United States District Court, E.D. Louisiana
PEGGY ENRIQUES MIRANDA, ET AL.
SELECTIVE INSURANCE COMPANY OF THE SOUTHEAST, ET AL.
ORDER & REASONS
J. BARBIER, UNITED STATES DISTRICT JUDGE.
OF MOTION AND RELIEF REQUESTED
the Court is a Motion to Remand to State Court
(Rec. Doc. 148) filed by Plaintiffs, Jimmy
and Peggy Miranda, and an opposition thereto filed by
Defendant, Dwight W. Andrus Insurance, Inc. (Rec. Doc. 152).
Having considered the motion and legal memoranda, the record,
and the applicable law, the Court finds that the motion
should be GRANTED.
AND PROCEDURAL BACKGROUND
own property located in Covington, Louisiana, which sustained
damage in a flooding event in March of 2016. Plaintiffs
allege that they contracted with Dwight W. Andrus Insurance,
Inc. (“Andrus”) for the procurement of flood
insurance coverage for their property. Andrus obtained
insurance from Selective Insurance Company of the Southeast
(“Selective”), a Write-Your-Own Program Carrier
participating in the National Flood Insurance Program.
According to Plaintiffs, Selective would bill Plaintiffs'
mortgage company, Nationstar Mortgage, LLC
(“Nationstar”) for the flood insurance premium,
and the premium would then be paid from an escrow account
maintained by Nationstar. However, when Plaintiffs'
property flooded on March 12, 2016, Plaintiffs discovered
that their property was not insured because the policy had
lapsed due to nonpayment.
Plaintiffs' property suffered damage as a result of the
flooding. On June 2, 2016, Plaintiffs filed a lawsuit against
Selective, Nationstar, and Andrus in the 22nd Judicial
District Court for the Parish of St. Tammany, Louisiana.
(Rec. Doc. 1-1.) On July 8, 2016, Selective removed the case
to this Court on the basis of federal question jurisdiction
pursuant to the National Flood Insurance Act
(“NFIA”). 42 U.S.C. §§ 4001, et seq.
Plaintiffs later amended their complaint adding CoreLogic
Solutions, LLC (“CoreLogic”) as a defendant.
Selective filed a Motion for Judgment on the Pleadings, which
was granted by this Court on the grounds that Plaintiffs'
state law claims against Selective were preempted by federal
law. (Rec. Doc. 130). Plaintiffs moved to dismiss Nationstar
as a result of a settlement agreement, which the Court
granted. (Rec. Doc. 144.) The Court also granted
CoreLogic's Motion to Dismiss for failure to state a
claim against it. (Rec. Doc. 99.) Thus, since removal, Andrus
is the only remaining defendant in this case.
September 6, 2017, Plaintiffs filed a Motion to
Remand this matter back to state court arguing that all
of the claims raising federal question jurisdiction have been
dismissed. (Rec. Doc. 148.) Andrus has filed
an opposition to the motion acknowledging that there are no
remaining allegations over which this Court has original
jurisdiction, but requesting that this Court exercise
supplemental jurisdiction over the remaining state law
claims. (Rec. Doc. 152.) The motion is now before the Court
on the briefs and without oral argument.
STANDARD AND DISCUSSION
Selective removed this case to federal court, it predicated
jurisdiction on the National Flood Insurance Act
(“NFIA”). 42 U.S.C. §§ 4001, et seq.
The NFIA grants federal courts original exclusive
jurisdiction over lawsuits against Write-Your-Own
(“WYO”) insurance companies like Selective for
disallowing claims made by insureds under Standard Flood
Insurance Policies (“SFIPs”). 42 U.S.C. §
4072. WYO companies are the fiscal agents of the United
States by statute, and all payments on SFIP claims come from
the federal treasury. Wright v. Allstate Ins. Co.,
415 F.3d 384, 386 (5th Cir. 2005); 42 U.S.C. § 4071; see
Waltrip v. Brooks Agency, Inc., 417 F.Supp.2d 768,
770 (E.D. Va. 2006) (“[A] significant federal interest
exists in the uniform application of the NFIP as it directly
impacts the federal coffers.”). Therefore, when an
insured sues its WYO insurance carrier over the handling of
its claim under SFIP, the suit must be brought in federal
court. Corliss v. S.C. Ins. Co., 03-2944, 2004 WL
2988497, at *2 (E.D. La. Dec. 14, 2004). The Court must
determine whether federal jurisdiction remains in this case
now that Andrus is the only remaining Defendant.
claims against Andrus are for its alleged “failure to
properly and fully provide and/or secure NFIP flood insurance
coverage for the policy period from November 2, 2015 -
November 2, 2016 and/or failing to inform Plaintiffs of
non-payment by Nationstar.” (Rec. Doc. 1-1 ¶ 21.)
Specifically, Plaintiffs assert the following claims against
Andrus: breach of contract, breach of fiduciary duty,
negligent misrepresentation, negligence pursuant to Article
2315, and detrimental reliance. Andrus admits that there are
no remaining allegations that would fall under the original
jurisdiction of this Court. See Landry v. State Farm Fire
& Cas. Co., 428 F.Supp.2d 531, 534 (E.D. La. 2006)
(“claims involving procurement of NFIA policies do not
fall within the Court's federal question
jurisdiction”). Andrus is not a WYO insurance carrier
and is not a fiscal agent of the United States, thus, federal
funds are not implicated. Furthermore, Plaintiffs are not
alleging that Andrus breached the SFIP; rather, Plaintiffs
allege that they entered into a contract with Andrus to
procure flood insurance on their property and that Andrus
breached this contract by failing to procure flood insurance.
The interpretation of NFIP regulations is not an issue in
this case. See Sullivan v. State Farm & Cas.
Co., 06-1677, 2006 WL 2119320, at *3 (E.D. La. July 27,
2006) (finding that because “Plaintiffs' claims do
not arise from [the insurer's] compliance with FEMA
regulations under an NFIP policy, but rather are claims that
relate to the procurement of insurance and errors and
omissions of an insurance agent, ” the case did not
fall under the court's federal question
jurisdiction.”); see also Waltrip v. Brooks Agency,
Inc., 417 F.Supp.2d 768, 770 (E.D. Va. 2006) (Federal
question “jurisdiction does not exist in a lawsuit
bringing state law claims of negligence, breach of contract,
or fraud relating to the procurement of flood
insurance under the NFIP.”). As such, the Court agrees
with the parties that the remaining claims against Andrus do
not raise federal question jurisdiction.
the Court must determine whether to exercise supplemental
jurisdiction over the state claims asserted against Andrus.
Pursuant to 28 U.S.C. § 1367(a), a court may exercise
supplemental jurisdiction over claims “that are so
related to claims in the action within such original
jurisdiction that they form part of the same case or
controversy.” Furthermore, section 1367(c) allows a
district court to decline to exercise supplemental
jurisdiction over a claim, if any of the following four
factors are met and weigh in favor of doing so:
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or
claims over which the district court has ...