Housing and Redevelopment Insurance Exchange v. Guy Carpenter & Company, LLC

Background

Housing and Redevelopment Insurance Exchange asserted claims against Guy Carpenter & Company, LLC for breach of contract, unjust enrichment, conversion, breach of fiduciary duty, fraudulent inducement, and misrepresentation. The plaintiff invoked diversity jurisdiction under 28 U.S.C. § 1332, which permits federal courts to hear certain disputes between citizens of different states when the amount in controversy exceeds $75,000.

The action was originally filed in the U.S. District Court for the Middle District of Pennsylvania. It was later transferred to the Southern District of New York under a forum-selection clause in the parties’ contract. Guy Carpenter had moved to dismiss the amended complaint under Rule 12(b)(6), or alternatively to strike the plaintiff’s request for punitive and consequential damages.

Jurisdictional deficiencies

The court examined subject matter jurisdiction before addressing the parties’ arguments on the pending motion. For diversity jurisdiction, the parties must have complete diversity, meaning that every plaintiff must be a citizen of a different state from every defendant.

The amended complaint described the plaintiff as a nonprofit inter-indemnifactor reciprocal insurance exchange but did not clearly identify whether it was a corporation, partnership, limited liability company, or another type of unincorporated organization. That distinction matters because different entity types have different citizenship rules. For example, a corporation’s citizenship generally depends on its state of incorporation and principal place of business, while an unincorporated entity generally has the citizenship of each member or partner.

The court also found that the allegations concerning Guy Carpenter’s citizenship were insufficient because they were made only “upon information and belief.” The complaint alleged that Guy Carpenter was a limited liability company whose sole member was Marsh U.S.A., Inc., but the court concluded that these allegations did not adequately establish the citizenship of the relevant entities. The court therefore could not determine whether complete diversity existed.

Ruling

The court held that it could not assume subject matter jurisdiction when the complaint did not provide the necessary facts to establish it. The plaintiff’s claims were dismissed without prejudice for lack of subject matter jurisdiction. The court granted the plaintiff leave to file a further amended complaint by March 31, 2025, to cure the identified jurisdictional deficiencies.

The court directed the Clerk of Court to terminate the motion pending at docket entry 29. The opinion did not decide the merits of the plaintiff’s claims or the defendant’s Rule 12(b)(6) arguments.