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INTERLANDI v. BUDGET TRUCK RENTAL, LLC et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
1:15-cv-02147 Search Pacer
ACE Group party(s): 
Opposing Party: 
Daniel Interlandi
Court Type: 
Federal
US District Court: 
Eastern District of New York
Date Filed: 
Apr 15 2015

TO THE CLERK OF THE ABOVE ENTITLED COURT:

PLEASE TAKE NOTICE that defendant Penn-Star Insurance Company sued herein as
Penn Star Insurance Co. (“Penn-Star” or “Petitioner”) hereby removes to this Court the New
York State Court action described below under 28 U.S.C. § 1446.

1. JURISDICTION

On March 9, 2015, plaintiff Interlandi filed in the Supreme Court of the State of New
York in and for the County of Kings an action styled Interlandi v. Budget Truck Rental, LLC, et
al., No. 502702/2015 (the “Interlandi Insurance Action”). A true and correct copy of the
Summons and Complaint in the Interlandi Insurance Action is attached hereto as Exhibit A. The
Interlandi Insurance Action is a civil action of which this Court has original jurisdiction under 28
U.S.C. § 1332(a), and is one that may be removed to this Court by Petitioner pursuant to the
provisions of 28 U.S.C. §1446 in that, as explained within, as to the only insurance company
defendants, is a civil action between citizens of different states, and the matter in controversy
exceeds the sum of $75,000, exclusive of interest and costs.

A.    AMOUNT IN CONTROVERSY

With a breach of contract cause of action, Interlandi alleges entitlement to $6 million of
insurance proceeds from Penn-Star as Luxe Living Design’s commercial general and umbrella
liability insurer for injuries he sustained as a pedestrian in a motor vehicle accident that is the
subject of an underlying tort case. (Exhibit A, Complaint, Par. 42 and 51.) Also with a breach of
contract cause of action, Interlandi alleges entitlement to $1 million of insurance proceeds from
ACE American Insurance Company and Budget Truck Rental LLC, et al. as the insurers who
provided supplemental liability insurance for a rented truck that was later involved in the motor
vehicle accident that is the subject of an underlying tort case. (Exhibit A, Complaint, Par. 38.)
Interlandi seeks declaratory judgment that the insurers are obligated to provide coverage to their
insureds, presumably, so that they may pay the policy limits to Interlandi in settlements of the
underlying tort action. The amount in controversy thus exceeds $75,000.

