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Romero v. Hartford Casualty Insurance Co.

United States District Court, D. New Mexico

August 3, 2017

FERNANDO ROMERO, doing business as FERNY'S ELECTRONICS, Plaintiff,
v.
HARTFORD CASUALTY INSURANCE COMPANY a foreign corporation, and JOHN DOE, Defendants.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. BRACK, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Plaintiff Fernando Romero's Opposed Motion to Amend/Correct the Complaint (Doc. 23) and Defendant Hartford Casualty Insurance Company's (“Hartford”) Cross Motion for Judgment on the Pleadings (Doc. 26). Having reviewed the accompanying briefing and being otherwise fully advised, the Court will deny Plaintiff's Motion to Amend and grant in part and deny in part Defendant's Motion for Judgment on the Pleadings.

         I. Procedural Posture

         Plaintiff filed a Complaint against both the company that issued his insurance policy and an individual, identified as John Doe, who he alleges trespassed on his property while acting as Hartford's agent. Plaintiff seeks to recover for the losses he incurred after an armed robbery occurred at Ferny's Electronics on February 11, 2013. (Doc. 1-1.) Plaintiff claims that Hartford engaged in bad faith, unfair practices, and breach of contract for failing to act reasonably under the circumstances to conduct a timely and fair evaluation of his claim and failing to accept and pay Plaintiff's claim for coverage for the losses after charging and collecting premiums from him. Id.

         Plaintiff initially brought suit in the New Mexico First Judicial District Court, County of Santa Fe, and Defendant Hartford removed the action to this Court on December 7, 2016. (Doc. 1.) On April 13, 2017, Plaintiff filed a motion to amend his complaint in order to identify the aforementioned John Doe as Wade Mascarenas, the claims contractor assigned to inspect Romero's property by Hartford. (Doc. 23.) On May 11, 2017, Defendant Hartford filed a cross motion to dismiss Plaintiff's claims for Count VI (Trespass), Count IV (Breach of Contract), and Count II (Unfair Practices Act) and opposed amendment of the Complaint on the basis that Plaintiff's trespass claim against Mr. Mascarenas is merely pretext for the purpose of defeating diversity jurisdiction and returning this action to state court. (Doc. 26.) Following extension, the parties filed their respective responses/replies and briefing was completed on July 10, 2017. (See Docs. 30, 32, 37, 38.)

         II. Plaintiff's Factual Allegations

         A. Allegations Regarding Insurance Contract and Investigation of Claim

         Plaintiff is a New Mexico resident who, while doing business as Ferny's Electronics, conducted business in Albuquerque, Bernalillo County, New Mexico. (Doc. 1-1 at 1.) Hartford, a non-resident insurer authorized to do business in the State of New Mexico, issued a Spectrum business insurance policy to Plaintiff Romero d/b/a Ferny's Electronics (policy number 34 SBA RV0470) that was effective May 4, 2012 through May 5, 2013. (Id. at 1-2.) During the effective term of the Insurance Policy, an armed robbery occurred at Ferny's Electronics on February 11, 2013. (Id. at 2.) After the armed robbery, Plaintiff was discovered with serious and extensive personal injuries to his brain and skull which required hospitalization and surgery at the University of New Mexico Hospital. (Id.) As a result of these injuries, Plaintiff could no longer generate income from the electronic repair business. (Id. at 3.) Additionally, the robbery resulted in extensive damage to the building structure, as well as loss or damage to much of the merchandise available for sale. (Id.)

         On May 1, 2013, Defendant Hartford notified Plaintiff that it was denying him coverage under the insurance policy for the injuries he sustained and advised him to forward additional information which might alter its coverage decision. (Id.) Thereafter, Plaintiff retained counsel and on March 3, 2014, notified Hartford of his intent to pursue claims under the Insurance Policy for damage to the building, personal property losses, and loss of business income, and provided documentation and estimates of the damage to the building and of the personal property losses as well as copies of tax return transcripts for 2008 through 2012 to demonstrate that he was unable to continue with his business. (Id.)

