IN THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF OHIO 

EASTERN DIVISION 

ROGER LEE WARD, 

 

 Plaintiff, 

vs. Civil Action 2:12-cv-478 

 Magistrate Judge King 

 

NORTH POINTE INSURANCE 

COMPANY, 

 Defendant. 

OPINION AND ORDER

 This action was removed to this Court from the Court of Common 

Pleas for Gallia County, Ohio, as one arising under the Court’s 

diversity jurisdiction. Notice of Removal, Doc. No. 1. Plaintiff 

Roger Lee Ward asserts claims for declaratory relief, breach of 

contract and bad faith in connection with the fire loss of a 

commercial building and its contents insured by defendant North Pointe 

Insurance Company. This matter is now before the Court, with the 

consent of the parties pursuant to 28 U.S.C. § 636(c), for 

consideration of Plaintiff’s Motion to Dismiss for Lack of Diversity 

Jurisdiction and Motion to Join the Estate (“Plaintiff’s Motion”), 

Doc. No. 19. 

Plaintiff’s Motion seeks an order remanding the case to the 

Gallia County Court of Common Pleas or, alternatively, to join the 

Estate of Samuel Richard Salem (the “Estate”) as a defendant. Id. at 

p. 3. Defendant opposes the joinder of the Estate as a party but does 

not oppose the remand of the action for lack of diversity 

jurisdiction. North Point’s Response to the Plaintiff’s Motion to 

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Dismiss for Lack of Diversity Jurisdiction and Brief in Opposition to 

Plaintiff’s Motion to Join the Estate (“Defendant’s Response”), Doc. 

No. 20. Plaintiff has filed a reply, Plaintiff’s Reply to Defendant’s 

Response to Plaintiff’s Motion to Dismiss for Lack of Diversity 

Jurisdiction and Motion to Join the Estate, Doc. No. 21. This matter 

is now ripe for consideration. 

 This action was removed to this Court pursuant to 28 U.S.C. § 

1441 on the basis of diversity jurisdiction under 28 U.S.C. § 1332. 

Notice of Removal, p. 1. Under 28 U.S.C. § 1441(a), “[a]ny civil 

action brought in a State court of which the district courts of the 

United States have original jurisdiction, may be removed by the . . . 

defendants to the district court of the United States for the district 

and division embracing the place where such action is pending.” 

Ahearn v. Charter Twp. of Bloomfield, 100 F.3d 451, 453 (6th Cir. 

1996) (quoting 28 U.S.C. § 1441(a)). Federal courts have “original 

‘diversity’ jurisdiction where the suit is between citizens of 

different states and the amount in controversy exceeds $75,000, 

exclusive of costs and interest.” Rogers v. Wal–Mart Stores, Inc., 

230 F.3d 868, 871 (6th Cir. 2000) (citing 28 U.S.C. § 1332(a)). The 

removing party bears the burden of demonstrating federal jurisdiction 

and all doubts should be resolved in favor of remand. Eastman v. 

Marine Mech. Corp., 438 F.3d 544, 549–50 (6th Cir. 2006) (citations 

omitted). 

 In the case presently before the Court, plaintiff is a citizen of 

the State of Ohio and defendant is a corporation incorporated under 

the laws of the State of Delaware with its principal place of business 

in the State of Michigan. Notice of Removal, p. 3. Plaintiff has 

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moved to remand for lack of diversity jurisdiction, and defendant does 

not oppose that motion. In seeking remand, the parties characterize 

the action as a “direct action against the insurer of a policy or 

contract of liability insurance, . . . to which action the insured is 

not joined as a party-defendant.” Plaintiff’s Motion, pp. 2-3; 

Defendant’s Response, p. 1, citing 28 U.S.C. § 1332(c)(1)(A). The 

Court disagrees with that characterization. 

Section 1332(c)(1)(A) provides that 

in any direct action against the insurer of a policy or 

contract of liability insurance, whether incorporated or 

unincorporated, to which action the insured is not joined 

as a party-defendant, such insurer shall be deemed a 

citizen of-- 

(A) every State and foreign state of which the insured is a 

citizen[.] 

