Thomas Towns v. State Farm Fire and Casualty Company; and Kevin Murphy Insurance Agency, Inc.

Summary

The United States District Court for the Western District of Oklahoma grants Plaintiff Thomas Towns’s motion to remand an insurance dispute to the District Court of Grady County, Oklahoma. The court concludes that State Farm failed to establish fraudulent joinder of the nondiverse insurance agency, either because Towns could not state a claim against the agency or because he committed actual fraud in pleading jurisdictional facts.

Holdings

1. State Farm did not establish with complete certainty that Towns could not establish a claim against Murphy Agency in Oklahoma state court; therefore, Murphy Agency was not shown to have been fraudulently joined.
2. State Farm did not establish that Towns lied in his pleadings or otherwise committed actual fraud in pleading jurisdictional facts.
3. Because State Farm failed to establish fraudulent joinder, complete diversity was not shown and the federal court lacked subject-matter jurisdiction.

Questions Presented

1. Whether State Farm established that Murphy Insurance Agency, the nondiverse defendant, was fraudulently joined because Towns had no possible cause of action against it under Oklahoma law.
2. Whether State Farm established actual fraud in Towns’s pleading of jurisdictional facts.
3. Whether the case should be remanded for lack of subject-matter jurisdiction.

Disposition

remanded