Umbarger et al v. State Farm Mutual Automobile Insurance Company
Filing
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OPINION AND ORDER denying 5 MOTION to Remand filed by Margaret Umbarger, Richard Umbarger. Signed by Senior Judge James T Moody on 1/22/14. (kjp)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
MARGARET UMBARGER, and
RICHARD UMBARGER,
Plaintiffs,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Defendant.
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No. 2:13 CV 363
OPINION and ORDER
On September 28, 2011, plaintiff Margaret Umbarger was involved in a car accident
in St. Joseph County, Indiana, and sustained personal injuries. (DE # 1 at 1.) She was
insured by defendant for underinsured motor vehicle coverage. (DE # 1 at 2.) On June 14,
2013, plaintiffs’ counsel sent a letter to defendant, purportedly via fax and certified mail,
claiming that, as of that date, Margaret had incurred medical expenses in the amount of
$70,296.13. (DE # 5-4.) In the letter, plaintiffs’ counsel also requested that defendant permit
Margaret to accept $100,000 from the other driver’s insurer. (Id.) Plaintiffs allege that
defendant granted the request on June 20, 2013. (DE # 1 at 2.)
On June 28, 2013, plaintiffs filed a complaint against defendant in St. Joseph
Superior Court. (DE # 1.) The complaint contained no demand for a specific dollar
amount. Defendant claims that as part of the discovery process in state court, defendant
served a request for admission (“RFA”) on plaintiffs, requesting that plaintiffs admit that
the amount in controversy exceeded $75,000. Defendant further claims that plaintiffs failed
to respond to its RFA, which under Indiana’s trial rules constituted an admission of
that fact.
On October 10, 2013, defendant removed the case to this district, citing 28 U.S.C.
§ 1332(a), which grants federal district courts original jurisdiction over civil actions
between citizens of different states where the amount in controversy exceeds $75,000.
Plaintiffs have moved to remand the case back to state court, claiming that defendant’s
removal procedure was defective because: (1) defendant filed its notice of removal more
than 30 days after receipt of a paper from which it may have been ascertained that the case
was removable (specifically, the complaint, which was preceded by a letter detailing
Margaret’s medical expenses of approximately $70,000); and (2) defendant waived its
ability to remove this case by participating in discovery and scheduling in state court.1 (DE
# 5.)
Plaintiffs’ first argument is based upon 28 U.S.C. § 1446(b)(3), which states:
[I]f the case stated by the initial pleading is not removable, a
notice of removal may be filed within thirty 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.
However, plaintiffs’ argument fails. The parties do not dispute that on June 14, 2013,
plaintiffs communicated to defendant the fact that Margaret had incurred approximately
1
Notably, plaintiffs do not claim that the amount in controversy is $75,000 or
less, which (if true) would have divested the court of subject matter jurisdiction. Rather,
plaintiffs’ challenges are limited to alleged defects in defendant’s removal process.
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$70,000 in medical expenses. Further, the parties do not dispute that defendant’s liability
(if any) would be reduced by any money received by plaintiffs from other sources, and
that on June 20, 2013, defendant approved plaintiffs’ request to accept $100,000 from
another insurer. Accordingly, by the time plaintiffs filed their complaint in state court on
June 28, 2013, all parties were aware that Margaret had incurred approximately $70,000 in
expenses but had received $100,000 in compensation, leaving her with a net gain of
approximately $30,000.2 Perhaps more expenses were forthcoming, but there is no
indication that the amount of any such expenses were communicated to defendant, and no
demand was made in the complaint. In short, when plaintiffs filed their lawsuit in state
court, the amount plaintiffs sought to recover from defendant was quite uncertain.
Because of this uncertainty, defendant could not – and did not – immediately remove the
case to federal court. Accordingly, plaintiffs’ argument that defendant should have
removed within 30 days of receiving the complaint fails.3
In support of their second argument, plaintiffs cite Fate v. Buckeye State Mut. Ins. Co.,
174 F. Supp. 2d 876, 880-81 (N.D. Ind. 2001), arguing that by participating in discovery and
scheduling in state court proceedings, defendant waived its right to remove the case to
federal court. However, Fate suggests that waiver is appropriate when affirmative action
2
According to internal business records submitted by defendant, defendant also
paid plaintiffs $53,848.86 on July 18, 2013, after the lawsuit was filed. (DE # 6-1 at 1.)
3
The court will not consider other possible challenges to the timeliness of
defendant’s removal, because such challenges must be raised by plaintiffs. Matter of
Cont’l Cas. Co., 29 F.3d 292, 295 (7th Cir. 1994) (non-jurisdictional objections to removal
may be waived, and district judge should not consider such issues sua sponte, but rather
should wait for the parties to reveal whether they want to continue in federal court).
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or relief is sought in state court, such as the filing of a motion to dismiss or motion for a
temporary restraining order. Id. Further, the defendant in Fate had litigated in state court
for almost a year and knew of the likelihood of the case’s removability from the outset. Id.
None of these circumstances appear to be present in this case. There is no indication that
defendant filed any dispositive motions or sought any other affirmative action or relief in
state court, defendant removed within a few months of the state court complaint’s filing,
and, as this court has already discussed, the removability of this case was largely
unknown when the case was filed. For all these reasons, plaintiffs’ waiver argument fails.
For the foregoing reasons, plaintiffs’ motion to remand (DE # 5) is DENIED.
SO ORDERED.
Date: January 22, 2014
s/ James T. Moody
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT COURT
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