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A federal appeals court on Tuesday refused to consider whether two risk retention groups could be reimbursed for the settlement they paid in connection with an assisted living facility fire that killed four residents, based on the apparent same “citizenship” of the parties in the case.
In 2017, a fire at the Barclays Friends assisted living facility in West Chester, Pennsylvania, caused four residents’ deaths, according to the ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia in Peace Church Risk Retention Group (a reciprocal) as subrogee of Barclay Friends; Caring Communities (a reciprocal) as subrogee of Barclay Friends. v. Johnson Controls Fire Protection LP, FKA SimplexGrinnell L.P.
The estates of the killed residents sued Barclay Friends and Boca Raton-based Johnson Controls, formerly known as SimplexGrinnell, which had maintained and monitored the facility’s fire suppression system.
Barclay Friends’ two risk retention groups, Peace Church, which is based in Burlington, Vermont, and Liberty, Illinois-based Caring Communities, settled with the estates for an undisclosed amount, then sued Johnson Controls in U.S. District Court in Philadelphia, alleging its conduct caused the fire and the resident’s deaths, seeking reimbursement for the settlement.
After the district court refused Johnson Controls motion to dismiss the case, the company appealed to the district court. A three-judge panel said it could not decide the case at this point because of a diversity statute that says opposing parties in federal lawsuits cannot be citizens of the same state.
While Peace Church is organized under Vermont’s laws, and Caring Communities under the District of Columbia’s, they have subscribers in states, including Delaware and Wisconsin, the ruling said. And Johnson Controls, a limited partnership, has members in Delaware and Wisconsin as well.
“In short, diversity jurisdiction appears to be lacking,” said the ruling. “We are not prepared to rest on appearances when additional fact-finding is clearly required,” it said, in remanding the case to the lower court to evaluate the issue.
Attorneys in the case did not respond to requests for comment.