Chukly v. American Family Mutual Insurance Co.

          ORDER

          Honorable Raner C. Collins Chief United States District Judge

         Pending before the Court is Plaintiffs Emery and Angela Chuckly’s motion to amend or correct the complaint (Doc. 12) and remand to state court (Doc. 13), Defendants Charles Bushman’s and John Perrill’s motion to dismiss (Doc. 14), a Report and Recommendation (“R & R”) prepared by Magistrate Judge Lynnette C. Kimmins (Doc. 24), Defendants Bushman’s and Perrill’s objection to the R & R (Doc. 25) and Plaintiffs’ reply to the objections (Doc. 29). In the R & R, Magistrate Judge Kimmins recommended that this Court grant Plaintiffs’ motion to remand to state court and deny as moot the remaining motions. For the following reasons, this Court shall adopt the R & R as the holding of this Court, grant Plaintiffs’ motion to remand to state court and deny the remaining motions.

         Background

         This action arises from an insurance claim. On December 24, 2014, Plaintiffs’ home suffered damage due to a microburst and massive rain. On December 19, 2016, Plaintiffs Emery and Angela Chuckly, on behalf of themselves and their minor child, filed a complaint in Pima County Superior Court alleging Defendant American Family Mutual Insurance (“American Family”) breached a home owner’s insurance contract with the Chucklys and committed bad faith claims handling by failing to make payments to Plaintiffs for the full amount due. Plaintiffs also allege that Defendant Charles Bushman, an American Family claims manager, and John Perrill, an American Family adjuster, aided and abetted American Family in committing bad faith because Bushman and Perrill substantially assisted American Family in breaching its duty and both Bushman and Perill knew or should have known that they were assisting the breach.

         On February 24, 2017, Defendants removed the case to this Court. Defendants stated that this Court has diversity jurisdiction because American Family is a resident of Wisconsin and Plaintiffs are residents of Arizona. Defendants also argue that this Court should disregard the Arizona residency of Defendants Bushman and Perrill because they were fraudulently joined.

         On March 27, 2017, Plaintiffs filed a motion to amend or correct the complaint (Doc. 12) and a motion to remand to state court (Doc. 13). On the same day, Defendants Bushman and Perrill filed a motion to dismiss (Doc. 14).

         On June 7, 2017, Magistrate Judge Kimmins issued a R & R that recommended that this Court grant Plaintiffs motion to remand and deny the remaining motions as moot.

         On June 20, 2017, Defendants Bushman and Perrill filed an objection. On July 7, 2017, Plaintiffs filed a reply.

         Standard of Review

         The duties of the district court in connection with a R & R are set forth in Rule 72 of the Federal Rules of Civil Procedure and 28 U.S.C. § 636(b)(1). The district court may “accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.” Fed. R. Civ. P. 72(b)(3); 28 U.S.C. § 636(b)(1).

         Where the parties object to an R & R, “[a] judge of the [district] court shall make a de novo determination of those portions of the [R & R] to which objection is made.” 28 U.S.C. § 636(b)(1); see Thomas v. Arn, 474 U.S. 140, 149-50 (1985). When no objection is filed, the district court need not review the R & R de novo. Wang v. Masaitis, 416 F.3d 992, 1000 n. 13 (9th Cir.2005); United States v. Reyna-Tapia, 328 F.3d 1114, 1121-22 (9th Cir. 2003) (en banc). The Court will not disturb a magistrate judge’s order unless his factual findings are clearly erroneous or his legal conclusions are contrary to law. 28 U.S.C. § 636(b)(1)(A). “[T]he magistrate judge’s decision…is entitled to great deference by the district court.” United States v. Abonce-Barrera, 257 F.3d 959, 969 (9th Cir. 2001). A failure to raise an objection waives all objections to the magistrate judge’s findings of fact. Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998). A failure to object to a Magistrate Judge’s conclusion “is a factor to be weighed in considering the propriety of finding waiver of an issue on appeal.” Id. (internal citations omitted).

         Here, Defendants have filed an objection claiming that Arizona law requires plaintiffs to plead a separate act to aid and abet a primary and that this District has interpreted Arizona law to require plaintiffs to plead a separate act to aid and abet a primary act.

         Discussion

         In the R & R, Magistrate Judge Kimmins recommended granting the motion to remand because the Arizona Court of Appeals and this Court have reached divergent results and all ambiguity ...