James Dickey, Inc. v. Nationwide Mutual Insurance Company

Filing 14

MINUTE Order: (1) GRANTING Plaintiff's Motion to Remand (Dkt. No. 11 ); (2) REMANDING this action; and (3) VACATING the January 22, 2018 Hearing (IN CHAMBERS) by Judge Jesus G. Bernal. (SEE ORDER FOR FURTHER DETAILS) For the foregoing reasons, the Court GRANTS Plaintiffs Motion, REMANDS the action, and VACATES the January 22, 2018 hearing. (Remanded to Riverside County Superior Court, RIC 1712053. MD JS-6. Case Terminated.) (iva)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

EDCV 17-02271 JGB (KKx)

Date January 18, 2018

Title James Dickey, Inc. v. Nationwide Mutual Insurance Company
Present: The Honorable

JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE

MAYNOR GALVEZ

Not Reported

Deputy Clerk

Court Reporter

Attorney(s) Present for Plaintiff(s):

Attorney(s) Present for Defendant(s):

None Present

None Present

Proceedings:

Order: (1) GRANTING Plaintiff’s Motion to Remand (Dkt. No. 11);
(2) REMANDING this action; and (3) VACATING the January 22, 2018
Hearing (IN CHAMBERS)

Before the Court is Plaintiff James Dickey, Inc.’s (“Plaintiff”) motion to remand.
(“Motion,” Dkt. No. 11.) The Court finds this matter appropriate for resolution without a
hearing. See Fed. R. Civ. P. 78; L.R. 7-15. After considering all papers timely filed in support of,
and in opposition to, the Motion, the Court GRANTS Plaintiff’s Motion and REMANDS this
action. The January 22, 2018 Hearing is hereby VACATED.
I.

BACKGROUND

On June 29, 2017, Plaintiff filed a complaint in the Superior Court of California, County
of Riverside against Nationwide Mutual Insurance Company and Does 1 through 20.
(“Complaint,” Dkt. No. 1-2.) On November 7, 2017, Defendant Nationwide Mutual Insurance
Company (“Defendant”) removed the action to this Court. (Dkt. No. 1.) Plaintiff then filed this
Motion on December 7, 2017. Defendant filed an opposition on December 28, 2017.
(“Opposition,” Dkt. No. 12.) Plaintiff filed a reply on January 5, 2018. (“Reply,” Dkt. No. 13.)
II.

LEGAL STANDARD

Federal courts have limited jurisdiction, “possessing only that power authorized by
Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256 (2013). As such, federal courts
only have original jurisdiction over civil actions in which a federal question exists or in which

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complete diversity of citizenship between the parties exists and the amount in controversy
exceeds $75,000. See 28 U.S.C. §§ 1331, 1332.
Moreover, the Ninth Circuit “strictly construe[s] the removal statute against removal
jurisdiction,” and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of
removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “The
strong presumption against removal jurisdiction means that the defendant always has the burden
of establishing that removal is proper.” Jackson v. Specialized Loan Servicing, LLC, 2014 WL
5514142, *6 (C.D. Cal. Oct. 31, 2014). The court must resolve doubts regarding removability in
favor of remanding the case to state court. Id.
The procedure for removal is set forth in 28 U.S.C. § 1446. Section 1446(a) provides
generally that a defendant seeking to remove a civil action shall file a notice of removal in the
district court. 28 U.S.C. § 1446(a). Section 1446(b) requires that a notice of removal be filed
within two thirty-day periods: (1) thirty days of receipt from the plaintiff of an initial pleading, or
(2) if the initial pleading does not clearly indicate whether the case is removable, thirty days from
receipt of an amended pleading or some other document from which it is ascertainable that the
case is removable. 28 U.S.C. §§ 1446(b)(1), (b)(3). Specifically, section b of the statute reads:
(1) The notice of removal of a civil action or procedure 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, or within 30 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.
…
(3) Except as provided in subsection (c), 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 be first ascertained that the case is one which
is or has become removable.
28 U.S.C. §§ 1446(b)(1), (b)(3).
“[T]he first thirty-day period for removal in 28 U.S.C. § 1446(b) only applies if the case
stated by the initial pleading is removable on its face.” Harris v. Bankers Life & Cas. Co., 425
F.3d 689, 694 (9th Cir. 2005). In Harris, the Ninth Circuit held “notice of removability under
§ 1446(b) is determined through the four corners of the applicable pleadings.” Id. “If no ground
for removal is evident in [the initial] pleading, the case is ‘not removable’ at that stage. In such a
case, the notice of removal may be filed within thirty days after the defendant receives ‘an
amended pleading, motion, order or other paper’ from which it can be ascertained from the face
of the document that removal is proper.” Id. The Ninth Circuit rejected the notion that a
defendant has a duty to investigate a basis for removal when it is not clear from the face of the
pleading. Id.
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III.

