The opinion
THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
DANO SARACINAJ d/b/a :
DANO’S PUB, :
: CIVIL ACTION NO. 3:21-CV-793
Plaintiff,
: (JUDGE MARIANI)
V. :
NATIONWIDE INSURANCE CO. d/b/a:
SCOTTSDALE INSURANCE CO., :
LESLIE NESTER, and ROBERT □
TUSCANO, :
Defendants. :
MEMORANDUM OPINION
I. INTRODUCTION
Plaintiffs Motion to Remand (Doc. 23) is pending before the Court. With the motion,
Plaintiff requests that the Court remand the above-captioned matter to the Court of
Common Pleas of Luzerne County, Pennsylvania. (/d. at 3.) Defendant Scottsdale
Insurance Co. (“Scottsdale”) removed the action to this Court on May 3, 2021, pursuant to
28 U.S.C. §§ 1332 and 1446(b) based on the allegedly fraudulent joinder of Defendants
Leslie Nester and Robert Tuscano.' (Notice of Removal ff] 7, 18-19 (Doc. 1 at 2, 7).2)
Specifically, Defendant Scottsdale avers that “Defendant Nester and Defendant Tuscano
1 In the Notice of Removal, Defendant Scottsdale states that it was “incorrectly identified as
‘Nationwide Insurance Co. d/b/a/ Scottsdale Insurance Co.” (Doc. 1 at 3.)
2 Because of the number of separate documents contained in Document 1, most of which have
separate pagination, the Court refers to the ECF assigned page number(s) rather that the individual
document page number(s) when identifying page numbers in Document 1.
have been fraudulently joined such that their citizenship should be disregarded for the
purpose of determining diversity. Consequently, complete diversity of citizenship exists
between the only two properly joined parties, plaintiff and Scottsdale.” (/d. [J] 18-19 (Doc. 1
at 7).) In the Motion to Remand, Plaintiff maintains that the claim of fraudulent joinder is
unsupported and he has asserted valid claims against Defendants Nester and Tuscano.
(Doc. 23 Jj 7-9.) Plaintiff concludes that, because Defendants have not met their burden of
showing fraudulent joinder, the case should be remanded based on a lack of diversity
jurisdiction. (/d. | 10.) For the reasons that follow, the Court will grant Plaintiffs Motion.
Il. PROCEDURAL HISTORY AND FACTUAL ALLEGATIONS
Relevant to the diversity issue presented with the pending motion, the Complaint
States that Plaintiff Dano’s Pub is a commercial establishment in Drums, Pennsylvania,
Plaintiff Saracinaj owns and operates Dano’s Pub, Defendant Scottsdale is a corporation
and insurance company conducting business in Pennsylvania with a corporate office in
Ohio, Defendant Tuscano d/b/a W.N. Tuscano Agency Inc. is an insurance brokerage
agency in Greensburg, Pennsylvania, and Leslie Nester is an insurance agent with a
principal address in Minersville, Pennsylvania. (Compl. ff] 1-2, 4-5 (Doc. 1 at 25-26).)
According to the Complaint, at all relevant times Plaintiff was insured by a policy
underwritten by Defendant Scottsdale, and he procured the policy after consultation with
Defendant Nester who is an insurance agent for Defendant Tuscano’s brokerage. (Id. {J 3-
(Doc. 1 27, 27).) Plaintiff asserts that he sought the guidance of Defendant Nester
regarding the correct insurance coverage for his commercial establishment, including review
of his past policy to make sure that his business was properly covered. (/d. {| 7 (Doc. 1 at
26).) In a discussion which followed Defendant Nester’s inspection of the premises, Plaintiff
avers that he advised Defendant Nester that he “wanted full 100% coverage” and he was
assured that Dano’s Pub “would be 100% covered by sufficient insurance for any loss of
income as well as property damage.” (/d. J] 8-10 (Doc. 1 at 26.) Plaintiff further avers that,
“as a result of the representation and assurances of Defendant Leslie Nester, [he] entered
into a comprehensive insurance policy” with Defendant Scottsdale. (/d. 911 (Doc. 1 at 27).)
