OPINION & ORDER This case arises from an insurance claim filed after pipes burst at an apartment complex on a cold winter evening. Plaintiff Hudson EFT, LLC (“Hudson”) alleges that its insurer, defendant Westchester Surplus Lines Insurance Company (“Westchester”), breached the parties’ insurance contract by failing to cover Hudson’s losses caused by the burst pipes. Hudson originally brought this action in New York State court. Westchester timely removed it to this Court, based on diversity jurisdiction. Hudson now seeks to add a new, non diverse party, and therefore to remand the action to state court pursuant to 28 U.S.C. §1447(e). The new party — The Wavecrest Management Team (“Wavecrest”) — is the property manager whose negligence, Hudson claims, caused the pipes at issue to freeze and burst. Westchester, however, argues that because Hudson’s motive in seeking to join Wavecrest is, at least in part, to destroy diversity so as to deprive Westchester of its chosen federal forum, the Court should deny leave to join Wavecrest. For the following reasons, the Court grants Hudson leave to join Wavecrest to this action and accordingly remands the case to New York State court. I. Background1 Hudson is a New York limited liability company. Compl. 1. Its members are residents of New Jersey, Florida, and New York. Dkt. 20 at 1-2. It owns property located at 80 Main Street, Ossining, New York, 10562. Compl. 8. As of January 6, 2020, that property was covered by an insurance policy issued by Westchester, a Georgia corporation with its principal place of business in Pennsylvania. Id. 9; Dkt. 8 (“Notice of Removal”) 7 On January 6, 2020, the property was damaged after a frozen pipe on the premises burst. Compl. 19. Hudson submitted an insurance claim to Westchester seeking indemnification for the damage. Id. 20. Westchester, however, denied the claim on the basis that Hudson negligently maintained heat in the property, allowing the pipes to freeze and burst. Id.
22-26; Westchester Ltr. at 1. Wavecrest, a New York corporation with its principal place of business in Queens, New York, was Hudson’s property manager and was responsible for maintaining the insured property. Dkt. 10 at 1. Although Hudson had not filed legal action against Wavecrest until its attempt to add Wavecrest to this lawsuit, Hudson maintains that Wavecrest negligently caused the pipes at the property to freeze and burst, thereby breaching its contract with Hudson and making it liable to Hudson for any losses Westchester does not cover. Id. On May 28, 2020, Hudson filed the initial state-court complaint against Westchester. See Compl. In it, Hudson alleged that Westchester’s failure to pay under the insurance policy was a breach of contract. Id.
