PAUL G. ROSENBLATT, District Judge.
Pending before the Court is the plaintiff's Motion for Leave to File Second Amended Complaint (Doc. 34), to which only defendant Freedom Mortgage Corporation has filed an opposition. Having reviewed the parties' memoranda, the Court, in the exercise of its discretion, finds that the motion should be granted.
This action was removed from state court on the basis of diversity of citizenship jurisdiction by defendant Stillwater Insurance Company. The Amended Complaint alleges a claim for breach of contract against Stillwater, the plaintiff's insurer, a claim for breach of the covenant of good faith and fair dealing against defendant Freedom Mortgage Company, the plaintiff's mortgage company, and a claim for punitive damages against both defendants, all arising from the manner in which the defendants handled the aftermath of an accidental fire on June 24, 2014 that caused extensive damage to the plaintiff's home and personal property. In her pending motion to amend, the plaintiff seeks to file a second amended complaint in order to add a non-diverse defendant, Desert Dry Restoration, LLC, an emergency mitigation and disaster remediation company that undertook to do a post-fire inventory of the plaintiff's property.
As the plaintiff notes in her motion, and Freedom Mortgage ignores in its opposition, when a plaintiff seeks to enjoin a non-diverse defendant to an action removed on the basis of diversity of citizenship jurisdiction, joinder is governed by 28 U.S.C. § 1447(e), which provides that "[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the state court." The decision to permit joinder of a diversity-destroying defendant is left to the sound discretion of the Court.
Because § 1447(e) is silent as to how courts should exercise this discretion, district courts within the Ninth Circuit have considered a variety of factors, including (1) whether the person sought to be joined is necessary for the just adjudication of the controversy, (2) the plaintiff's motive for seeking joinder and whether the plaintiff is seeking to add the defendant solely to destroy diversity of citizenship jurisdiction, (3) whether there has been a delay in seeking to add the new defendant, (4) whether, if joinder is denied, the statute of limitations would bar an action against the new defendant in state court, (5) the apparent validity of the claims against the new defendant, and (6) any prejudice to the plaintiff if the amendment is denied.
As for the first factor, the plaintiff argues that Desert Dry is a necessary party at this time because Stillwater has failed to admit in its discovery responses that Desert Dry is its agent and that it is variously liable for Desert Dry's actions and omissions, whereas Freedom Mortgage argues that Desert Dry is not a necessary party under the standard of Fed.R.Civ.P. 19 because the plaintiff has not demonstrated how complete relief cannot be afforded in this action unless Desert Dry is added as a defendant. The Court disagrees with Freedom Mortgage's position because § 1447(e) gives the Court more flexibility than a strict Rule 19 analysis,
As for the second factor, the Court, notwithstanding Freedom Mortgage's argument to the contrary, is not convinced that the plaintiff is seeking to amend her complaint solely for the purpose destroying diversity jurisdiction. The Court accepts the plaintiff's reasoning for seeking to add Desert Dry at this time, which is based on Stillwater's failure to concede that Desert Dry is its agent, and declines to impute an improper motive to the plaintiff simply because she seeks to add a non-diverse defendant post-removal. See
As for the third factor, the Court's rejects Freedom Mortgage's argument that the plaintiff unduly delayed in seeking to add Desert Dry as a defendant. While the motion to amend was filed some 4½ months after this action was originally filed in state court, the Court accepts the plaintiff's explanation that at the time she filed her state court complaint and her Amended Complaint she did not know that there was any dispute as to Desert Dry's status as Stillwater's agent, and that she sought to add Desert Dry as a defendant immediately after learning from Stillwater's discovery responses that there was a dispute. In any case, any delay is inconsequential since the Court has not yet held a scheduling conference in this action.
As for the fourth and sixth factors, the Court concludes that they weigh in favor of joinder given the possibility that the plaintiff's proposed interference with contract claim against Desert Dry, which is subject to a two-year statue of limitations,
As for the fifth factor, the Court concludes that it weighs in favor of joinder because the plaintiff has shown that it has claims against Desert Dry that are sufficiently valid for § 1447(e) purposes. Therefore,
IT IS ORDERED that plaintiff Lori Rodd's Motion for Leave to File Second Amended Complaint (Doc. 34) is granted to the extent that the plaintiff shall file her second amended complaint as proposed in Exhibit 1 to her Addendum to Motion for Leave to File Second Amended Complaint (Doc.36) no later than July 29, 2016.
Freedom Mortgage also concedes in its opposition to the motion to amend that its liability to the plaintiff, which is premised on the plaintiff's allegation that it improperly used insurance claim proceeds from Stillwater to pay off the plaintiff's mortgage instead of repairing the plaintiff's home, is not tied to any actions by Desert Dry.