Tiffin Motorhomes, Inc. v. National Interstate et al

Filing 13

MEMORANDUM OPINION as more fully set out therein. Signed by Judge C Lynwood Smith, Jr on 10/16/2013. (AHI )

FILED
2013 Oct-16 PM 02:32
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
NORTHWESTERN DIVISION
TIFFIN MOTORHOMES, INC.,
Plaintiff,
vs.
NATIONAL INTERSTATE, a
corporation, and G.A. RENTALS,
LLC,
Defendants.

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Civil Action No.CV-13-S-1569-NW

MEMORANDUM OPINION ORDER
This declaratory judgment action is before the court on defendant’s motion for
leave to file a First Amended Answer and Counterclaims,1 and plaintiff’s motion to
remand the case to state court.2 Upon consideration, the court concludes that the
motion to remand should be granted and, accordingly, the motion for leave to file a
First Amended Answer and Counterclaims should be denied as moot.
I. PROCEDURAL HISTORY
This is the second time this case has been before this court. The case began
with a Complaint for Declaratory Judgment filed on December 14, 2012 by plaintiff,
Tiffin Motorhomes, Inc. (“Tiffin”), against defendants, National Interstate and G.A.

1

Doc. no. 3.

2

Doc. no. 9.

Rentals, LLC, in the Circuit Court of Franklin County, Alabama.3 The complaint
consisted of the following paragraphs:
1.

Plaintiff [Tiffin Motorhomes, Inc.] is a domestic corporation with
its principal place of business in Franklin County, Alabama. The
motorhome at issue in this case was designed, manufactured and
placed into the stream of commerce by Plaintiff in Franklin
County, Alabama.

2.

Defendant G.A. Rentals (“GA”) is, according to Plaintiff’s best
knowledge and belief, a foreign limited liability company which
purchased the motorhome at issue in a used condition from a prior
owner. Defendant National Interstate is, according to Plaintiff’s
best knowledge and belief, a foreign corporation with its principal
headquarters in the state of Ohio, which is the insurer of the
motorhome owned by Defendant GA.

3.

On or about August 5, 2012, a 2008 Phaeton motorhome
manufactured by Plaintiff and owned by GA suffered a total fire
loss in the state of Louisiana.

4.

Defendant National Interstate, as the insurer of said motorhome
for GA, has put Plaintiff on notice that it holds Plaintiff
responsible for said fire loss and intends to pursue its contractual
subrogation rights against Plaintiff. Plaintiff denies fault or
liability for said fire loss, whether to Defendant National Interstate
or to Defendant GA for any loss it has sustained which is not
covered by insurance.

5.

A real and present justiciable controversy exists between Plaintiff
and Defendants as to the cause and origin of the subject fire, and
Plaintiff’s liability to Defendants for said fire loss.

Wherefore, Plaintiff prays that the Court will take jurisdiction of
this case pursuant to the Alabama Declaratory Judgment Act, Code of
3

See Complaint in Civil Action No. 3:13-cv-093-CLS.
2

Alabama Section 6-6-220, et seq. and will proceed to determine the
respective rights and liabilities of the parties to the controversy set forth
herein.4
National Interstate removed the case to this court on January 15, 2013, and it
was assigned Civil Action No. 3:13-cv-093-CLS.5 National Interstate asserted
jurisdiction based on the diversity statute, 28 U.S.C. § 1332(a)(1).6 This court entered
an opinion and order on May 21, 2013, sua sponte remanding the case to state court.7
There was no question that the parties were of diverse citizenship, or that the
jurisdictional amount in controversy was satisfied. See 28 U.S.C. § 1332(a)(1).8 Even
so, this court found that the case was not ripe for judicial review, as required by
Article III’s limitation of federal jurisdiction to actual “cases or controversies.” See,
e.g., Konikov. v. Orange County, Florida, 410 F.3d 1317, 1322 (11th Cir. 2005).
Despite plaintiff’s assertion in its complaint that a “real and present justiciable
controversy” existed between the parties, both parties subsequently acknowledged in
their briefs that the controversy was “contingent upon whether National Interstate, as
the insurer, attempts to hold plaintiff responsible for the damages caused by the fire.”9
4

Id. at 1-2 (alteration supplied).

