Fridman v. Safeco Insurance Company of Illinois
Filing
30
ORDER granting 15 Motion to Remand to State Court. This action is REMANDED to the Circuit Court of the Ninth Judicial Circuit, in and For Orange County Florida. Signed by Judge Roy B. Dalton, Jr. on 5/20/2017. (VMF)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
ADRIAN FRIDMAN,
Plaintiff,
v.
Case No. 6:16-cv-2020-Orl-37KRS
SAFECO INSURANCE COMPANY OF
ILLINOIS,
Defendant.
ORDER
This cause is before the Court on consideration of: (1) Plaintiff’s Motion to Remand
and Incorporated Memorandum of Law (Doc. 15), filed December 15, 2016;
(2) Defendant’s Response to Plaintiff’s Motion to Remand (Doc. 16), filed
December 21, 2016; and (3) Plaintiff’s Reply to Defendant’s Response to Plaintiff’s Motion
to Remand (Doc. 22), filed February 3, 2017.
I.
BACKGROUND
Defendant Safeco Insurance Company of Illinois (“Safeco”) and Plaintiff Adrian
Fridman (“Fridman”) are before this Court after extensive litigation in the Florida courts
(“State Proceedings”), 1 which commenced on April 29, 2009, when Fridman filed a
See Fridman v. Safeco Ins. Co. of Ill., 2012 WL 609851 (Fla. 5th DCA Jan. 24, 2012)
(denying motion for new trial), rev’d Safeco Ins. Co. of Ill. v. Fridman, 117 So. 3d 16 (Fla. 5th
DCA 2013) (“Fridman I”), quashed Fridman v. Safeco Ins. Co. of Ill., 185 So. 3d 1214
(Fla. 2016) (“Fridman II”); see also Safeco Ins. Co. of Ill. v. Fridman, 196 So. 3d 1284 (Fla. 5th
DCA 2016) (“Fridman III”) (holding on remand that trial court erred in denying Safeco
its remittitur for unproved lost earnings); Fridman v. Safeco Ins. Co. of Ill., 2012 WL 609852
1
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complaint against Safeco (“Initial Complaint”) in the Circuit Court of the Ninth Judicial
Circuit, in and For Orange County Florida (“State Trial Court”). 2 “[I]n accordance with
the provisions of § 627.727, Florida Statutes” and insurance policy number X5140979
(“Policy”)—Fridman demanded “damages in excess of $15,000.00, exclusive of
prejudgment interest, costs and attorney’s fees” (“UM Claim”), which damages arose out
of an automobile accident with an underinsured tortfeasor (“UTF”) on January 8, 2007
(“Accident”). 3
Before initiating the State Proceedings, Fridman sent Safeco multiple unsuccessful
settlement demands, which advised that:
(1)
the UTF’s insurance carrier tendered $10,000 to
Fridman for the Accident (“UTF Payment”); 4
(2)
due to injuries from the Accident, chiropractor Vincent
A. Preziosi, D.C. assigned Fridman a “10% permanent,
partial impairment to the body as a whole,” and
estimated that Fridman would annually incur $1,000 to
$1,800 in future medical expenses; 5 and
(3)
Fridman had incurred $16,800 in medical bills—$8,600
of which was paid by Safeco as personal injury
protection benefits (“PIP Payment”), and $8,000 of
which was paid “out of pocket” by Fridman. 6
Fridman also served Safeco with a civil remedy notice (“CRN”), which Safeco did not
(Fla. 5th DCA Jan. 9, 2012).
2 (See Doc. 1-4, pp. 3–5 (providing a copy of the Initial Complaint); see also Doc. 2,
¶¶ 9, 10.)
3 (See Doc. 1-4, pp. 3–5.)
4 (See Doc. 15-1, p. 1; see also Doc. 1-4, p. 58; Doc. 1-5, p. 66.)
5 (See Doc. 15-2, pp. 4, 5.)
