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Weskan Agency, LLC v. CGB Diversified Services, Inc.

United States District Court, D. Idaho

March 31, 2019

WESKAN AGENCY, LLC, a Kansas limited liability company, Plaintiff,
v.
CGB DIVERSIFIED SERVICES, INC. dba DIVERSIFIED CROP INSURANCE SERVICES, a Louisiana Corporation; and CROP USA INSURANCE AGENCY, INC., an Idaho corporation Defendants.

          MEMORANDUM DECISION AND ORDER

          David C. Nye, Chief U.S. District Court Judge.

         I. INTRODUCTION

         Before the Court is Plaintiff Weskan Agency, LLC's (“Weskan”) Motion to Remand. Dkt. 13. Having reviewed the record and briefs, the Court finds that the facts and legal arguments are adequately presented. Accordingly, in the interest of avoiding further delay, and because the Court finds that the decisional process would not be significantly aided by oral argument, the Court will address the motion without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons outlined below, the Court finds good cause to GRANT the motion (Dkt. 13) and remand this case to state court. As a result, all other motions currently pending before the Court (Dkt. 4; Dkt. 30) are DISMISSED as MOOT.

         II. BACKGROUND

         A. Factual Background

         Weskan is a Kansas limited liability company with its primary place of business in Lewiston, Idaho. Through its agents, Weskan solicited, procured, and submitted crop insurance applications for farmers in the state of Kansas.

         Defendant CGB Diversified Services, Inc (“Diversified”) is a Louisiana corporation that underwrites, sells, and adjusts crop insurance policies. Defendant Crop USA Insurance Agency, Inc. (“Crop USA”) is a crop insurance company incorporated in Idaho with its primary place of business in Lewiston, Idaho.

         In July 2011, Diversified entered a sales agent-company agreement with Crop USA (Crop USA-Diversified Agency Agreement) (hereinafter “CDAA”). Pursuant to this agreement, Crop USA acted as a general agent for Diversified, managed policy premiums, and received payments derived from policies underwritten by Diversified. In return, Diversified agreed to pay Crop USA commissions based upon a portion of the premiums it collected.

         In September 2010, Crop USA entered into an independent agent contract with Weskan (Crop-Weskan Agreement) (hereinafter “CWA”). Under the CWA, Weskan agreed to solicit, procure, and submit applications for insurance coverage. In return, Crop USA agreed to pay Weskan commissions from Crop USA's own commissions received from Diversified, after subtracting Crop USA's administrative fee for those sales.

         Under the CWA, Weskan solicited and sold crop insurance policies for crop year 2013, earning commissions in the amount of $137, 773.64. However, Weskan never received these commissions from Crop USA. This failure stemmed from Diversified's failure to pay Crop USA its commissions for crop year 2013 (in an amount exceeding $137, 773.64). As noted, Crop USA's commission payments to Weskan were derived from the commission payments that Crop USA received from Diversified.

         In 2014, Diversified cancelled the CDAA. However, it maintained its affiliation and commission structure with Weskan. Weskan continued to solicit and sell insurance policies for crop year 2014 (earning $136, 379.89 in commissions), but, once again, did not receive commission payments from Diversified.

         On July 11, 2018, Weskan filed its Complaint against Diversified and Crop USA in the District Court for the Second Judicial District of Idaho, Nez Perce County. The complaint alleges state law claims against Crop USA and Diversified. As against Crop USA, Weskan alleges Breach of Contract (Count I), Breach of Covenant of Good Faith and Fair Dealing (Count III), Accounting (Count IV), and Unjust Enrichment (Count V). As against Diversified, Weskan alleges Breach of Contact (Count II), Brach of the Convenant of Good Faith and Fair Dealing (Count III), Accounting (Count IV), Unjust Enrichment (Count V), and Constructive Trust (Count VI).

         B. Procedural Background

         On August 13, 2018, Diversified removed this action to federal court. Diversified contends that removal is proper because complete diversity exists between the actual parties in this case. Although Weskan's Complaint names a non-diverse defendant (Crop USA) Diversified alleges that Weskan's sole purpose for including Crop USA as a party was to improperly or fraudulently prevent diversity jurisdiction under 28 U.S.C. ยง 1332. Accordingly, ...


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