Harrison v. ABC Transportation, Inc. et al

Filing 17

MEMORANDUM OPINION AND ORDER, denying 8 MOTION to Remand to State Court; denying as moot 15 MOTION to Strike 12 . Signed by Honorable William Keith Watkins on 6/15/09. (Attachments: # 1 appeals checklist)(vma, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION P A T R IC IA P. HARRISON, as Dependent S p o u se of William Michael Harrison, dec.; a n d as Administrator of the Estate of W illia m Michael Harrison, dec., P la in tif f , v. A C E AMERICAN INSURANCE COM PA N Y , D e f e n d a n t. ) ) ) ) ) ) ) ) ) ) ) ) )

C A S E NO. 2:09-CV-229-WKW [WO]

M E M O R A N D U M OPINION AND ORDER Patricia P. Harrison filed a wrongful death action against Ace American Insurance C o m p a n y ("Ace") in the Circuit Court of Barbour County, Alabama, on May 9, 2008. (Compl. (Ex. 23 to Notice).) Harrison's deceased husband, William Michael Harrison, died w h e n a vehicle traveling southbound allegedly struck him in the northbound lane, where he w a s stooped near the front of a parked truck he drove for ABC Transportation, Inc. ("ABC T ra n s p o rta tio n " ). (First Am. Compl. ¶¶ 1, 12, 20-25 (Ex. 18 to Notice).1 ) Harrison sued A B C Transportation for worker's compensation and Ace for breach of contract for failure t o pay coverage benefits under its commercial automobile insurance policy with ABC

Harrison amended her complaint to substitute the correct name for her husband's employer, Defendant ABC Transportation. Instead of filing an amended complaint with substitutions for each time Defendant was mentioned, however, Harrison merely noted the change and refiled the complaint. ABC Transportation is substituted for Magantran whenever this opinion directly quotes from Harrison's complaint.

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Transportation.2 (First Am. Compl. ¶¶ 28-40.) The worker's compensation claim was s e v e re d from the case March 11, 2009.3 (Ex. 1 to Notice.) Less than two weeks after ABC T ra n s p o rta tio n was severed, Ace removed the case under 28 U.S.C. § 1441(a) on the basis o f diversity jurisdiction under § 1332.4 (Notice ¶ 3 (Doc. # 1).) Harrison filed a timely m o tio n to remand under § 1447(c). (Doc. # 8.) ABC Transportation responded in opposition to remand, with a supporting brief (Docs. # 12 & 13), and Harrison replied (Doc. # 14). For th e following reasons, the motion to remand is due to be denied. A civil action brought in state court over which federal district courts would have o r i g i n a l jurisdiction may be removed by a defendant. § 1441(a). A case that is not re m o v a b le based on the initial pleadings may later be removed within thirty days of d e f e n d a n t's receipt "of a copy of an amended pleading, motion, order or other paper from w h ic h it may first be ascertained that the case is one which is or has become removable." § 1446(b).

Harrison also sued ABC Transportation on the breach-of-contract claim (see First Am. Compl. ¶ 31), but in its supplemental brief on a motion to sever, ABC Transportation stated that the complaint and verbal confirmation from counsel confirmed that the breach-of-contract claim was against Ace only (State Ct. Br. 1-2 (Ex. 5 to Notice).) The Order severing the claim and Harrison's arguments do not suggest otherwise.
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The third Defendant was also dismissed, earlier in the case. (See Ex. 4 to Notice.)

ABC Transportation's principal place of business is in Alabama. (First Am. Compl. ¶ 3.) Once ABC Transportation was severed, there was complete diversity of citizenship because Harrison is a citizen of Alabama and Ace is a Pennsylvania corporation under both tests for corporate citizenship (First Am. Compl. ¶¶ 1, 4). See § 1332(a)(1).

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Harrison argues that removal was improper because there is no subject-matter ju ris d ic tio n to hear the case. (Mot. ¶ 25.) Challenges to removal filed within thirty days of re m o v a l, whether based on procedural defects or lack of jurisdiction, are challenges to the p ro p rie ty of removal itself. See Lowery v. Ala. Power Co., 483 F.3d 1184, 1213 n.64 (11th C ir. 2007). "[I]n assessing the propriety of removal, the court considers the document re c e iv e d by the defendant from the plaintiff ­ be it the initial complaint or a later received p a p e r ­ and determines whether that document and the notice of removal unambiguously e s ta b lis h federal jurisdiction." Id. at 1213. "[T]he district court has before it only the limited u n iv e rs e of evidence available when the motion to remand is filed ­ i.e., the notice of re m o v a l and accompanying documents." Id. at 1214. Those documents must "unambiguously" establish jurisdiction. Lowery, 483 F.3d at 1 2 1 3 . The jurisdictional amount must be "stated clearly on the face of the documents before th e court, or readily deducible from them." Id. at 1211. If the evidence does not

u n a m b ig u o u s ly establish jurisdiction in this way, "neither the defendants nor the court may s p e c u la te in any attempt to make up for the notice's failings."5 Id. at 1214-15.

