Corp, v. Lumbermens Mutual Casualty Co., 416 F.2d 707, 710 (7th Cir.1969). An “interest”
arises if that entity may be affected in some way by the judgment. See Jn re Korhumel Industries,
dne., 103 B.R. 917, 924-25 (N.D. Ill, 1989) (although debtor did not seek relief directly from
entity, that entity was nevertheless a proper party because if the debtor obtained the declaratory
rehef it sought, the entity would be affected); /nnkeepers Telemungement and Equipment Corp.
y. Hummert Management Group, Inc., No. 92 C 8416, 1994 WL 478491 *6 (N.D. lll. Aug. 30,
1994) (in contract dispute between a hotel and a provider of telephone equipment and services,
the fact that hotel managers would be affected by the resolution of the declaratory judgment
action gave them “at Jeast some arguable interest in the outcome of the declaratory judgment
action” and thus meant they were properly named as defendants); see also In re Management
Data Services, Inc., 43 B.R. 962, 965 (W.D. Wa. 1984) (where disposition of case could
potentially bar attomey from representing clients in cerlain future cases, attorney had a sufficicnt
interest in the matter to be named as a party), Moreover, as noted above, the court must resolve
all issues of law in Arvida’s favor. See Poulos v. Naas Foods, Inc., 959 F.2d at 73.

Arvida seeks a declaration that Home Insurance is obligated to defend and indemnify it
with respect to certain litigation. In connection with this request, it seeks an order requiring Risk
Enterprise Management to effectuate this relief through its administration of Home Insurance’s
business affairs. Risk Enterprise Management is thus indisputably not a major player in this
case.

Nevertheless, an entity need not be a major player to be a proper party. The disposition of
the claims against Home Insurance potentially affects what actions Risk Enterprise Management

may have to take in the future, and this is cnough to make it a proper party. This is especially

4.



As the removing parties, the defendants bear the “heavy burden” of establishing that
diversity jurisdiction is improper. Jd, To do this, they must prove either that Arvida: (1) has no
chance of success against the non-diverse defendant; or (2) has fraudulently pled jurisdictional
facts. Jd. The defendants have not argued the latter, so the court’s analysis is limited to
consideration of whether Arvida can state a colorable cause of action against Risk Enterprise
Management.

Arvida alleges that Risk Enterprise Management runs all of Home Insurance’s business
affairs, and that Home Insurance, acting through its agent, Risk Enterprise Management refused
to abide by its contractual obligations under Home Insurance’s excess policy. Second Amended
Complaint at {| 80 & 82. Arvida also seeks a declaration that Home Insurance is obligated to
defend and indemnify it with respect to certain litigation. 7d. at Counts TT and TV. In connection
with this request, it seeks an order requiring Risk Enterprise Management to effectuate this relicf
through its administration of Home Insurance’s business affairs. Jd.

According to the defendants, these claims relate to Risk Enterprise Management because
it acted as the alleged wrongdoer’s agent, but do not seek any actual relief from Risk Enterprise
Management. The defendants thus conclude that Arvida’s complaint does not include any claims
directly against Risk Enterprise Management. It is true that Risk Enterprise Management did not
issue the policy on behalf of Home Insurance and that it is not a party to any of the policies at
issuc in this case. But to permit joinder of Risk Enterprise Management only if at least one of
these things occurred is to paint with too broad a brush.

An entity who has an interest in the determination of questions raised in declaratory

actions should be before the court when those questions are resolved. See Diamond Shamrock

-3-



true given that the court must resolve all issues of law in Arvida’s favor. See Poulos v. Naas
Foods, Inc., 959 F.2d at 73. The inclusion of Risk Enterprise Management means that the parties
are not completely diverse. Accordingly, this case must be remanded to the Circuit Court of
Cook County pursuant to 28 U.S.C. § 1447(c), based on lack of subject matter junsdiction.
Conclusion
For the reasons specified above, Arvida’s motion to remand [14-1] is granted, and this
casc is remanded to the Circuit Court of Cook County pursuant to 28 U.S.C. § 1447(c), based on

lack of subject matter jurisdiction.

DATE: 5-§-03 Bhnele i Wrrmig

Blanche M. Manning Y
United States District Judge

‘03ev988.remand



Minute One Form “969

yee

United States District Court, Northern District of Illinois

Nome of Ani ote | Blanche M. Manning | Sn Jute ote

CASE NUMBER 03 C 988 DATE May 8, 2003

CASE Arvida v. U.S. Fire

TITLE

[In the following box (a) indicate the party filing dhe motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state brietly the
MOTION: nature of the motion being presented. |
DOCKET ENTRY:
(1) a Filed motion of [ use listing in “Motion” box above. |
(2) o Brief in support of motion due
(3) oO Answer brief to motion due. «Reply to answer brief due__
(4) Bb Ruling/Hearing on ___set for at
(5) im} Status hearing[held/continued to] [set for/re-set for} on set for at
(6) im Pretrial conference|held/continued to] [set for/re-set for} on setfor at
(7) Oo Trial[set for/re-set for]on at
(8) im [Bench/Jury trial] [Hearing] held/continned toa
(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) General Rule 21 FRCP41(a)(1) O FRCP41(a)(2).

