Drago v. Sykes et al
Filing
12
ORDER and REASONS denying 4 Motion to Remand to State Court, as stated within document. Signed by Judge Kurt D. Engelhardt on 7/19/2013. (cbs)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DAVID A. DRAGO
CIVIL ACTION
VERSUS
NO. 13-563
QIANA S. SYKES, ET AL
SECTION “N” (1)
ORDER AND REASONS
Before the Court is a Motion to Remand (Rec. Doc. 4), filed by the plaintiff. Opposition
memoranda are filed at Rec. Docs. 5 and 11. A reply memorandum was filed at Rec. Doc. 8.
I. BACKGROUND:
This case arises out of a car accident on September 26, 2011, in which the plaintiff rearended a vehicle driven by Qiana Sykes. Plaintiff’s insurer, State Farm Mutual Automobile
Insurance Company (“State Farm”), settled without litigation the personal injury and property
damage claims filed by Ms. Sykes. One year after the accident, on September 25, 2012,
plaintiff filed suit in the Civil District Court, Parish of Orleans, against Sykes, her insurer (Geico
Indemnity Company), and State Farm, alleging that Sykes was at fault for the accident and that
State Farm owes him under-insured motorist coverage. (Rec. Doc. 4-3).
On December 7, 2012, plaintiff filed a motion to dismiss Sykes and Geico after settling
with Geico for policy limits of $30,000. (Rec. Docs. 4-5 at 7, 4-6). However, notice of this
dismissal was not served on State Farm, and it did not obtain a copy of the motion or the state
court’s order of dismissal until March 11, 2013. See Rec. Doc. 4-11; see also Rec. Doc. 1 at 5-6.
On March 27, 2013, State Farm removed the case to this Court on the basis of diversity.
II. LAW AND ANALYSIS:
Plaintiff seeks remand on grounds that the removal is untimely under 28 U.S.C. §
1446(b). Plaintiff argues: (1) that Sykes was a Texas resident at the time of the initial pleading
and, thus, that pursuant to 28 U.S.C. § 1446(b)(2)(B), the thirty-day window for removal
commenced when State Farm received the initial state court petition; and (2) that alternatively,
pursuant to 28 U.S.C. § 1446(b)(3), the thirty-day window commenced on November 20, 2013,
when State Farm received discovery responses indicating that plaintiff had settled with Geico
and revealing that plaintiff had undergone shoulder surgery.
A.
The Citizenship of Qiana Sykes:
“A party may remove an action from state court to federal court if the action is one over
which the federal court possesses subject matter jurisdiction.” Manguno v. Prudential Property
& Casualty Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (citing 28 U.S.C. § 1441(a)). “The
removing party bears the burden of showing that federal jurisdiction exists and that removal was
proper.” Id. Federal courts have diversity jurisdiction where there is complete diversity
between all plaintiffs and all defendants, and the amount in controversy exceeds $75,000,
exclusive of interest and costs. 28 U.S.C. § 1332(a).1 There is no dispute here as to whether the
$75,000 jurisdictional amount is satisfied. The parties also agree that the citizenship of the
1
In removal cases, as a general rule, “diversity of citizenship must exist both at the time
of filing in state court and at the time of removal to federal court.” Coury v. Prot, 85 F.3d 244,
249 (5th Cir.1996). However, an exception to this rule exists where the non-diverse defendant
is dismissed voluntarily by the plaintiff. In such cases, the matter becomes removable even
though diversity did not exist at the time suit was filed. See Weems v. Louis Dreyfus Corp., 380
F.2d 545, 548 (5th Cir. 1967); see also, e.g., Mumfrey v. ANCO Insulations, 2011 WL 4745626
(E.D. La. 2011).
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plaintiff (a Louisiana resident) is and was at the time of removal diverse from that of the sole
remaining defendant, State Farm (an Illinois corporation with its principal place of business in
Illinois). Thus, the requirements of 28 U.S.C. § 1332 are met, and this Court has subject matter
jurisdiction over the case.
