John S. Clark Company, Inc. v. Travelers Indemnity Company Of Illinois

359 F.Supp.2d 429 (2004)

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Nature of the Case

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Facts

P is a building contractor incorporated under the laws of a state other than North Carolina and registered to do business in North Carolina. P maintains an office in North Carolina and qualifies as a citizen of North Carolina for jurisdictional purposes. Ignacio and Marina Herrera are individuals whose domiciles and primary residences are located in North Carolina. Herrera Masonry, Inc., is a North Carolina corporation with its principal place of business in North Carolina. D is an insurance company incorporated under the laws of a state other than North Carolina with its principal place of business in Hartford, Connecticut. P accepted a construction contract for the Parish Life Center and other associated renovations. P obtained multiple layers of insurance to cover the construction project itself and P's liabilities while working on the construction project, including a series of commercial general liability insurance policies that D issued to P. P was covered for property damage arising from work performed by subcontractors on P's behalf as well as coverage for costs that P might incur to repair or replace defective work during the construction project. P hired Herrera (Ds) as masonry subcontractors. The contained required Ds to assume responsibility 'for assuring that [their] workmanship and material [were] in compliance with all local, state and/or federal codes.' The contract also contained a warranty 'against all deficiencies and defects in materials and/or workmanship' as well as Ds' promise to indemnify P 'from and against all claims, damages, loss, and expenses . . . arising out of or resulting from the performance of [their] work.' A portion of the construction project collapsed in part from errors, omissions, and deficiencies in the Ds' masonry. P repaired and rebuilt the collapsed portion. P filed this civil action in North Carolina, demanding payment and indemnity from both D and Ds for 'losses and damages, including, but not limited to, property damage, loss of use, delay and acceleration damages, other charges. P's complaint stated two claims against Ds for breach of contract and negligence based on the alleged improper installation of rebar in certain sections of masonry, failure to install rebar in certain sections of masonry, failure to install grout in certain sections of masonry, and faulty workmanship, which Plaintiff apparently discovered throughout the construction project. P's complaint also stated three separate claims against D for breach of contract, bad faith, and unfair and deceptive trade practices based on D's alleged failure to investigate and pay P's claims for costs that P incurred to repair and rebuild the collapsed portion of the construction project and costs that P incurred to repair portions of the construction project which contained structural defects but did not collapse. D filed a notice of removal pursuant to §§ 1441 and 1446, which cited §1332 as the only basis for federal jurisdiction of the subject matter of this civil action. Ds filed an answer to P's complaint and a motion to remand this civil action to the General Court of Justice for lack of subject matter jurisdiction. Ds denied the material allegations and asserted several affirmative defenses to the allegations including the defense of contributory negligence. Ds contend that the court lacks jurisdiction over the subject matter of this civil action because 'P and Ds are all citizens of the State of North Carolina; there is not complete diversity between the parties.' P filed its own motion to remand under § 1447(c). It stated that there is not complete diversity between P and Ds. D denied the material allegations and asserted several affirmative defenses to the allegations. D contends that the court should disregard Ds for jurisdictional purposes and dismiss Ds because they do not qualify as necessary parties or proper parties to the controversy between P and D. D claims P should pursue its separate claims against Ds in North Carolina state court.