Klotz v. Louisiana Citizens Property Insurance Corporation et al
ORDER granting 7 Motion to Remand to State Court; denying attorney fees, costs and expenses. Signed by Judge Nannette Jolivette Brown. (jrc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
LA. CITIZENS PROP. INS. CORP., ET AL
Pending before the Court is Plaintiff John Klotz’s (“Plaintiff”) motion to remand.1 Plaintiff
filed an action in the 24th Judicial District Court for the Parish of Jefferson, State of Louisiana, to
recover damages from his insurer, Louisiana Citizens, after a fire damaged his property. After
settling with Louisiana Citizens, Plaintiff filed what he entitled “Petition for Concursus” against
Defendant Nationstar into the existing state court action for damages, to determine who is entitled
to the settlement sum. Defendant Nationstar then filed a notice of removal regarding only the
petition for concursus, and Plaintiff filed the instant motion to remand. Having considered the
motion, the memoranda in support and in opposition, and the applicable law, the Court will grant
the motion and remand this case to the 24th Judicial District Court for the Parish of Jefferson, State
According to Plaintiff’s petition, on or about January 9, 2011, a fire caused “massive
damage” to Plaintiff’s property, located at 6408 Glendale Street, Metairie, LA 70003.2 Plaintiff
allegedly had homeowners insurance with Louisiana Citizens Property Insurance (“Louisiana
Rec. Doc. 7.
Rec. Doc. 1-1.
Citizens”).3 Plaintiff alleged that Louisiana Citizens “failed to pay for the property damage, loss
of use, and lost contents” from the fire.4 Plaintiff further alleged that there was subsequent
vandalism and theft of various items on his property, and Louisiana Citizens failed to pay for the
theft damage, as well.5
According to the “Memorandum in Support of Motion to Remand,” Plaintiff John Klotz
signed a contract of representation with W. Patrick Klotz of Klotz & Early, LLC, “to represent him
in his claim and subsequent state court litigation against Louisiana Citizens Insurance,” agreeing
to pay forty percent (40%) of any monies received, plus costs incurred.6 The state court litigation
was filed in the 24th Judicial District Court, Parish of Jefferson, State of Louisiana.7 Moreover,
Plaintiff states that Louisiana Citizens “began tendering certain amounts periodically for the
damage to the property.” Plaintiff asserts that “[s]aid sums were made payable to Plaintiff and his
mortgage companies, Bank of America and Hibernia Bank.”8 Plaintiff states that Hibernia Bank
was then purchased by Capital One Home Loans, LLC, (“Capital One”) and Bank of America held
the amounts in trust.9 Plaintiff avers that “Bank of America allegedly then sold its mortgage to
Nationstar Mortgage, LLC, who confirmed that it is currently holding plaintiff’s insurance funds
in the amount of $132,036.43 in trust.”10
Rec. Doc. 7-1 at 1.
See Rec. Doc. 1-1.
Id. at 2.
Additionally, Plaintiff claims that he “recently settled his claims with Citizens for an
additional $65,000.00.”11 Moreover, Plaintiff asserts that he “has recovered a total of $195,500.92
from his insurer, Citizens.”12 Plaintiff argues that due to the contingency fee agreement with his
attorney, Plaintiff’s counsel is entitled to a fee of $78,600.37 and costs of $2,700.00, and Plaintiff
is entitled to the remainder.13 Plaintiff “filed a Petition for Concursus into the underlying state
court lawsuit” with Nationstar and Capital One as party defendants, and he claims that “defendants
have refused to deposit the funds from Louisiana Citizens into attorney W. Patrick Klotz’[s] trust
account for distribution.”14
On March 9, 2017, the state court signed an order granting Plaintiff leave to deposit the
full sum of $64,464.49 into the court registry, directing Nationstar to deposit the full sum of
$132,036.43 into the court registry, and ordering a hearing on May 4, 2017, for Nationstar and
Capital One to show cause as to why Plaintiff’s counsel was not entitled to attorney’s fees with
Plaintiff entitled to the remainder.15 Plaintiff asserts that he followed the order to deposit the
$64,464.49 into the court registry; but, Plaintiff avers, Nationstar did not place the $132,036.43
into the registry and instead filed a Notice of Removal on April 21, 2017.16 In response, the
Plaintiff filed the instant “Plaintiff’s Motion to Remand” on May 11, 2017.17
Rec. Doc. 1 at 2–3.
Rec. Doc. 1-1 at 378.
Rec. Doc. 7-1 at 3.
Rec. Doc. 7.
