Garcia v. Century Surety Company
ORDER DENYING 13 MOTION FOR REMAND. By Judge Robert E. Blackburn on 10/17/2014. (alowe) Modified text on 10/17/2014 (alowe).
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No.: 14-cv-01493-REB-KLM
CENTURY SURETY COMPANY, an Ohio Corporation
ORDER DENYING MOTION FOR REMAND
The matter before me is plaintiff’s Motion For Remand [#13],1 filed August 25,
2014. I deny the motion.
I putatively have subject matter jurisdiction pursuant to 28 U.S.C. § 1332
(diversity of citizenship).
II. STANDARD OF REVIEW
The federal removal statute provides that “any civil action brought in a State court
of which the district courts of the United States have original jurisdiction, may be
removed by the defendant or the defendants, to the district court of the United States for
the district and division embracing the place where such action is pending.” 28 U.S.C. §
“[#13]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.
1441(a). A motion to remand the case based on any defect other than subject matter
jurisdiction must be filed within 30 days of the filing of the notice of removal; a motion to
remand based on lack of federal subject matter jurisdiction may be filed at any time prior
to the entry of final judgment. 28 U.S.C. § 1447(c). If the court finds that remand is
appropriate and that the removing party lacked an objectively reasonable basis for
removal, costs – including attorney fees – may be awarded as well. Martin v. Franklin
Capital Corp., 546 U.S. 132, 141, 126 S.Ct. 704, 711, 163 L.Ed.2d 547 (2005); Porter
Trust v. Rural Water Sewer and Solid Waste Management District No. 1, 607 F.3d
1251, 1253 (10th Cir. 2010).
This case involves the removal of a writ of garnishment in a third-party insurance
case. Colorado’s garnishment procedures are set forth in Colorado Rule of Civil
Procedure 103, and have been summarized by the courts as follows:
The judgment creditor attempting to collect on the judgment
debt bears the burden of proving the existence and validity
of the indebtedness of the garnishee. Accordingly, the
garnishee is treated in the same manner as if it had been
sued directly on the debt by the judgment debtor and is thus
entitled to deny the indebtedness to the judgment debtor, to
engage in discovery, and to have a hearing at which the
judgment creditor must prove the allegations by a
preponderance of the evidence. The parties may offer expert
testimony and also may rely on portions of the record in the
underlying tort case.
Hoang v. Monterra Homes (Powderhorn) LLC, 129 P.3d 1028, 1033 (Colo. App. 2005)
(internal citations omitted). The ultimate question in this case is whether the damages as
to which plaintiff has recovered judgment are covered by the policy of insurance. See
Bohrer v. Church Mutual Insurance Co., 965 P.2d 1258, 1266 (Colo. 1998).
Plaintiff is the holder of a judgment entered in April 2014 by the district court of
Weld County, Colorado. Defendant was not a party to that litigation, but plaintiff alleges
that the policy of insurance which defendant issued to the judgment debtors is liable to
satisfy the judgment against them. Defendant previously filed suit in the federal district
court seeking a declaration to the contrary. (See Century Surety Co. v. Smith et al.,
Civil Action No. 14-cv-00947-RM-MJW.) Five weeks later, plaintiff filed two writs of
garnishment directed to defendant in the state court case. Defendant removed that
action to this court. Plaintiff now seeks remand.
Initially, I note that plaintiff’s motion for remand was filed more than 30 days after
the case was removed to this court. Plaintiff therefore has waived her right to seek
remand on the basis of any alleged defect other than lack of subject matter jurisdiction.
See 28 U.S.C. § 1447(c); Farmland National Beef Packing Co., L.P. v. Stone
Container Corp., 98 Fed. Appx. 752, 756 (10th Cir. April 16, 2004) (“[T]he thirty-day
period binds the district court as well as the party opposing removal.”). I thus do not
consider plaintiff’s arguments regarding whether the “service of suit” clause of the
insurance policy prevents defendant from removing, as the right to complain of any such
defect has been forfeited.
By contrast, plaintiff’s claims that this case does not constitute a “civil action” within
the meaning of 28 U.S.C. § 1441(a) do implicate the court’s subject matter jurisdiction.2
“It is a well settled rule that a suit which is merely ancillary or supplemental to another
Contrary to defendant’s intimation, this requirement is clearly jurisdictional.
action cannot be removed from a state court to a federal court.” Western Medical
Properties Corp. v. Denver Opportunity, Inc., 482 F. Supp. 1205, 1207 (D. Colo.
1980). Relying primarily on the holding of Western Medical Properties, plaintiff urges
me to conclude, based on the characterization of garnishment as an ancillary proceeding
under Colorado law, that it is not a “civil action” capable of being removed. I decline that
I find the rationale of Western Medical Properties problematic for several
reasons. First, although the Western Medical Properties court perceived a split in
authority as to whether federal or state law should control the characterization of the
underlying proceeding as ancillary vel non, the issue strikes this court as more nuanced.
