United States District Court, E.D. Wisconsin
ROBERT BASALDUA, SHARON BASALDUA, DAVID HINKLEY, and LAURA HINKLEY, Plaintiffs,
THE CHARTER OAK FIRE INSURANCE COMPANY, INC. Involuntary Plaintiff,
PRINCE MINERALS LLC, PRINCE MINERALS INC., EVANSTON INSURANCE COMPANY, OHIO CASUALTY INSURANCE COMPANY, NAVIGATORS INSURANCE COMPANY, LIBERTY MUTUAL INSURANCE COMPANY, and DEF INSURANCE COMPANY, Defendants.
Stadtmueller U.S. District Judge.
2, 2019, Defendants Prince Minerals LLC and Prince Minerals
Inc invoked diversity jurisdiction to remove this personal
injury case from Milwaukee County Circuit Court. (Docket #1).
On July 31, 2019, Plaintiffs timely filed a motion to remand,
arguing that there is not complete diversity under 28 U.S.C.
§ 1332(a) because the involuntary plaintiff, The Charter
Oak Fire Insurance Company (“Charter Oak”), and
one of the defendants, Navigators Insurance Company
(“Navigators”), are both citizens of Connecticut.
Defendants opposed the motion, arguing that Navigators is a
citizen only of New York and, in the alternative, that
Charter Oak is a nominal party whose citizenship should not
be considered for jurisdictional purposes. The motion to
remand is now fully briefed. For the reasons explained below,
the Plaintiffs' motion will be granted, and the case will
be remanded back to Milwaukee County Circuit Court.
courts have jurisdiction over civil actions “where the
matter in controversy exceeds the sum or value of $75, 000,
exclusive of interest and costs, and is between. . .citizens
of different States.” 28 U.S.C. § 1332(a).
“[A] corporation shall be deemed to be a citizen of
every State and foreign state by which it has been
incorporated and of the State or foreign state where it has
its principal place of business.” Id. §
1332(c). In the Seventh Circuit, “a company's
principle place of business is where its ‘nerve
center' is located, or, more concretely, where its
executive headquarters are located” at the date that
the notice of removal was filed. Ill. Bell Tel. Co. v.
Global NAPs Ill., Inc., 551 F.3d 587, 590 (7th Cir.
2008). When federal jurisdiction is contested, the party
seeking to remain in federal court “must establish
those facts [establishing jurisdiction] by a preponderance of
the evidence.” Id.
have not shown, by a preponderance of evidence, that
Navigators is not a Connecticut citizen. Plaintiffs, on the
other hand, have provided considerable evidence that
Navigators keeps its headquarters in Connecticut. The Court
considers the following submissions from Plaintiffs: a 2019
quarterly statement showing that Navigators keeps its
“main administrative office, ” mailing address,
and books and records in Stamford, Connecticut, (Docket #16-1
at 1); a rating report that lists Navigators as having its
administrative offices in Stamford, Connecticut, (Docket
#23-1 at 1); a copy of the State of Wisconsin Office of the
Commissioner of Insurance listing that states Navigators'
business, mailing, and main administrative office address is
in Stamford, Connecticut, (Docket #16-5 at 1); an employment
agreement indicating that the executive of Navigators is
based in Stamford, Connecticut, (Docket #23-3 at 1); and a
shareholder's presentation that lists Navigators'
headquarters in Stamford, Connecticut, (Docket #16-8 at 1).
Additionally, in light of the fact that corporations may be
citizens of their state of incorporation and their
principal place of business for jurisdictional analyses, 28
U.S.C. § 1332(c), the Court does not believe that
Plaintiffs have “conveniently ignore[d]” the
facts that the company's statutory home office is listed
as New York. (Docket #19 at 3). There is no disputing the
fact that Navigators is a citizen of New York-it is
incorporated there. But, based on the evidence before the
Court, it appears that Navigators is also a citizen of
Connecticut, where its headquarters are located.
reaching this conclusion, the Court does not rely on the
headquarters location of either Navigators parent company
(which is also, apparently, called “Navigators”)
or the holding company, “Hartford.” Nor are
Navigators' two complaints from 2013 and 2014, which
allege Connecticut citizenship, dispositive, as they precede
the date of the instant litigation. Nevertheless, they do
offer support for Plaintiffs' contention that Navigators
is, and has been, a citizen of Connecticut.
the Court turns to the question of whether Charter Oak's
Connecticut citizenship should be considered in the
jurisdictional analysis. Charter Oak is a worker's
compensation insurer for two of the plaintiffs, and is
included in the litigation as an involuntary plaintiff. For
the reasons explained below, Charter Oak is a real party in
interest, such that its citizenship must be considered in the
Stat. § 102.29(1)(a)-(b) provides that
[a]n employer or compensation insurer that has paid or is
obligated to pay a lawful claim under this chapter shall have
the same right to make claim or maintain an action in tort
against any other party for such injury or death. . .Each
party shall have an equal voice in the prosecution of the
claim, and any disputes arising shall be passed upon by the
court before whom the case is pending. . .the
liability of the tort-feasor shall be determined as to all
parties having a right to make claim and, irrespective of
whether or not all parties join in prosecuting the claim, the
proceeds of the claim shall be divided as follows. .
