Neky v. Costco Wholesale Corporation

Filing 25

ORDER GRANTING MOTION TO REMAND. Signed by Judge William H. Orrick on 10/10/2019. The case is remanded to the Superior Court of California, County of San Mateo. (jmdS, COURT STAFF) (Filed on 10/10/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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MICHAEL NEKY,
Plaintiff,

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ORDER GRANTING MOTION TO
REMAND

v.
COSTCO WHOLESALE CORPORATION,

United States District Court
Northern District of California

Re: Dkt. No. 6

Defendant.
INTRODUCTION

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Case No. 19-cv-03781-WHO

Plaintiff Michael Neky filed suit in San Mateo County Superior Court against defendant

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Costco Wholesale Corporation (“Costco”) alleging negligence and premises liability. Costco

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removed the case to federal court based on diversity jurisdiction, and Neky has filed a motion to

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remand. Because Costco’s Notice of Removal was filed outside of the 30-day window allowed by

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28 U.S.C. § 1446(b)(3), the Motion to Remand is GRANTED.
BACKGROUND

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On January 19, 2017, while working for Heartland Express, Inc., Neky made a delivery to

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a Costco-owned property in Foster City, California. Complaint, Ex. A to the Notice of Removal

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[Dkt. No. 1-1] (“Compl.”) ¶ 6. During the delivery, he slipped and fell on a wet area of the

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property’s delivery docks, sustaining severe personal injuries. Id. at ¶ 7. He alleges that

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Costoco’s negligence and failure to maintain the property were the proximate causes of his fall

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and subsequent injuries. Id. at ¶ 8.

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Neky filed suit in state court on January 17, 2019, alleging negligence and premises

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liability against the defendant. In his Complaint, Neky requests general damages, special

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damages, loss of earnings, and other costs in an unspecified amount. Id. On March 1, 2019,

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Costco’s registered agent was personally served with summons, a copy of the Complaint, and

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other papers, including plaintiff’s Statement of Damages enumerating over $1 million in general

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and specific damages. Proof of Service of Summons and Statement of Damages, attached at Ex. A

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to the Notice of Removal [Dkt. No. 1-1 at ECF Pgs. 15-17 of 40]. The Proof of Service was

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signed by the process server on March 7, 2019, and was filed with the Superior Court on March

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25, 2019. Dkt. No. 1-1 ECF Pg. 15. Costco filed an answer to the Complaint on April 15, 2019.

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Dkt. No. 1-1 ECF pgs. 18-21 of 40.

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On May 30, 2019, Costco’s counsel of record received an Application for Lien from

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Heartland Express, Inc., claiming and applying for a lien of $116,048.00. Notice of Removal

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[Dkt. No. 1] 2-3. The Application for Lien states that “[a]s a proximate result of the injuries to

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plaintiff . . . [Heartland Express, Inc.] has paid to and on behalf of plaintiff, the minimum sum of

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$116,048.00, as and for workers’ compensation benefits and medical care and temporary and/or

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United States District Court
Northern District of California

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permanent disability indemnity.” Id.
On June 28, 2019, Costco removed the case to this court on the basis of diversity

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jurisdiction. Id. On July 26, 2019, Neky filed a motion to remand, asserting that removal was

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improper because there is not complete diversity among the parties and the Notice of Removal

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was untimely. Dkt. No. 6.

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LEGAL STANDARD

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A defendant may remove a case from state to federal court by filing a notice of removal

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that lays out the grounds for removal. 28 U.S.C. § 1441(a). A “notice of removal may be filed

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within 30 days after receipt by the defendant, through service or otherwise, of a copy of an

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amended pleading, motion, order or other paper from which it may first be ascertained that the

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case is one which is or has become removable.” 28 U.S.C. § 1446(b)(3). The removal statute’s

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“time limit is mandatory and a timely objection to a late petition will defeat removal. . . .” Fristoe

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v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir. 1980).

