United States District Court, D. Oregon, Eugene Division
JARED REDIGER, MYRANDA REDIGER, and HAYSTORM HARVESTING & FIBER, INC., Plaintiffs,
COUNTRY MUTUAL INSURANCE COMPANY, Defendant.
OPINION AND ORDER
Aiken United States District Judge
dispute concerns defendant County Mutual Insurance
Company's ("defendant") alleged failure to
issue a policy on terms agreed to between plaintiffs Jared
and Myranda Rediger ("plaintiffs") and insurance
agent Bob Bronson ("agent"). Defendant moves to
dismiss under Fed.R.Civ.P. 12(b)(7) for failure to join a
party under Fed.R.Civ.P. 19. For the reasons below,
defendant's motion is denied.
was a licensed insurance agent in Oregon and an authorized
agent of defendant. Pis.' Compl. ¶ 5 (doc. 1). In
June 2014, agent viewed and inspected plaintiffs'
household and business operations in Harrisburg, Oregon.
Id., at ¶¶ 6, 9, 10. Also in June 2014,
plaintiffs allegedly purchased insurance coverage from agent
on their business operations and home, including coverage for
liability, property, and business interruption from perils,
including fire. Id. at ¶ 14. Plaintiffs allege
that agent agreed to fully insure plaintiffs for replacement
of real or personal property, and for agricultural products
recovery from business income interruption, in the event of
"total loss from perils such as fire." Id.
at ¶ 15. In June 2014, plaintiffs paid enough to cover
the first six months of their insurance policy. Id.
at ¶ 16. For nearly six months, plaintiffs waited for a
written policy to issue from defendant, while agent assured
them that they were insured. Id. at ¶¶ 17,
December 2014, a fire caused damage to plaintiffs'
property and their business operations. Id. at
¶ 19. Plaintiffs notified agent and defendant
immediately. Id. at ¶ 21. Defendant accepted
the claim. Id. at ¶ 22. Defendant also, at that
point, issued the written policy. Id. at ¶ 23.
Plaintiffs hired a public adjusting company, which concluded
that plaintiffs suffered approximately $2.5 million in
property damage, and up to $900, 000 in lost business.
Id. at ¶¶ 24, 25, Defendant paid
plaintiffs $1, 573, 420.03 to compensate for their property
losses. Defendant issued no payment for the income plaintiffs
lost due to the interruption of their business operations.
Id. at ¶26.
filed suit. They claim that defendant failed to issue a
written policy in conformance with the agreement reached
between agent and plaintiffs, and that defendant failed to
pay for damages and losses covered under the agreement.
Id. at ¶ 27. Plaintiffs claim that j
defendant's failure to pay for these damages and losses
was a breach of their insurance contract negotiated on
defendant's behalf by agent. Id. Plaintiffs
claim that as a result of this breach, they have been damaged
in the amount of $ 937, 973 in property damage, and up to
$900, 000 in J business interruption losses. Id. at
¶ 29. Defendant has not challenged plaintiffs'
allegation that agent was the authorized agent of defendant
at the time plaintiffs negotiated their insurance policy with
agent and defendant.
moves to dismiss under Rule 12(b)(7) for failure to join
agent, claiming that agent is a necessary and indispensable
party under Rule 19, and that because joining agent would
destroy diversity, this case must be dismissed. I will first
determine whether agent is a necessary party under Rule
19(a), and then address whether agent is an indispensable
party under Rule 19(b).
Is Agent Necessary Under Rule 19(a)?
Ninth Circuit's analysis of what makes an absent person a
necessary party under I i Rule 19(a)(1)
consists of two broad inquiries. Ward v. Apple Inc.,
791 F.3d 1041, 1048 (9th Cir. 2015). First, under Rule
19(a)(1)(A), can complete relief be provided to existing
parties without I the absent person? Id. Second, in
the alternative, under Rule 19(a)(1)(B), does the absent
person claim an interest that relates to the subject of the
action? Id. The moving party has the burden of
persuasion in arguing for dismissal. Makah Indian Tribe
v. Verity, 910 F.2d 555, 558 (9th Cir. 1990). I start
with whether complete relief can be accorded in agent's
absence; then, in the alternative, I turn to whether agent
claims an interest relating to the subject of the action.
is "designed to protect the interests of absent parties,
as well as those ordered before the court, from multiple
litigation, inconsistent judicial determinations or the
impairment of interests or rights." CP Nat'l
Corp. v. Bonneville Power Admin., 928 F.2d 905, 911 (9th
Cir. 1991). Accordingly, Rule 19 issues may be raised sua
sponte by reviewing courts. Id. Thus, while
defendant does not argue that complete relief cannot be
accorded without agent, I will I walk through a complete
analysis of Rule 19 as it applies to the present case.
Complete Relief to Existing Parties
is no precise precedent in the Ninth Circuit on whether
complete relief can be accorded existing parties to an
insurance dispute in the absence of the agent who represented
the insurance company in negotiating the contract at issue.
However, other recent district court decisions provide
helpful guidance. These courts have held that when there is a
dispute between an insured plaintiff and an insurance-company
defendant over the coverage provided by the insurance
company, courts can accord complete relief without the
insurance agent as a party. See Auto-Owners Ins. Co. v.
Morris, 191 F.Supp.3d 1302, 1305 (N.D. Ala. 2016)
(insurance agent's conduct was "certainly relevant
to the coverage issue, " but "the court can accord
complete relief on that coverage issue without the [agent]
being joined as a party"); Republic-
Franklin Ins. Co. v. Pasour, 2011 WL 5169958, at
*4-5 (W.D. N.C. July 29, 2011) (when an action involves a
contractual dispute over the extent of insurance coverage,
the court can provide complete relief without joining an
agent who is neither named in the lawsuit nor a party to the
contract); Nationwide Mut. Ins. Co. v. Ruff, 2011 WL
2491345, at *2 (D.S.C. June 22, 2011) (concluding that when
there is a contractual dispute about insurance coverage, the
court can grant complete relief among existing parties when
the existing parties are the "only two parties to the
contract"). In the present case, it is undisputed that
agent was defendant's agent in negotiating the contract
and agent was not a party to the contract, so 1 can accord
complete relief to the plaintiffs and defendant without agent
as a party.
Ninth Circuit's Rule 19 jurisprudence also supports this
conclusion. Complete relief can be accorded when a court is
able to fashion "meaningful relief between the existing
parties. Disabled Rights Action Comm. v. Las Vegas
Events, Inc.,375 F.3d 861, 879 (9th Cir. 2004). Relief
is "meaningful" when it is not "partial or
hollow, " and when it precludes "multiple lawsuits
on the same cause of action." Id. (quoting
Northrup Corp. v. McDonnell DouglasCorp.,705 F.2d 1030, 1043 (9th Cir. 1983)). I begin with whether
this Court can provide relief that is not partial or ...