Instead, the issue is more properly characterized as one of federal law which may be
informed, but not controlled, by state standards. See, e.g., Stark-Romero v. National
Railroad Passenger Co., 763 F.Supp.2d 1231, 1248-49 (D.N.M. 2011); Scanlin v. Utica
First Insurance Co., 426 F.Supp.2d 243, 248 (M.D. Pa. 2006); Smotherman v.
Caswell, 755 F.Supp. 346, 348-49 (D. Kan. 1990). See generally 14B WRIGHT ET AL.,
Federal Practice & Procedure, Jurisdiction § 3721 at 36-37(4th ed. 2009 & Supp. 2010)
[hereinafter “FPP”]. This interpretation makes sense – as a federal law governing access
to a federal tribunal, the removal statute must be subject to a uniform, nationwide
The removal statute which is nationwide in its operation, was
intended to be uniform in its application, unaffected by local
law definition or characterization of the subject matter to
which it is to be applied. Hence the Act of Congress must be
construed as setting up its own criteria, irrespective of local
law, for determining in what instances suits are to be
removed from the state to the federal courts.
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104, 61 S.Ct. 868, 870, 85 L.Ed.
1214 (1941). See also Chicago, R.I. & P.R. Co. v. Stude, 346 U.S. 574, 580, 74 S.Ct.
290, 98 L.Ed. 317 (1954) ("[A state statute’s] procedural provisions cannot control the
privilege or removal granted by the federal statute."). I thus find this line of authority to
be better reasoned and more in keeping with the nature and purposes of the removal
statute, and thus consider “the state characterization [of the proceeding as ancillary] as
weighty but not conclusive.” FPP § 3721 at 37.
The law of the Tenth Circuit is not clearly to the contrary either. It is true that in
London & Lancashire Indemnity Co. v. Courtney, 106 F.2d 277 (10th Cir. 1939), to
which the Western Medical Properties decision cites, the court did look to the
characterization of garnishment proceedings under Oklahoma law to inform its
determination that the case there was a separate and independent action, and thus
properly removed. Id. at 283. A subsequent decision which relied on Courtney,
however, was not so limited. Instead, in Adriaenssens v. Allstate Insurance Co., 258
F.2d 888 (10th Cir. 1958), the court found that removal of two related garnishment
actions was appropriate because they were “original and independent actions between
the holders of the judgments and the insurer” in which the issues to be tried were
different from those decided in the original suit. See id. at 889-90. Other district courts
in this circuit have also concluded that the law of the circuit is not beholden to state law
in the manner suggested by Western Medical Properties. See, e.g., Memorandum
Opinion and Order, Old Republic Insurance Co. v. Eclipse Aviation Corporation,
No. CV 12-323-RB-RHS (D.N.M. Aug. 9, 2012) (Brack, J.) (Def. Resp. App., Exhibit D);
Smotherman, 755 F.Supp. at 348-49 &n.1. I thus do not believe that the Tenth Circuit
would consider Colorado’s characterization of garnishment as an ancillary proceeding to
be dispositive ipso facto of the federal issue of removal.
The Adriaenssens decision also highlights another point on which I disagree
with the analysis of Western Medical Properties: the reliance on the mere label
“ancillary” is too simplistic. See Harding Hospital v. Sovchen, 868 F.Supp. 1074,
1078 (S.D. Ind. 1994). For although a writ of garnishment is filed in aid of execution of
the judgment, plaintiff’s claims against defendant here are wholly distinct from the
claims on which she prevailed at trial. The case now must focus, not on the negligence
of the judgment debtors, but on whether defendant is liable to compensate plaintiff as a
result of that negligence under the terms of the policy of insurance. Defendant is
entitled to contest its liability for the judgment in the garnishment proceedings. It may
seek discovery and is entitled to an evidentiary hearing at which plaintiff must prove her
claims by a preponderance of the evidence. See C.R.C.P. 103 §§ 4 & 6; Maddalone v.
C.D.C., Inc., 765 P.2d 1047, 1049 (Colo. App. 1988).
The substance of those underlying proceedings must prevail over the label
affixed by state court practice. Both the Tenth Circuit and other federal courts have
recognized that in such circumstances – where the state court procedures contemplate
adversarial testing of disputed issues not previously decided by the state court and
implicate a party not previously subject to the jurisdiction of the state court – removal is
proper. See Adriaenssens, 258 F.2d at 889-90; Connecticut Bank of Commerce v.
Republic of Congo, 440 F.Supp.2d 346, 351 (D. Del. 2006); Scanlin, 426 F.Supp.2d
at 250; Harding Hospital, 868 F.Supp. at 1078. See also FPP § 3721 at 36. I concur
with these decisions and conclude that the garnishment proceedings in this case
constitute separate civil actions which defendant was entitled to remove. Thus, the
motion to remand must be denied.
THEREFORE, IT IS ORDERED that plaintiff’s Motion For Remand [#13], filed
August 25, 2014, is DENIED.
Dated October 17, 2014, at Denver, Colorado.
BY THE COURT:
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