Nathaniel Keely; Anita Keely v. State Farm Fire and Casualty Company; David Merriman Insurance Agency, Inc.; David Merriman

Summary

The United States District Court for the Northern District of Oklahoma denied the Keelys’ motion to remand their insurance dispute to state court. The court held that the insurance agent and agency were fraudulently joined because the plaintiffs lacked colorable claims against them under Oklahoma law, leaving complete diversity between the plaintiffs and State Farm.

Holdings

1. The Keelys did not state a colorable claim under Oklahoma law against the insurance agent or agency for breach of contract or negligent procurement where the defendants procured the precise replacement-cost policy the Keelys requested, despite the policy's later failure to cover some or all of the claimed losses.
2. The Keelys did not state a viable fraud claim against the agent or agency because they did not identify losses caused by the alleged representations rather than by State Farm's refusal to honor the policy.
3. The court had diversity jurisdiction because Merriman and the agency were fraudulently joined and, after their citizenship was disregarded, complete diversity existed between the Keelys and State Farm.

Questions Presented

1. Whether David Merriman and the David Merriman Insurance Agency were fraudulently joined because the Keelys lacked a viable claim against them under Oklahoma law.
2. Whether, after disregarding the citizenship of the allegedly fraudulently joined defendants, complete diversity existed to support federal jurisdiction under 28 U.S.C. § 1332.
3. Whether the Keelys' motion to remand should be granted.

Disposition

other