DISCUSSION

A. Central District of California Local Rule 7-3
Local Rule 7-3, Conference of Counsel Prior to Filing of Motions, provides, in part:
[C]ounsel contemplating the filing of any motion shall first contact opposing
counsel to discuss thoroughly, preferably in person, the substance of the
contemplated motion and any potential resolution. The conference shall take
place at least seven (7) days prior to the filing of the motion.
L.R. 7-3 (emphasis in original). Although Plaintiff represented in its motion that the parties
conducted the conference of counsel pursuant to Local Rule 7-3 (Mot. at 2), Defendant alleges
that the parties did not discuss the substance of the contemplated motion (Opp. at 2-3). See
Smith v. Harbor Freight Tools, USA, Inc., No. CV136262JFWVBKX, 2014 WL 12487663, at * 1
(C.D. Cal. Jan. 10, 2014) (denying the plaintiff’s motion for class certification for failure to
comply with Rule 7-3, as the parties did not thoroughly discuss the substance of the contemplated
motion and any potential resolution). Moreover, in Plaintiff’s Counsel’s declaration, Stephen
Hsu states: “On December 7, 2017, I called and spoke with counsel for WAL-MART, Brian
Pelanda, regarding my intention to file a motion for remand.” (“Hsu Declaration,” Dkt. No. 11
¶ 6.) WAL-MART is not party to this action. In its Reply, Plaintiff did not address its alleged
failure to comply with Rule 7-3. (See generally Reply.)
Plaintiff contacted Defendant on December 7, 2017 and filed its Motion that same day.
Plaintiff, thus, failed to comply with Rule 7-3 by not waiting the appropriate 7 days and by not
discussing the substance of the contemplated motion. Plaintiff filed its Motion on the last day
permitted under the 28 U.S.C. § 1447(c). 28 U.S.C. § 1447(c) (“A motion to remand the case on
the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days
after the filing of the notice of removal under section 1446(a).”) Although Plaintiff could have
been more diligent in its efforts to adhere to Rule 7-3, Defendants have not alleged any material
prejudice resulting from Plaintiff’s failure to comply. Accordingly, the Court will consider the
Motion. See, e.g., ECASH Techs., Inc. v. Guagliardo, 35 Fed. Appx. 498, 500 (9th Cir. May 13,
2002) (Unpub. Disp.) (“The Central District of California’s local rules do not require dismissal
of appellee’s motions for failure to satisfy the meet-and-confer requirements” (citations
omitted)); CarMax Auto Superstores California LLC v. Hernandez, 94 F. Supp. 3d 1078, 1088
(C.D. Cal. 2015) (“Failure to comply with the Local Rules does not automatically require the
denial of a party’s motion, . . . particularly where the non-moving party has suffered no apparent
prejudice as a result of the failure to comply”) (collecting cases).
B. Initiation of the 30-Day Period
The parties agree they are citizens of different states, and the amount in controversy
exceeds $75,000. The parties dispute whether the fact that the amount in controversy exceeds
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$75,000 is clear from the face of the Complaint, and thus whether Defendant’s removal is timely.
Plaintiff contends it is clear from the face of the Complaint, while Defendant maintains that the
amount in controversy first became clear in other papers, thus implicating 28 U.S.C. §
1446(b)(3). (See Mot. at 4; Opp. at 5.)
In particular, Plaintiff argues the Complaint reveals the jurisdictional amount exceeds
$75,000. (Reply at 4.) The Complaint states the tools purchased to replace the stolen tools
totaled “hundreds of thousands of dollars.” (Compl. ¶ 11.) Plaintiff alleges Defendant failed to
cover the cost of the stolen tools, as covered under the policy. (Id. ¶¶ 10-11.) Plaintiff brings this
action seeking the following monetary relief:









“Damages for contract on the policy according to proof”;
“special damages for breach of contract according to proof”;
“incidental damages for breach of contract in amount to be determined at trial”;
“general damages for breach of the implied covenant of good faith and fair dealing
in an amount to be determined at trial”;
“special damages for breach of the implied covenant of good faith and fair
dealing”;
“punitive and exemplary damages according to proof”;
“attorney’s fees and costs incurred . . . according to proof”; and
“costs of suit incurred.”

(Id. at 7.)
Although the prayer for relief does not specify the amount sought, the body of the
Complaint reveals the cost for replacement goods totaled over $75,000. In the Complaint,
Plaintiff alleges the following:
Plaintiff promptly presented his claim for damages and loss of use to Defendants.
Although the loss was clearly covered under the POLICY, Defendants have
unreasonably withheld payment for Plaintiff’s stolen INSURED PROPERTY for
nearly two years. Plaintiff has supplied adjusters with inventories, receipts, and
price lists; but Defendants continue to withhold insurance benefits as to which
Plaintiff is entitled.
Defendants were sent estimates from the tool manufacturer confirming that the
replacement cost of Plaintiff’s tools. Defendants were also sent Plaintiff’s
invoices and receipts’ [sic] demonstrating that Plaintiff has in fact purchased
hundreds of thousands of dollars of tools. Nevertheless, Defendants unreasonably
continue to withhold all payment for the stolen tool. In the time that has passed
since the theft, Plaintiff is yet to receive $1.00 from Defendants as compensation
for Plaintiff’s stolen tools, materials and equipment.

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(Compl. ¶¶ 10-11 (emphasis added).) From these allegations, it is reasonably clear that
Plaintiff seeks in excess of $75,000 in damages. Thus, removability could have been
determined from the face of the Complaint. Accordingly, Defendant had 30 days from
the receipt of the initial pleading—the Complaint—or the service of summons of the
Complaint. 28 U.S.C. 1446(b)(1). Plaintiff filed its Complaint on June 29, 2017. (Dkt.
No. 1-2.) Defendant removed the action on November 7, 2017, more than 30 days after
the Complaint was filed. (Dkt. No. 1.) Thus, removal was untimely.
IV.

CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiff’s Motion, REMANDS the
action, and VACATES the January 22, 2018 hearing.
IT IS SO ORDERED.

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