"[I]n some limited circumstances, a defendant may effectively amend a defective notice of removal upon receipt of additional evidence that supplements the earlier-filed notice." Lowery, 483 F.3d at 1214 n.66. But because the face of Harrison's complaint alone establishes jurisdiction, it is unnecessary to resolve whether an affidavit filed with Ace's response may be considered for determining jurisdiction. For the same reason, Harrison's motion to strike the affidavit (Doc. # 15) is due to be denied as moot.

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Harrison opposes removal, arguing that the amount in controversy is not u n a m b ig u o u s ly established by the complaint.6 (Mot. ¶ 24.) Although the complaint never e x p l i c itly alleges damages in excess of $75,000, it does allege that in late 2007, Harrison " m a d e a claim with [ABC Transportation] for uninsured and underinsured motorist coverage p o lic y limits" on policies described earlier in the complaint, and that the claim was denied (F irs t Am. Compl. ¶¶ 26-27). (See Resp. Br. 2-3.) The only policy alleged earlier in the c o m p la in t, which is described with a specific reference to company name and policy number, i s the one Ace issued to ABC Transportation for commercial automobile insurance. (See F irs t Am. Compl. ¶¶ 9-13.) The complaint acknowledges that the limit for that policy is $ 2 ,0 0 0 ,0 0 0 . (First Am. Compl. ¶ 15.) H a rris o n argues that because her claim for the policy limits was directed to ABC T ra n s p o rta tio n , however, and not to Ace, it cannot serve as a proxy for the damages at issue in her breach of contract claim against Ace. (See Reply 3-4.) This argument fails. Lowery d o e s not impose hyper-technical rules on litigants seeking to remove cases that clearly belong in federal court. The removal rules as interpreted by Lowery protect against "speculation" a s to whether jurisdiction exists. See Lowery, 483 F.3d at 1211. It is the "absence of factual a l le g a tio n s " that should prevent courts from determining the existence of jurisdiction "by lo o k in g to the stars." Id. at 1215 (emphasis added).

Diversity jurisdiction requires there to be an amount in controversy that exceeds $75,000. § 1332(a).

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No divination is necessary here. It is common practice in Alabama to make demands o n an insured for the benefits due under under an insurance policy. The facts as alleged in th e complaint establish that Harrison made a claim to ABC Transportation for the policy lim its of $2,000,000 on a policy issued to ABC Transportation by Ace. That much money, th e re f o re , to a legal certainty, is in controversy with respect to the breach-of-contract claim a g a in s t Ace.7 Jurisdiction is unambiguously established by the face of the complaint because it alleges that Harrison made a demand for policy limits, which exceed $75,000, and on a p o lic y issued by the defendant.8

The following footnote to the response Ace filed to Harrison's motion to strike states the argument accurately: It is important to note that, although Plaintiff's complaint alleges that the policy limits demand was made on [ABC Transportation], the demand was made for benefits under the Policy. Thus, Plaintiff was valuing her total claims under the Policy at $2,000,000.00. The demand was sent to ABC Transportation, as Defendant's insured. Such a demand was no different than if it had been to Defendant, itself. Further, Lowry [sic] only requires that the document showing the value of Plaintiff's claims come from the Plaintiff[;] it does not require it be directed to the defendant who is ultimately sued, Lowery at 1213 n. 63. By making the demand articulated in paragraph 26 of Plaintiff's complaint, Plaintiff valued her claims against the Policy at $2,000,000.00. Plaintiff has sued Defendant for benefits as issuer of the Policy. Thus, Plaintiff has previously represented that the amount in controversy in this action is at least $2,000,000.00. The fact that the demand was made on [ABC Transportation] rather than Defendant is completely irrelevant to the amount in controversy in this action. (Resp. to Mot. Strike 3 n.1 (Doc. # 16).) Cf. Warth v. State Farm Fire & Cas. Co., 792 F. Supp. 101, 103 (M.D. Fla. 1992) ("Due to the fact that Plaintiffs in this case have not plead or represented to this Court the damages they seek, the face amount of the policy does not control on the issue of the threshold jurisdictional amount." (emphasis added)). Incidentally, the court in Lowery stated that demand letters establishing an amount in controversy exceeding $75,000 and filed on removal may be the basis for removal under § 1446(b). Lowery, 483 F.3d at 1212 n.62; cf. id. at 1213 n.66 (noting exception related to letters filed later). In this case, jurisdiction is established in even one less step removed. The complaint itself alleges that Harrison made a claim on the policy's insured for the policy limits. The complaint then is the documentation of a demand sufficient to establish jurisdiction.
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Accordingly, it is ORDERED that Harrison's motion to remand (Doc. # 8) is D E N IE D . It is further ORDERED that Harrison's motion to strike (Doc. # 15) is DENIED a s moot. DONE this 15th day of June, 2009. /s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE

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