Pulver Macz Funeral Home, Inc. v. West Bend Mutual Insurance Company et al

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
PULVER MACZ FUNERAL HOME, INC.,
Plaintiff,
v.
WEST BEND MUTUAL INSURANCE
COMPANY, and HAUSCH & COMPANY, INC.,
Defendants.
Case No. 25-cv-01747-JPG
MEMORANDUM AND ORDER
This case is before this Court after it ordered Plaintiff Pulver Macz Funeral Home
(“Pulver Macz”) to show cause why the Court should not use the fraudulent joinder doctrine to
disregard the citizenship of Defendant Hausch & Company (“Hausch”) when determining
whether the parties are completely diverse under 28 U.S.C. § 1332(a) (Doc. 8).
I. 	BACKGROUND
On July 29, 2025, Pulver Macz filed this action in the Marion County Circuit Court
against Defendants West Bend Mutual Insurance Company (“West Bend”) and Hausch. The
complaint alleges two causes of action—breach of contract and violation of Section 155 of the
Illinois Insurance Code—against West Bend, and one cause of action—negligent
misrepresentation—against Hausch. On September 5, 2025, West Bend filed a Notice of
Removal (Doc. 1). In its notice of removal, West Bend asks the Court to apply the fraudulent
joinder doctrine to disregard the citizenship of Hausch for the purposes of determining diversity
jurisdiction. The following day, the Court entered an order requiring Pulver Macz to show cause
why the Court should not use the fraudulent joinder doctrine to disregard the citizenship of
Hausch. Pulver Macz filed a response that asks the Court to remand the case because (1) Hausch
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was not fraudulently joined, and (2) West Bend’s removal was untimely. (Doc. 12). West Bend
filed a reply that addresses both arguments (Doc. 16).
II. 	LEGAL STANDARD
A. Removal Standard:
A defendant may remove a case filed in state court if the federal court would have had
original jurisdiction to hear the case when the plaintiff originally filed it. 28 U.S.C. § 1441(a);
Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 758 (7th Cir. 2009). “The party seeking
removal has the burden of establishing federal jurisdiction, and federal courts should interpret the
removal statute narrowly, resolving any doubt in favor of the plaintiff’s choice of forum in state
court.” Schur, 577 F.3d at 758 (citing Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir.
1993)). If the case stated by a plaintiff’s initial pleading is removeable, that is, if it states a case
over which a federal court has original jurisdiction, the defendant must file a notice of removal
within thirty days of receiving the complaint. 28 U.S.C. § 1446(b). If the notice of removal is
defective for failure to meet time requirements, the Court should remand the case pursuant to 28
U.S.C. § 1447(c).
III. 	ANALYSIS
A. Timeliness of Removal:
The Court starts by addressing Pulver Macz’s argument that it should remand this case
because West Bend’s removal was untimely. Here, Pulver Macz served West Bend pursuant to
215 ILCS 5/123. The statute states that a company’s “issuance or delivery of contracts of
insurance” to Illinois residents constitutes “an appointment by such company, of the Director and
his or her successor . . . to be its true and lawful attorney upon whom may be served all lawful
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process in any action or proceeding against it, arising out of such policy or contract of
insurance.” Id. In addition, it describes how to serve process on the Director:
Service of such process shall be made by delivering and leaving with the Director
a copy thereof and the payment to the Director of the fee prescribed by this Code.
The Director shall keep a record of all process so served upon him or her. Such
process shall be sufficient service upon such foreign or alien company provided
notice of such service and a copy of the process are, within 10 days thereafter,
sent by certified or registered mail by the plaintiff’s attorney of record to the
defendant at the last known principal place of business of the defendant . . . .
Id. Pulver Macz served Michelle Dianzo, an Office Associate at the Illinois Department of
Insurance, on August 1, 2025. However, it was not until five days later, on August 6, 2025, that
Ann Gillespie, the Director of the Illinois Department of Insurance, received the service of
process. Thus, West Bend was served on August 6, 2025. West Bend filed its notice of removal
on September 5, 2025, which is within thirty days after it received the complaint. Therefore, its
removal was timely.
B. Fraudulent Joinder:
Since the Court finds that the removal was timely, it must decide whether Hausch was
fraudulently joined in this action. In its notice of removal, West Bend asserts that the Court has
original diversity jurisdiction over this matter. Diversity jurisdiction exists when there is
complete diversity of citizenship between the parties and the amount in controversy exceeds
$75,000. See 28 U.S.C. § 1332. In this case, there is not complete diversity between the parties
because Pulver Macz and Hausch are citizens of the same state. However, West Bend asks the
Court to disregard Hausch’s citizenship for diversity purposes because Hausch was “fraudulently
joined” as a defendant in this case.
The doctrine of fraudulent joinder is based on the principle that a plaintiff cannot defeat a
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defendant’s right to removal by naming or joining a nondiverse party against whom it has no
chance of success. Morris v. Nuzzo, 718 F.3d 660, 666 (7th Cir. 2013); Schur, 577 F.3d at 763;
Gottlieb v. Westin Hotel Co., 990 F.2d 323, 327 (7th Cir. 1993). The Court must ignore the
citizenship of fraudulently joined defendants when determining if it has diversity jurisdiction.
