Bollea v. Wells Fargo Insurance Services Southeast, Inc. et al

Filing 22

ORDER: Bollea's Motion for Remand 10 is granted in part and denied in part. It is GRANTED to the extent that Bollea requests that the case be remanded to state court; however, it is DENIED to the extent that Bollea requests an award of costs and attorneys' fees. The Clerk is directed to REMAND this case to the Circuit Court for Pinellas County, Florida, Circuit Civil. After remand has been effected, the Clerk is directed to CLOSE THIS CASE. Signed by Judge Virginia M. Hernandez Covington on 7/22/2010. (SAL)

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION TERRY BOLLEA a/k/a, HULK HOGAN, Plaintiff, v. WELLS FARGO INSURANCE SERVICES SOUTHEAST, INC., and WELLS FARGO INSURANCE SERVICES USA, INC., Defendants. _______________________________/ ORDER This cause comes before the Court pursuant to Bollea's Motion for Remand (Doc. # 10). Defendants filed a Response For the CASE NO: 8:10-cv-1085-T-33EAJ

and Memorandum of Law in Opposition (Doc. # 13).

reasons that follow, Bollea's Motion to Remand is GRANTED. Bollea's motion for attorneys' fees and costs is DENIED. I. Background and Procedural History This lawsuit involves Defendants' alleged negligent

failure: (1) to advise Bollea regarding Bollea's need for excess/umbrella insurance; (2) to obtain an excess/umbrella insurance quote and coverage for Bollea after Bollea's

children reached legal driving age; and (3) to convey to Bollea the availability and desirability (Doc. # 2). of such In his

excess/umbrella insurance coverage.

complaint, Bollea seeks damages against Defendants for alleged negligent breaches of fiduciary duty arising out of these insurance coverage issues. Id.

Bollea originally brought this lawsuit in state court on April 21, 2010, and Defendants removed the case to this Court based on diversity jurisdiction on May 7, 2010. (Doc. # 1).

On June 3, 2010, Bollea moved to remand the lawsuit alleging that Defendants failed to establish complete diversity of citizenship between Bollea and the Defendants. (Doc. # 10).

Defendants contend that diversity jurisdiction exists because Defendant Wells Fargo Insurance Services USA, Inc. ("Wells Fargo USA") is a citizen of North Carolina (the state of incorporation) and Illinois (the principal place of business), and Bollea is a citizen of Florida. (Docs. ## 1, 13).

Importantly, Defendants contend that the other Defendant, Wells Fargo Insurance Services Southeast, Inc. ("Wells Fargo Southeast"), should not be considered in the diversity

jurisdiction analysis.

Id.

Defendants state that Wells Fargo Southeast, originally deemed a citizen of Florida both due to its state of

incorporation and its principal place of business, merged with Wells Fargo USA on January 1, 2010. Id. Defendants allege

that a merged corporation, like Wells Fargo Southeast, loses 2

its citizenship for diversity jurisdiction purposes when it completely merges into another company. Bollea contends that Wells Fargo Id. Conversely, should be

Southeast

considered in the diversity jurisdiction analysis because Wells Fargo Southeast is merely an inactive corporation which remains a citizen of its state of incorporation, namely, Florida. II. (Doc. # 10).

Standard of Review A federal court is a court of limited jurisdiction.

Diebel v. S.B. Trucking Co., 262 F. Supp. 2d 1319, 1326 (M.D. Fla. 2003)(citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994)). As such, statutes which

authorize removal to federal courts must be strictly construed against removal. Id. Particularly, "[f]ederal courts are

directed to construe removal statutes strictly, resolve all doubts about jurisdiction in favor of remand, and employ a presumption in favor of remand to state courts." Total Fleet

Solutions, Inc. v. Nat'l Ins. Crime Bureau, Inc., 612 F. Supp. 2d 1232, 1234 (M.D. Fla. 2009)(citing Univ. of S. Ala. v. Am. Tobacco Co., 168 F. 3d 405, 411 (11th Cir. 1999)); see Diebel v. S.B. Trucking Co., 262 F. Supp. 2d 1319, 1326 (M.D. Fla. 2003). 3

It is well established that a removing party must present facts establishing its right to remove. Diebel, 262 F. Supp.

2d at 1326 (citing Perez v. AT & T Co., 139 F.3d 1368, 1373 (11th Cir. 1998); Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir. 1996)). so, remand is favored. Nevertheless, a federal When the defendant fails to do

Diebel, 262 F. Supp. 2d at 1326. court should "be cautious about

remand, lest it erroneously deprive [a] defendant of the right to a federal forum." Id. (citing 14A Charles Wright, Arthur

Miller & Edward H. Cooper, Federal Practice & Procedure, § 3721 at 218-19 (2d ed. 1985)). Federal jurisdiction pursuant to 28 U.S.C. § 1332 exists only when there is complete diversity between the plaintiff and the defendants. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978). For diversity purposes, a corporation

is deemed a citizen of (1) its state of incorporation; and (2) the state where it has its principal place of business. U.S.C. § 1332(c)(1). III. Analysis Defendants concede that Wells Fargo Southeast was a Florida corporation by way of (1) its state of incorporation; and (2) its principal place of business until it merged with 4 28

Wells Fargo USA on January 1, 2010, approximately three months before Bollea brought this action in state court. 1, 13). Southeast (Docs. ##

Defendants contend that the merger of Wells Fargo into Wells Fargo USA extinguished Wells Fargo

Southeast's legal existence, and thus totally extinguished its citizenship in Florida. Id. To support this contention,

Defendants cite Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309, 1311 (11th Cir. 2007). addressed whether the plaintiff In Ambrosia, the court acquired diversity

jurisdiction in violation of 28 U.S.C. § 1359 when the plaintiff's non-diverse subsidiaries assigned their claims to the plaintiff, their diverse parent corporation. Id. at 1312. The plaintiff brought the action as the sole plaintiff. at 1313. The Ambrosia. instant case is clearly distinguishable from Id.

