Robert Jeffrey Zapp v. State Farm Fire and Casualty Company and Andy Swann

Summary

The United States District Court for the Western District of Oklahoma grants Plaintiff Robert Jeffrey Zapp’s motion to remand an insurance dispute to state court. The court concludes that State Farm failed to establish fraudulent joinder of nondiverse defendant Andy Swann, including because Plaintiff may have a viable negligent-procurement claim under Oklahoma law. The court also finds no actual fraud in the pleading of jurisdictional facts and remands the case to the District Court of Oklahoma County.

Holdings

1. State Farm failed to show that Plaintiff had no possibility of recovering against Swann on the negligent-procurement claim. Plaintiff's allegations could state a viable claim under Oklahoma law, and factual questions remained concerning Swann's procurement conduct, the coverage requested and received, and Swann's knowledge of the alleged scheme.
2. State Farm failed to establish actual fraud in Plaintiff's pleading of jurisdictional facts. The alleged use of a template petition in multiple similar cases was not, by itself, sufficient to establish that Plaintiff lied in pleading jurisdictional facts.
3. Because Swann was not shown to be fraudulently joined and was nondiverse, complete diversity was lacking and the federal court lacked subject matter jurisdiction.

Questions Presented

1. Whether State Farm established that Andy Swann was fraudulently joined because Plaintiff had no possibility of establishing a negligent-procurement claim against him under Oklahoma law.
2. Whether State Farm established actual fraud in Plaintiff's pleading of jurisdictional facts.
3. Whether the court had subject matter jurisdiction based on diversity after considering the citizenship of the nondiverse defendant.

Disposition

remanded