II. Parties’ Arguments
A. Plaintiff’s Motion to Remand
In the motion to remand, Plaintiff provides that the removing party bears the burden of
proving that removal was proper, and that “statutes conferring removal jurisdiction are to be
strictly construed in favor of remand.”18
1. Plaintiff Argues that Louisiana Citizens Remains a Party in the Suit
Plaintiff first argues that the Court lacks jurisdiction pursuant to 28 U.S.C. § 1332 because
there is not complete diversity among the parties.19 Plaintiff argues that Louisiana Citizens remains
a party to the litigation, and both Louisiana Citizens and Plaintiff are citizens of Louisiana.20
Moreover, Plaintiff argues that Defendant Nationstar “failed to obtain the consent of Citizens, who
remains a party to the state court action” before removing this matter to federal court.21 Plaintiff
further contends that Nationstar, in the alternative, was required to “affirmatively explain” why
consent of Louisiana Citizens was unnecessary.22 Instead, Plaintiff avers that Nationstar has
completed neither of the two options.23
Rec. Doc. 7-1 at 3 (citing Manguno v. Prudential Prop. And Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); De
Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995)).
Id. at 4.
Id. at 5.
Id. (citing Alford v. Chevron U.S.A., Inc., No. 13-5457, 2014 WL 37600, at *2 (E.D. La. 2014)).
2. Plaintiff Argues that Removal of the Petition for Concursus Constitutes Partial
Additionally, Plaintiff argues that partial removal should not be permitted.24 Plaintiff
asserts that “Nationstar is seeking removal of the concursus action only, as opposed to the entire
underlying lawsuit.”25 Plaintiff avers that the Fifth Circuit has held that “because the phrase ‘civil
action’ in § 1441 ‘denotes the entirety of the proceedings in question,’ the removability of such
civil action is determined as to its entirety, not as to particular claims or parties.”26 Moreover,
Plaintiff asserts that another division of the Eastern District of Louisiana determined in Grefer v.
Travelers Insurance Co. that the severance of claims does not necessarily mean that one set of
claims is removable without the other.27 Instead, Plaintiff states, the severance of claims must
clearly result in two separate lawsuits in order for one to be removable without the other.28 Plaintiff
argues that “there has not even been any such severance of Plaintiff’s Petition for Concursus,” so
the Court should “decline to exercise jurisdiction over just part of the underlying state court
Plaintiff then notes “one limited exception to the prohibition on partial removal related to
third-party demands.”30 Plaintiff states that the Fifth Circuit has allowed “removal by a third-party
Id. (citing Grefer v. Travelers Ins. Co., No. 03-0253, 2003 WL 22717716 at *2 (E.D. La. 2003) (quoting Arango v.
Guzman Travel Advisors Corp., 621 F.2d 1371, 1376 (5th Cir. 1980)).
Id. at 6 (citing Grefer, 2003 WL 22717716 at *4).
Id. at 7.
defendant after the third-party demand was severed from the main demand.”31 However, Plaintiff
argues that the claim Nationstar is attempting to remove is not a third-party demand, so the narrow
exception does not apply to the present matter.32
3. Plaintiff Argues that Nationstar Filed Its Notice of Removal More Than One Year
After the Suit Commenced
Finally, Plaintiff argues that Nationstar is not entitled to an equitable exception to the oneyear time limit on removal set forth in 28 U.S.C. § 1446(c)(1).33 Plaintiff states that Nationstar
cites to Tedford v. Warner-Lambert Co. in its argument that such an exception applies.34 Plaintiff
avers that § 1446 has been updated since Tedford, to explicitly include a “bad faith” exception to
the one-year time limit.35 Plaintiff further argues that, although it had not yet been codified,
Tedford acknowledges a similar exception “where a plaintiff has attempted to manipulate the
statutory rules for determining federal removal jurisdiction, thereby preventing the defendant from
exercising its rights.”36 Plaintiff contends that there has been no bad faith on his part, and
Nationstar has not alleged bad faith, and, therefore, the Tedford exception does not apply.37
Id. (citing Sun Industries, LLC v. Phoenix Ins. Co., No. 17-172-BAJ-EWD, 2016 WL 6275188 at *10 (M.D. La.
Id. at 8.
Id. (quoting Tedford, 327 F.3d at 428–29).
Id. at 8-9.