6 (See Doc. 15-8, p. 2; see also Doc. 1-4, p. 8; Doc. 15-1, p. 2.)
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cure. 7 Nonetheless, Fridman did not assert a statutory bad faith claim (“Bad Faith Claim”)
against Safeco in his Initial Complaint.
In the year following commencement of the State Proceedings, Fridman and Safeco
conducted discovery concerning Fridman’s claimed injuries and economic damages
(“State Discovery”). 8 By August 2009, Fridman had provided Safeco with discovery
responses representing that his medical expenses totaled approximately $17,049.00.9
Subsequently, Fridman incurred an additional $62,217.00 in medical expenses; however,
it is unclear when Safeco learned of these additional damages. 10
In 2011: (a) Safeco tendered the UM Limits and requested entry of final judgment
in favor of Fridman; 11 (b) after a hearing on the matter, the State Trial Court denied
Safeco’s request (“Confessed Judgment Ruling”); 12 (c) Fridman then prevailed in a jury
trial—obtaining a one million dollar verdict against Safeco (“Excess Verdict”)); 13 and
(See Doc. 2, ¶¶ 7, 8; Doc. 15-8.)
(See Doc. 1-4; Doc. 1-5, pp. 14–102.)
9 (See Doc. 1-4, pp. 55–56.)
10 Based on a filing in the State Trial Court dated September 13, 2011 (“Medical
Expense Summary”), it appears that Fridman incurred an additional $8,161.04 in medical
expenses prior to January 25, 2010. (See Doc. 1-5, pp. 117–19.) Further, on unspecified
dates between February 17, 2010 and July 22, 2011, Dr. Scott Katzman billed Fridman
$51,656.00 in medical charges. (See id.)
11 (See Doc. 1-4, pp. 324–25, 357–59, 373–75, 423–39; Doc. 2, ¶¶ 12.)
12 (See Doc. 1-4, pp. 355, 391–410 (providing transcript of hearing before State Trial
Court); Doc. 1-5, pp. 6–7 (providing a copy of the Confessed Judgment Ruling); see also
Doc. 2, ¶ 13.)
13 The Excess Verdict specified that Fridman was entitled to: (a) $80,000.00 for past
medical expenses; (b) $300,000.00 for future medical expenses; (c) $270,000.00 for lost
earnings in the past and future; and (d) $350,000.00 for past and future pain and suffering.
(See Doc. 15-9; see also Doc. 1-5, pp. 274–79 (minutes of jury trial); id. at 416–524 (trial
transcripts); Docs. 1-6, 1-7, 1-8 (trial transcripts); Doc. 1-9, pp. 1–129 (trial transcripts).)
7
8
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(d) the State Trial Court entered judgment in favor of Fridman and against Safeco in “the
sum of $50,000.00 . . ., notwithstanding the [Excess Verdict]” (“2011 Judgment”). 14 In the
2011 Judgment, the State Trial Court reserved “jurisdiction to determine” Fridman’s right
to amend his Complaint to assert a Bad Faith Claim against Safeco “as a result of” the
Excess Verdict (“Reserved Jurisdiction Ruling”). 15
On direct appeal to the Fifth District Court of Appeals for the State of Florida
(“State Appellate Court”), Safeco challenged the Confessed Judgment Ruling, the Excess
Verdict, and the Reserved Jurisdiction Ruling. 16 Ruling in favor of Safeco, the State
Appellate Court: (1) held that the State Trial Court should have entered the confessed
judgment in favor of Fridman as Safeco requested; and (2) directed the State Trial Court
on remand to “enter an amended final judgment deleting any reference to the [Excess
Verdict] and declining to reserve jurisdiction to consider a request to amend the
complaint to add a [Bad Faith Claim].” Fridman I, 117 So. 3d at 20–21. On remand, the
State Trial Court entered an amended final judgment as directed by the State Appellate
Court (“2013 Judgment”). 17
The damages Fridman could recover under the UM Claim were capped at
$50,000, which was the maximum uninsured motorist insurance benefits available to
Fridman under the Policy (“UM Limits”). (See Doc. 1-5, pp. 281–83 (conceding that
Fridman’s “current right to a Judgment is limited to the sum of $50,000.00,” and
requesting that the State Trial Court reserve jurisdiction to determine Fridman’s right to
amend the Complaint to assert a Bad Faith Claim to recover the remainder of the Excess
Verdict); see id. at 323–24 (conceding that Fridman “is legally entitled to recover”
$50,000.00 from Safeco); Doc. 2-1 (providing a copy of the Policy).)