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DISCUSSION

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Costco filed the Notice of Removal on June 28, 2019, after its counsel received the

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Application for Lien on May 30, 2019. Dkt. No. 1. It claims the Application for Lien was the first

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indicator that the case involved an amount in controversy above the $75,000 threshold for

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diversity jurisdiction. Costco’s Opposition to Motion to Remand 3, 6-8 [Dkt. No. 11]. However,

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Neky points out that Costco was served with the Statement of Damages seeking a total of
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$1,525,000.00 in damages on March 1, 2019. Motion to Remand 3 [Dkt. No. 6], Dkt. No. 1-1 at

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ECF pgs. 14-17. Because Costco filed the Notice of Removal more than 30 days after March 1,

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2019, Neky argues the Notice was untimely and therefore invalid. Id. at 4-5.
A defendant must file its notice of removal, including “a short and plain statement of the

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grounds for removal,” within 30 days of receiving the initial pleading. 28 U.S.C. § 1446. If the

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initial pleading does not appear removable on its face, the defendant may file a notice of removal

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“within 30 days after receipt . . . , through service or otherwise, of a copy of an amended pleading,

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motion, order or other paper from which it may first be ascertained that the case is one which is or

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has become removable.” 28 U.S.C. § 1446(b)(3). If a notice of removal is filed outside the 30-

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day limit and the opposing party objects in a timely manner, removal is defeated. Fristoe, 615

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United States District Court
Northern District of California

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F.2d at 1212.
Costco failed to file its Notice of Removal within 30 days of being served with plaintiff’s

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Statement of Damages, making removal untimely. Although the Complaint did not indicate a

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specific amount in controversy, the Statement of Damages that was served with the Complaint

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outlined general and specific damages of $1,525,000.00. Statement of Damages, Dkt. No. 1-1 at

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ECF pgs. 14-17. Statements of damages, like the one here, are considered “the functional

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equivalent of an amendment to a complaint.” Plotitsa v. Superior Court, 140 Cal. App. 3d 755,

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759 (1983). Its service on March 1, 2019, therefore, triggered the 30-day period to remove the

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case.

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In its opposition, Costco objects to the court taking judicial notice of the Statement of

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Damages and the related Proof of Service. Oppo. 7. However, the Statement of Damages, as well

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as the Complaint and the Proof of Service, were part of the Costco’s Notice of Removal. Dkt. No.

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1-1. These documents are part of the record of this case, and subject to judicial notice in the same

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way the state court Complaint is. United States v. Wilson, 631 F.2d 118, 119 (9th Cir. 1980)

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(court may take judicial notice of its own records).

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Costco also notes that the California statute governing statements of damages provides that

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a defendant “may” ask for plaintiff to provide one. Cal. C.C.P. § 425.11.1 But there is nothing in

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the statutory language that prevents a plaintiff from serving one on its own accord, absent a

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request from the defendant. Id. The purpose of the statute “is to give the defendant specific notice

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of damages sought,” therefore allowing defendants to better address claims brought against them.

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Debbie S. v. Ray, Cal. App. 4th 193, 199 (1993). Costco was given that specific notice when

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Neky served the Statement of Damages on March 1, 2019. Costco had notice that this case was

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removable on that date.
Costco does not dispute, through a declaration or otherwise, that it received the Statement

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along with the Complaint on March 1, 2019. Costco’s counsel merely asserts that he was not

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aware of the amount in controversy until he received the Application for Lien. Declaration of

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United States District Court
Northern District of California

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Arthur J. Casey [Dkt. No. 11-1]. But that does not counter or otherwise undermine Neky’s Proof

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of Service of the Statement on March 1, 2019.
Defendant did not file a timely notice of removal and, therefore, this case must be

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remanded.2

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CONCLUSION

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Because defendant’s Notice of Removal was filed after the 30-day statutory limit, the

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Motion to Remand is GRANTED and the case is remanded to the Superior Court of California,

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County of San Mateo.
IT IS SO ORDERED.

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Dated: October 10, 2019

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William H. Orrick
United States District Judge

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Cal. Code Civ. Proc. § 425.11(b) provides “When a complaint is filed in an action to recover
damages for personal injury or wrongful death, the defendant may at any time request a statement
setting forth the nature and amount of damages being sought. The request shall be served upon the
plaintiff, who shall serve a responsive statement as to the damages within 15 days.”
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Because the notice of removal was untimely, I need not reach whether there is diversity
jurisdiction.
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