B. Memorandum In Opposition to Motion to Remand
1. Nationstar Argues that Louisiana Citizens Is Not a Party to the Action
After stating the standard of review on a motion to remand, Nationstar argues that
Louisiana Citizens is no longer a party to the lawsuit.38 Nationstar states that Plaintiff did not name
Louisiana Citizens in the Petition for Concursus, and Louisiana Citizens does not have an interest
in the suit since it has settled the claims against it.39
Nationstar asserts that “the filing of an amended petition completely supercedes any prior
petitions.”40 Nationstar first cites a case from the Eastern District of Virginia, Sanford v. The
Commonwealth of Virginia, where the court granted a defendant’s 12(b)(6) motion to dismiss after
the plaintiff’s amended complaint did not name that defendant.41 Nationstar notes that the court
stated that “it was questionable as to whether the motion was even necessary as the original
complaint ceased to exist.”42 Nationstar, citing Westbrook v. Pike Electric, L.L.C., then states that
another division of this Court found that a motion to dismiss was moot after the amended complaint
did not incorporate the original complaint and did not name the previous defendant.43 Nationstar
then asserts that “the Petition for Concursus does not name Louisiana Citizens as a defendant, does
not contain any allegations against Louisiana Citizens, nor does it seek to incorporate any of the
Rec. Doc. 10 at 4.
Id. at 5.
Id. at 6–7 (citing Sanford v. The Commonwealth of Virginia, No. A122874, 2009 WL 2707437 at *1 (E.D. Va. Aug.
Id. at 7 (citing Westbrook v. Pike Electric, L.L.C., et. al., 799 F. Supp. 2d 665 (E.D. La. 2011)).
previous petitions.”44 Thus, Nationstar avers, Louisiana Citizens is no longer a party, and its
citizenship is irrelevant to complete diversity.45
Moreover, Nationstar states that Plaintiff has acknowledged that its claims against
Louisiana Citizens have been resolved.46 Nationstar further asserts that Louisiana Citizens has also
“issued payment under the settlement.”47 Therefore, Nationstar argues, “complete diversity exists,
the case is removable, and Louisiana Citizens’ consent is not required.”48
2. Nationstar Alleges that the Notice of Removal Was Timely Pursuant to Louisiana
Furthermore, Nationstar contends that its notice of removal was timely.49 Because “[a]
state’s own procedural rules govern when an action is ‘commenced,’”50 Nationstar states that
“[t]he Louisiana Supreme Court has distinguished between an ‘action’ or a ‘demand’ and a ‘cause
of action.’”51 Nationstar asserts that “a ‘cause of action’ is alleged in pleadings by stating ‘the facts
upon which the plaintiff’s right to sue is based, and upon which the defendant’s duty has arisen,
coupled with the [f]acts which constitute the latter’s wrong.”52 It then states that a demand “is
Id. at 8.
Id. at 9.
Id. at 10.
Id. at 11.
Id. (citing Braud v. Transport Serv. Co. of Ill., 45 F.3d 801, 801 (5th Cir. 2006)).
Id. (citing Hope v. Madison, 188 So. 711, 715 (La. 1939)).
Id. (citing Hope, 188 So. at 715).
better defined as ‘the object of the suit.’”53 Finally, it states that “an action which states a cause
may conclude with more than one demand.”54
Moreover, Nationstar asserts that a district court in the Middle District of Louisiana,
analyzing the above definitions, “concluded that a cause of action can lead to the presentation of
two different demands in two different pleadings that can be construed has [sic] having two
different commencement dates.”55 Nationstar states that, in that case, the plaintiff filed suit against
an individual, his employer, and State Farm after a car accident.56 The plaintiff then filed a
supplemental and amending petition alleging violations of the Louisiana Products Liability Act
against General Motors.57 Following that, a second supplemental and amending petition was filed
which added an additional insurer of the employer.58 After receiving a payment from State Farm,
the plaintiff provided State Farm an unlimited release from his claims and provided the individual
and his employer a limited release.59 Following a motion for summary judgment from the
additional insurer, GM removed the action 16 months after the original petition, asserting that the
additional insurer was improperly joined.60 On a motion to remand, Nationstar asserts, the court in
that case found removal timely, as “the cause of action led to the presentation of two different
Id. (citing Nat’l Sur. Corp. v. Standard Accident Ins. Co., 175 So.2d 263, 266 (La. 1965)).
Id. (citing Hayes v. Muller, 243 So.2d 830, 834 (La. App. 3 Cir. 1971)).
Id. at 12 (citing Gore v. Robertson, No. 14-00749, 2015 WL 5749459 (M.D. La. Sept. 30, 2015)).
Id. (citing Gore, 2015 WL 5749459).
Gore, 2015 WL 5749459, at *1.