Although Qiana Sykes has been dismissed as a defendant, her citizenship remains at issue
because it bears upon plaintiff’s argument that the removal was untimely.
Plaintiff argues that
Sykes was a Texas resident at the time of the initial pleading and, thus, that the thirty-day
window for removal commenced when State Farm received the state court complaint.
“[T]o be a citizen of a state within the meaning of the diversity provision, a natural
person must be both (1) a citizen of the United States, and (2) a domiciliary of that state.” Coury
v. Prot, 85 F.3d 244, 248 (5th Cir.1996); see also Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir.)
(“For diversity purposes, citizenship means domicile; mere residence in the State is not
sufficient.”), cert. denied, 419 U.S. 842 (1974). “A person’s domicile is the place of his true,
fixed, and permanent home and principal establishment, and to which he has the intention of
returning whenever he is absent therefrom.” Mas, 489 F.2d at 1399 (internal quotations
omitted). In determining domicile, the court “should look to all evidence shedding light on the
litigant’s intention to establish domicile.” Coury, 85 F.3d at 251. Relevant factors may include
where the litigant votes, works, maintains his or her home, owns property, has a driver’s license,
and pays taxes, among others. Id. “No single factor is determinative.” Id.
A litigant’s
statement of intent “is relevant to the determination of domicile,” but it cannot override the
objective facts. Id.
“A change in domicile typically requires only the concurrence of: (1)
physical presence at the new location and (2) an intention to remain there indefinitely;...or, as
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some courts articulate it, the absence of any intention to go elsewhere.” Coury, 85 F.3d at 250
(citations omitted).
Although one may have more than one residence, as a general rule, a
person has only one domicile at any given time. See Acridge v. Evangelical Lutheran Good
Samaritan Society, 334 F.3d 444, 451 (5th Cir. 2003).
In this case, the question of domicile is not a close one. Although plaintiff alleged in his
petition that Sykes was a resident of Texas, Sykes has attested that she resided in New Orleans at
the time of the accident and has continued to reside here through the present date. (Rec. Doc. 51). She attests that she was born in Louisiana and returned here from Texas prior to the accident
with the intent of making New Orleans her permanent home. Id. Her actions bear out her stated
intent. In addition to residing in New Orleans, Sykes is employed in Louisiana and takes classes
at a local college in New Orleans. Id. Indeed, all of the record facts support the conclusion that
Sykes was a domiciliary of Louisiana at the time suit was filed and has remained so thereafter.
Plaintiff argues (apparently based on the police accident report) that Sykes had a Texas driver’s
license at the time of the accident (on September 26, 2011). However, plaintiff has not shown
that Sykes retained even this thin tie to Texas at the time suit was filed one year later. All of
Sykes’ actions support her affidavit testimony that she moved to Louisiana with the intent to
make it her permanent home. She resides here; she works here; and she attends school here.
Ms. Sykes is a Louisiana domiciliary.
B.
Commencement of the Thirty-Day Removal Period:
Ordinarily, a defendant must file a notice of removal within thirty days after receiving a
copy of the initial pleading setting forth the claim for relief. 28 U.S.C. § 1446(b)(2)(B).
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However, “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...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.” 28 U.S.C. § 1446(b)(3). Stated differently, “if the initial pleading sets
forth a claim that triggers the removal clock, the defendant must file notice of removal within
thirty days of receiving it. If the initial pleading did not trigger the thirty-day removal clock, a
notice of removal must be filed within thirty days of the defendant’s receipt of a document from
which it may ascertain that the case is, or has become, removable.” Mumfrey v. CVS Pharmacy,
Inc., — F.3d —, 2013 WL 2476402 *4 (5th Cir. June 10, 2013).
1.