15 (See Doc. 1-5, pp. 325–26 (providing a copy of the 2011 Judgment); see also id. at
345–46 (noting that the 2011 Judgment “is the proper judgment”).)
16 (See Doc. 1-10, pp. 282–335, 393–413; see also id. at 336–92; Doc. 1-12, pp. 2–4.)
17 (See Doc. 1-10, p. 207.)
14
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Fridman sought reconsideration or review of the State Appellate Court’s
decision, 18 and the Florida Supreme Court invoked its jurisdiction over the matter on
April 14, 2014. Fridman v. Safeco Ins. Co. of. Ill., 145 So. 3d 823 (Fla. 2014). After full briefing
and oral argument, 19 the Florida Supreme Court held that:
(1)
the Consent Judgment Ruling was proper because
Fridman was “entitled to a determination of liability
and the full extent of his . . . damages in the UM action
before filing a first-party bad faith action”;
(2)
the Excess Verdict is “binding, as an element of
damages, in a subsequent first-party bad faith action
against [Safeco] so long as the parties have the right to
appeal any properly preserved errors in the [Excess
Verdict];” and
(3)
the State Trial Court “did not err in retaining
jurisdiction to allow the filing of a bad faith cause of
action.”
See Fridman II, 185 So. 3d at 1216, 1229–30. Hence Fridman I was quashed, and the matter
was remanded to the State Appellate Court. See id. at 1230.
On remand, the State Appellate Court held that the State Trial Court erred in
denying Defendant’s request for remittitur of lost earnings damages, and remanded for
further proceedings. See Fridman III, 196 So. 3d at 1285. The State Trial Court then vacated
(See Doc. 1-12, pp. 301–02 (requesting that the Florida Supreme Court invoke its
jurisdiction to review Fridman I); Doc. 1-13, pp. 37–49 (Fridman’s Jurisdictional Brief); id.
at 88–101 (Safeco’s Jurisdictional Brief); see also Doc. 1-12, pp. 265–81 (requesting
rehearing or certification to the Florida Supreme Court); id. at 282–95 (opposing rehearing
or certification); id. at 299–300 (denying rehearing and certification); id. at 329–75
(Fridman’s Reply Brief).)
19 (See Doc. 1-13, pp. 119–66 (Fridman’s Initial Brief); id. at 241–95 (Safeco’s Answer
Brief); id. at 368–82 (concerning Safeco’s request for supplemental briefing).)
18
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the 2013 Judgment and entered an amended final judgment (see Doc. 1-1 (“Final
Judgment”)). The Final Judgment provided that: (1) Fridman had already accepted
Safeco’s tender of the UM Limits, which was all Fridman was “entitled to recover” from
Safeco; (2) the trial court reserved “jurisdiction to determine [Fridman’s] right to amend
his [Initial] Complaint” to assert a Bad Faith Claim; and (3) if Fridman prevails on a Bad
Faith Claim, then he “will be entitled to a judgment” of $692,632.91 in accordance with
the jury’s remitted Excess Verdict, “plus any other damages allowed by the law.” 20
Based on the Final Judgment, Fridman sought leave to amend his Initial Complaint
to assert his Bad Faith Claim (“Motion to Amend”). 21 After conducting a hearing on
October 26, 2016 (Doc. 16-1 (“Amendment Hearing”)), the State Trial Court granted the
Motion to Amend on October 28, 2016 (Doc. 1-11, p. 39 (“Amendment Order”)). Fridman
then filed an amended complaint on November 7, 2016 (Doc. 2 (“Amended
Complaint”)), which set forth a single Bad Faith Claim against Safeco.
