Lee Memorial Health System v. State Farm Mutual Automobile Insurance Company
Filing
54
OPINION AND ORDER denying 9 Motion to Remand to State Court. Signed by Judge John E. Steele on 9/23/2015. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
LEE MEMORIAL HEALTH SYSTEM,
Plaintiff,
v.
Case No: 2:14-cv-651-FtM-29DNF
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Defendant/Third
Party Plaintiff
DELILAH CARROWAY,
Third Party Defendant.
OPINION AND ORDER
This matter comes before the Court on review of plaintiff Lee
Memorial Health System’s Motion for Remand (Doc. #9) filed on
December
8,
2014.
Defendant,
State
Farm
Mutual
Automobile
Insurance Company filed a Response in Opposition (Doc. #13) on
December 23, 2014.
The Motion is now fully briefed and ripe for
the Court’s review.
I.
On
November
9,
2013,
Delilah
Carraway
(Carraway)
passenger on a motorcycle being operated by Gary Nicholas.
#9, p. 2.)
was
a
(Doc.
Carraway was seriously injured when the motorcycle
collided with an automobile that was owned by Domonic Zammit
(Zammit) and operated by Rajner Llanaj, who was cited for failure
to yield to oncoming traffic.
(Id.)
Carraway was admitted for
emergency treatment at one of Lee Memorial Health Systems (LMHS)
hospitals 1 on November 9, 2013, and remained hospitalized until
November 15, 2013.
(Doc. #2, ¶ 5.)
LMHS billed Carraway $76,047.98 for the medical services she
was provided while she was hospitalized, all of which remains
unpaid.
On November 13, 2013, LMHS recorded a hospital lien claim
against Carraway for $47,475.48 in the official records of Lee
County, Florida.
On November 27, 2013, LMHS recorded an amended
claim of lien against Carraway in the official records of Lee
County, Florida in the amount of $76,047.98.
State Farm Mutual Automobile Insurance Company (State Farm)
is an Illinois corporation doing business as an insurer in the
State of Florida.
State Farm, which insured Zammit’s automobile,
settled the claim with Carraway, who released State Farm from any
further liability after the settlement.
LMHS alleges that State
Farm settled Carraway’s claim without consideration of LMHS’s
hospital lien claim.
LMHS did not consent to the release from
liability nor did it approve the settlement between Carraway and
State Farm.
about
the
LMHS argues that State Farm knew or should have known
hospital
services
lien
claim
and
Carraway without first satisfying the lien.
not
settled
with
As a result, LMHS
The Complaint does not specify which one of the hospitals operated
by Lee Memorial Health Services treated Carraway.
1
2
filed this lawsuit against State Farm in the Circuit Court of the
Twentieth Judicial Circuit, in and for Lee County, Florida. LMHS’s
Complaint alleges that State Farm impaired its hospital lien by
settling with Carraway without satisfying the hospital claim of
lien, resulting in damages to LMHS.
State Farm removed the case from the State Court to this Court
on November 6, 2014, on the basis of diversity of citizenship
jurisdiction.
LMHS now seeks to remand the case to the state
Circuit Court, arguing that the parties are not completely diverse
and therefore the Court lacks subject matter jurisdiction.
II.
A defendant may remove a civil case from state court to
federal court if the case could have originally been brought in
federal court.
28 U.S.C. § 1441(a).
Federal courts have original
jurisdiction if there is complete diversity of citizenship among
the
parties
and
the
amount
in
exclusive of interest and costs.
seeking
removal
bears
the
controversy
exceeds
28 U.S.C. § 1332(a).
burden
of
establishing
jurisdiction as of the date of the removal.
$75,000,
The party
diversity
Pretka v. Kolter City
Plaza II, Inc., 608 F.3d 744, 751 (11th Cir. 2010).
The parties do not dispute that the amount in controversy has
been
satisfied,
but
LMHS
asserts
that
there
is
not
complete
diversity of citizenship because their claim is a “direct action”
against
an
insurance
company,
as
3
described
in
28
U.S.C.
§
1332(c)(1), and therefore the Florida citizenship of the insured
is imputed to State Farm.
State Farm counters that this is not a
direct action under § 1332(c)(1), and the parties are completely
diverse.
For the purposes of determining diversity, a corporation is
generally deemed to be a citizen of every State and foreign state
in which it was incorporated, as well as the State or foreign state
in which it has its principal place of business.
1332(c)(1).
28 U.S.C. §
The statute imputes an additional citizenship “in any
direct action against the insurer of a policy or contract of
liability insurance . . . to which action the insured is not joined
as a party-defendant . . .”
28 U.S.C. § 1332(c)(1).
In such a
direct action case, the insurance company is also deemed to be a
citizen of “every State and foreign state of which the insured is
a citizen; . . .”
28 U.S.C. § 1332(c)(1)(A).
Thus, “if a third-
party plaintiff brings a direct action against a tortfeasor's
liability insurer, the insurer is considered a citizen of the
insured's state.”
Kong v. Allied Prof’l Ins. Co., 750 F.3d 1295,
1299 (11th Cir. 2014).
Although not statutorily defined, courts have “‘uniformly
defined’ the term ‘direct action’ to refer to those ‘cases in which
a party suffering injuries or damage for which another is legally
responsible is entitled to bring suit against the other's liability
insurer without joining the insured or first obtaining a judgment
4
against him.”
Kong, 750 F.3d at 1299–1300 (quoting Fortson v. St.
Paul Fire & Marine Ins. Co., 751 F.2d 1157, 1159 (11th Cir. 1985)
(emphasis
omitted)).
The
direct
action
statute
will
defeat
diversity jurisdiction only if the claim the third party has
against the insured is the same one asserted against the insurance
company as within the zone of primary liability for which the
company issued the policy.
John Cooper Produce, Inc. v. Paxton
Nat. Ins. Co., 774 F.2d 433, 435 (11th Cir. 1985).
In this instance, LMHS’s claim against State Farm does not
satisfy the definition of direct action.
LMHS’s claim against
State Farm is not of the same type as covered by the insurance
policy issued by State Farm to Zammit, the insured owner of the
vehicle that hit Carraway.
A direct action does not exist unless
the plaintiff's cause of action against the insurer is of such a
nature that the liability sought to be imposed could be imposed
against the insured.
Fortson, 751 F.2d at 1159.
LMHS’s litigation
against State Farm is not this type of action and is therefore not
a direct action.
As such, the direct action exemption does not
apply to this case.
Upon review of the Notice of Removal and Complaint, the Court
finds the plaintiff LMHS is a citizen of the State of Florida.
The defendant State Farm is a corporation organized and existing
under the laws of the state of Illinois with its principal place
of business also in Illinois.
Accordingly, State Farm is a citizen
5
of
the
State
jurisdiction.
of
Illinois
for
the
purposes
of
diversity
Therefore, the parties are diverse, the Court
maintains diversity jurisdiction, and the motion to remand is
denied.
Accordingly, it is now
ORDERED:
Plaintiff's Motion for Remand (Doc. #9) is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
September, 2015.
Copies:
Counsel of record
6
23rd
day of
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