5

See doc. no. 1 (Notice of Removal) in Civil Action No. 3:13-cv-093-CLS.

6

Id. ¶ 2.

7

See doc. no. 21 in Civil Action No. 3:13-cv-093-CLS.

8

See id. at 1-2. See also doc. no. 8 in Civil Action No. 3:13-cv-093-CLS (Order Denying
Motion to Remand).
9

Doc. no. 21 in Civil Action No. 3:13-cv-093-CLS, at 5-6 (emphasis in original).
3

Indeed, National Interstate represented that, at the time of this court’s decision to
remand the previous case, it had neither completed its investigation of the cause of the
fire that destroyed its insured’s mobile home, nor made a determination regarding
liability. Further, plaintiff confirmed that National Interstate had only informed it of
the potential that National Interstate would hold it liable for any losses.10 As this court
observed, “the fact that National Interstate may, at some future time, attempt to hold
plaintiff responsible for the loss” was too speculative to create a ripe, justiciable
controversy.11 Accordingly, there was no federal subject matter jurisdiction, and the
case was remanded to the Franklin County Circuit Court.12 At the conclusion of the
memorandum opinion explaining the remand decision, this court made the following
observations:
This court expresses no opinion about the underlying merits of this
action, or whether it presents a justiciable controversy as a matter of
Alabama law. Those matters are for the state court to decide on remand.
Alabama courts may, of course, have more liberal ripeness standards
than the federal judiciary. But the ability of this court to adjudicate a
case remains constitutionally constrained by Article III, even when a
statutory basis for jurisdiction — here, the parties’ diversity of
citizenship — exists.13
10

See id. at 6 (citing doc. no. 14 in Civil Action No. 3:13-cv-093-CLS (National Interstate’s
Reply Brief), at 5; doc. no. 13 in Civil Action No. 3:13-cv-093-CLS (Plaintiff’s Response Brief),
at ECF 2-3).
11

Doc. no. 21 in Civil Action No. 3:13-cv-093-CLS, at 6-7 (emphasis in original).

12

Id. at 11 (“Because this case is not ripe for adjudication in the Article III sense, the court
lacks subject matter jurisdiction.”).
13

Id. at 11-12 (emphasis in original).
4

There is no indication that any further proceedings occurred in state court
before the case was once again removed to this court on August 23, 2013.14 The
Second Notice of Removal was filed by an entity called Triumphe Casualty Company
(“Triumphe”), a company that was not named in the plaintiff’s December 14, 2012
complaint, but which asserted that it is a wholly owned subsidiary of National
Interstate: the entity that was named as a defendant.15 Plaintiff later acknowledged
that Triumphe, not National Interstate, is the proper defendant, by filing a “First
Amendment to Complaint” in this court on September 11, 2013: a pleading that
sought to “substitute as the proper party Defendant herein Triumphe Casualty
Company, and to delete National Interstate as a party Defendant.”16
It should be emphasized that the interesting factual twist in this case is that
Triumphe was never named as a party in the state court proceedings that have been
removed here, for the second time. Indeed, Triumphe’s Second Notice of Removal
addresses the same state court complaint that was encompassed by the first removal.
In the Second Notice of Removal, Triumphe states:
14

See doc. no. 1 (Second Notice of Removal). Defendant indicates that “all pleadings in the
underlying civil action filed in the Circuit Court of Franklin County, Alabama” were attached to the
Second Notice of Removal. Id. ¶ 1. Those documents do not appear to include any activity
occurring between the date on which the case was remanded and the date on which it was removed
the second time.
15

Id. at 1.