On November 18, 2016, Safeco removed the action to this Court based on diversity
jurisdiction under 28 U.S.C. § 1332. 22 (Doc. 1 (“Notice of Removal”).) According to the
Notice of Removal, Safeco was “entitled to remove within 30 days of [the] filing” of the
Amended Complaint because such pleading reflected Fridman’s first assertion of a Bad
Faith Claim, “which is a separate and distinct cause of action.” (See id. ¶ 5 (citing
(See Doc. 1-1; see also Doc. 1-10, pp. 497–99; Doc. 1-11, pp. 24–31.)
(See Doc. 1-10, pp. 500–08.)
22 In diversity cases, district courts have original jurisdiction when the parties are
completely diverse and the amount in controversy exceeds $75,000 (“AIC”). See
28 U.S.C. § 1332(a).
20
21
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28 U.S.C. § 1441 and Lahey v. State Farm Mut. Auto. Ins. Co., 8:06-cv-1949-T-27TBM,
2007 WL 2029334, at *2 (M.D. Fla. 2007).)) Fridman timely moved for remand (Doc. 15
(“Remand Motion”)), Safeco responded (Doc. 16), and Fridman replied (Doc. 22). 23 The
matter is now ripe for the Court’s consideration.
II.
LEGAL STANDARDS
Although plaintiffs are well-recognized to be the master of their own claims, 24
Congress has conferred a limited right on defendants to remove a civil action from state
court to “the district court of the United States for the district and division within which
such action is pending.” See 28 U.S.C. § 1446(a); see Burns v. Windsor Ins. Co., 31 F.3d 1092,
1095 (11th Cir. 1994). Defendants may remove only those “actions that originally could
have been filed in federal court,”25 and they bear the burden of proving by a
preponderance of the evidence that original jurisdiction exists (“Removal Jurisdiction”).
See Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir. 2001); see also Lowery v. Ala.
Power Co., 483 F.3d 1184, 1207–09 (11th Cir. 2007); Fowler v. Safeco Ins. Co. of Am.,
915 F.2d 616, 617 (11th Cir. 1990).
In accordance with the requirements of 28 U.S.C. § 1446(a), Safeco filed copies
“of all process, pleadings, and orders served upon” Safeco in the State Proceedings. (See
Docs. 1-1 through 1–17 (“State Record”).) The State Record is voluminous.
24 See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 n.7 (1987) (citing The Fair v. Kohler
Die & Specialty Co., 228 U.S. 22, 25 (1913)); Merle Wood & Assocs., Inc. v. Trinity Yachts, LLC,
714 F.3d 1234, 1237 (11th Cir. 2013) (“Plaintiffs are the masters of their claims”). “[T]he
plaintiff is absolute master of what jurisdiction he will appeal to.” Healy v. Sea Gull
Specialty Co., 237 U.S. 479, 480 (1915). Such mastery means that a “plaintiff may by the
allegations of his complaint determine the status with respect to removability of a case.”
See Great N. R. Co. v. Alexander, 246 U.S. 276, 282 (1918).
25 Caterpillar, 482 U.S. at 392; see 28 U.S.C. § 1441(a).
23
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In addition to the Removal Jurisdiction requirement, Congress also imposed time
constraints on the right to remove—particularly when removal is based on diversity
jurisdiction:
(b)
Requirements; generally.—
(1) The notice of removal of a civil action or proceeding
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 30 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 first be ascertained that the case is one which is or has
become removable.
(c)
Requirements; removal based on diversity of
citizenship.—
(1) A case may not be removed under subsection (b)(3)
on the basis of [diversity] jurisdiction . . . more than 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.