Plaintiff’s Argument that the Thirty-Day Removal Period Commenced Upon
State Farm’s Receipt of the Initial Pleading:
Plaintiff argues that his initial pleading triggered the thirty-day removal clock because he
alleged therein that Sykes was a Texas resident. According to plaintiff’s argument, since he
alleged out-of-state citizenship for each of the defendants, State Farm’s receipt of the initial
pleading triggered the thirty-day clock regardless of whether the bases for diversity jurisdiction
actually existed at that time. The Court disagrees. A case is removable only if it is one over
which federal district courts would have original jurisdiction. 28 U.S.C. § 1441(a). Because
both Sykes and plaintiff are (and were on September 25, 2012) Louisiana domiciliaries, diversity
jurisdiction did not exist when suit was filed or when State Farm received a copy of the initial
pleading. Thus, the case stated in the initial pleading was not removable, and plaintiff’s
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mistaken allegation that Sykes was a Texas resident could not render it otherwise.2 See, e.g.,
Ballew v. Continental Airlines, Inc., 668 F.3d 777, 786 (5th Cir. 2012) (“[P]arties ... may neither
confer subject matter jurisdiction on the district court nor strip it of such jurisdiction by
agreement or waiver.”) (quoting Buchner v. FDIC, 981 F.2d 816, 818 (5th Cir. 1993)). Indeed,
had State Farm removed the case based upon the initial pleading, the Court’s examination of the
jurisdictional facts almost certainly would have resulted in remand and possibly even sanctions
given that State Farm knew (based upon its earlier interactions with Sykes’ in settling her
claims) that Sykes was a Louisiana resident. Because the parties lacked complete diversity of
citizenship, the case stated in the initial pleading was not removable, and State Farm’s receipt of
the initial pleading did not trigger the thirty-day clock.
There is another reason why the initial pleading could not have commenced the thirtyday removal period. The petition did not “affirmatively reveal[] on its face that the plaintiff
[was] seeking damages in excess of the minimum jurisdictional amount.” Mumfrey, 2013 WL
2
Nor did State Farm render the case removable, as plaintiff argues, by stating in its
answer that all plaintiff’s allegations were “denied...except to admit status and domicile....” Rec.
Doc. 4-4. Even if this “admission” could be construed to refer to Sykes’ domicile and not just
State Farm’s own domicile, parties cannot confer jurisdiction on a court. Ballew, 668 F.3d at
786. Also off base is plaintiff’s oblique argument that State Farm should be judicially estopped
from now arguing that Sykes is a Louisiana domiciliary, given its earlier “admission” that she
had a Texas domicile. See Rec. Doc. 8 at 2. State Farm’s current position is not clearly
inconsistent with the boilerplate statement in its answer concerning domicile and even if it were,
no court accepted the earlier position to State Farm’s advantage. See, e.g., Arthur J. Gallagher
& Co. v. Babcock, 703 F.3d 284, 291 n.18 (5th Cir. 2012) (“Judicial estoppel is an equitable
doctrine, invoked at the court’s discretion, that is designed to protect the integrity of the judicial
process by prohibiting parties from deliberately changing positions according to the exigencies
of the moment....Louisiana and the Fifth Circuit apply this doctrine only if the party’s position is
clearly inconsistent with its position in a previous case, and if the court accepted the party’s
previous position.”).
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2476402 at *5 (quoting Chapman v. Powermatic, Inc., 969 F.2d 160, 163 (5th Cir. 1992)). As
explained in Mumfrey, the Fifth Circuit has rejected the “so-called due diligence standard,”
adopting instead a “bright line rule” requiring a “specific allegation that damages are in excess of
the federal jurisdictional amount” in order for the pleading to trigger the removal clock:
In our seminal case on timeliness disputes, Chapman v. Powermatic, Inc., 969 F.2d
160 (5th Cir.1992), this Court held that the thirty-day removal period under the first
paragraph is triggered only where the initial pleading “affirmatively reveals on its
face that the plaintiff is seeking damages in excess of the minimum jurisdictional
amount of the federal court.” Id. at 163 (emphasis added). The Chapman court
specifically declined to adopt a rule which would expect defendants to “ascertain[
] from the circumstance[s] and the initial pleading that the [plaintiff] was seeking
damages in excess of the minimum jurisdictional amount.” Id.