added). In other words, “if either the injured employee
or the insurance carrier choose[s] not to be a party to a
suit against the alleged tort-feasor, the absent party will
be bound by the judgment in any such court action of which
they have notice.” Klick v. Am. Mut. Ins. Co. of
Boston, 80 F.R.D. 711, 712 (E.D. Wis. 1978). Thus, both
employee and worker's compensation insurer have
“every incentive to advocate for full recovery against
defendants to maximize its potential subrogation
recovery.” Lund v. Univ. Furniture Indus.,
Inc., No. 07-C-237, 2007 WL 5595963, at *1 (W.D. Wis.
June 11, 2007).
Lund, the court denied plaintiff's motion to
re-align a worker's compensation insurer (who had been
included as an involuntary plaintiff) as a defendant in order
to destroy diversity and remand the case. Id. The
court assumed, without deciding, that the worker's
compensation fund was a real party in interest. Id.
In so doing, the court explained that the employee and the
worker's compensation insurers' interests were
directly aligned in the litigation such that it was
“irrelevant” that plaintiff and the worker's
compensation carrier “may have a coverage dispute in
another forum.” Id.
this district previously determined that an employee had a
right to intervene in his worker's compensation
carrier's third-party action against the tortfeasor in
light of Wis.Stat. § 102.29(1). Ins. Co. of N. Am.
v. Blindauers Sheet Metal & Heating Co., 61 F.R.D.
323, 325 (E.D. Wis. 1973). In concluding that the employee
was an indispensable party under Rule 19, the
Blindauers court found it highly relevant that the
tortfeasor's liability would be determined as to all
parties with the right to make a claim, regardless of whether
they had joined in its prosecution. Id. After adding
the diversity-destroying employee as a plaintiff, the court
dismissed the case for lack of jurisdiction. Id.
These two cases suggest that, if a worker's compensation
insurer chooses to participate in a case, its interests are
aligned with the plaintiff and sufficient to render it a real
party in interest, and its citizenship must be included in
the jurisdictional analysis.
primary argument against considering Charter Oak a real party
in interest is the fact that Wis.Stat. § 102.29 protects
a worker's compensation insurer's right to recover
against the third-party tortfeasors regardless of whether the
worker's compensation insurer participates in the
employee's lawsuit. Guyette v. W. Bend Mut. Ins.
Co., 307 N.W.2d 311, 313 (Wis. Ct. App. 1981). According
to Defendants, this right-to-reimbursement renders Charter
Oak a nominal party. However, Defendants fail to account for
the fact that even if Charter Oak does not participate in
this case, “it will be bound by the resolution of the
plaintiffs' claims in this case.” Klick,
80 F.R.D. at 712 (citing Holmgren v. Strebig, 196
N.W.2d 655, 659 (1971)). As of December 13, 2018, Charter Oak
paid out $503, 332.66 to the Hinkley Plaintiffs and $294,
975.19 to the Basaldua Plaintiffs in indemnity and medical
expenses. (Docket #1-4 at 11, 33). Under Wis.Stat. §
102.29(1)(b), one-third of the proceeds automatically go to
the injured employee, and “out of the balance
remaining. . .[the worker's compensation fund] shall be
reimbursed for all payments.” Charter Oak therefore has
a strong interest in litigating this case in order to secure
a resolution that will fully compensate it for its
the cases that Defendants cite in support of their contention
that “when a party's only interest in a lawsuit is
maintaining its right to reimbursement under Wis.Stat. §
102.29, the party must be considered nominal” all
pertain to parties who were initially listed as
defendants, and their holdings are not on point.
(Docket #19 at 8); Houston v. Newark Boxboard Co.,
597 F.Supp. 989, 990 (E.D. Wis. 1984) (holding that
“removal does not. . .require the consent of nominal
defendants, ” and determining that a worker's
compensation insurer was a nominal defendant because no cause
of action was alleged against it); Eichmann v. Hunter
Automated Mach., Inc., 167 F.Supp.2d 1070, 1072 (E.D.
Wis. 2001) (holding that an employer was a nominal defendant
for diversity purposes where no cause of action was alleged
against it); Woodbury v. Courtyard Mgmt. Corp., No.
4:11-CV-1049, 2012 WL 482344, at *2 (E.D. Mo. Feb. 14, 2012)
(realigning a nominal defendant as a plaintiff in order to
preserve diversity); see also Vandervest v. Wis. Cent.,
Ltd., 936 F.Supp. 601, 604-05 (E.D. Wis. 1996) (finding
that a plaintiff's insurers had no adverse interest to
the plaintiff, and therefore did not destroy diversity). In
this case, Charter Oak has an interest adverse to the
Defendants, and seeks to recover a significant sum of money
from them. Charter Oak's citizenship is properly
considered, and its presence in the lawsuit destroys
IT IS ORDERED that Plaintiffs' motion to
remand (Docket #14) be and ...