28 U.S.C. § 1446.
Plaintiffs may seek remand of a removed action back to state court based on two
grounds: “(1) lack of subject matter jurisdiction; or (2) procedural defect in the removal
of the case.” Russell Corp. v. Am. Home Assur. Co., 264 F.3d 1040, 1043–44 (11th Cir. 2001);
see 28 U.S.C. § 1447(c). Due to “significant federalism concerns arising in the context of
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federal removal jurisdiction,” removal requirements and limitations are “strictly
interpreted and enforced.” See Russell, 264 F.3d at 1049. “[A]mbiguities are generally
construed against removal,” 26 and “uncertainties are resolved in favor of remand.” See
Burns, 31 F.3d at 1095 (noting that the “[d]efendant’s right to remove and [the] plaintiff’s
right to choose his forum are not on equal footing”).
III.
DISCUSSION
The Remand Motion is based on two grounds: (1) “Safeco waived its right of
removal by its active participation that manifested an intent to litigate in state court”
(“Waiver Argument”); and (2) “Safeco failed to timely file a notice of removal”
(“Timeliness Argument”). (See Doc. 15, pp. 5, 7.) The Waiver Argument is meritless, the
Timeliness Argument is not.
A.
Waiver Argument
“Waiver may be a proper basis upon which to find lack of removal jurisdiction.”
Codgell v. Wyeth, 366 F.3d 1245, 1249 (11th Cir. 2004). Waiver occurs when, although the
right to remove is apparent, the defendant takes “‘some substantial offensive or defensive
action in the state court action indicating a willingness to litigate in that tribunal . . . .’”
See Yusefzadeh v. Nelson, Mullins, Riley & Scarborough, LLP, 364 F.3d 1244, 1246
(11th Cir. 2004) (quoting Charles A. Wright, et al., 14B Federal Practice & Procedure § 3721
(2003)); Engle v. R.J. Reynolds Tobacco Co., 122 F. Supp. 2d 1355, 1360 (S.D. Fla. 2000)
(“A defendant waives its right to remove . . . after it is apparent that the case is removable”
26
Jones v. LMR Int’l, Inc., 457 F.3d 1174, 1177 (11th Cir. 2006).
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by taking action in state court that manifest “intent to have the matter adjudicated
there.”).
There is no dispute that the damages Fridman could recover under the claim
asserted in his Initial Complaint were capped at $50,000.00, which is significantly less
than the requisite AIC. Nonetheless, Fridman contends that his “uncured” CRN should
have put Safeco on notice that the AIC was met. (See Doc. 15, pp. 16–17; Doc. 22, pp. 2–5.)
He is wrong. “Jurisdiction may not be sustained on a theory that the plaintiff has not
advanced.” Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804, 809 n.6 (1986). An uncured
CRN is not advancement of a Bad Faith Claim—it is a mere prerequisite to the filing of a
Bad Faith Claim. 27 Thus, Safeco’s undisputed litigiousness in the State Proceedings was
no waiver because Removal Jurisdiction was not apparent—indeed, the AIC was not
satisfied—until Fridman asserted his Bad Faith Claim. 28
See Llaca v. State Farm Mut. Auto. Ins. Co., No. 6:16-cv-261-Orl-37KRS,
2016 WL 1238009, at *2 (M.D. Fla. Mar. 30, 2016) (rejecting argument that an uninsured
motorist policy limit is not the ceiling for purposes of the court’s jurisdictional analysis
before a bad faith claim is asserted); see also Orton v. Encompass Indem. Co.,
No. 6:15-cv-1114-Orl-40GJK, 2015 WL 12830479, at *2 (M.D. Fla. Oct. 5, 2015) (assigning
bad faith claim no value for purposes of determining the AIC for a motion to remand);
Montanez v. Integon Indem. Corp., No. 6:15-cv-25-Orl-22KRS, 2015 WL 12839272, at *2
(M.D. Fla. Apr. 1, 2015) (same).
