Frydman v. Endurance American Insurance Co.
- Kenneth Karas
- 7:22-cv-05558
- U.S. District Court · Southern District of New York
- 3
In Frydman v. Endurance American Insurance Co., Judge Karas transferred the case to New York state court after finding no diversity jurisdiction.
Jacob Frydman and Endurance American Insurance Co.; the federal action was transferred to New York state court because the parties were not completely diverse for federal jurisdiction.
What happened
In Frydman v. Endurance American Insurance Co., Jacob Frydman sued Endurance American Insurance Co. over an alleged breach of an insurance contract. Frydman initially claimed federal jurisdiction because the parties were citizens of different states.
While preparing an amended complaint, Frydman reported that Endurance’s principal place of business was in New York. Because Frydman was also a New York resident, the court found that the parties were not completely diverse for federal jurisdiction.
Judge Kenneth M. Karas transferred the action to New York state court and directed the Clerk of Court to close the federal case. The court did not grant Frydman’s request to dismiss the action without prejudice.
The detailed version
- Frydman v. Endurance American Insurance Co. · No. 7:22-cv-05558
- Kenneth Karas
- Sept. 9, 2022
Background
Jacob Frydman filed a contract lawsuit against Endurance American Insurance Co., alleging that the company breached an insurance contract. Frydman initially asserted that the federal court had jurisdiction because of diversity of citizenship, which generally requires all plaintiffs and defendants to be citizens of different states.
Frydman’s complaint described him as a New York resident and Endurance as a Delaware corporation. The complaint also alleged that Endurance was not registered to do business in New York and stated that the company had been acquired by a Japanese insurance conglomerate doing business as Sompo International.
After Endurance sought a pre-motion conference regarding a possible motion to dismiss, Frydman asked for permission to amend his complaint. The court granted that request. During preparation of the amended complaint, Frydman reported that further investigation showed Endurance maintained its principal place of business in New York. Endurance apparently confirmed that information. Frydman then asked the court to dismiss the action without prejudice for lack of diversity jurisdiction.
Jurisdiction
For diversity jurisdiction, a corporation is generally considered a citizen of both its state of incorporation and the state where its principal place of business is located. The court explained that diversity jurisdiction requires complete diversity, meaning that every plaintiff must be a citizen of a different state from every defendant.
Because Frydman was a New York resident and Endurance maintained its principal place of business in New York, the court concluded that the parties were citizens of the same state and that the federal court lacked the required subject-matter jurisdiction. The opinion did not identify the specific location of Endurance’s principal place of business within New York.
Ruling
The court stated that it had authority under 28 U.S.C. § 1406 to transfer a case when venue is improper if transfer would serve the interests of justice. It transferred the action to New York state court and directed the Clerk of Court to transfer the case forthwith and close the federal action.
The order therefore transferred the case rather than granting Frydman’s requested dismissal without prejudice. Judge Kenneth M. Karas signed the order on September 9, 2022.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.