Washington et al v. Government Employees Insurance Company
Filing
24
ORDER granting 14 Plaintiff's Motion to Remand. Signed by Judge Paul G. Byron on 2/7/2017. (SEN)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
IRENE WASHINGTON,
Plaintiff,
v.
Case No: 6:16-cv-1775-Orl-40KRS
GOVERNMENT EMPLOYEES
INSURANCE COMPANY,
Defendant.
ORDER
This cause comes before the Court on Plaintiff’s Motion to Remand (Doc. 14), filed
November 11, 2016. On November 23, 2016, Defendant responded in opposition.
(Doc. 17). Upon consideration, Plaintiff’s Motion to Remand will be granted.
I.
BACKGROUND
On July 18, 2012, Plaintiff, Irene Washington (“Washington”), initiated this lawsuit
in state court by filing a two-count Complaint against Defendant, Government Employees
Insurance Company (“GEICO”). In her Complaint, Washington alleged that she suffered
injuries when an underinsured motorist negligently struck a vehicle being driven by her
husband and in which she was a passenger. Washington therefore sought to recover
uninsured/underinsured motorist (“UM”) coverage under her husband’s insurance policy
with GEICO. Washington later amended her Complaint to include a first-party bad faith
claim against GEICO. After Washington filed her Amended Complaint, the state court
abated Washington’s bad faith claim pending the result of the underlying UM coverage
dispute.
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The UM action ultimately proceeded to trial and resulted in a verdict in favor of
Washington in the amount of $360,000. On September 16, 2016, the state court entered
judgment in favor of Washington in the amount of $20,000 (the maximum amount of UM
benefits recoverable under GEICO’s policy) and lifted the abatement of Washington’s bad
faith claim. On October 12, 2016, GEICO removed the case to this Court based on
diversity jurisdiction. Washington now moves to remand back to state court.
II.
DISCUSSION
Washington moves to remand on the ground that GEICO’s removal of this case
was untimely. Specifically, Washington contends that GEICO’s right of removal expired
long ago pursuant to 28 U.S.C. § 1446(c)(1)’s one-year bar.
A defendant is authorized to remove a civil action from state court to federal court
where the controversy lies within the federal court’s original jurisdiction. 28 U.S.C.
§ 1441(a). With respect to timing, a defendant who wishes to remove a case to federal
court must do so within thirty days after receiving the initial pleading, id. § 1446(b)(1), or,
if the case was not initially removable, within thirty days after receiving “an amended
pleading, motion, order, or other paper” from which it can be deduced that the case has
become removable, id. § 1446(b)(3). However, where removal is predicated on diversity
jurisdiction, as is the case here, the right of removal expires “1 year after commencement
of the action, unless the district court finds that the plaintiff has acted in bad faith in order
to prevent a defendant from removing the action.” Id. § 1446(c)(1).
When timely challenged by a plaintiff, “[t]he burden rests with the removing
[defendant] to show that it followed the proper removal procedures.”
Lazo v. U.S.
Airways, Inc., No. 08-80391-CIV, 2008 WL 3926430, at *1 (S.D. Fla. Aug. 26, 2008).
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Because removal from state court constitutes an infringement upon state sovereignty, the
procedural requirements for removal must be strictly construed, and all doubts about the
propriety of removal must be resolved in favor of remand. Russell Corp. v. Am. Home
Assurance Co., 264 F.3d 1040, 1049–50 (11th Cir. 2001).
GEICO’s argument in support of removal and against Washington’s position that
removal was untimely is that Washington’s bad faith claim was not “commenced” within
the meaning of § 1446(c)(1) until the state court lifted the abatement of that claim. GEICO
maintains that, according to Florida law, Washington’s bad faith claim is a separate and
distinct claim from her UM claim and did not accrue until the state court jury awarded an
excess verdict. See Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289, 1291
(Fla. 1991).
Since the state court lifted its abatement of the bad faith claim on
September 16, 2016, GEICO concludes that the claim commenced on that date and that
GEICO’s October 12, 2016 removal was therefore timely.
GEICO rightly points out that the judges in Florida’s Middle District have reached
conflicting conclusions on how to treat bad faith claims which were either abated in state
court until the resolution of the underlying UM claim or were brought in the same lawsuit
through an amendment of the initial complaint after the jury’s excess verdict. Some view
the post-verdict accrual of a bad faith claim as the commencement of a new civil action,
thus “reset[ting] the removal clock” as to that claim. Johnson v. State Farm Mut. Auto.
Ins. Co., No. 6:15-cv-1942-Orl-31TBS, 2016 WL 277768, at *2 (M.D. Fla. Jan. 22, 2016)
(Presnell, J.); see also, e.g., Thorne v. State Farm Mut. Auto. Ins. Co., No. 8:14-CV-827T-17AEP, 2015 WL 809530, at *6 (M.D. Fla. Feb. 25, 2015) (Kovachevich, J.); Lahey v.
State Farm Mut. Auto. Ins. Co., No. 8:06-CV-1949-T27-TBM, 2007 WL 2029334, at *2
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(M.D. Fla. July 2007) (Whittemore, J.). Other judges, however, consider the post-verdict
accrual of a bad faith claim to result in the commencement of a new claim—rather than a
new civil action—which does not reset the removal clock. See, e.g., Baroso v. Allstate
Prop. & Cas. Ins. Co., 958 F. Supp. 2d 1344, 1346–47 (M.D. Fla. 2013) (Dalton, J.);
Daggett v. Am. Sec. Ins. Co., No. 2:08-cv-46-FtM-29DNF, 2008 WL 1776576, at *3 (M.D.