After the business was forced to close in March 2020 due to the Pennsylvania
Governor's shutdown order, Plaintiff filed a claim for business loss of income in April 2020.
(Id. TJ] 12, 15 (Doc. 1 at 27).) On July 15, 2020, Plaintiff received notification that the claim
would be denied because Plaintiffs property suffered no physical damage and the loss was
caused by a virus or bacteria. (/d. {| 18 (Doc. 1 at 27).)
Sometime after Plaintiff filed the business income-loss claim, the walk-in cooler
malfunctioned which resulted in the contents of the cooler being destroyed. (/d. 16 (Doc.
1 at 27).) Plaintiff also states that “in or about May 20, 2020, Plaintiff sustained a property
loss and thereafter filed a claim” with Defendant Scottsdale which was denied on August 13,
2020, because the policy excluded coverage for damage due to an electrical surge.° (Id. Tf]
17, 19 (Doc. 1 at 27).)
Plaintiff contends that Defendant Nester “clearly represented Plaintiff had 100%
coverage for these losses without any exclusions.” (/d. 20 (Doc. 1 at 27).) He further
contends that he would not have paid for the business insurance policy “but for the clear
representations of Defendant Nester.” (/d. J 21 (Doc. 1 at 28).)
These events gave rise to the filing of Plaintiff's April 1, 2021, Complaint which sets
out a breach of contract claim against Defendant Scottsdale based on loss of business
income (Count |), a breach of contract claim against Defendant Scottsdale based on loss of
property damage (Count II), a negligence claim against Defendants Nester and Tuscano
based on allegedly incorrect advice they provided to Plaintiff (Count III), and a bad faith
claim against Defendant Scottsdale (Count IV). (Id. {J 24-43 (Doc. 1 at 28-32).)
In the claim for negligence which is relevant to the pending motion, Plaintiff states
that Defendant Nester personally inspected Dano’s Pub and made observations on
Plaintiffs insurance needs. (/d. (Doc. 1 at 29).) Plaintiff further states that he and
Defendant Nester “discussed the needs of the insured to make certain that he was covered
for loss of income in any circumstances and properly insured for property damage.” (/d.)
Plaintiff maintains that when he “inquired of Defendant Nester whether it was advisable to
seg, ithe Complaint itis ot clear whether the cooler malfunction was the basis for the property loss
cialm.
obtain any other coverage for the premises to protect against loss of income and property
damage, Nester informed Plaintiff that he was 100% covered by the insurance policy for
such loss.” (/d. ] 32 (Doc. 1 at 29).) Plaintiff concludes that the incorrect information
provided by Defendants Nester and Tuscano and his reliance on the incorrect information
have caused damages for which he seeks compensation. (/d. Jf] 35-38 (Doc. 1 at 30).)
As noted above, on May 3, 2021, Defendant Scottsdale removed this action to
federal court pursuant to 28 U.S.C. §§ 1332 and 1446(b) based on fraudulent joinder.
Plaintiff thereafter filed the Motion for Remand (Doc. 23) on September 10, 2021, pursuant
to 28 U.S.C. § 1446(c). (Doc. 23.) Plaintiffs supporting brief (Doc. 27) was filed on
September 24, 2021. All Defendants timely filed briefs in opposition. (Docs. 29-31.)
Ill. ANALYSIS
With the Motion to Remand, Plaintiff maintains that Defendants Nester and Tuscano
were not fraudulently joined and Defendants “simply cannot demonstrate that Plaintiff has
failed to assert viable claims against these Defendants.” (Doc. 27 at 3.) Defendants
respond that Plaintiffs motion should be denied because there is no reasonable basis in
fact or law for the negligence claims against Defendants Nester and Tuscano. (Doc. 29 at
6; Doc. 30 at 5; Doc. 31 at 9.)
A removing party bears the burden of demonstrating “that at all stages of the
litigation the case is properly before the federal court.” Brown v. Jevic, 575 F.3d 322, 326
(3d Cir. 2009). “Removal statutes are to be strictly construed, with all doubts to be resolved
in favor of remand.” /d. (citing Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir.
1992)).