28 U.S.C. § 1332(c)(1)(A). As used in this statute, the term “direct 

action” refers to an action in which an injured party sues – not the 

tortfeasor – but instead the tortfeasor's liability insurer. See 

Estate of Monahan v. Am. States Ins. Co., 75 F. App’x 340, 343 (6th 

Cir. 2003); Peterson v. TIG Specialty Ins. Co., 211 F.Supp.2d 1013, 

1015 (S.D. Ohio 2002) (the term “direct action” is one in which the 

injured party is entitled to bring suit against the tortfeasor's 

liability insurer without joining the insured or first obtaining a 

judgment against the insured). An action between an insured plaintiff 

and that insured’s own insurance company is not a “direct action” 

within the meaning of § 1332(c)(1)(A). See Lee-Lipstreu v. Chubb 

Group of Ins. Cos., 329 F.3d 898, 899-900 (6th Cir. 2003) (“Applying 

the direct action provision to a dispute solely between an insured and 

her own insurance company would result in an absurdity — federal 

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courts would never hear common insurance disputes because the insured 

and the insurer, the plaintiff and the defendant, would always be 

considered citizens of the same state.”). 

 Plaintiff brings this action against defendant North Pointe 

Insurance Company in connection with a “commercial general liability 

and commercial property policy of insurance” issued by defendant. 

Complaint, ¶ 1. Plaintiff is the named insured under that insurance 

policy. See id. at ¶¶ 1, 4, 14, pp. 5-30. This action is therefore 

not a “direct action” within the meaning of § 1332(c)(1)(A). See LeeLipstreu, 329 F.3d at 899-900. 

Plaintiff is a citizen of Ohio, see Complaint, p. 1, and 

defendant is a citizen, for diversity purposes, of Delaware and 

Michigan. See Notice of Removal, p. 3. There is no dispute that the 

amount in controversy exceeds $75,000. Under these circumstances, the 

Court is vested with jurisdiction over the action pursuant to 28 

U.S.C. § 1332. Accordingly, remand of the action for lack of 

diversity jurisdiction would be improper. 

Plaintiff’s Motion also seeks to join the Estate of Samuel 

Richard Salem (“Decedent”) as a defendant. Plaintiff’s Motion, p. 3. 

The commercial property that is the subject of the dispute presently 

before the Court was sold to plaintiff by Decedent by land contract on 

September 5, 2008. Land Contract, attached to Plaintiff’s Reply as 

Doc. No. 21-1, at pp. 3-6. That land contract requires that Decedent 

convey legal title to the property upon full payment of the purchase 

price, which was payable in monthly installments. Id. 

The commercial property was destroyed by fire on April 8, 2010. 

Complaint, ¶ 4. Decedent, who lived in Gallia County, Ohio, died 

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testate on June 28, 2011. Entry Appointing Fiduciary, attached to 

Plaintiff’s Reply as Doc. No. 21-1, at p. 2. Plaintiff represents 

that the commercial property and related land contract are now assets 

of the Estate because Decedent died before the land contract had been 

fully executed. Plaintiff’s Reply, pp. 1-2. 

Plaintiff’s Motion seeks to join the Estate as a defendant 

because it is the title owner of the property that forms the subject 

of the insurance dispute between the current parties. Id. Because 

Decedent was a citizen of Ohio at the time of his death, see Entry 

Appointing Fiduciary, p. 2, the legal representative of the Estate 

would also be deemed a citizen of Ohio. See 28 U.S.C. § 1332(c)(2) 

(“[T]he legal representative of the estate of a decedent shall be 

deemed to be a citizen only of the same State as the decedent[.]”). 

Joinder of the Estate as a defendant would therefore destroy 

diversity. See 28 U.S.C. § 1332(a)(1). 

Pursuant to 28 U.S.C. § 1447(e), the Court “may deny” a request 

to join an additional defendant if the request follows removal from 

state court and if the joinder “would destroy subject matter 

jurisdiction.” 28 U.S.C. § 1447(e). Although the United States Court 

of Appeals for the Sixth Circuit has not addressed the standard 

governing the application of § 1447(e), “this Court has recently 

determined that the issue is discretionary.” Scott Elliot Smith, LPA 

v. Travelers Cas. Ins. Co. of Am., No. 2:12-cv-0065, 2012 WL 1758398 

at *2 (S.D. Ohio May 16, 2012) (quoting Kunkel v. CUNA Mut. Ins. Soc., 

No. 2:11-CV-492, 2011 WL 4948205, at *1-2 (S.D. Ohio Oct. 18, 2011)). 