Fla. Apr. 17, 2008) (Steele, J.).
The undersigned sides with those judges who find that the post-verdict accrual of
a bad faith claim does not reset the removal clock. When interpreting the meaning of a
statute, the Court must first look to the language of the statute itself. Fed. Election
Comm’n v. Reform Party of the United States, 479 F.3d 1302, 1307 (11th Cir. 2007) (per
curiam). “If the statute’s meaning is plain and unambiguous, there is no need for further
inquiry.” United States v. Fisher, 289 F.3d 1329, 1337–38 (11th Cir. 2002). Here, the
removal statute at issue provides, in pertinent part, that the right of removal expires
“1 year after commencement of the action.” 28 U.S.C. § 1446(c)(1). In writing the statute,
Congress notably chose the word “action” in delineating when a defendant’s right of
removal expires. “Action” is a well-known term of art which means “[a] civil or criminal
judicial proceeding”; in other words, a lawsuit. Action, BLACK’S LAW DICTIONARY (10th ed.
2014).
Accordingly, by the statute’s plain and unambiguous language, the right of
removal expires one year after the commencement of a lawsuit.
GEICO’s argument in support of removal essentially asks the Court to read into
the statute that which is not there. GEICO is certainly correct that a bad faith claim is a
separate and distinct cause of action under Florida law and that a plaintiff could
conceivably file a new action (or lawsuit) to pursue that claim following an excess verdict.
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See Blanchard, 575 So. 2d at 1291. However, for whatever reason, Florida also allows
a plaintiff to pursue a bad faith claim within the same lawsuit by filing an amended
complaint following an excess verdict or by stating the bad faith claim in the initial pleading
and holding the claim in abatement until the jury’s verdict establishes the elements
necessary to state the claim. See Fridman v. Safeco Ins. Co., 185 So. 3d 1214, 1229–
30 (Fla. 2016). In either case, there is no new “action,” only a new “claim,” and the two
words are not synonymous.
See Claim, BLACK’S LAW DICTIONARY (10th ed. 2014)
(defining “claim” as “[a] demand for money, property, or a legal remedy to which one
asserts a right,” and, “the part of a complaint in a civil action specifying what relief the
plaintiff asks for”); cf. PTA-FLA, Inc. v. ZTE USA, Inc., 844 F.3d 1299, 1307 (11th Cir.
2016) (observing the legal distinction between a “claim” and an “action” in the context of
Rule 41). Had Congress intended to use the commencement of a claim as the yardstick
by which § 1446(c)(1)’s one-year bar is measured, it easily could have selected a term of
art which met that intent, such as “claim,” “claim for relief,” or “cause of action.” Instead,
Congress chose the word “action,” and the Court “presume[s] that Congress said what it
meant and meant what it said.” United States v. Steele, 147 F.3d 1316, 1318 (11th Cir.
1998) (en banc).
There is a good reason Congress based § 1446(c)(1)’s one-year bar on the
commencement of an action rather than on the commencement of a claim, and that
reason revolves around principles of federalism:
In 1988, Congress amended this statute to prohibit the
removal of diversity cases more than one year after their
commencement. This change was intended to encourage
prompt determination of issues of removal in diversity
proceedings, and it sought to avoid the disruption of state
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court proceedings that might occur when changes in the case
made it subject to removal.
H.R. Rep. No. 112-10, 2011 WL 484052, at *15 (2011) (emphasis added). Indeed, “[a]fter
removal, state court proceedings are treated as those of the district court, and the district
court naturally is able to reexamine its own proceedings.” Jackson v. Am. Sav. Mortg.
Corp., 924 F.2d 195, 198 (11th Cir. 1991). In other words, removal grants a district court
the authority to modify or vacate any order or judgment previously entered by the state
court. See id. To permit removal of a lawsuit several years after it was commenced in
state court therefore sets a dangerous stage for the district court to review and meddle
with the state court’s proceedings, effectively allowing the district court to act as a state
appellate court if it wishes. Such authority seems repugnant to the tenets of federalism,
and § 1446(c)(1)’s one-year bar on removal provides a method for limiting federal
intrusion into state litigation.
To be sure, GEICO’s allusions to fairness and equity are not lost on the Court. It
is clearly incongruent to permit some defendants to remove bad faith claims but not others
solely based on where the plaintiff decided to state the claim—whether in a new lawsuit
or within the same lawsuit following the jury’s verdict. However, whatever unfairness
results from this incongruity is a matter of legislation rather than judicial intervention.
III.
CONCLUSION
Because GEICO removed this action more than one year after it was commenced
in state court, such removal was untimely. It is ORDERED AND ADJUDGED as follows:
1. Plaintiff’s Motion to Remand (Doc. 14) is GRANTED.
2. This case is REMANDED to the Circuit Court of the Ninth Judicial Circuit in
and for Orange County, Florida.
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3. The Clerk of Court is DIRECTED to send a certified copy of this Order to
the Clerk of Court for the Circuit Court of the Ninth Judicial Circuit in and for
Orange County, Florida.
4. The Clerk of Court is thereafter DIRECTED to close the file.
DONE AND ORDERED in Orlando, Florida on February 7, 2017.
Copies furnished to:
Counsel of Record
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