Generally, a plaintiff has “the option of naming those parties whom [he or she]
chooses] to sue, subject only to the rules of joinder of necessary parties.” Boyer v. Snap-
on Tools Corp., 913 F.2d 108, 110 (3d Cir. 1990).
While the plaintiff's] decision in this regard may have repercussions for
purposes of diversity jurisdiction, there is no reason for a court to interfere with
this inevitable consequence of a plaintiffs election unless the plaintiff had
impermissibly manufactured diversity or used an unacceptable device to defeat
diversity.
ld. Thus, although a court should be cautious not to interfere with a plaintiff's election,
“Federal courts should not sanction devices intended to prevent a removal to a Federal
court where one has that right,” Brown, 575 F.3d at 326 (quoting Wecker v. Nat'l Enameling
& Stamping Co., 204 U.S. 176, 186 (1907)). As the Supreme Court established long ago,
the “right of removal cannot be defeated by a fraudulent joinder of a resident defendant
having no real connection with the controversy.” Wilson v. Republic Iron & Steel Co., 257
U.S. 92, 97 (1921) (citing Wecker v. National Enameling and Stamping Co., 204 U.S. at
185, 186). “If in such a case a resident defendant is joined, the joinder, although fair upon
its face, may be shown by a petition for removal to be only a sham or fraudulent device to
prevent a removal.” /d. (citing Chesapeake & Ohio Ry. Co. v. Cockrell, 232 U. S. 146, 152
(1914)). In sum, “the diverse defendant may still remove the action if it can establish that
the non-diverse defendants were fraudulently named or joined solely to defeat diversity
jurisdiction.” In re Briscoe, 448 F.3d 201, 216 (3d Cir. 2006) (citations omitted). But
defendants alleging fraudulent joinder bear a “heavy burden of persuasion.” Batoff, 977
F.2d at 851.
Batoff reviewed the standards to be applied in a fraudulent joinder analysis:
Joinder is fraudulent where there is no reasonable basis in fact or
colorable ground supporting the claim against the joined defendant, or no real
intention in good faith to prosecute the action against the defendants or seek a
joint judgment. But, 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 joinder was proper and remand the
case to state court. ...
In evaluating the alleged fraud, the district court must focus on the
plaintiffs complaint at the time the petition for removal was filed. In so ruling,
the district court must assume as true all factual allegations of the complaint. It
also must resolve any uncertainties as to the current state of controlling
substantive law in favor of the plaintiff.
Batoff, 977 F.2d at 851-52 (internal quotations and citations omitted).
Briscoe further explained that, in Batoff, the Circuit Court
rejected the district court's decision to conduct a merits determination in the
context of a fraudulent joinder inquiry ... because “it is possible that a party is
not fraudulently joined, but that the claim against that party ultimately is
dismissed for failure to state a claim upon which relief may be granted,” the
district court had “erred in converting its jurisdictional inquiry into a motion to
dismiss.” [Batoff, 977 F.2d] at 852. Unless the claims against the non-diverse
defendant could be deemed “wholly insubstantial and frivolous,” which they’
were /iot, the joiider could not be considered fraudulent.
Briscoe, 448 F.3d at 217-18.
In reviewing Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 32 (3d Cir. 1985), a
case where the plaintiffs filed an action in state court to recover under their insurance policy
for the loss of their home and named the insurer and ten “John Doe” employees of the
insurer who were non-diverse from the plaintiffs, Briscoe analyzed the Circuit Court's
decision that the district court’s refusal to remand was error:
We explained that the presence of the Doe defendants could not be said to
represent an attempt to defeat diversity jurisdiction. We stated that a court must
first “ask whether, on the face of the complaint, there are sufficient allegations
concerning [the non-diverse defendants'] identity and conduct to justify
consideration of their citizenship,” and, second, we must “look beyond the face
of the complaint for indicia of fraudulent joinder.” Abels, 770 F.2d at 29.