Morris, 718 F.3d at 666; Schur, 577 F.3d at 763; Gottlieb, 990 F.2d at 327. If diversity
jurisdiction exists once the fraudulently joined parties’ citizenships have been disregarded, the
Court may dismiss the fraudulently joined defendants and continue exercising jurisdiction over
the case. Morris, 718 F.3d at 666; Schur, 577 F.3d at 763. The party invoking the Court’s
jurisdiction bears a heavy burden of persuasion to demonstrate fraudulent joinder. Schur, 577
F.3d at 763. Doubts about whether a defendant was fraudulently joined and whether removal
was, as a consequence, proper must be resolved in favor of the plaintiff. Morris, 718 F.3d at 668.
Fraudulent joinder must be proven by clear and convincing evidence. 5 M OORE’S F EDERAL
P RACTICE § 102.21[5][a] (3d ed. 2002).
Fraudulent joinder can occur in two circumstances: (1) when there is no possibility that a
plaintiff can state a cause of action against a nondiverse defendant, or (2) where there has been
outright fraud in plaintiff’s pleading of jurisdictional facts. Gottlieb, 990 F.2d at 327. To
establish fraudulent joinder under the first prong, a defendant must demonstrate that, “after
resolving all issues of fact and law in favor of the plaintiff, the plaintiff cannot establish a cause
of action against the in-state defendant.” Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir.
1992) (emphasis in original); accord Morris, 718 F.3d at 666; Schur, 577 F.3d at 764. If there is
“any reasonable possibility,” Poulos, 959 F.2d at 73, that the plaintiff could succeed against a
defendant, the defendant will not be deemed fraudulently joined. Schur, 577 F.3d at 764.
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West Bend argues that Hausch was fraudulently joined because there is no possibility that
Pulver Macz can state a claim against Hausch for negligent misrepresentation. The Court agrees.
To establish a claim of negligent misrepresentation under Illinois law, a plaintiff must
demonstrate:
(1) a false statement of a material fact; (2) carelessness or negligence in
ascertaining the truth of the statement by the party making it; (3) an intention to
induce the other party to act; (4) action by the other party in reliance on the truth
of the statement; and (5) damage to the other party resulting from such reliance
when the party making the statement is under a duty to communicate accurate
information.
Capiccioni v. Brennan Naperville, Inc., 791 N.E.2d 553, 562 (Ill. App. Ct. 2003). The Court
starts by noting that it is not convinced that Pulver Macz can prove Hausch was under a duty to
communicate accurate information to Pulver Macz. Hausch is a third-party field adjusting
company that was hired by West Bend to inspect the property so West Bend could prepare an
estimate. Under Illinois law, Hausch is an independent adjuster. See 215 ILCS 5/1575(f)(1)(B)
(“‘Independent adjuster’ means the insurance adjusters who are hired on a contract basis by an
insurance company to represent the insurance company’s interest in the settlement of the claim.
They are paid by your insurance company. They will not charge you a fee.”). The majority of
states have held that an independent adjuster owes no independent duty to the insured. Lodholtz
v. York Risk Servs. Grp., Inc., 778 F.3d 635, 641 n.11 (7th Cir. 2015) (“A survey of state-court
decisions confirms that the majority of states have held that a claims adjuster owes no
independent duty to the insured.”). However, no Illinois court has addressed this question, and
the Court does not need to because it finds that Pulver Macz is unable to establish that it took any
action in reliance on a statement made by Hausch.
Pulver Macz alleges that it “reviewed and relied on Hausch’s analysis as part of West
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Bend’s reporting until [it] hired its own independent contractor to independently value the
claim.” However, the allegation of reliance does not align with the facts in this case. Hausch
inspected Pulver Macz’s property on August 5, 2023, and provided its initial estimate on August
25, 2023. Pulver Macz retained its own contractor, Elite Contracting and Consulting (“Elite”), to
independently value its claim. Elite inspected the property on August 5, 2023, and provided its
initial estimate that same day. Therefore, Pulver Macz received its independent estimate from
Elite nearly three weeks before it received any information from Hausch. As such, Pulver Macz
is unable to show that it took any action in reliance on its trust in a statement made by Hausch.
Since it is not possible for Pulver Macz to make out a claim against Hausch for negligent
misrepresentation, Hausch was fraudulently joined in the action. If the citizenship of Hausch is
disregarded, the requirements for diversity jurisdiction are met. See 28 U.S.C. § 1332. First, there
is complete diversity of citizenship between the parties. Pulver Macz is a citizen of Illinois, and
West Bend is a citizen of Wisconsin. Second, the amount in controversy exceeds $75,000. Pulver
Macz alleges that the damage to the property at issue was nearly $952,000. Accordingly, the
Court will dismiss Hausch as a defendant in this action and continue to exercise jurisdiction over
this case.
IV. 	CONCLUSION
The Court finds that this case is properly in federal court for two reasons. First, West
Bend’s notice of removal was timely. Second, Hausch was fraudulently joined in this action. If
the citizenship of Hausch is disregarded, both requirements for original diversity jurisdiction are
met. Therefore, the Court DISMISSES Pulver Macz’s negligent misrepresentation claim against
Hausch without prejudice and retains jurisdiction over the case.
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IT IS SO ORDERED.
DATED: 	October 22, 2025
s/ J. Phil Gilbert
J. PHIL GILBERT
United States District Judge
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