See also J. Lewis Cooper Co. v. Diageo N. Am., Inc., 370 F.Supp.2d 

613, 618 (E.D. Mich. 2005). In exercising that discretion under 28 

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U.S.C. § 1447(e), courts have considered “the diverse defendant’s 

interest in selecting a federal forum” and four other factors: “(1) 

the extent to which the purpose of the amendment is to defeat 

jurisdiction; (2) whether the plaintiff was dilatory in seeking the 

amendment; (3) whether the plaintiff will be injured significantly if 

the amendment is not allowed; and (4) any other factors bearing on the 

equities.” J. Lewis Cooper, 370 F.Supp.2d at 618 (citations omitted). 

In the case presently before the Court, plaintiff’s sole basis 

for joinder of the Estate is the Estate’s title ownership of the 

commercial property that forms the subject of the insurance dispute 

between the current parties and interest in the land contract. See

Plaintiff’s Reply, pp. 1-2 (“As the land contract was in effect and 

not completed at the time of Samuel Richard Salem’s death, the land 

contract and the property are both a part of the estate of Samuel 

Richard Salem. Therefore, the Estate of Samuel Richard Salem should 

be joined in this matter.”). Plaintiff has not tendered a proposed 

amended complaint nor has plaintiff sought leave to amend the 

Complaint; indeed, plaintiff has wholly failed to state a cause of 

action against the Estate or to explain the basis of any claim against 

the Estate. There is no evidence, and plaintiff does not argue, that 

the Estate is a named insured, an additional insured, or a loss payee 

under the insurance policy, the Decedent is not otherwise mentioned in 

the insurance policy attached to the Complaint,1 see Complaint, pp. 5-

 

1

 The Court conferred with counsel for the parties on January 3, 2013, and 

issued an Order, Doc. No. 18, that provides in pertinent part: 

The parties agree that the estate of the seller of the premises 

at issue in this case, which is the loss payee under defendant’s 

policy, should be joined in settlement discussions and as a party 

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30, and the land contract does not require the Decedent to be listed 

as a named insured or loss payee, nor does it provide for insurance 

proceeds to be paid to the Decedent. See Land Contract, attached to 

Plaintiff’s Reply as Doc. No. 21-1. Mere title ownership of real 

property is also insufficient to establish a right to insurance 

proceeds. Allason v. Gailey, 939 N.E.2d 206, 212-15 (Ohio Ct. App. 

2010); Kulich v. Troppe, No. 15260, 1992 WL 74208, at *2-3 (Ohio Ct. 

App. Apr. 8, 1992) (“Immediately upon execution [of a land contract], 

the purchaser becomes the equitable owner of the estate while the 

vendor, who still holds the legal title, retains a ‘lien’ on the 

property for the unpaid balance due. . . . The longstanding rule is 

that the equitable owner of the estate bears all risks but enjoys all 

benefits that may accrue.”) (citing Gilbert v. Port, 28 Ohio St. 276, 

293 (Ohio 1876); Whitacre v. Hoffman, 79 N.E.2d 373 (Ohio Ct. App. 

1947); United States v. Big Value Supermarkets, Inc., 898 F.2d 493, 

497 (6th Cir. 1990)). Furthermore, there is no apparent connection 

between the Decedent or the Estate and plaintiff’s current claims. 

The Complaint asserts claims for breach of the insurance agreement and 

breach of the duty of good faith and fair dealing in refusing to pay 

plaintiff’s claim. Complaint, ¶¶ 9-12, 14. The Complaint also seeks 

a declaratory judgment “construing the insurance contract and the 

terms, limitations, and exclusions contained in the insurance 

 to the action. Whether the estate should be joined as a 

plaintiff or as a defendant, and whether the estate’s joinder 

will affect the Court’s diversity action, is not yet clear. 

Id. at p. 1. Plaintiff’s Motion and the related briefing do not, however, 

present any evidence or even suggest that the Estate is a loss payee under 

defendant’s policy. Even assuming that the Estate is a loss payee, that fact 

would suggest that the Estate should be joined as a plaintiff, not as a 

defendant, in this action. Of course, joinder of the Estate as a plaintiff 

would not destroy diversity jurisdiction. 

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contract.” Id. at ¶ 8. Plaintiff does not allege or argue that the 

Estate owes any duties under the insurance policy. Based on the 

arguments and evidence presented, it is unlikely that plaintiff has a 

colorable claim against the Estate related to the insurance policy at 

issue. See Pavlovich v. Nat'l City Bank, 435 F.3d 560, 565 (6th Cir. 

