Browning v. United National Insurance Company et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
CRAIG BROWNING,
Plaintiff,
v.
UNITED NATIONAL INSURANCE
COMPANY and JACE KIRK,
Defendants.
Case No. 25-cv-2325-EFM-GEB
MEMORANDUM AND ORDER
Plaintiff Craig Browning brought this lawsuit against Defendants United National
Insurance Company (“UNIC”) and Jace Kirk in the District Court of Miami County, Kansas. He
asserts two claims against UNIC and one claim against Kirk. UNIC removed the case to this Court
based on diversity jurisdiction. In its removal, UNIC acknowledges that Browning and Kirk are
non-diverse parties but argues that Kirk is fraudulently joined in the action because Browning
cannot establish a cause of action against Kirk. Browning has now filed a Motion to Remand (Doc.
11) arguing that his claim against Kirk is valid, and thus the Court lacks diversity jurisdiction and
the case should be remanded. For the reasons stated in more detail below, the Court grants
Browning’s Motion.
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 1 of 10

-2-
I. 	Factual and Procedural Background1
Plaintiff Browning resides in Paola, Kansas, and he is the owner and sole operator of
Browning Homes, LLC. Defendant Kirk also resides in Paola. Kirk, acting in the course and scope
of his employment with Defendant UNIC, sold a commercial liability insurance policy to
Browning for Browning Homes, LLC. UNIC insured Browning Homes, LLC and Browning, as
its owner and sole operator, through this policy. The policy was in effect from March 29, 2022
through March 29, 2023. Browning’s policy provides coverage to him and Browning Homes, LLC
for property damage that results from an occurrence, defined to mean an accident.
In April 2022, Terry and Kristen Presta contracted with Browning, acting through
Browning Homes, LLC for the construction of a single-family home in Kansas. The contract and
subsequent invoices erroneously referred to Browning Development, LLC instead of Browning
Homes, LLC. This error was due to Browning’s failure to update paperwork to reflect the
formation of his new business entity.
At all times, Browning had exclusive control over the hiring and managing of all sub-
contractors for work performed on the Presta’s home. Browning hired Precision Service Company,
Inc. to perform the framing work of the house. Precision did not properly frame the home to the
specification outlined in the agreed upon plans and did not complete work in a workmanlike
manner. Thus, the property was not constructed or delivered as contracted for and has substantial
structural and aesthetic deficiencies. Due to the deficiencies, the house was unsalvageable and had
1 The facts in this section are primarily taken from Plaintiff’s Petition. In addition, the Court sets forth the
factual and procedural background of an underlying state court case and a related declaratory judgment case filed by
UNIC currently pending before this Court. The Court will address those cases and the procedural aspects of them in
more detail below.
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 2 of 10

-3-
to be demolished. In addition, Browning failed to properly arrange, contract for, and oversee the
construction of an intended pond. To date, the pond has not been delivered to the Prestas.
UNIC was made aware of a pending claim regarding these deficiencies by July 26, 2023.
The Prestas filed suit in state court against Browning in November 2023, naming Browning and
Browning Development, LLC as defendants (the “Original Petition”). The Original Petition was
forwarded to UNIC on January 8, 2024, and UNIC initially hired counsel and defended Browning
and Browning Development, LLC.
On June 25, 2024, UNIC reversed course and denied coverage, in part, because the
allegations concerned Browning Development, LLC who was not a named insured in the insurance
policy. In August 2024, the Prestas were granted leave to file an amended petition (the “Amended
Petition”), which added claims against Browning FBA, LLC f/k/a Browning Homes, LLC and
Browning as its owner operator.2 The Amended Petition was tendered to UNIC on August 20,
2024.
On August 28, 2024, UNIC sent two letters to Browning. The first letter denied coverage
for all claims against Browning Development, LLC and all claims against Browning as a manager
or member of Browning Development, LLC. The second letter outlined UNIC’s position that no
coverage exists for Browning Homes, LLC or Browning, as its member or manager, but that
subject to its reservation of rights, it would offer a defense to both. Browning contends that UNIC
did not retain counsel for Browning and never entered an appearance on behalf of Browning. Thus,
Browning was left without insurance-hired defense counsel, and he sought resolution of the claims
himself.
2 The insurance policy was issued to Browning Homes, LLC. On or about January 20, 2023, Browning
changed its name from Browning Homes, LLC to Browning FBA, LLC. The Prestas therefore named Browning FBA,
LLC f/k/a Browning Homes, LLC.
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 3 of 10