28 Even if Fridman could have alleged a viable Bad Faith Claim in his Initial
Complaint, he has not explained to this Court—or the State Trial Court—how Safeco
should have known that the AIC was met. (See Doc. 16-1, pp. 7–8, 14.) Notably, the State
Record indicates that Safeco would have had a hard time establishing the AIC by a
preponderance of the evidence before it received the Medical Expense Summary on
September 13, 2011. Before then, Fridman’s discovery responses reflected that he had
incurred only $17,049.00 in medical expenses, which were subject to at least $18,600.00 in
setoffs for the PIP and UTF Payments. (See supra note 3; see also Doc. 1-4, pp. 8, 55–58;
Doc. 1-5, p. 66; Doc. 15-1, pp. 1–2; Doc. 15-8, p. 2.)
27
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B.
Timeliness Argument
Again, when a defendant asserts Removal Jurisdiction under 28 U.S.C. § 1332, its
notice of removal must be filed within one year of the date the plaintiff commenced the
action in state court (“One Year Limit”). (Supra p. 8.) Thus, the first question is the date
the removed action “commenced” for removal purposes. The parties point to different
dates: (1) Fridman’s date is April 29, 2009, when the Initial Complaint was filed;
(2) Safeco’s date is November 7, 2016, when Fridman first asserted a Bad Faith Claim in
his Amended Complaint. The Court considers Florida law to resolve this dispute. See
Moultrop v. GEICO Gen. Ins. Co., 858 F. Supp. 2d 1342, 1346 (S.D. Fla. 2012).
In Florida, there is “one form of action to be known as ‘civil’ action” (Florida Rule
of Civil Procedure 1.040), and such civil action “shall be deemed commenced when the
complaint or petition is filed” (Rule 1.050). Pleaders “may set up in the same action as
many claims or causes of action . . . in the same right as the pleader has.” Fla. R.
Civ. P. 1.110(g). Further, once a civil action is commenced by filing a complaint, Florida
courts may allow the parties to add new claims—including separate and distinct claims
added after final judgment—when justice requires. 29 See Fla. R. Civ. P. 1.110(h)
(providing for subsequent pleadings after entry of judgment); Fla. R. Civ. P. 1.190
(permitting amended and supplemental pleadings); see also Fla. R. Civ. P. 1.170
Rule 1.050 provides one exception for “ancillary proceedings,” which “shall be
deemed commenced when the writ is issued or the pleading setting forth the claim of the
party initiating the action is filed.” Because that exception does not apply here, Safeco’s
argument that a new civil action “commenced” when the Amended Complaint was filed
is further undermined.
29
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(permitting Counterclaims and Crossclaims); Fla. R. Civ. P. 1.180 (permitting Third Party
Complaints); Fla. R. Civ. P. 1.250(a) (permitting the addition of parties).
By its Reserved Jurisdiction Ruling, the State Trial Court determined that Fridman
should be permitted to amend his Initial Complaint to add the Bad Faith Claim and
continue in the removed action. Importantly, the Florida Supreme Court agreed over
Safeco’s strenuous objections. See Fridman II, 185 So. 3d at 1216, 1229–30 (reasoning that
the Reserved Jurisdiction Ruling was consistent with controlling precedent—Allstate
Indemnity Company v. Ruiz, 899 So. 2d 1121, 1130 (Fla. 2005)—and similar to the process
of abating Bad Faith Claims that are initially filed with UM Claims). Given this law, the
Court must reject Safeco’s argument that the Amended Complaint commenced a new
civil action. Hence the Court finds that the removed action commenced on April 29, 2009,
and the One Year Limit expired on April 29, 2010. Because Safeco filed its Notice of
Removal on November 18, 2016, the Timeliness Argument has obvious merit.
Safeco has recognized that this Court consistently remands removed insurance
disputes under circumstances similar to this action. 30 (Doc. 16, p. 14 n.5; see Barroso v.
