Robert Melock v. Scottsdale Insurance Company, et al.

Summary

The United States District Court for the Northern District of Illinois granted Robert Melock's motion to remand his declaratory-judgment action against multiple insurers to the Circuit Court of Cook County. The court held that the removing insurer failed to establish complete diversity because the citizenship of all members of the named Lloyd's of London syndicates had not been identified. The court rejected arguments that the syndicate members were fictitious defendants or fraudulently joined, and declined to award costs or attorney's fees.

Holdings

1. For purposes of diversity jurisdiction, Lloyd's of London underwriting syndicates are treated like limited partnerships, and the removing party must affirmatively establish the citizenship of every member of each syndicate named as a defendant.
2. The members of the named Lloyd's syndicates are not fictitious defendants under 28 U.S.C. § 1441(b)(1), and their citizenship cannot be disregarded merely because their identities are difficult to ascertain.
3. Hartford did not establish fraudulent joinder because Melock had at least a reasonable possibility of prevailing on a coverage claim against the Underwriters.
4. The court declined to award costs or attorney's fees under 28 U.S.C. § 1447(c).

Questions Presented

1. Whether Hartford established complete diversity when the complaint named Lloyd's of London syndicates but Hartford did not allege the citizenship of every syndicate member.
2. Whether the syndicate members could be treated as fictitious defendants under 28 U.S.C. § 1441(b)(1) so that their citizenship would be disregarded for removal jurisdiction.
3. Whether the Lloyd's syndicates were fraudulently joined because Melock allegedly had no reasonable possibility of succeeding on his insurance-coverage claims.
4. Whether remand costs and attorney's fees should be awarded under 28 U.S.C. § 1447(c).

Disposition

remanded