Id. at *2.
demands in two different pleadings that could be construed as having two different commencement
3. Nationstar Argues, in the Alternative, the Equitable Tolling Exception Applies to the
Filing of the Notice of Removal
Moreover, in the alternative, Nationstar argues that the equitable tolling exception should
be applied.62 Nationstar asserts “when the plaintiff attempts to circumvent federal jurisdiction,”
equitable tolling of the removal period is appropriate.63
Nationstar asserts that the one-year time limit is intended to prevent removal after
substantial progress has been made.64 Nationstar argues that such substantial progress concerns
“are not at issue here.”65 Nationstar avers that, “for all intents and purposes,” it was brought into
the suit after the case was completed.66 Nationstar avers, since the claim against Nationstar and
Capital One are “only related to Plaintiff’s damages action because it involves the funds that
Louisiana Citizens paid to settle the damages action . . . , removal of this case does not impact the
prior progress in state court because the state court matter has ended.”67 Nationstar further
contends, “[B]y filing the Petition for Concursus into the damages action after the damages action
settled, Plaintiff is attempting to improperly bootstrap the Petition for Concursus to the damages
Rec. Doc. 10 at 12 (citing Gore, 2015 WL 5749459 at *3).
Id. at 13 (citing Tedford v. Warner-Lambert Co., 327 F.3d 423, 426 (5th Cir. 2003)).
Id. (citing Tedford, 327 F.3d at 426 n.8).
action and deny Nationstar a federal forum.”68 Instead, Nationstar asserts, if Plaintiff had filed the
Petition for Concursus as an independent action, Nationstar would be able to remove the suit.69
Nationstar argues that removal has been allowed in similar situations where a plaintiff “similarly
attempted to deny a defendant the federal forum to which it was entitled.”70
Finally, Nationstar asserts that Plaintiff’s request for fees and expenses should be denied.71
Nationstar states that they have an objectively reasonable reason for removal, since the demand
against Nationstar can be construed as having a different commencement date from the original
C. Reply to Nationstar’s Memorandum in Opposition to Motion to Remand
1. Plaintiff Argues that Louisiana Citizens Remains a Party
Plaintiff first argues that Nationstar cites inapplicable case law in support of its argument
that Louisiana Citizens is no longer a party.73 Plaintiff states that only one of the four primary
cases that Nationstar cites was decided by a district court of the Eastern District of Louisiana.74
Moreover, that case, Westbrook, concerned an application of Federal Rule of Civil Procedure
15(a)(1)(B), which, Plaintiff contends, is not applicable in this case because the Petition for
Concursus was not an amended petition.75 Plaintiff states that Louisiana Citizens remains a party
Id. at 14.
Rec. Doc. 14 at 1.
Id. at 1–2.
to the underlying state court action, and “Nationstar has offered no plausible reason why its
Louisiana citizenship should be ignored and its consent to the removal was not required.”76
2. Plaintiff Argues that Separating the Petition for Concursus from the Underlying
Action Constitutes Partial Removal
Moreover, Plaintiff argues that Nationstar does not address the issue of partial removal.77
Plaintiff states that “this Court has declined to extend jurisdiction unless it is clear that the claims
constitute a separate “civil action.”78 Plaintiff argues that “Nationstar has offered no explanation
as to why this Court should exercise jurisdiction over just part of the underlying state court
Plaintiff further contends that Tedford is outdated, since it was decided prior to the
codification of the bad faith exception.80 Even so, Plaintiff states that Nationstar does not allege
bad faith by Plaintiff, so “there is no basis for the Court to apply an exception.”81
Additionally, Plaintiff states that Nationstar’s argument regarding the existence of different
commencement dates because of different demands should not be considered because “this
argument was not presented by Nationstar in its Notice of Removal.”82 Still, if the Court considers
Id. at 2.
Id. (citing Grefer, 2003 WL 22717716).
Id. at 3.