-4-
Browning consented to arbitration with the Prestas to resolve the outstanding issues. While
the case brought by the Prestas against Browning (and others) was proceeding in state court, UNIC
filed a Declaratory Judgment Action in this Court on March 27, 2025.3 UNIC brought suit against
Browning; Browning Development, LLC; Browning FBA LLC, f/k/a Browning Homes LLC;
Terry Presta; and Kristen Presta. UNIC seeks rescission of the insurance policy or, in the
alternative, a declaratory judgment establishing that UNIC does not have a duty to defend nor
indemnify Browning Development, LLC; Browning FBA, LLC f/k/a Browning Homes, LLC, or
Browning in the Prestas’ case.
Arbitration in the Prestas’ state case was held on March 31, 2025, in front of the Honorable
Judge Edward Sweeney between the Prestas and Browning. At the conclusion of arbitration, Judge
Sweeney made several findings, including: (1) the contract and subsequent invoices erroneously
referred to Browning Development, LLC instead of Browning Homes, LLC; (2) the proper entity
was Browning Homes, LLC; (3) the name of the entity was not a material term to the contract; (4)
Browning was working in the course and scope of his employment of Browning Homes, LLC as
its owner and sole operator; (5) Browning failed to properly investigate, oversee, or manage the
hired sub-contractors or perform work in a workmanlike manner; (6) due to the seriousness of the
structural deficiencies and the failure to deliver the property as promised, the home is
unsalvageable and must be demolished to serve its intended purpose; and (7) the construction
contract provides that any party in default will owe reasonable attorney fees. Judge Sweeney found
in favor of the Prestas and against Browning and assessed damages in the amount of
3 Case No. 25-2158.
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 4 of 10

-5-
$2,002,887.80.4 The arbitration award was confirmed on April 28, 2025, and judgment was entered
against Browning. Thus, Browning has a final and binding judgment against him.
On May 29, 2025, Browning filed this Petition in Miami County, Kansas (the “Browning
State Court Action”). Browning asserts two claims against UNIC: (1) breach of contract – bad
faith failure to defend, and (2) bad faith refusal to settle. As to the first claim, Browning alleges
that the policy provides coverage for the underlying claims, and no exclusion bars coverage. He
contends that UNIC’s actions and omissions were deliberate choices and a breach of the insurance
policy. As to the second claim, Browning alleges that the policy grants to UNIC the exclusive right
to contest or settle any claim. He alleges that UNIC had a duty to engage in good faith in settling
any claim against Browning and had a duty to protect Browning’s financial interests. He claims
that UNIC breached its obligation of good faith and fair dealing and acted in bad faith in numerous
ways.
Browning also asserts a claim of negligent misrepresentation against Kirk. He alleges that
Kirk had actual or constructive knowledge of his businesses (Browning Development, LLC and
Browning Homes, LLC) and their respective business activities and insurance needs. Browning
alleges that Kirk owed a duty of reasonable care to Browning in obtaining appropriate coverage
concerning the scope, limitations, and conditions of such coverage. He alleges that Kirk breached
that duty and negligently misrepresented or failed to inform Browning as to the scope and
limitations of the policy in several areas. Browning alleges that he relied on Kirk’s representations
and/or omissions and believed that he had coverage through the policy for the work performed
under his construction contract with the Prestas. He claims that, due to Kirk’s negligent
4 Browning and Browning Development were dismissed from the case without prejudice, but Browning FBA,
LLC f/k/a Browning Homes, LLC remains.
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 5 of 10