2006) (“To establish a breach of contract, a plaintiff must show that 

a contract existed, the plaintiff performed, the defendant breached, 

and the plaintiff suffered damages.”) (citing Wauseon Plaza Ltd. 

P'ship v. Wauseon Hardware Co., 807 N.E.2d 953, 957 (Ohio Ct. App. 

2004)); Zoppo v. Homestead Ins. Co., 644 N.E.2d 397, 400 (Ohio 1994) 

(“An insurer fails to exercise good faith in the processing of a claim 

of its insured where its refusal to pay the claim is not predicated 

upon circumstances that furnish reasonable justification therefor.”) 

(citations omitted). 

The fact that plaintiff offers no basis for a claim against the 

Estate suggests that the purpose of the requested joinder is to defeat 

the Court’s jurisdiction. This conclusion is also supported by 

plaintiff’s failure to explain why the Estate was not named as a 

defendant in the original Complaint, despite knowledge of the Estate’s 

existence and its interest in the commercial property. See Wells v. 

Certainteed Corp., 950 F.Supp. 200, 201 (E.D. Mich. 1997) (denying 

joinder where, inter alia, plaintiff offered no reason why the 

proposed defendant had not been named as a defendant in the original 

action). Consideration of the first factor therefore militates 

against joinder of the non-diverse Estate as a defendant. 

In considering the second factor, the Court concludes that, 

although plaintiff was dilatory in seeking joinder of the Estate, that 

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delay is not determinative. Plaintiff filed the Complaint in the 

state court on April 3, 2012, Complaint, Doc. No. 3, the action was 

removed to this Court on June 4, 2012, Notice of Removal, Doc. No. 1, 

and the action was stayed on July 11, 2012, “pending defendant’s 

investigation of plaintiff’s claim and the parties’ mediation of that 

claim.” Preliminary Pretrial Order, Doc. No. 11. The Court conferred 

with counsel for the parties on January 3, 2013, and ordered that a 

motion to join the Estate be filed no later than January 31, 2013. 

Order, Doc. No. 18. Plaintiff’s Motion was filed on January 30, 2013. 

Although other federal courts have found similar conduct to be 

dilatory, see Scott Elliot Smith, LPA, 2012 WL 1758398 at *3 (finding 

a delay of two months after removal to be dilatory) (citing MultiShot, LLC v. B & T Rentals, Inc., No. H-09-3283, 2010 WL 376373, at *9 

(S.D. Tex. Jan. 26, 2010) (collecting cases)), Plaintiff’s Motion was 

filed within the deadline set by the Court and before significant 

activity in the case had occurred. Under the circumstances, the Court 

concludes that consideration of this factor does not weigh strongly in 

favor of either position. 

Third, there is no indication that plaintiff will be 

significantly injured if the Estate is not joined as a party. As 

discussed supra, plaintiff has failed to state a cause of action or to 

explain the basis of any claim against the Estate; it is not apparent 

that the Estate owes or is owed any duties under the insurance 

agreement or that plaintiff has a colorable claim against the Estate 

related to the insurance contract. Furthermore, the resolution of 

plaintiff’s claims does not require the Court to determine ownership 

of or the proper disposition of the Estate’s real property. Under the 

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circumstances, the Court can provide complete relief between the 

current parties without joining the Estate as a party and without the 

risk of significant injury to plaintiff. Cf. Morelli v. Morelli, C2-

00-988, 2001 WL 1681119 (S.D. Ohio Sept. 27, 2001) (finding a nonparty to be necessary and indispensable under Rule 19 where the 

plaintiff sought to obtain “exclusive title” to property owned by the 

non-party). 

Based on the foregoing, and considering defendant’s interest in 

selecting a federal forum, the Court concludes that its discretion 

under 28 U.S.C. § 1447(e) is better exercised in denying plaintiff’s 

request to join the Estate as a defendant. Plaintiff’s Motion, Doc. 

No. 19, is therefore DENIED. 

This denial is without prejudice to renewal upon articulation of 

the particular claim sought to be asserted by or against the Estate. 

The parties are ADVISED that any renewed motion to join the Estate 

must also address whether the Estate should be joined as a plaintiff 

or defendant and the effect, if any, of its joinder on the Court’s 

subject matter jurisdiction. 

March 29, 2013 s/Norah McCann King_______ 

 Norah McCann King 

 United States Magistrate Judge 

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