Because the plaintiffs’ complaint identified the Doe defendants with specificity
and raised express claims against them, we found the allegations sufficient to
defeat diversity jurisdiction. We then “look[ed] beyond” the allegations and
found that, at least subjectively, the “[p]laintiffs' conduct . . . [was] consistent
with an intention to actually proceed against at least some Doe
defendants.” /d. at 32. We were “somewhat more troubled” when looking at
“the objective criteria that there be some reasonable basis in fact and some
colorable legal ground supporting a claim against the Doe
defendants.” /d. Nevertheless, we determined that “enough recent authority”
supported the plaintiffs’ claim that a cause of action existed under state law,
thereby precluding a finding that there was no colorable legal basis. /d. “To
inquire any further into the legal merits would be inappropriate in [a] preliminary
jurisdictional determination.” /d. at 32-33.
Briscoe, 448 F.3d at 218-19.
Further, a district court's evaluation of the alleged fraud must “focus on the plaintiffs
complaint at the time the petition for removal was filed.” Batoff, 977 F.2d at 852; Briscoe,
448 F.3d at 217. “[T]he district court must assume as true all factual allegations of the
complaint.” /d. The court “must also resolve any uncertainties as to the current state of
controlling substantive law in favor of the plaintiff.” Briscoe, 448 F.3d at 217.
The Court will first consider whether Plaintiffs Complaint on its face contains
sufficient allegations concerning the non-diverse Defendants’ identity and conduct to justify
consideration of their citizenship. Abels, 770 F.2d at 29; Briscoe, 448 F.3d at 218. As in
Briscoe, Plaintiffs Complaint identifies the non-diverse Defendants, Leslie Nester and
Robert Tuscano, with specificity and asserts a claim of negligence against them which
contains specific allegations. (Compl. Jf] 4-6, 30-38 (Doc. 1 at 26, 29-30).) As these
circumstances on their face are sufficient to defeat diversity jurisdiction, the Court next looks
beyond the face of the Complaint “for indicia of fraudulent joinder.” Briscoe, 448 F.3d at 219
(citing Abels, 770 F.2d at 32).
Here, the Court finds no indication that Plaintiff has “no real intention in good faith to
prosecute the action against the defendants or seek a joint judgment.” Batoff, 977 F.2d at
851. In other words, Plaintiffs conduct has been consistent with an intention to proceed
against the non-diverse Defendants. Briscoe, 448 F.3d at 219; Abels 770 F.2d at 32.
The final question is whether there is some reasonable basis in fact and some
colorable legal ground supporting a claim against Defendants Nester or Tuscano. /d. This
is the question of whether a cause of action against these Defendants exists under state
law. Id. As stated in Batoff, “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 joinder was proper and remand the case to state court.” 977
F.2d at 851. Because Plaintiff asserts a claim of negligence against Defendants Nester and
Tuscano based on allegedly inadequate representations and inaccurate assurances
(Compl. J] 30-38 (Doc. 1 at 29-30)), the Court must determine whether Pennsylvania law
possibly recognizes a cause of action for negligence against a plaintiff's insurance agent or
insurance broker in such circumstances.‘
In Wisniski v. Brown & Brown Ins. Co. of PA, 906 A.2d 571 (Pa. Super. Ct. 2006), a
case where insureds raised a negligence claim against an insurance agency, agents, and
property insurer to recover for failure to recommend flood insurance, the Superior Court of
Pennsylvania considered whether an insurance agency, in its capacity as an insurance
broker, owed a duty to insureds to inspect their property before advising them about their
insurance needs. Wisniski first set out relevant general principles:
“It is axiomatic that in order to maintain a negligence action, the plaintiff must
show that the defendant had a duty to conform to a certain standard of conduct;
that the defendant breached that duty; that such breach caused the injury in
question; and actual loss or damage.” Phillips v. Cricket Lighters, 576 Pa. 644,
841 A.2d 1000, 1008 (2003) (citation omitted).
“The initial element in any negligence cause of action is the first: that
the defendant owes a duty of care to the plaintiff. The existence of a duty is a
question of law for the court to decide. In negligence cases, a duty consists of
one party's obligation to conform to a particular standard of care for the
protection of another. This concept is rooted in public policy." v.
Manzek, 585 Pa. 335, 888 A.2d 740, 746 (2005) (citations omitted).
