Brink's Co. v. Chubb European Grp. Ltd.

THE BRINK'S COMPANY, Plaintiff, v. CHUBB EUROPEAN GROUP LIMITED, et al., Defendants.

Civil Action No. 3:20-cv-520-HEH

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division

November 20, 2020

MEMORANDUM OPINION

(Denying Motion for Remand)

This matter is before the Court on The Brink's Company's ("Plaintiff") Motion for Remand (ECF No. 8), filed on July 14, 2020. This case was removed from the Circuit Court for the County of Henrico on July 9, 2020. (ECF No. 1.) Plaintiff contests removal, and claims that there is not diversity jurisdiction in this case because Chubb European Group Limited ("Chubb") and Certain Underwriters at Lloyd's, London Subscribing to Policy No. B091/L11831111 ("Underwriters," collectively "Defendants") have not adequately pled their citizenship. The parties have filed memoranda in support of their respective positions and the Court heard oral argument on the Motion on September 30, 2020. The Motion is ripe for the Court's review. For the foregoing reasons, the Court will deny the Motion for Remand.

I. BACKGROUND

As set forth in the Complaint, Plaintiff is a cash management company based in Henrico, Virginia. (Notice of Removal, ECF No. 1, Ex. A, ¶ 8.) In 2018, Plaintiff sought specialty insurance and obtained comprehensive crime insurance through the insurance marketplace Lloyd's, London ("Lloyd's"). (Id. ¶ 10.)

Lloyd's is not an insurance company; it is an entity that controls a specialty insurance marketplace, functioning similarly to the New York Stock Exchange. Allen v. Lloyd's, London, No. 3-cv-522-REP, 1996 WL 490177, at *2 (E.D. Va. Aug. 23, 1996). The market was originally (and still is in part) funded by wealthy individuals who provide capital to underwrite insurance policies for a variety of risks. Id. at *2-3. These individuals are members of Lloyd's and are called "Names," and, over time, Names have become a mixture of business entities and individuals. Id. at *3. Names are grouped into syndicates, which can also sometimes form groups, to underwrite a policy or risk. Id. Generally, Names are not involved in day-to-day management of a syndicate; instead, a manager or agent is appointed to monitor daily operations. Id.

Plaintiff obtained primary coverage for its comprehensive crime insurance through Chubb and first excess comprehensive insurance coverage through the Underwriters for the period between April 1, 2018 and April 1, 2019. (ECF No. 1, Ex. A, ¶ ¶ 10-11.) Together, the policies covered Plaintiff in an amount up to $50,000,000.00 (a $10,000,000.00 policy limit on the primary coverage and $40,000,000.00 of excess coverage through the excess comprehensive policy). (Id. ¶ 12.) During the 2018 coverage period, Plaintiff discovered that one of its employees, Roiland Gotiangco ("Gotiangco"), defrauded Plaintiff by modifying, corrupting, and erasing confidential data in Plaintiff's systems dating back as far as 2016. (Id. ¶¶ 14-15.) As a result of this scheme, Plaintiff alleges that Gotiangco fraudulently transferred $1,220,078.27, leadingto a federal investigation and subsequent indictment for wire fraud and identity theft. (Id. ¶¶ 18-21.)

Thereafter, Plaintiff contends it notified Chubb in September 2018 of the theft and warned in October 2018 that further investigation may uncover additional losses. (Id. ¶ 22.) Chubb allegedly told Plaintiff that the additional losses would "fall within the definition of a single claim and would 'attach back' to this notification." (Id.) Plaintiff employed KPMG to perform a forensic accounting investigation. (Id. ¶¶ 23-25.) Based upon the results of KPMG's investigation, Plaintiff asserts that it suffered a loss of $21,725,000.00 from accounts lost due to Gotiangco's modification of the computer records and $4,500,000.00 in costs to reproduce Plaintiff's accounts and data in addition to the $1,220,078.27 transferred to Gotiangco's personal accounts. (Id. ¶ 25.) Plaintiff states that it then notified the Underwriters that Plaintiff's losses could be as much as $25,000,000.00. (Id. ¶ 26.) Accounting for the $100,000.00 deductible, Chubb paid Plaintiff $1,120,078.27 for the actual amount Gotiangco misappropriated as well as an additional $100,000.00 for the proof of loss KPMG prepared. (Id. ¶ 27.) Plaintiff claims that Chubb and Underwriters have failed to properly compensate Plaintiff for its losses attributed to Gotiango's fraud. (Id. ¶ 28.) Plaintiff brings two claims of breach of contract, one as to each Defendant for failing to cover the entirety of Plaintiff's $26,250,000.00 loss.