At a fundamental factual level, the instant case

involves two Defendants, both of whom have been sued, while Ambrosia involved a single plaintiff who had gathered

available claims from its subsidiaries before filing its lawsuit. Id. Further, the Ambrosia court's focus was on

whether the assignment of claims from multiple non-diverse claim-holders to the sole diverse party before that party brought the lawsuit was improper or collusive. 5 Id. at 1312.

In contrast, the instant issue is whether for diversity purposes, the citizenship of a corporation is totally

extinguished by its merger into another corporation. Ambrosia simply does not speak to this issue. See id. at 1311-17.

Next, Defendants cite MacGinnite v. Hobbs Grp., LLC, 420 F.3d 1234, 1237 (11th Cir. 2005). The MacGinnite court

addressed the location of an inactive corporation's principal place of business in the context of a dispute over restrictive covenants in an employment contract. Id. at 1239-40.

The plaintiff in MacGinnite, a citizen of Georgia, sued two defendants who had merged two years before the plaintiff filed the lawsuit. Id. at 1238. The first defendant ("HRH")

was incorporated and had its principal place of business in Virginia. Id. at 1237. The second defendant ("Hobbs") was

incorporated in Delaware and before it was purchased by HRH, had its principal place of business in Georgia, where the plaintiff resided. Id. The plaintiff asserted that diversity was destroyed because Hobbs's principal place of business was still in Georgia. Id. at 1239.

The MacGinnite court discussed the "total activities test" to determine Id. a corporation's principal place of

business.

In applying this test, the MacGinnite court 6

avoided the plaintiff's proposal that a merged or inactive corporation's principal place of business remained the same as its last place of business when it was still active. Id.

Instead, the court held that the total activities test was sufficient to identify the location of an inactive

corporation's principal place of business and noted that postmerger, Hobbs functioned solely through HRH in Virginia. Id.

at 1240. As such, the court held that Hobbs's principal place of business was in Virginia at the time the plaintiff filed his lawsuit and that therefore, there was complete diversity. Id. In short, MacGinnite only provides guidance as to one of the two places where a corporation is a citizen: its principal place of business. Id. at 1239-40. It simply does not speak

to the other place where a corporation is a citizen: its state of incorporation. Complete See id. at 1237. requires that no defendant in a

diversity

diversity action be a citizen of the same state as any plaintiff. 28 U.S.C. § 1332. Further, it provides that a

corporation is deemed to be citizen of both (1) its state of incorporation; and (2) the state where it has its principal place of business. Id. Like our sister court in the Northern

District, this Court finds that a corporation does not lose 7

its citizenship in its state of incorporation when it is dissolved or becomes inactive. See Dunkle v. Denko, 1997 U.S. Dist. Lexis 16412 at *5-6 (N.D. Fla. Aug. 12, 1997)(concluding that a corporation retains its citizenship in any state where it "has been incorporated" for diversity purposes); see also Diebel v. S.B. Trucking Co., 262 F. Supp. 2d 1319, 1333 n.54 (M.D. Fla. 2003)(same). Diebel reasoning This Court finds the Dunkle and and applicable despite the

persuasive

differing paths by which the corporations at hand attained inactive status. After due consideration, and in light of the authority directing federal courts to strictly construe removal

statutes, resolve all doubts about jurisdiction in favor of remand, and employ a presumption in favor of remand to state courts, the Court holds that Defendants have failed to present sufficient facts or legal authority to establish total

diversity and thus their right to remove.

Total Fleet

Solutions, Inc. v. Nat'l Ins. Crime Bureau, Inc., 612 F. Supp. 2d 1232, 1234 (M.D. Fla. 2009); see Diebel, 262 F. Supp. 2d at 1326. Therefore, the Court grants the Bollea's Motion for

Remand and orders that the case be remanded to state court due to the parties' lack of complete diversity.

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IV.

Costs and Attorneys' Fees Bollea requests an award of his costs and attorneys'

fees, pursuant to 28 U.S.C. § 1447(c), which provides that when a court remands a case, the court may award costs and attorneys' fees incurred as a result of the removal. U.S.C. § 1447(c). 28

However, the award of costs and attorneys' See Publix Supermarkets,

fees is completely discretionary.

Inc. v. United Food & Commercial Workers Int'l Union, AFL-CIO & CLC, 900 F. Supp. 419, 421 (M.D. Fla. 1995)(citation omitted). reasonable, removal. The Court finds that Defendants had an arguably although ultimately unsuccessful, basis for

As such, Bollea's request for costs and attorneys'

fees is denied. Accordingly, it is now ORDERED, ADJUDGED, and DECREED: (1) Bollea's Motion for Remand (Doc. #10) is granted in part and denied in part. It is GRANTED to the extent that

Bollea requests that the case be remanded to state court; however, it is DENIED to the extent that Bollea requests an award of costs and attorneys' fees. (2) The Clerk is directed to REMAND this case to the Circuit Court for Pinellas County, Florida, Circuit Civil. 9

(3)

After remand has been effected, the Clerk is directed to CLOSE THIS CASE. DONE and ORDERED in Chambers in Tampa, Florida, this 22th

day of July, 2010.

Copies to: All Counsel of Record

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