The Chapman court had several practical ramifications in mind when it announced
this standard. By rejecting a so-called due-diligence standard, it sought to promote
efficiency by preventing courts from expending copious time determining what a
defendant should have known or have been able to ascertain at the time of the initial
pleading. Id. Morever, the Chapman court wanted to avoid encouraging defendants
to remove cases prematurely for fear of accidentally letting the thirty-day window
to federal court close when it is unclear that the initial pleading satisfies the amount
in controversy. Id. Ultimately, Chapman lays out a “bright line rule requiring the
plaintiff, if he wishes the thirty-day time period to run from the defendant's receipt
of the initial pleading, to place in the initial pleading a specific allegation that
damages are in excess of the federal jurisdictional amount.” Id. (emphasis added).
Mumfrey, 2013 WL 2476402 at *5 (quoting Chapman, 969 F.2d at 163). In this case, plaintiff’s
initial pleading did not contain a specific allegation that plaintiff’s damages exceeded the
jurisdictional amount. See Rec. Doc. 4-3. The only hint as to quantum was the allegation that
“the injuries to Mr. Drago are valued in excess of $25,000.” Id. at ¶ VIII. Therefore, for this
additional reason, the initial pleading did not trigger the thirty-day removal clock in this case.
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2.
Plaintiff’s Argument that the Thirty-Day Removal Period Was Triggered by
His Discovery Responses on November 20, 2013:
Plaintiff argues in the alternative that under 28 U.S.C. § 1446(b)(3), the thirty-day
removal period commenced to run on November 20, 2013, when State Farm received discovery
responses indicating that plaintiff had settled with Geico and revealing that plaintiff had
undergone shoulder surgery and steroid injections. Pursuant to section 1446(b)(3), “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...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.”
28 U.S.C. § 1446(b)(3).
Plaintiff argues that his responses to interrogatories constitute “other paper” from which
State Farm should have known that the case had become removable. In his responses to
interrogatories, dated November 20, 2013 (and presumably received by State Farm shortly
thereafter), plaintiff stated that he had undergone surgery for a torn tendon in his shoulder and
had received steroid injections for sciatica and lumbago. Rec. Doc. 4-5 at 3. He also stated that
he had “settled with tortfeasor’s insurer, Geico Indemnity Insurance Co., for policy limits of
$30,000.00.” Id. at 7.
The Fifth Circuit’s test for whether an “amended pleading, motion, order or other paper”
is sufficient to trigger the thirty-day removal period was enunciated in Bosky v. Kroger Texas,
LP, 288 F.3d 208, 211 (5th Cir. 2002). In Bosky, a jurisdictional amount case, the court was
asked to decide whether the plaintiff’s answers to interrogatories had triggered the removal clock
even though they did not state that the plaintiff’s claims exceeded $75,000. See Appellant’s
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Brief, 2001 WL 34127779 at *7-8.3 The district court held that they did not, finding that the
only thing they revealed with certainty about jurisdictional amount was that the plaintiff had
accumulated medical bills of nearly $50,000, a sum which fell short of the jurisdictional
threshold by more than $25,000. See Memorandum Opinion and Order, Civ. Action No. 00-CV284, Rec. Doc. 24 at 7 (E.D. Tex. Dec. 20, 2000). The district court rejected the plaintiff’s
argument that her discovery response regarding medical bills, when taken together with
plaintiff’s prayer for other categories of unliquidated damages in her original petition and given a
general knowledge about quantum for similar cases, should have put the defendant on notice that
the amount in controversy exceeded $75,000. Id. The Fifth Circuit agreed. Bosky, 288 F.3d at
209. In affirming, the Fifth Circuit noted that, under the text of the removal statute, the only
sort of amended pleading or “other paper” that will trigger the removal clock is one “from which
it may first be ascertained that the case is...removable.” Id. at 210 (emphasis in original).
“‘Ascertain’ means ‘to make certain, exact, or precise’ or ‘to find out or learn with certainty.’”
