MBO v. Old Republic Insurance Company

Background

David Daouda MBO sued Old Republic Insurance Company in New York Supreme Court, Bronx County, seeking benefits under a motorist policy for injuries allegedly sustained in an automobile collision in Kings County, New York. Old Republic removed the case to the Southern District of New York, asserting federal diversity jurisdiction. The opinion also notes that claims against Liberty Mutual Insurance Company and Allstate Insurance Company had previously been dismissed without prejudice.

Jurisdiction and Venue

The court explained that federal courts must independently determine whether subject-matter jurisdiction exists. Diversity jurisdiction requires adequate allegations of the parties’ citizenship. Old Republic’s removal notice alleged that MBO was a New York resident and that Old Republic was organized under Pennsylvania law and had its principal place of business in Illinois. The court held that alleging residence alone was not enough to adequately plead MBO’s citizenship. As a result, subject-matter jurisdiction was not adequately pleaded in the removal notice.

The court also observed that Kings County is within the Eastern District of New York and that a substantial part of the events giving rise to the claim occurred there. The court stated that, if subject-matter jurisdiction exists, it was inclined to transfer the case to the Eastern District of New York under the federal transfer statute. The court did not make a final transfer ruling in this order.

Orders

The court ordered Old Republic to show cause by April 15, 2024, why the case should not be remanded—that is, returned—to the Supreme Court of New York, Bronx County. The court separately ordered Old Republic to show cause by the same date why the case should not be transferred to the Eastern District of New York if federal jurisdiction exists. Alternatively, the parties could inform the court that they consented to that transfer, assuming jurisdiction exists.

Because subject-matter jurisdiction and venue were unresolved, Judge Rearden denied Old Republic’s summary-judgment motion without prejudice to renewal if the court later determined that federal jurisdiction exists and venue in the Southern District of New York is proper. The Clerk of Court was directed to terminate ECF No. 38.