16

Doc. no. 6 (First Amendment to Complaint), at 1. Defendant, as expected, consented to
the amendment. See id.
5

A concrete case or controversy has recently arisen in this matter,
and thus the case has become removable. This defendant has concluded
its investigation regarding the cause of the fire, and now holds Plaintiff
responsible for the damages resulting from the loss. Plaintiff has been
apprised of this Defendant’s position, and this Defendant will, following
the removal of this case, request leave to file an Amended Answer and
Counterclaims.17
Because of the counterclaims it seeks to assert against plaintiff, Triumphe asserts that
the dispute between the parties “is no longer ‘hypothetical’ or ‘abstract,’”18 and that
“an actual controversy has arisen.”19
As noted in the introductory paragraph of the present opinion, Triumphe has
moved this court for leave to file a First Amended Answer and Counterclaims.20
Triumphe alleges in one of its counterclaims that it
performed a thorough investigation of the damaged motor coach to
determine the cause and scope of the damage, which included multiple
inspections by multiple experts. [Triumphe’s] investigation has recently
revealed the damage to the motor coach was caused by a fire which
originated from improper securement of the batteries contained in the
motor coach. [Tiffin] was responsible for the improper securement.21
Triumphe proposes to assert counterclaims against Tiffin for negligence, products
liability, and breach of warranty, all of which arise from Tiffin’s alleged failure to
17

Doc. no. 1 ¶ 6.

18

Id. ¶ 10. See also id. ¶ 11 (“[T]his suit is no longer ‘speculative’ for the reasons discussed
above.’”) (alteration supplied).
19

Id. ¶ 13.

20

Doc. no. 3.

21

Id. at 6 ¶ 9 (alterations supplied).
6

properly secure the motor coach’s batteries.22
II. DISCUSSION OF MOTION TO REMAND
Plaintiff asserts two arguments in support of its motion to remand: first, that
Triumphe’s second removal was statutorily improper; and, second, that the case still
is not ripe for judicial review. Because the court agrees with plaintiff’s first
contention, it is not necessary to reach the second.
Plaintiff asserts that defendant’s “re-removal”23 of the case is procedurally
improper under 28 U.S.C. § 1446(b)(3), which provides, in pertinent part, that
if the case stated by the initial pleading is not removable, a notice of
removal may be filed within 30 days after receipt by the defendant,
through service or otherwise, of a copy of an amended pleading, motion,
order or other paper from which it may first be ascertained that the case
is one which is or has become removable [emphasis supplied].24
22

Id. at 6-9.

23

It is important to note that plaintiff is not categorically arguing against a defendant’s ability
to remove a case for a second time after a remand order has been entered, if there has been a change
in circumstances warranting the exercise of federal jurisdiction. Indeed, as defendant rightfully
points out, there is no rule prohibiting “re-removals,” as long as the requirements of § 1446 are
satisfied. See, e.g., Brown v. Jevic, 575 F.3d 322, 328 (3rd Cir. 2009) (“The removal statute, 28
U.S.C. §§ 1441-[14]52, does not categorically prohibit the filing of a second removal petition
following remand. . . . If subsequent pleadings or conduct by the parties or various other
circumstances brings a case that was not previously removable within the removal jurisdiction of
the federal courts, a second notice of removal is permissible.”) (citations and internal quotations
omitted, bracketed alteration in original). Plaintiff’s argument is the procedural requirements of §
1446 have not been satisfied with regard to the Second Notice of Removal.
24

It should be noted that plaintiff cites to an earlier version of § 1446, which provided, prior
to the effective date of the current statutory language, that:
If the case stated by the initial pleading is not removable, a notice of removal
may be filed within thirty days after receipt by the defendant, through service or
otherwise, of a copy of any amended pleading, motion, order or other paper from
7

Plaintiff argues that the “re-removal” should not be allowed because Triumphe did not
receive anything from plaintiff indicating that the case had become removable.
According to plaintiff, § 1446(b) is designed to permit removal only when “diversity
jurisdiction arises later in a case due to a dismissal, substitution or realignment of
parties,” not when a party “come[s] to its own conclusions on its own timetable,” as
did Triumphe when it completed its investigation and determined that plaintiff was at
fault.25
Plaintiff did not cite any authority, other than the statutory language of §
1446(b), to support this argument. Even so, it is supported by Eleventh Circuit case
law. In Lowery v. Alabama Power Co., 483 F.3d 1184 (11th Cir. 2007), the Eleventh
Circuit considered an earlier version of § 1446 which then provided, in pertinent part,
that:
(a) A defendant or defendants desiring to remove any civil action
. . . from a State court shall file in the district court . . . a notice of
removal signed pursuant to Rule 11 of the Federal Rules of Civil
Procedure and containing a short and plain statement of the grounds for
removal, together with a copy of all process, pleadings, and orders
served upon such defendant or defendants in such action.
which it may first be ascertained that the case is one which is or has become
removable, except that a case may not be removed on the basis of jurisdiction
conferred by section 1332 of this title more than 1 year after commencement of the
action.
Doc. no. 9, at 2.
25