Allstate Prop. & Cas. Ins. Co., 958 F. Supp. 2d 1344, 1347 (M.D. Fla. 2013)). 31 Nonetheless,
Safeco urges the Court to deny remand in this case because “the procedures employed by
This Court’s approach is not uniformly embraced. Indeed, the Eleventh Circuit
has noted that a dispute exists, but it has not yet resolved the matter. See King v. Gov’t
Emps. Ins. Co., 579 F. App’x 796, 800 (11th Cir. 2014).
31 See also Washington v. Gov’t Emps. Ins. Co., No. 6:16-cv-1775-Orl-40KRS,
2017 WL 490541, at *3–*4 (M.D. Fla. Feb. 7, 2017); Darragh v. Nationwide Mut. Fire Ins. Co.,
6:14-cv-104-Orl-41KRS, 2014 WL 4791993, at *4 (M.D. Fla. 2014); van Niekerk v. Allstate Ins.
Co., No. 12-62368, 2013 WL 253693, at * (S.D. Fla. Jan. 23, 2013); Moultroup v. GEICO Gen.
Ins. Co., 858 F. Supp. 2d 1342, 1346–47 (S.D. Fla. 2012)).
30
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the state court” violate the Supremacy Clause of the U.S. Constitution (“Supremacy
Clause Argument”). (See Doc. 16.)
The Supremacy Clause, Art. VI, cl. 2, creates “a rule of decision” for the courts:
This Constitution, and the Laws of the United States which
shall be made in Pursuance thereof; and all Treaties made, or
which shall be made, under the Authority of the United
States, shall be the supreme Law of the Land; and the Judges
in every State shall be bound thereby, any Thing in the
Constitution or Laws of any State to the Contrary
notwithstanding.
Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct. 1378, 1383 (2015). “The purpose of the
Supremacy Clause is . . . to ensure that, in a conflict with state law, whatever Congress
says goes.” Douglas v. Indep. Living Ctr. of S. Cal., Inc., 565 U.S. 606, 618 (2012). Courts
violate the Supremacy Clause by giving “effect to state laws that conflict with federal
laws.” See Armstrong, 135 S. Ct. at 1383; see also Kan. Pub. Emps. Ret. Sys. v. Reimer & Koger
Assoc., Inc., 4 F.3d 614, 619 (8th Cir. 1993) (finding that a Kansas court violated the
Supremacy Clause by entering an ex parte severance order with the “stated purpose” of
preventing the Resolution Trust Corporation from intervening and removing a state
court action as explicitly provided for under federal law, 12 U.S.C. § 1441a(l)(3)(A)).
According to Safeco, the Florida courts have violated the Supremacy Clause by
employing either of two procedures to effectively foreclose proper removal of Bad Faith
Claims asserted by plaintiffs—like Fridman—who have UM insurance policies with
coverage limits that do not exceed the AIC:
(1)
one procedure allows insureds to “co-plead” a Bad
Faith Claim with a UM Claim and then abate the Bad
Faith Claim pending resolution of the UM Claim
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(“Abatement Procedure”); and
(2)
the other procedure allows insureds who have
prevailed on a UM Claim to amend their complaints to
add a Bad Faith Claim (“Amendment Procedure”).
(See id. at 7–14.) These procedures effectively foreclose removal because the One Year
Limit inevitably expires before a Bad Faith Claim can be added or abated. (See id.)
Here, Safeco contends that the Amendment Procedure was used to defeat Safeco’s
“right” to remove the Bad Faith Claim. (See id.) Safeco urges the Court to remedy this
purported violation of the Supremacy Clause by denying the Remand Motion based on
findings that:
(1)
the Amendment Order is void and the Amended
Complaint is “a new lawsuit, which Safeco timely
removed;”
(2)
the One Year Limit is equitably or otherwise tolled by
the State Court’s violation of the Supremacy Clause; or
(3)
Fridman’s use of the Amendment
“constitutes bad faith under § 1446(c).”
