Opinion
21-cv-09755-JD
07-22-2022
HOOPES VINEYARD LLC, Plaintiff, v. UNITED STATES FIRE INSURANCE COMPANY, et al., Defendants.
ORDER RE MOTIONS TO AMEND AND REMAND
JAMES DONATO UNITED STATES DISTRICT JUDGE
Plaintiff Hoopes Vineyard sued defendants United States Fire Insurance Company (U.S. Fire) and Randy Derr, who is now deceased, over an insurance coverage dispute for smoke damage to Hoopes Vineyard's wine grapes caused by the 2017 California wildfires. Hoopes Vineyard alleges California state law claims for breach of contract, breach of the covenant of good faith and fair dealing, bad faith, negligent misrepresentation, professional negligence, and declaratory relief. Dkt. No. 1-4 (complaint).
The complaint was originally filed in Napa Superior Court, and U.S. Fire removed the case on diversity jurisdiction grounds. See 28 U.S.C. § 1441(b); Dkt. No. 1 ¶¶ 1-2. Hoopes Vineyard asks for a remand to state court, and to amend the complaint to add the George Petersen Insurance Agency (GPIA) as a defendant. Dkt. Nos. 10, 11, 29, 30. The parties' familiarity with the record is assumed and the motion to amend is granted. Remand is also granted.
Amending the complaint to add GPIA as a defendant will destroy diversity jurisdiction because GPIA, like Hoopes Vineyard, is incorporated in California and consequently is a California citizen under 28 U.S.C. § 1332(c). See Dkt. No. 11 at 2. The removal statute expressly provides that, “[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.” 28 U.S.C. § 1447(e).
In exercising the discretion afforded by Section 1447(e), the Court considers “the potential prejudice to [the plaintiff],” the balance of equities, and whether injustice would occur if joinder is denied. Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998); see also 3WL, LLC v. Master Prot., LP, 851 Fed.Appx. 4, 7 (9th Cir. 2021) (unpublished). Denying joinder would likely prejudice Hoopes Vineyard because it alleges that it communicated with Derr regarding insurance claims, the motion to amend says that Derr was an employee of GPIA, and the record indicates that Derr passed away after the complaint was filed. See Dkt. No. 1-4 ¶¶ 10-13, 39-41; Dkt. No. 11 at 2; Dkt. No. 26 at 8. Because the case is at an early stage, no prejudice is likely to defendants, and the Court finds no dilatory intent because Hoopes Vineyard moved to amend and remand shortly after removal. Consequently, leave to amend to add GPIA as a defendant is granted. See Najera v. Steelhead Fabrication, No. 14-cv-02070-JD, 2014 WL 4100665, at *2 (N.D. Cal. Aug. 20, 2014) (finding similar facts justified granting leave to amend to add a non-diverse defendant under § 1447(e)).
Hoopes Vineyard is directed to file by July 29, 2022, an amended complaint that names GPIA as a defendant and that includes factual allegations that GPIA is incorporated in California. This will resolve the motions to remand because “the district court's only option is to remand” once a diversity-destroying defendant is joined. De Martini v. De Martini, 964 F.3d 813, 819 (9th Cir. 2020). Upon the filing of the amended complaint, the case will be remanded to the Superior Court.
IT IS SO ORDERED.