Id. at 3 (alteration supplied).
8

(b) The notice of removal of a civil action or proceeding shall be
filed within thirty days after the receipt by the defendant, through service
or otherwise, of a copy of the initial pleading setting forth the claim for
relief upon which such action or proceeding is based, or within thirty
days after the service of summons upon the defendant if such initial
pleading has then been filed in court and is not required to be served on
the defendant, whichever period is shorter.
If the case stated by the initial pleading is not removable, a notice
of removal may be filed within thirty days after receipt by the defendant,
through service or otherwise, of a copy of an amended pleading, motion,
order or other paper from which it may first be ascertained that the case
is one which is or has become removable[.]
Lowery, 483 F.3d at 1212 n.60 (quoting the text of 28 U.S.C. 1446 then in existence)
(alterations in Lowery).26 According to the Lowery opinion, the former
§ 1446(a) answers the question of how removal is accomplished, stating
that a defendant may remove any “civil action” by filing a notice of
removal, signed pursuant to the good faith requirements of Rule 11,
which contains “a short and plain statement of the grounds for removal.”
28 U.S.C. § 1446(a). [The former s]ection 1446(b) then answers the
question of when an action is removable, setting forth the preconditions
for removal in two types of cases: (1) those removable on the basis of an
initial pleading; and (2) those that later become removable on the basis
of “a copy of an amended pleading, motion, order or other paper.” §
1446(b). Regardless of the type of case, a defendant must remove within
thirty days of receiving the document that provides the basis for removal.
§ 1446(b).
Lowery, 483 F.3d at 1211-13 (footnotes omitted) (alteration and emphasis supplied).
“Thus, under [the former] § 1446(b), in assessing the propriety of removal, the court
26

For reference, the former § 1446(a) is substantially similar to the current § 1446(a); the
first paragraph of the former § 1446(b) is substantially similar to the current § 1446(b)(1); and the
second paragraph of the former § 1446(b) is substantially similar to the current § 1446(b)(3).
9

considers the document received by the defendant from the plaintiff — be it the initial
complaint or a later received paper — and determines whether that document and the
notice of removal unambiguously establish federal jurisdiction.” Id. at 1213 (footnote
omitted) (alteration and emphasis supplied).
The Lowery Court then further elaborated on the difference in the analysis for
removals under the first and second paragraphs of the former § 1446(b) (a distinction
that, as noted in footnote 26, supra, is the equivalent of comparing the current §
1446(b)(1) with the current § 1446(b)(3)):
Under the first paragraph of [former] § 1446(b) [current §
1446(b)(1)], a case may be removed on the face of the complaint if the
plaintiff has alleged facts sufficient to establish the jurisdictional
requirements. Under the second paragraph[ current § 1446(b)(3)], a case
becomes removable when three conditions are present: there must be (1)
“an amended pleading, motion, order or other paper,”[27] which (2) the
defendant must have received from the plaintiff (or from the court, if the
document is an order), and from which (3) the defendant can “first
27

The Eleventh Circuit stated in Lowery that

What constitutes “other paper, . . . has been developed judicially. Courts have not
articulated a single test for identifying “other paper,” but numerous types of
documents have been held to qualify. They include: responses to request for
admissions, Wilson v. Gen. Motors Corp., 888 F.2d 779, 780 (11th Cir. 1989);
settlement offers, Addo v. Globe Life & Accident Ins. Co., 230 F.3d 759, 761–62 (5th
Cir. 2000); interrogatory responses, Akin v. Ashland Chem. Co., 156 F.3d 1030, 1036
(10th Cir. 1998); deposition testimony, S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d
489, 494 (5th Cir. 1996); demand letters, Williams v. Safeco Ins. Co., 74 F. Supp. 2d
925, 929 (W.D. Mo. 1999); and email estimating damages, Callahan v. Countrywide
Home Loans, Inc., No. 3:06–105, 2006 WL 1776747, at *3–*4 (N.D. Fla. June 26,
2006).
Lowery, 483 F.3d at 1212 n.62 (alteration supplied).
10