Id. at 211 (quoting WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY (1990)). The court
concluded that “ascertain” requires “that the facts supporting removability be stated
unequivocally.”4 Id. Although information in a document might “place[ a] person on inquiry,”
3
The interrogatory answer stated: “Plaintiff will not seek more than $500,000.00 for all
of her damages and may seek less than this amount of money once the plaintiff has fully and
finally totaled her medical bills, which currently are close to $50,000, and after evidence of
Plaintiff's loss of earnings capacity has been fully gathered and analyzed.” 2001 WL 34127779
at *7.
4
As noted in Mumfrey, the Bosky court mistakenly understood that this standard
differed from (in that it required an even “greater level of certainty” than) the standard for
triggering the removal clock based on an initial pleading (i.e., under 28 U.S.C. § 1446(b)(1)).
Mumfrey, 2013 WL 2476402 at *6 (statement in Bosky “that complaints stating unspecified
damage amounts trigger the time limit — is incorrect.”). Mumfrey made clear that the bright9
it does not trigger the removal period unless it “permit[s] him to learn with certainty.” Id.
Therefore, in order to start the time limit for removal, the facts supporting removal contained in
the amended pleading or other paper must be “unequivocally clear and certain.” Id.
Here, plaintiff stated in his responses to interrogatories, dated November 20, 2012, that
he had “settled with tortfeasor’s insurer, Geico Indemnity Insurance Co., for policy limits of
$30,000.00.” Rec. Doc. 4-5 at 7. This response does not provide “unequivocally clear and
certain” notice that the case had become removable. It does not state that Sykes (the only nondiverse defendant) had been dismissed. In fact, she had not been dismissed. Plaintiff argues
that his discovery response put State Farm on notice such that it should have taken action to
learn whether Sykes had been dismissed. See Rec. Doc. 8 at 2. This is precisely the sort of
inquiry that the bright line rules enunciated in Chapman and Bosky were designed to avoid. The
Fifth Circuit has repeatedly rejected the “so-called due-diligence standard,” which would require
courts to expend judicial resources trying to speculate about what a defendant knew or “what the
defendant would have known had it exercised due diligence.” Chapman, 969 F.2d at 163; see
also Mumfrey, 2013 WL 2476402 at *5; Bosky, 288 F.3d at 211.
Plaintiff did not move to dismiss his claims against Sykes until December 7, 2012. (Rec.
Doc. 4-6). It is undisputed (1) that neither counsel nor the state court clerk served a copy of the
dismissal on State Farm, and (2) that State Farm first received a copy of the dismissal on March
11, 2013. This was the first paper to provide “unequivocally clear and certain” notice from
which State Farm was able to “ascertain” (i.e., “learn with certainty”) that plaintiff had moved to
line rule enunciated in Chapman remains the law even for initial pleadings. Id. If removability
is not “affirmatively reveal[ed]” on the face of the initial pleading, then it does not trigger the
removal clock. Id. In the case of jurisdictional amount, this requires a specific allegation that
damages are in excess of $75,000. Id. at *7.
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dismiss Sykes as a defendant. Bosky, 288 F.3d at 211.5 Given that State Farm filed its notice of
removal within thirty days of receipt of this paper, removal was timely.
Accordingly, for all of the foregoing reasons;
IT IS ORDERED that the plaintiff’s Motion to Remand (Rec. Doc. 4) is hereby
DENIED.
New Orleans, Louisiana, this 19th day of July, 2013.
____________________________________
KURT D. ENGELHARDT
UNITED STATES DISTRICT JUDGE
5
cf. Smith v. Daimler Trucks North America, LLC, 2011 WL 1661514 (N.D. Tex. 2011)
(although removing defendant knew of settlement, it did not receive an other paper with
“unequivocally clear and certain” notice of in-state defendant’s dismissal until receiving the
court’s order); Polk v. Sentry Insurance, 129 F. Supp. 2d 975, 980 (S.D. Miss. 2000) (for “other
paper” to trigger thirty-day clock in case of voluntary dismissal of non-diverse defendant, the
paper “must clearly and definitively evidence the plaintiff’s desire voluntarily to dismiss any
non-diverse defendant”).
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