         On April 4, 2014, Hartford, through a second claims adjuster, advised Plaintiff that the claim was delayed because estimates for damages to the building and supporting documentation for claimed personal property losses had not been received. (Id. at 3.) On May 6, 2014, Hartford again requested the documentation in support of the pending claims for damage to Ferny's Electronics, personal property loss, and loss of business income. (Id. at 4.) On October 3, 2014, at the request of Hartford, Plaintiff provided a personal property inventory and estimates in support of personal property loss; a structural damages form and estimates in support of structural damages; and a copy of the police report regarding the burglary of February 11, 2013. (Id.)

         On November 17, 2014, Hartford notified Plaintiff that it had reassigned a third adjuster to handle the pending claims. (Id.) After a telephone conference on November 18, 2014, with representatives for Mr. Romero and Ferny's Electronics, on January 13, 2015, Plaintiff provided Hartford with tax returns for 2012, and copies of sales receipts for December 2012 through January 2013, in support of the claim for loss of business income as requested by Hartford. (Id.) On February 12, 2015, Hartford requested that a completed Proof of Loss Sworn Statement be submitted and again requested a list of damaged and/or stolen property along with other previously provided information in support of the pending claims. (Id.) On March 30, 2015, Plaintiff again provided information in support of the pending claims for coverage and submitted the executed Proof of Loss Sworn Statement as requested by Hartford. (Id.) On April 10, 2015, Hartford again requested estimates in support of the damages to the building and indicated that a request had been made for inspection of the building. (Id. at 4-5.) On June 30, 2015, Plaintiff provided additional documentation in support of the pending claims to Hartford. Plaintiff did not receive a response from Hartford to the June 30, 2015 correspondence. (Id. at 5.) On July 30, 2015, Plaintiff provided another narrative account of the events leading to the pending claims and a list of the documentation submitted in support of such claims. (Id.) Plaintiff requested a value at which Hartford was willing to settle the pending claims. (Id.)

         On July 30, 2015, Hartford advised Plaintiff that a fourth Hartford adjuster would now handle the claims. (Id.) Hartford indicated that the information provided on July 30, 2015 would be provided to the fourth adjuster. Id. On August 18, 2015, the fourth adjuster again requested, by telephone, information and documentation regarding the pending claims on behalf of Mr. Romero and Ferny's Electronics. (Id.) On September 8, 2015, Plaintiff provided an additional narrative of facts in support of the pending claims. (Id. at 6.) Yet again, Plaintiff gave the newest adjuster a complete file of all correspondence and documentation regarding the pending claims. (Id.) On September 8, 2015, Plaintiff requested documentation regarding the inspection conducted solely by Hartford but received no response. (Id.) Also on September 8, 2015, Plaintiff notified Hartford that the failure to resolve the claims on behalf of Mr. Romero constituted violations of New Mexico law and demanded an amount to settle the pending claims. Plaintiff requested a response to the demand by September 18, 2015. (Id.)

         On October 20, 2015, Hartford offered to resolve the claims regarding structural damage and the claims regarding the personal property. (Id.) Additionally, Hartford offered to resolve the loss of business income claim for a two-week period of restoration. (Id.) The total amount offered was approximately 18.75% of the initial demand. (Id.) On November 18, 2015, Plaintiff rejected the offer of settlement proffered by Hartford and demanded another amount to resolve all pending claims. (Id.) On December 2, 2015, Hartford offered to resolve the structural damage and personal property loss claims for an amount slightly more than originally claimed for those items. (Id.) Hartford offered to continue to negotiate the remaining claims. (Id.) On December 4, 2015, Plaintiff accepted the offer to resolve the structural damage and personal property loss claims. (Id. at 7.) This settlement expressly preserved the right to pursue the remaining claims. (Id.) On April 28, 2016, in response to ongoing discussions regarding the remaining claims, Plaintiff demanded an amount to resolve the claims for loss of business income, trespass, and violations of New Mexico law. (Id.) On June 10, 2016, after a telephone inquiry due to Hartford's failure to respond to the April 28, 2016 letter, Hartford offered to resolve the remaining claims on behalf of Mr. Romero for 6.25% of the prior demand. (Id.)