B.    DIVERSITY OF CITIZENSHIP OF PLAINTIFF AND PETITIONER

On information and belief, plaintiff Interlandi is a citizen of New York for purposes of
determining diversity jurisdiction. (Exhibit A, Complaint, Par. 8.)
In contrast, the only actual insurance company defendants to the Interlandi Insurance
Action are citizens of states other than New York. Penn-Star Insurance Company was at the
time the Interlandi Insurance Action was filed, and still is, a Pennsylvania corporation with its
principal place of business in Bala Cynwyd, Pennsylvania. (Exhibit B, Certificate of Good
Standing from the Commonwealth of Pennsylvania, Department of State of Penn-Star Insurance
Company; Exhibit C, printout of excerpts from the Excess Lines Association of New York
website at (http://www.elany.org/es.aspx?m=elf) listing Penn-Star Insurance Company as an
eligible excess lines insurer in New York and stating its state of domicile and Home Office are in
Pennsylvania); Exhibit D, printout of excerpts from the National Association of Insurance
Commissioners’ website at (https://eapps.naic.org/cis/companySearch.do) stating that Penn-Star
Insurance Company’s Home Office is in Pennsylvania.)
ACE American Insurance Company was at the time the Interlandi Insurance Action was
filed, and still is, also a Pennsylvania insurance company having its principal place of business in
Philadelphia, Pennsylvania. (Exhibit E, printout of excerpts from the New York State
Department    of    Financial    Services    website    at
(https://myportal.dfs.ny.gov/companydirectory/dir srch optiono.jsp) stating that ACE American
Insurance Company is domiciled in Pennsylvania, and its address is in Philadelphia,
Pennsylvania; Exhibit F, printout of excerpts from the National Association of Insurance
Commissioners’ website at (https://eapps.naic.org/cis/companySearch.do) stating that ACE
American Insurance Company’s Home Office is in Pennsylvania.)
The Interlandi Insurance Action is related to a tort action in the Supreme Court for the
Case l:15-cv-02147-WFK-MDG Document 1 Filed 04/15/15 Page 4 of 8 PagelD #: 4
State of New York in an action titled Interlandi v. Luxe Event Rental LLC, et al, Kings County
Supreme Court Index No. 503889/2013 which was filed on or about July 11, 2013 (Exhibit A,
Complaint, Par. 1; Exhibit G, Complaint; Exhibit H, Amd. Complaint). In the Interlandi Tort
Action, plaintiff alleges that on June 1, 2013, as a pedestrian he was struck by a motor vehicle
and sustained bodily injuries (Exhibit A, Complaint, Par. 6; Exhibit G, Complaint, Par. 14;
Exhibit H, Amd. Complaint, Par. 11). Plaintiff alleges the truck involved in the accident was
owned by Budget Truck Rental, et al. and operated by Odilidzoh Muminov, who was then in the
course of employment for at least six employers, one of whom was Penn-Star’s insured, Luxe
Living Design (Exhibit G, Complaint, Par. 14-16; Exhibit H, Amd. Complaint, Par. 12-18). The
underlying tort action remains pending (Exhibit I, Docket of the Interlandi Tort Action, Request
for Judicial Notice).
The non-insurance company defendants to the Interlandi Insurance Action, including:
Budget Truck Rental, LLC, Perfect Car Rental, Budget Truck Trust I, Budget Truck Funding,
LLC, Luxe Event Rental, LLC, and Luxe Living Design, LLC are all defendants to the Interlandi
Tort Action. While Interlandi alleges essentially that the “Budget Truck Rental defendants” are
insurers (Exhibit A, Complaint, Par. 38), documents available to the Court by judicial notice
show they are not insurance companies (Exhibit J, printout of excerpts from the New York State
Department    of    Financial    Services    website    at
(https://myportal.dfs.ny.gov/companydirectory/dir_srch_optiono.jsp) containing no entry for an
insurance company with its name starting with the word “Budget”; Exhibit K, printouts of
excerpts from the National Association of Insurance Commissioners’ website at
(https://eapps.naic.org/cis/companySearch.do) returning no results for insurance companies
whose name starts with “Budget”, “Budget Truck Rental”, “Perfect Car Rental”, etc.). Budget
Truck Rental, LLC is, however, an insurance agent of ACE American Insurance Company in
New York (Exhibit L, printouts of excerpts from the New York State Department of Financial
Services website at (https://myportal.dfs.ny.gov/nylinxext/elsearch.alice). Under New York law,
insurance agents are not parties to the insurance policies they transact, and are not liable for any
breach thereof by the insurer. See, Carcone v. D'Angelo Insurance Agency, 302 A.D.2d 962, 755
N.Y.S.2d 172 (4th Dep’t 2003) (Insurance Law §3420 creates rights against insurers, not against
agents or brokers).
The other parties to the Interlandi Insurance Action are not insurance companies. Yet,
the Interlandi Insurance Action seeks damages from the insurers, and declaratory judgment that
the insurers are obligated to pay Interlandi their limits of liability. The non-insurer defendants
are therefore “straw” or “fraudulently joined” defendants. “Fraudulent joinder is a term of art. If
the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious
according to the settled rules of the state, the joinder of the resident defendant is fraudulent.”
McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). “The defendant seeking
removal to the federal court is entitled to present the facts,” by way of pleadings and sworn
declarations, “showing the joinder to be fraudulent.” Id. “Removal to federal court will be
sustained if a defendant demonstrates there is no possibility that the plaintiff will be able to state
a cause of action against the non-diverse defendant.” Icasiano v. Allstate Ins. Co., 103
F.Supp.2d 1187, 1188 (N.D. Cal. 2000). The non-insurer defendants to the Interlandi Insurance
Action are all also defendants to the underlying tort action. There can no benefit to suing them
again in a separate action.
While Interlandi alleges controversies concerning the insurance contracts to which he is
not a party (as is apparent from his contention that he was struck by a motor vehicle as a
pedestrian, and that he is a third-party beneficiary to the policies), unless he first obtains a
judgment against the insureds to the insurance policies. New York law establishes he is not a
5
third-party beneficiary. Browdy v. State-Wide Ins. Co., 289 N.Y.S.2d 711, 56 Misc.2d 610
(1968) (“Except as section 167 [now 3420] of the Insurance Law gives the judgment creditor a
right of action, he is not a third-party beneficiary of the contract of insurance obtained by the
insured”)- Interlandi can sue for his own rights, but he lacks standing to assert the rights of
others (Caprer v. Nussbaum, 36 A.D.3d 176, 182 (2d Dept. 2006) (a plaintiff generally has
standing only to assert claims on his own behalf). Consequently, Interlandi lacks standing to sue
insurers alleging disputes as to policies to which Interlandi is not a party. Interlandi lacks
standing to sue alleging other “defendants” are entitled to insurance coverage from Penn-Star
and/or ACE American related to the motor vehicle accident. If these controversies exist, the
non-insurer defendants should be realigned in the Interlandi Insurance Action as plaintiffs.
Interlandi is not a judgment creditor of any of the defendants (Exhibit I, docket from the
Interlandi Tort Action) as would be necessary for him to sustain a direct action against a
defendant’s liability insurer. An action by the injured person against another’s liability insurer
exists solely on the basis of the special statutory provision under Insurance Law §3420. Holmes
v. Allstate Ins. Co., 33 A.D.2d 96, 305 N.Y.S.2d 563 (1st Dep’t 1969). “Plaintiff has no
common-law right to seek relief directly from a tortfeasor's insurer, and the statutory right
created in Insurance Law §3420 arises only after plaintiff has obtained a judgment in the
underlying personal injury action.” Lang v. Hanover Ins. Co., 820 N.E.2d 855, 3 N.Y.3d 350,
355, 787 N.Y.S.2d 211 (N.Y. 2004).
The only substantive, real, and possibly appropriate defendants to this action therefore
are the insurers Penn-Star Insurance Company and ACE American Insurance Company, and
their citizenship presents complete diversity for purposes of invoking federal jurisdiction.
Plaintiff is a citizen of New York; while defendants Penn-Star and ACE American are citizens of
Pennsylvania. Furthermore, even if Budget Truck Rental LLC is an insurer, which it is not, as is
essentially alleged in the Interlandi Insurance Action, Budget Truck Rental LLC is a New Jersey
business entity (Exhibit A, Complaint, Par. 9) with the Home State of New Jersey (Exhibit M).
There would still be complete diversity of citizenship between the plaintiff and the substantive
defendants.