Procedure
(See id. at 13–14.) Upon review, the Court rejects these and other radical remedies
suggested by Safeco as unwarranted under the law.
Declaring a state law or process void under the U.S. Constitution is a weighty
matter that federal courts avoid absent absolute necessity. See Neumont v. Fla.,
451 F.3d 1284, 1285 (11th Cir. 2006); see also Burton v. U.S., 196 U.S. 283, 295 (1905) (noting
that constitutional questions are not decided “unless absolutely necessary to a decision
of the case”); Brown v. U.S., 748 F.3d 1045, 1049 (11th Cir. 2014); 907 Whitehead St., Inc. v.
Sec’y of U.S. Dept. of Agric., 701 F.3d 1345, 1349 (11th Cir. 2012). Here, the Court is
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particularly hesitant to reach the constitutional issue because—as is evident from the
transcript of the Amendment Hearing—Safeco did not give the State Trial Court an
opportunity to pass on the matter. (See Doc. 16-1, pp. 5–12.) Although Safeco did
complain to the State Trial Court that allowing the amendment would prejudice Safeco
by preventing removal, Safeco did not explicitly argue that the Supremacy Clause
prohibited the Amendment Procedure in general or the Amendment Order in
particular. 32
Safeco also has not persuaded the Court that operation of the One Year Limit in
this case is inequitable or improper. To the contrary, allowing a Bad Faith Claim and a
UM Claims to be asserted in a single removable “civil action” is entirely consistent with
both the meaning of “civil action” discussed above (supra pp. 11–12), as well as the intent
of Congress to prevent removal—even to the detriment of defendants—once “substantial
progress” is made by the parties and the state court. 33 See Burns, 31 F.3d at 1097 n.12
(discussing the legislative history concerning the One Year Limit).
Here, substantial progress was made in the State Proceedings, and—although the
theories of liability are quite different for a Bad Faith Claim—the State Record will not be
Removal issues also were briefly discussed during oral argument before the
Florida Supreme Court; however, the issues were not briefed, and there certainly is no
indication that the Supremacy Clause was ever mentioned. (See Doc. 16, pp. 3–5; see also
Doc. 1-13, pp. 368–77.)
33 Application of the One Year Limit seems particularly appropriate here because
the AIC was not met at the commencement of the State Proceeding; rather, the damages
claim apparently changed over time—which is precisely the type of case where Congress
intended to limit a defendant’s ability to remove. (See supra notes 10, 28.)
32
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immaterial to resolution of the Bad Faith Claim. 34 Similarly, the State Trial Court’s
practical experience and knowledge of the parties and their attorneys gained after years
of litigation will plainly have value in the handling and resolution of the Bad Faith Claim.
In short, the One Year Limit was not intentionally subverted by the State Court here—it
simply operated as intended and in conformity with the Florida Supreme Court’s
approved methodology for resolution of such insurance disputes. Thus, the Court rejects
Safeco’s Supremacy Clause Argument.
IV.
CONCLUSION
Accordingly, it is ORDERED AND ADJUDGED that:
(1)
Plaintiff’s Motion to Remand and Incorporated Memorandum of Law
(Doc. 15) is GRANTED.
(2)
This action is REMANDED to the Circuit Court of the Ninth Judicial
Circuit, in and For Orange County Florida.
DONE AND ORDERED in Orlando, Florida, this 20th day of May, 2017.
34 This
Court agrees with Safeco that a Bad Faith Claim is a “separate and distinct”
cause of action from a UM Claim, and it could—and perhaps should—have been raised
by Fridman in a newly-commenced action. But the Florida Supreme Court has said
otherwise for reasons that are unrelated to Safeco’s right of removal. Thus, the Court does
not find that the Supremacy Clause is implicated under the facts presented here.
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Copies to:
Counsel of Record
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