend her complaint. Instead, in the parties’ Rule 26(f) 

report, Plaintiff affirmatively states that she does not oppose 

Defendant Jones’ motion, thereby essentially acknowledging that 

there is no possibility that she can state a valid claim against 

Defendant Jones. Under these circumstances, the undersigned 

finds that Jones has satisfied his burden of showing that he was 

fraudulently joined. Accordingly, the undersigned recommends 

that Jones’ motion be granted. See Florence, 484 F.3d at 1297 

(11th Cir. 2007)(If fraudulent joinder is found, “the federal 

court must dismiss the non-diverse defendant, and deny any 

motion to remand the matter back to state court.).

 

4 Plaintiff has also asserted a promissory estoppel claim against 

both Jones and State Farm. A claim of promissory fraud requires

proof of the elements of fraud, specifically "(1) a false 

representation (2) of a material existing fact (3) reasonably 

relied upon by the plaintiff (4) who suffered damage as a 

proximate consequence of the misrepresentation" and that "two 

additional elements must be satisfied: (5) proof that at the 

time of the misrepresentation, the defendant had the intention 

not to perform the act promised, and (6) proof that the 

defendant had an intent to deceive." S.B. v. St. James Sch., 959 

So. 2d 72, 101, (Ala. 2006)(citations omitted). While Plaintiff 

contends that following the fire Jones told her that her home 

was covered and that State Farm would take care of all the 

damage, there is no assertion that Jones intended to deceive her 

in making the alleged statements.

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Notice of Right to File Objections

A copy of this report and recommendation shall be served on 

all parties in the manner provided by law. Any party who 

objects to this recommendation or anything in it must, within 

fourteen (14) days of the date of service of this document, file 

specific written objections with the Clerk of this Court. See 28 

U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); S.D. ALA. L.R. 72.4. 

In order to be specific, an objection must identify the specific 

finding or recommendation to which objection is made, state the 

basis for the objection, and specify the place in the Magistrate 

Judge’s report and recommendation where the disputed 

determination is found. An objection that merely incorporates 

by reference or refers to the briefing before the Magistrate 

Judge is not specific.

DONE this 24th day of October, 2014.

 /s/ SONJA F. BIVINS 

 UNITED STATES MAGISTRATE JUDGE

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