-6-
misrepresentations and/or concealment, Browning was denied coverage/defense and has suffered
financial and emotional damages.
On May 30, 2025, Browning and the Prestas filed motions to dismiss in the Declaratory
Judgment Action pending before this Court. Those motions remain pending and will be addressed
in a separate order in that case after the resolution of the Motion to Remand in this case.
On June 12, 2025, the Prestas filed a motion to intervene in the Browning State Court
Action to assert a claim for equitable garnishment.5 On June 16, 2025, UNIC removed the
Browning State Court Action to this Court on the basis of diversity jurisdiction. UNIC stated that
Kirk’s citizenship of Kansas should be disregarded for jurisdictional purposes because Browning
cannot state a claim against Kirk.6 Browning has now filed a Motion to Remand asserting that he
properly states a claim against Kirk, and thus the Court lacks diversity jurisdiction.
II. 	Legal Standard
A civil action filed in state court is only removable if the action could have originally been
brought in federal court.7 Diversity jurisdiction requires that the amount in controversy exceed
$75,000 and that each defendant is a resident of a different state than each plaintiff.8
The 	party 	requesting 	removal 	has 	the 	burden 	of 	establishing 	the 	federal 	court’s
jurisdiction.9 “Removal jurisdiction over diversity cases is more limited than jurisdiction over
5 The Prestas also filed a Motion to Intervene in this Court after UNIC removed the case. The Prestas’ motion
was granted (Doc. 13), and they are aligned with Browning (Doc. 19).
6 The Court notes that Kirk did not join in UNIC’s Notice of Removal on June 16, 2025, nor file his own
motion to dismiss. In addition, Kirk did not file a response to Browning’s Motion to Remand. Instead, he filed an
Answer on July 21, 2025.
7 28 U.S.C. § 1441(a).
8 Dutcher v. Matheson, 733 F.3d 980, 987 (10th Cir. 2013).
9 Wolf Creek Nuclear Operating Corp. v. Framatome ANP, Inc., 416 F. Supp. 2d 1081, 1084–85 (D. Kan.
2006).
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 6 of 10

-7-
diversity cases originally brought in federal court because removal based on diversity is available
only if none of the defendants is a citizen of the state in which the action is brought.”10 “Because
federal 	courts 	are 	courts 	of 	limited 	jurisdiction, 	there 	is 	a 	presumption 	against 	federal
jurisdiction.” 11 If there are any doubts regarding the federal court’s jurisdiction, the court must
resolve these doubts in favor of remand.12
A plaintiff, however, cannot defeat the right of removal by fraudulently joining a non-
diverse defendant who has “no real connection with the controversy.”13 “Fraudulent joinder is a
term of art; it does not reflect on the integrity of the plaintiff or counsel, but exists regardless of
the plaintiff’s motives when the circumstances do not offer any other justifiable reason for joining
the defendant.”14 “[U]pon specific allegations of fraudulent joinder, the court may pierce the
pleadings, consider the entire record, and determine the basis of joinder by any means available.”15
The party seeking removal and asserting fraudulent joinder has a heavy burden.16 To
establish fraudulent joinder, the removing party must establish that “there is no possibility that
[plaintiff] would be able to establish a cause of action against [the joined party] in state court.”17
All disputed questions of fact or ambiguities in law must be resolved in favor of the non-removing
party.18 Remand is required if there is the possibility of the viability of any of the claims against
10 Id. at 1085.
11 Lowe v. Postrock Midcontinent Prod. LLC, 2013 WL 6000004, at *2 (D. Kan. Nov. 12, 2013) (quotation
marks and citation omitted).
12 Id.
13 Id. (citation omitted).
14 Id.
15 Wolf Creek, 416 F. Supp. 2d at 1085.
16 Dutcher, 733 F.3d at 988.
17 Montano v. Allstate Indem., 2000 WL 525592, at *1 (10th Cir. Apr. 14, 2000) (quoting Hart v. Bayer
Corp., 199 F.3d 239, 246 (5th Cir. 2000)).
18 Id.
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 7 of 10