         B. Allegations Regarding Trespass Claim and Motion to Amend

         On April 14, 2015, Hartford notified Plaintiff that its agent and/or employee, claims adjuster, John Doe, had “driven by” Ferny's Electronics without the prior approval from or knowledge of a representative on behalf of Mr. Romero or Ferny's Electronics. (Doc. 1-1 at 5.) On June 30, 2015, Plaintiff requested information regarding the pending inspection indicated in the April 14, 2015 correspondence so a representative on behalf of Mr. Romero and Ferny's Electronics could be present at that time. (Id.) During an August 18, 2015 telephone conversation, the fourth adjuster indicated that Defendant John Doe conducted an inspection of Ferny's Electronics. (Id. at 5-6.) Hartford provided photographs that Defendant John Doe took during said inspection. (Id.) The photographs provided demonstrate that Defendant John Doe trespassed upon the premises. (Id. at 6.)

         Plaintiff, prior to instituting litigation, requested the identity of the individual who inspected the building in which he operated his business. (Doc. 23 at 2.) Hartford refused to provide the identity of this individual. (Id.) After filing suit, Plaintiff served discovery on Hartford and requested the identity of the individual assigned to inspect Plaintiff's property. (Id. at 2-3.) Hartford removed the matter to this Court on December 7, 2016, which instituted a stay on discovery. (Id. at 3.) Hartford served its Initial Disclosures on February 27, 2017. (Id.) A review of the documents provided with the initial discovery reveals that Wade Mascarenas is the individual who was assigned to inspect Mr. Romero's property without permission, and who, was indeed present on Mr. Romero's property. (Id.) Thus, Plaintiff now seeks to amend his complaint in order to identify Defendant Doe as Mr. Mascarenas. (See Doc. 23.)

         III. Legal Standards

         A. Motions for Judgment on the Pleadings under Rule 12(c)

         “After the pleadings are closed -- but early enough not to delay trial -- a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). “Any party may move for judgment on the pleadings if no material facts are in dispute and the dispute can be resolved on both the pleadings and any facts of which the Court can take judicial notice.” Ramirez v. Wal-Mart Stores, Inc., 192 F.R.D. 303, 304 (D.N.M. 2000).

         The standard for deciding a motion on the pleadings mirrors the applicable standard for a Rule 12(b)(6) motion to dismiss. Myers v. Koopman, 738 F.3d 1190, 1193 (10th Cir. 2013). Under Rule 12(b)(6), the Court accepts only the well-pleaded factual allegations as true, viewing them in the light most favorable to the plaintiff. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); Casanova v. Ulibarri, 595 F.3d 1120, 1125 (10th Cir. 2010). Thus, the Court need only evaluate allegations “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. Following these principles, the Court considers whether the facts “plausibly give rise to an entitlement to relief.” Barrett v. Orman, 373 Fed.Appx. 823, 825 (10th Cir. 2010) (quoting Iqbal, 556 U.S. at 677-78).

         B. Amending a Complaint and Joinder of Parties

         Federal Rule of Civil Procedure 15(a) states that leave to amend “shall be freely given when justice so requires.” Unlike the good cause requirements under Rule 16, this standard has been described as lenient and easily reached. Rowen v. New Mexico, 210 F.R.D. 250, 252 (D.N.M. 2002); Youell v. Russell, Civ. No. 04-1396 JB/WDS 2007 WL 709041, at *1 (D.N.M. February 14, 2007). Under this rule, leave to amend should be granted “[i]n the absence of any apparent or declared reason-such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962); see also Frank v. U.S. W., Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).

         However, once removed to federal court, proposed amendments to the complaint seeking to join additional defendants whose joinder would destroy subject matter jurisdiction are governed by 28 U.S.C. § 1447(e) rather than FRCP Rule 15. See McPhail v. Deere & Co., 529 F.3d 947, 951 (10th Cir. 2008). Under Section 1447(e), the Court has discretion to determine whether it will allow the plaintiff to join additional defendants whose joinder would destroy subject matter jurisdiction. 28 U.S.C. § 1447(e). Further, under FRCP Rule 19, this Court must determine whether or not the party sought to be joined is indispensable. If so, “Rule 19 requires the court either to join the party, in which case remand is necessary under § 1447(e), or to deny joinder, in which ...


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