C.    VENUE

Pursuant to 28 U.S.C. § 1446, this action is properly removed to the Eastern District of
New York because the Interlandi Insurance Action was filed in Kings County, which is within
the district of the Eastern District Court.

2.    SERVICE OF COMPLAINT

Penn-Star Insurance Company was personally served with the Summons and Complaint
to the Interlandi Insurance Action on March 16, 2015 in Bala Cynwyd, Pennsylvania (Exhibit
N). That was the first time that Penn-Star received a copy of the Summons and Complaint in the
Interlandi Insurance Action. I am informed and believe that defendant ACE American Insurance
Company has not yet been served with the Summons and Complaint.
At this time, the Supreme Court file in the Interlandi Insurance Action contains the
Summons and Complaint, but no other documents. There are no affidavits of service or returns
of the Summonses. The defendants to the present case have not filed any documents in the
Interlandi Insurance Action in Kings County.

3.    ON DEFENDANTS’ CONSENT TO THE REMOVAL PETITION

Penn-Star Insurance Company seeks to have the Interlandi Insurance Action removed to
the Eastern District of New York and have the Federal Court decide the action. The only other
real and non-straw or non-fraudulently joined defendant, ACE American Insurance Company,
has not been served with the Summons for the case, and until it is, it is not a party to the action.
Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U S. 344, 351 (1999) (a defendant is not an
official party to a suit until service of process is properly executed). Consent from ACE
American therefore should not be required, and that means Penn-Star is the only real defendant
in interest. Budget Truck Rental has declined to consent to Penn-Star’s removal petition, but it is
a straw defendant and a non-insurer in the Interlandi Insurance Action which ostensibly seeks $7
million from insurance companies. The removal petition should not be denied because of the
lack of consent of “defendants” who have not been served, or because of the refusal of straw
defendants to agree to have the case heard in Federal Court.
WHEREFORE Petitioner Penn-Star Insurance Company prays that this Court remove the
Interlandi Insurance Action from the Supreme Court of the State of New York, County of Kings,
in accordance with 28 U.S.C. §1446 and for any other relief the Court deems just and proper.
 

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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