-8-
the non-diverse defendant.19 “[T]he propriety of removal is judged on the complaint as it stands at
the time of the removal.”20
III. 	Analysis
Browning contends that this Court should remand this case to state court because the Court
lacks diversity jurisdiction. He states that both he and Defendant Kirk are residents of Kansas, and
he states a valid claim against Kirk. UNIC argues that Browning fraudulently joined Kirk because
he does not state a valid claim against him, and thus Kirk’s citizenship should be disregarded.
Browning asserts one claim against Kirk—negligent misrepresentation. Thus, the Court
must consider whether Browning adequately states this claim against Kirk.21 Kansas law sets forth
a negligent misrepresentation claim as:
One who, in the course of any transaction in which he or she has a pecuniary
interest, supplies false information for the guidance of another person is liable for
damages suffered by such other person caused by reasonable reliance upon the false
information if: (1) the person supplying the false information failed to exercise
reasonable 	care 	or 	competence 	in 	obtaining 	or 	communicating 	the 	false
information; (2) the person who relies upon the information is the person for whose
benefit and guidance the information is supplied; and (3) the damages are suffered
in a transaction that the person supplying the information intends to influence.22
Here, Browning alleges these elements. First, he alleges that Kirk held himself out as
qualified to assist and guide Browning in obtaining appropriate commercial liability insurance
coverage for Browning’s homebuilding operations. In addition, he alleges that Kirk had actual or
constructive knowledge of Browning’s businesses—both Browning Development, LLC and
19 Id. at *2.
20 Pfeiffer v. Hartford Fire Ins. Co., 929 F.2d 1484, 1488 (10th Cir. 1991).
21 Both parties discuss—and disagree—whether Browning states a claim for failure to procure insurance. In
the Browning State Court Action, Browning asserts one claim against Kirk and entitles that claim as negligent
misrepresentation. Thus, the Court will only consider whether Browning states a claim for negligent
misrepresentation.
22 Stroud v. Ozark Nat’l Life Ins. Co., 320 Kan. 180, 564 P.3d 725, 740 (2025) (quoting Stechschulte v.
Jennings, 297 Kan. 2, 298 P.3d 1083, 1097–98 (2013)).
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 8 of 10

-9-
Browning Homes, LLC—and their respective business activities and insurance needs. Next, he
alleges that Kirk negligently misrepresented or failed to inform Browning as to the scope and
limitations of the policy in numerous areas, including whether the insurance coverage applied to
Browning and Browning’s businesses. Thus, these allegations meet the first element of a negligent
misrepresentation claim.
As to elements two and three, Browning alleges that he was the person for whose benefit
and guidance the information provided by Kirk was intended. In addition, he alleges that he relied
upon Kirk’s representations and omissions and believed that he had insurance coverage for the
work Browning was performing under his construction contract with the Prestas. Finally,
Browning alleges that he suffered damages as a result of Kirk’s negligent misrepresentations
and/or concealment by being denied coverage and defense under the insurance policy.
UNIC asserts multiple arguments as to why Browning fails to state a negligent
misrepresentation claim against Kirk including that Browning fails to plead enough facts, he
cannot assert alternative bases in the claim, he fails to include sufficient factual information as to
the time and place of the false information, and that he fails to establish that he reasonably relied
on purported false information. As noted above, there are sufficient facts to state a claim. In
addition, pleading in the alternative is an acceptable practice.23 Furthermore, UNIC’s arguments
as to the lack of specificity of the false information improperly attempts to place a heightened
fraudulent pleading standard onto this claim.24 And, finally, UNIC’s arguments as to Browning’s
23 See Fed. R. Civ. P. 8(d)(2) (stating that “[a] party may set out 2 or more statements of a claim or defense
alternatively or hypothetically, either in a single count or defense or in separate ones.”).
24 See UMB Bank, N.A. v. Monson, 2025 WL 1580894, at *8 (D. Kan. June 4, 2025) (noting that a negligent
misrepresentation claim is not subject to the heightened pleading standard for fraud claims under Fed. R. Civ. P. 9)
(citing Graphic Techs., Inc. v. Pitney Bowes Inc., 998 F. Supp. 1174, 1178 (D. Kan. 1998)).
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 9 of 10

-10-
reliance are directed more toward factual issues than pleading deficiencies. Thus, the Court
concludes that Browning adequately states a claim against Kirk.
In sum, because Browning adequately states a claim against Kirk, he is not fraudulently
joined. Complete diversity, therefore, does not exist between the parties. Accordingly, this case
must be remanded to state court.
IT IS THEREFORE ORDERED that Plaintiff Browning’s Motion to Remand (Doc. 11)
is GRANTED. This case is remanded to state court.
IT IS SO ORDERED.
Dated this 10th day of December, 2025.
ERIC F. MELGREN
UNITED STATES DISTRICT JUDGE
Case 2:25-cv-02325-EFM-GEB Document 21 Filed 12/10/25 Page 10 of 10