Defendants contend that there is diversity jurisdiction because Plaintiff is diverse from all Defendants and the amount in controversy exceeds $75,000. (Id.) As alleged in the Notice of Removal, Defendants assert that the citizenship for all parties is as follows:

• Plaintiff is a Virginia corporation with its principal place of business in Henrico County, Virginia.

• Chubb Underwriting Agencies Limited is the managing agent for Lloyd's Syndicate 2488, which issued the primary coverage policy. Chubb Underwriting Agencies Limited is incorporated in the United Kingdom with its principal place of business in London, England. Lloyd's Syndicate 2488 has one member, Chubb Capital Limited, which is a private limited company incorporated in the United Kingdom with its principal place of business in London, England. Chubb European Group Limited, the named Defendant, is now called Chubb European Group SE and is incorporated in France with its principal place of business in Courbevoie, France.

• The Underwriters, who issued the excess coverage policy, consist of nine Names grouped into four Syndicates:

? QBE Syndicate 1886 is an unincorporated association. Its sole member is QBE Corporate Limited, a private limited company. QBE Corporate Limited is incorporated in England and Wales with its principal place of business in London, England.

? Probitas Syndicate 1492 is an unincorporated association. There are six members of this Syndicate: (1) OCIL Limited; (2) Probitas Corporate Capital Limited; (3) GIC Re, India, Corporate Member Limited; (4) IAT CCM Limited; (5) Iris Balanced Corporate Member Limited; and (6) Iris Low Volatility Plus Corporate Member Limited. These entities are allprivate limited companies organized under the laws of the United Kingdom with their principal places of business in the United Kingdom.

? Liberty Syndicate 4472 is an unincorporated association. Its sole member is Liberty Corporate Capital Limited. Liberty Corporate Capital Limited is a private limited company organized under the laws of the United Kingdom with its principal place of business in London, England.

? XL Syndicate 2003 is an unincorporated association. Its sole member is Caitlin Syndicate Limited. Caitlin Syndicate Limited is a private limited company organized under the laws of England with its principal place of business in London, England.

Plaintiff contends that Defendants insufficiently pled diversity jurisdiction as the Notice of Removal does not properly list all the relevant parties and corresponding citizenship. (ECF No. 9 at 1.) Specifically, Plaintiff argues that Defendants have not included all the Names underwriting the policy. (Id. at 2.) Moreover, as the Names comprising the syndicates are U.K. private limited companies, Plaintiff also asserts that a U.K. private limited company should not be treated as a corporation for diversity purposes, but rather as an unincorporated association. (ECF No. 19 at 11-6.) Accordingly, Plaintiff believes that Defendants must list all the stakeholders for each Name. (Id.) Defendants, however, assert that the Names listed comprise all the Names associated with the syndicates and that no other Name assisted in underwriting the policies. (ECF No. 18 at 1.) Defendants also argue that U.K. private limited companies are like corporations for diversity purposes and, thus, Defendants only need to allege theprincipal place of business and place of incorporation for each Name. (Id. at 6.)

II. STANDARD OF REVIEW

As the removing parties, Defendants bear the burden of demonstrating that this Court has subject matter jurisdiction. Pressl v. Appalachian Power Co., 842 F.3d 299, 302 (4th Cir. 2016). Removing proceedings from state court raises significant federalism concerns; accordingly, "[i]f federal jurisdiction is doubtful, a remand is necessary." Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). In contrast to state courts of general jurisdiction, "[f]ederal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute." Gunn v. Minton, 568 U.S. 251, 256 (2013) (quotations and citations omitted). In determining whether removal is proper, federal courts must be "sensitive to the delicate nature of federal-State relations [and] must take care not to assume jurisdiction of a case or controversy that belongs exclusively before a State tribunal." Thompson v. Gillen, 491 F. Supp. 24, 27 (E.D. Va. 1980). "[C]ourts may consider affidavits and other extrinsic information to determine whether subject matter jurisdiction exists." Saval v. BL Ltd., 710 F.2d 1027, 1029 n.2 (4th Cir. 1983).

This Court has "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of a State and citizens or subjects of a foreign state." 28 U.S.C. § 1332(a)(2). Diversity must be complete "such that the state of citizenship of each plaintiff must be different from that of each defendant" at the time an action commences. Athena Auto., Inc. v. DiGregorio, 166 F.3d 288, 290 (4th Cir. 1999). This holds true forwhen a citizen of a foreign state is a party to an action. Gen. Tech. Applications, Inc. v. Exro Ltda, 388 F.3d 114, 120-21 (4th Cir. 2004) (holding that non-diverse state citizenship or alienage on two sides of a dispute destroys diversity).

The amount in controversy is...