(10) [Other docket entry! Arvida’s motion to remand [14-1] is granted, and this case is remanded to the

Circuit Court of Cook County pursuant to 28 U.S.C. § 1447(c), based on lack of subject matter jurisdiction.
Enter Memorandum and Order. All other pending motions are denied as moot.

a {For further detail see order attached to the original minute order.)

qy)

No notices required, advised in open court

No notices required.
‘a umber of novices

MAC 14 2003

date dockered

¥ | Notices mailed by judge's staff,

Notified counsel by telephone,

Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

date mailed notive
courtroom

deputy’s
initials

RTS

Date/time received in

ventral Clerk's Office trailing deputy initials



LN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ARVIDA/JMB MANAGERS, INC,, on
behalf of ARVIDA/JMB PARTNERS, L.P.,
Plaintiff,

)

)

)

} C 988

v. No. 03 C

) DOCKETED
UNITED STATES FIRE INSURANCE )
COMPANY, THE HOME INSURANCE )
COMPANY, and RISK ENTERPRISE )
MANAGEMENT LIMITED, )
)

Defendants.

MAY 1 4 2003

MEMORANDUM AND ORDER

The defendants contend, among other things, that they were entitled to remove this case
because the plaintiff fraudulently joined a non-diverse party, The plaintiff unsurprisingly
disagrecs and seeks an order remanding this action back to slate court. For the following reasons,
the motion to remand is granted.

Discussion

The defendant in a removed action bears the burden of establishing that the requirements
for diversity jurisdiction have been met. Chase v. Shop ‘N Save Warehouse Foods, Inc., 110
F.3d 424, 427 (7th Cir. 1997). 28 U.S.C. § 1332 requires complete diversity and an amount in
controversy greater than $75,000. In this complex insurance dispute, more than $75,000 is
clearly at issue. The motion to remand focuses on the parties’ citizenship. Wc begin with the
defendants, as determining their citizenship is straightforward.

A corporation is a citizen of: (1) the state in which it is incorporated; and (2) the state

in which it has its principal place of business. 28 U.S.C. § 1332. Defendant United Fire

Insurance Company is a New York corporation with its principal place of business in New



Jersey, Home Insurance Company is a New Hampshire corporation with its principal place of
business in New York, and Risk Enterprise Management is a Delaware corporation with its
principal place of business in New York. This court’s jurisdiction is thus secure if the plaintiff is
not a citizen of New York, New Jersey, New Hampshire, or Delaware.

Plaintiff Arvida/JMB Managers filed suit on behalf of Arvida/JMB Partners, a Delaware
limited partnership. Because Arvida/JMB Managers brought this action on behalf of another
entity, Arvida/IMB Partners, only the citizenship of Arvida/JMB Partners (hereinafter “Arvida’’)
is relevant. National Assoc. of Realtors v. National Real Estate Assoc., Inc., 894 F.2d 937, 939
(7th Cir. 1990) (where not-for-profit corporation sued on behalf of its members, who were the
real parties in interest, the members’ citizenship was dispositive for the purposes of diversity
jurisdiction). A limited liability company like Arvida is a citizen of every jurisdiction of which
any partner is a citizen. Carden v. Arkoma Assocs,, 494 U.S, 185, 195-96 (1990); Cosgrove v.
Bartolotta, 150 F.3d 729, 731 (7th Cir. 1998), The parties vigorously disagree as to the
citizenship of virtually all of Arvida’s members. They do, however, agree that the inclusion of
Risk Enterprise Management destroys diversity jurisdiction as it is one of Arvida’s partners,
which makes Arvida a citizen of the same states as Risk Enterprise Management.

The defendants ask the court to ignore this problem, contending that Arvida fraudulently
joined Risk Enterprise Management. Joinder of non-diverse parties does not destroy diversity
jumsdiction if the joinder is fraudulent. Hoosier Energy Rural Elec. Co-op., Inc. v. Amoco Tax,
34 F.3d 1310, 1315 (7th Cir. 1994), Fraudulent joinder exists when, “after resolving all issues of
fact and law in favor of the plaintiff, the plaintiff cannot establish a cause of action against an

in-state defendant.” Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir. 1992).

-2-