ascertain” that federal jurisdiction exists. § 1446(b). Under either
paragraph, the documents received by the defendant must contain an
unambiguous statement that clearly establishes federal jurisdiction. See
Bosky v. Kroger Texas, LP, 288 F.3d 208, 211 (5th Cir. 2002) (holding
that grounds must be “unequivocally clear and certain”); Huffman v. Saul
Holdings, LP, 194 F.3d 1072, 1078 (10th Cir. 1999) (same).
Lowery, 483 F.3d at 1213 n.63 (alteration and emphasis supplied).
Here, Triumphe did not receive any document from plaintiff indicating that the
case had become removable. Instead, Triumphe concluded, as the result of its own
investigation, that it would attempt to hold plaintiff liable for its insured’s fire loss,
and that a justiciable controversy thus had arisen. Triumphe effectively acknowledges
this point several times in its brief. For example, Triumphe states that it and the other
defendant “completed their investigation of the matter and determined that Plaintiff
is responsible,” and they sent plaintiff “a letter indicating the result of the
investigation.”28 Triumphe also states that it based its decision to hold plaintiff liable
on information it received “from both experts and witnesses,” but it does not mention
any information it received from plaintiff.29 Indeed, Triumphe goes so far as to state
that it requested certain materials from plaintiff during the course of its investigation,
but that it “has yet to receive any of the materials.”30 Because Triumphe never

28

Doc. no. 11 (Triumphe’s Brief in Opposition to Motion to Remand) ¶ 7. See also id. ¶ 12
(stating that Triumphe notified plaintiff that it intended to hold plaintiff responsible for the loss).
29

Id.

30

Id.
11

received any document “or other paper” from plaintiff indicating that removal was
proper, it cannot remove under 28 U.S.C. § 1446(b)(3).
Perhaps anticipating this result, Triumphe asserts that its second removal was
invoked pursuant to § 1446(b)(1), not § 1446(b)(3). Triumphe correctly points out
that the requirement that a removing defendant receive, from the plaintiff, a document
indicating federal jurisdiction does not apply to removals under § 1446(b)(1). See
Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 761 (11th Cir. 2010) (“Lowery’s
‘receipt from the plaintiff’ rule has no application to cases, like this one, which are
removed under the first paragraph of § 1446(b).”). Even so, Triumphe’s argument
that the Second Notice of Removal falls under § 1446(b)(1) is unconvincing, and even
borders on being frivolous, considering that the Second Notice of Removal contained
the following sentence: “This Defendant files this second petition for removal
pursuant to 28 U.S.C. § 1446(b)(3) on the same grounds as originally petitioned and
granted . . . .”31

31

Doc. no. 1 ¶ 16 (emphasis supplied). Triumphe also asserts that plaintiff’s initial
complaint was not a “claim for relief” under § 1446(b)(1) because the parties did not yet have “an
actual dispute.” Doc. no. 11 ¶ 18. See 28 U.S.C. § 1446(b)(1) (“The notice of removal of a civil
action or proceeding shall be filed within 30 days after the receipt by the defendant, through service
or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such
action or proceeding is based . . . .”) (emphasis supplied). Triumphe cites no authority to support
its unusual construction of the phrase “claim for relief,” and the court is not persuaded by
Triumphe’s argument. In any event, Triumphe’s explicit statement in the Second Notice of Removal
that the Notice was being submitted pursuant § 1446(b)(3) undercuts its present attempt to
recharacterize the removal as falling under § 1446(b)(1).
12

III. CONCLUSION
In summary, Triumphe’s Second Notice of Removal, which was invoked
pursuant to 28 U.S.C. § 1446(b)(3), is not procedurally proper under that statute
because the removability of the case was not made apparent in any document received
by Triumphe from plaintiff. Accordingly, plaintiff’s motion to remand is due to be
granted. An order consistent with this opinion will be entered contemporaneously
herewith.
DONE this 16th day of October, 2013.

______________________________
United States District Judge

13