4 In his supporting brief, Plaintiff states that he “has alleged sufficient facts to establish that a
fiduciary and/or confidential relationship existed.” (Doc. 27 at 5.) However, his Complaint does not state a
claim for breach of fiduciary duty or specify the nature of his negligence claim against Nester and Tuscano.
Because the allegedly fraudulent joinder analysis must “focus on the plaintiffs complaint at the time the
petition for removal was filed,” Batoff, 977 F.2d at 852; Briscoe, 448 F.3d at 217, the Court focuses on the
Complaint itself and the general claim of negligence in determining whether remand is appropriate
10
Wisniski, 906 A.2d at 575-76. Concerning the legal concept of duty, Wisniski set out the
Pennsylvania Supreme Court's general parameters of the concept and the relevant test for
determining whether a duty exists:
“[T]he legal concept of duty of care is necessarily rooted in often amorphous
public policy considerations, which may include our perception of history,
morals, justice and society. The determination of whether a duty exists in a
particular case involves the weighing of several discrete factors which include:
(1) the relationship between the parties; (2) the social utility of the actor's
conduct; (3) the nature of the risk imposed and foreseeability of the harm
incurred; (4) the consequences of imposing a duty upon the actor; and (5) the
overall public interest in the proposed solution.”
906 A.2d at 577 (quoting Althaus v. Cohen, 756 A.2d 1166 (Pa. 2000).
Although the concept of whether a duty exists in a specific case is necessarily a fact-
intensive inquiry, several courts have identified a legal duty owed to an insured by an
insurance agent or broker under Pennsylvania law in considering a claim of negligence
brought by an insured.
In Pennsylvania, “[t]he duty of care owed to an insurance purchaser by an
insurance agent on a claim of simple negligence is to obtain the coverage that
a reasonably prudent professional insurance agent would have obtained under
the circumstances.” Amendolia v. Rothman, No. 02-8065, 2003 U.S. Dist.
LEXIS 22719, at *18 (E.D. Pa. Dec. 8, 2003). An insurance broker is liable for
any loss stemming from his negligence “unless the customer is also guilty of
failure to exercise care of a reasonably prudent businessman for the protection
of his own property and business which contributes to the happening of such
loss.” Consol. Sun Ray, Inc. v. Lea, 401 F.2d 650 (3d Cir.1968) (quotation
omitted), cert. denied, 393 U.S. 1050, 89 S.Ct. 688, 21 L.Ed.2d 692 (1969).
Nw. Mut. Life Ins. Co. v. Babayan, No. CIV. A. 03-1622, 2004 WL 1902516, at *20 (E.D. Pa.
Aug. 25, 2004), aff'd, 430 F.3d 121 (3d Cir. 2005).
11
Similarly, in Foremost Ins. Co., Grand Rapids, Michigan v. Himmel, Civ. A. No. 09-
CV-2575, 2010 WL 11549852 (M.D. Pa. July 8, 2010) (Jones, J.), this Court discussed the
existence under Pennsylvania law of a duty on the part of an insurance agent:
With regard to simple negligence, “[t]he duty owed by an insurance agent to an
insured is to obtain the coverage that a reasonable and prudent professional
insurance agent would have obtained under the circumstances.” Fiorentino v.
Travelers Ins. Co., 448 F. Supp. 1364, 1369-70 (E.D. Pa. 1978) (citing Rempel
v. Nationwide Life Ins. Co. Inc., 227 Pa. Super. 87, 323 A.2d 193
(1974), affd, 471 Pa. 404, 370 A.2d 366 (1977)). See also Amendolia v.
Rothman, 2003 U.S. Dist. LEXIS 22719, at *18 (E.D. Pa. Dec. 8, 2003)
(same); Hatch v. Prudential Fin., Inc., 2006 U.S. Dist. LEXIS 85371, at “16
(M.D. Pa. Nov. 16, 2006) (“Under Pennsylvania law, an insurance agent or
broker owes his prospective insured or annuitant a duty of care to obtain the
insurance coverage or annuity that a reasonably prudent person would have
obtained given the particular circumstances.”).
