HARTMAN v. GEICO CASUALTY COMPANY

RALPH BEISTLINE, District Judge

I. INTRODUCTION

Before the Court is Plaintiff Bernice Hartman ("Hartman") with a Motion to Amend Complaint (Docket No. 3) and an Objection to Defendant GEICO Casualty Company's Notice of Removal (Docket No. 4). Hartman's Motion to Amend seeks to add Kyle Barber ("Barber") as a non-diverse party defendant pursuant to Fed.R.Civ.P. 15. Defendant GEICO Casualty Company ("GEICO") opposes and argues Barber is a sham defendant whose joinder is sought merely for the purpose of destroying diversity. The Court disagrees. Because Hartman's punitive damage claimmay lie against Barber, Hartman's Motion to Amend Complaint (Docket No. 3) is hereby GRANTED. As a result, Hartman's Motion to Remand (Docket No. 4) is also GRANTED.

On or about August 1, 2003, Hartman's motor vehicle was rear-ended by Barber's. Barber was an uninsured motorist at the time of the collision. Thereafter, Hartman brought suit against GEICO, her own insurance company, "alleging various breach-of-contract and bad-faith claims for [GEICO's alleged] failure to reasonably settle [her] uninsured motorist claim regarding . . . Barber and the August 1, 2003 accident. . . ."

When she filed her First Amended Complaint, in the Superior Court for the State of Alaska, Hartman named GEICO as the sole Defendant. Pursuant to 28 U.S.C. §§ 1332, 1441 1446-48, and/or based on diversity jurisdiction, GEICO subsequently removed the case to Federal Court. Hartman then moved to amend her complaint to name Barber, an Alaska resident and/or a diversity destroying defendant, as an indispensable party. GEICO objects.

Once removal has occurred, the district court has two options in dealing with an attempt to join a non-diverse party. 28 U.S.C. § 1447(e) provides that [i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.

28 U.S.C. § 1447(e) permits the Court to exercise its discretion in examining joinder. This includes the consideration of equity issues which bear on allowing an amendment. Consequently, the Court carefully considers each of Hartman's claims against Barber.

Generally speaking, Hartman has no right to pursue claims against Barber that GEICO is obligated to pay. This much is clear. The parties concede, however, that punitive damages are excluded from Hartman's uninsured motorist coverage. As a result, the Court concludes Hartman may recover punitive damages from Barber — directly — if she is able to prove that his conduct was "so outrageous . . . as to go beyond all possible bounds of decency. . . ." Contrary to GEICO's well-articulated argument, the facts reveal she may be able to do so.

Indeed, Hartman's proposed amended complaint seeks punitive damages from Barber based upon the fact that he "was high on marijuana on August 1, 2003 at the time he struck . . . Hartman's vehicle." The Alaska Supreme Court has previously determined that the use of marijuana by a motor vehicle operator was "sufficiently outrageous" to permit a jury to consider punitive damages. The Court therefore concludes that a claim for punitive damages may lie against Barber in the instant action. As a result, the Court further concludes joinder of Barber is appropriate. As a result, this matter must be remanded to the State Court in accordance with 28 U.S.C. § 1447(e).

For reasons more carefully articulated herein, Hartman's Motion to Amend (Docket No. 3) is hereby GRANTED, as is Hartman's Motion to Remand (Docket No. 4).