## Facts

- Larson submitted a homeowners insurance claim to American Family Mutual Insurance Co. after a house fire.
- Larson believed American Family failed to pay (or failed to timely pay) benefits owed for the fire loss.
- Larson retained attorney Brad Ross-Shannon to pursue a claim against American Family arising from the fire-loss dispute.
- Larson later learned Ross-Shannon did not pursue the claim because Ross-Shannon wanted to represent American Family in other matters.
- Larson hired different counsel and filed suit against American Family in state court based on the handling of the fire claim.
- American Family removed the case to federal court based on diversity jurisdiction.
- Soon after removal, Larson amended the complaint to add Ross-Shannon as a defendant and to assert claims against him, including legal malpractice, breach of duty, and conspiracy.
- Ross-Shannon was not diverse from Larson, so adding him would eliminate complete diversity.
- American Family opposed the amendment/joinder, arguing that the claims against Ross-Shannon did not arise from the same transaction or occurrence (or series of transactions or occurrences) as the insurance claims, and therefore Ross-Shannon could not be joined under Federal Rule of Civil Procedure 20(a).

## Issues

1. Whether Larson’s claims against his former attorney and his claims against the insurer arose out of the same transaction or occurrence (or series of transactions or occurrences) and shared common questions, so that joinder of the attorney was proper under Federal Rule of Civil Procedure 20(a).
2. If joinder of the nondiverse attorney was proper, whether the federal court was required to remand the case to state court because complete diversity no longer existed.

## Decision

- The court permitted Larson to add Ross-Shannon as a defendant.
- The court concluded that Rule 20(a)’s requirements were satisfied because Larson’s claims against American Family and Ross-Shannon were sufficiently related as part of a connected series of events tied to the fire-loss claim and the effort to obtain payment for that loss.
- The court rejected American Family’s argument that the attorney-related claims were too separate from the insurance dispute to allow joinder.
- Because adding Ross-Shannon destroyed complete diversity, the court remanded the action to state court.

## Legal Principles

- Federal Rule of Civil Procedure 20(a) allows multiple defendants to be joined in one action when (1) the right to relief against them arises out of the same transaction or occurrence, or a series of transactions or occurrences, and (2) at least one question of law or fact is common to all defendants.
- Related events can qualify as a “series of transactions or occurrences” when they are logically connected and will involve overlapping factual questions, including questions about the same loss, the same claimed damages, and the same course of conduct tied to that loss.
- When a removed case depends on diversity jurisdiction, adding a properly joined nondiverse defendant eliminates complete diversity; without complete diversity, the federal court cannot keep the case and must remand to state court.

## Conclusion

Larson’s post-removal amendment adding his former attorney was allowed because the alleged mishandling of the fire-loss claim by the insurer and the attorney’s alleged failure to pursue the claim were part of a related series of events and raised overlapping factual questions under Rule 20(a). With the nondiverse attorney joined as a defendant, complete diversity was lost and the case was remanded to state court.


Larson v. American Family Mutual Ins. Co., 2007 U.S. Dist. LEXUS 41864 (2007)