Himmel, 2010 WL 11549852, at *3.5
Here, Defendant Nester inspected the premises to be insured and allegedly made
recommendations and gave assurances regarding coverage. Whether Nester and Tuscano
satisfied their duty “to obtain the coverage that a reasonable and prudent professional
insurance agent would have obtained under the circumstances,” Fiorentino, 448 F. Supp. at
5 In Yenchi v. Ameriprise Financial, Inc., 161 A.3d 811 (Pa. 2017), the Pennsylvania Supreme
Court held that a fiduciary duty did not arise in a consumer transaction for the purchase of a whole life
insurance policy based on the advice of a financial advisor. The Court noted that the plaintiffs’ complaint
had also contained a count for both professional negligence (“e.g., that Appellants breached a duty to
exercise reasonable care, skill and diligence in advising and recommending an insurance program
appropriate for the needs of the Yenchis”), and negligent misrepresentation (“e.g., that Appellants failed to
disclose full, correct and material information regarding the products being offered”). 161 A.3d at 816 n.3.
The Court further noted that the plaintiffs had pursued only a claim for negligent misrepresentation for
which summary judgment had been sought and denied. /d. This scenario indicates that claims for
negligence against an insurance advisor regarding policy advice, recommendations, and disclosures of
material information are not necessarily frivolous.
12
1369-70 (citing Rempel 323 A.2d 193), is a fact intensive inquiry not appropriately
undertaken in this jurisdictional analysis. Rather, it is sufficient for present purposes to
conclude that the claims against Defendants Nester and Tuscano cannot be deemed
“wholly insubstantial and frivolous” such that joinder can be considered fraudulent, Briscoe,
448 F.3d at 218, because Pennsylvania law recognizes that insurance agents and brokers
may have a duty to the insured which could possibly support a negligence claim here,
As previously noted, the Court's analysis is based on the allegations contained in
Plaintiff's Complaint.6 See supra p. 10 n.4. While Defendants’ analysis of whether
Defendants Nester and Tuscano were fraudulently joined delves into the potential merits of
Plaintiffs negligence claim against the non-diverse Defendants (see Docs. 29-31), the Court
declines to do so based on the Third Circuit's guidance on the limited nature of the
jurisdictional inquiry. See, e.g., Briscoe, 448 F.3d at 217-18. It may be that Plaintiff's
negligence claim is ultimately dismissed for failure to state a claim upon which relief may be
granted, but that standard is distinct form the “wholly insubstantial and frivolous” standard
which is used to determine whether joinder is fraudulent. /d.
6 Thus, the Court does not analyze Plaintiff's specific assertion in his supporting brief that he has
alleged sufficient facts to establish a fiduciary duty on the part of the non-diverse Defendants. (See Doc.
27 at 5.) Similarly, the Court does not analyze Plaintiff's averment that a confidential relationship existed
between him and Nester which can support a negligence claim (see id.) and Defendants’ argument to the
contrary (see, e.g., Doc. 29 at 14-16). However, based on the Pennsylvania Supreme Court's guidance
that the question of whether a confidential relationship exists between parties “is intensely fact-specific,”
Porreco v. Porreco, 811 A.2d 566 (Pa. 2002), the Court notes only that such a basis for liability is not
foreclosed by the Complaint.
13
As the removing party alleging fraudulent joinder, Defendant Scottsdale bears a
“heavy burden of persuasion” in this matter. Batoff, 977 F.2d at 851. The Court finds no
basis to conclude that Defendant Scottsdale has met this burden in that it has not
established that Defendants Nester and Tuscano were “fraudulently named or joined solely
to defeat diversity jurisdiction.” Briscoe, 448 F.3d at 216. It has not shown that there is not
“even a possibility that a state court would find that the complaint states a cause of action
against any one of the resident defendants.” Batoff, 977 F.2d at 851. Therefore, Plaintiff's
Motion to Remand (Doc. 23) is appropriately granted and this matter will be remanded to
the Court of Common Pleas of Luzerne County, Pennsylvania.
IV. CONCLUSION
For the foregoing reasons, Plaintiffs Motion to Remand (Doc. 23) will be granted. A
separate Order follows. □□
MV
Robert D. Mari
United States District Judge
14