Id. (citing Neal v. Kawasaki Motors Corp., No. 95-668, 1995 WL 419901 at *2 n.4 (E.D. La. July 13, 1995)).
this argument, Plaintiff avers, it should be rejected anyway because it is “tied to Nationstar’s effort
to effect a partial removal.”83
Finally, Plaintiff argues that Nationstar should have to pay fees and costs pursuant to 28
U.S.C. § 1447(c).84
III. Legal Standard
In a motion to remand, “the party seeking to remove bears the burden of showing that
federal jurisdiction exists and that removal was proper.”85 “Federal courts are courts of limited
jurisdiction. They possess only the power authorized by Constitution and statute, which is not to
be expanded by judicial decree.”86 The removal statute must be strictly construed, and “any doubt
about the propriety of removal must be resolved in favor of remand.”87
Pursuant to the removal statute, a defendant may remove a state civil court action to federal
district court if the federal court has original jurisdiction over the action.88 A federal court has
subject matter jurisdiction over an action under 28 U.S.C. § 1332 “where the matter in controversy
exceeds the sum or value of $75,000” and the action “is between citizens of different states.”89 “To
determine whether federal jurisdiction exists, this Court must consider the claims in the state court
Mumfrey v. CVS Pharm., Inc., 719 F.3d 392, 397 (5th Cir. 2013).
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (internal citations omitted).
Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007) (internal citation omitted). See also
Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)
28 U.S.C. § 1441(a); Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 34 (2002).
28 U.S.C. § 1332(a)(1).
petition as they existed at the time of removal.”90
Moreover, pursuant to 28 U.S.C. § 1446(c)(1), “A case may not be removed under
subsection (b)(3) on the basis of jurisdiction conferred by section 1332 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.”91
A. Whether Plaintiff’s Settlement with Louisiana Citizens Eliminates Louisiana Citizens
from the Case
Defendant argues that removal is proper because the parties are diverse, since, Defendant
avers, Louisiana Citizens was not named in the petition for concursus, and Louisiana Citizens
reached a settlement with Plaintiff.92
Grefer v. Travelers Ins. Co., No. 03-0253, 2003 WL 22717716, at *2 (E.D. La. Nov. 18, 2003) (citing Cavellini v.
State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1994)).
28 U.S.C. § 1446(c)(1). Moreover, 1446(b) provides:
(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.
(2)(A) When a civil action is removed solely under section 1441(a), all defendants who have been
properly joined and served must join in or consent to the removal of the action.
(B) Each defendant shall have 30 days after receipt by or service on that defendant of the initial
pleading or summons described in paragraph (1) to file the notice of removal.
(C) If defendants are served at different times, and a later-served defendant files a notice of removal,
any earlier-served defendant may consent to the removal even though that earlier-served defendant
did not previously initiate or consent to removal.
(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.
Id. at 6.
Nationstar first asserts, “When an amended complaint fails to name defendants named in a
prior complaint, the filing of the amended complaint acts as a dismissal of those defendants not
named in the amended complaint.”93 Nationstar argues that the petition for concursus has
superseded the petition for damages in a similar manner to an amended complaint, so Louisiana
Citizens is no longer a party. Moreover, Nationstar argues that an action that is nonremovable
when commenced may become removable by the voluntary act of the plaintiff.94 Nationstar asserts
that Plaintiff has admitted to settling its claims against Louisiana Citizens, so, Defendant avers,
Plaintiff has voluntarily dismissed Louisiana Citizens.95
The Fifth Circuit has stated, “Federal courts must look to state law to determine whether
removal is proper on the ground that the nondiverse defendant is no longer effectively a party to
the case. A case may be removed based on any voluntary act of the plaintiff that eliminates that
nondiverse defendant from the case.”96 The Fifth Circuit has further held that the “drafting,
signing, and filing of letters regarding settlement [are] voluntary acts” by a plaintiff, and a
settlement with a nondiverse defendant “effectively eliminate[s] the nondiverse defendant.”97
Moreover, pursuant to Louisiana Civil Code Article 3072, a settlement agreement is
enforceable if it is in writing and signed by the parties or their agents, or recited in open court and
capable of being transcribed from the record of the proceeding.98
Id. (citing Sanford v. Virginia, No. 3:08cv835, 2009 WL 2707434, (E.D. Va. Aug. 26, 2009)).
Id. at 9 (citing Weems v. Louis Dreyfus Corp., 380 F.2d 545, 547 (5th Cir. 1967)).
Id. at 10.
Estate of Martineau v. ARCO Chem. Co., 203 F.3d 904, 910 (5th Cir. 2000).
Id. at 912.
LA. CIV. CODE ANN. Art. 3072 (2007); see also Sullivan v. Sullivan, 95-2122 (La. 4/8/96); 671 So. 2d 315, 317–18.
Although Sullivan points to Louisiana Civil Code Article 3071, the Civil Code has since been revised, and it is clear
that the court was referring to the current Article 3072.
Finally, “[a]n exception to the general rule requiring all defendants to join a removal
petition is the nominal party exception.”99 Furthermore, “Defendants who have settled are nominal
parties who are ‘no longer effectively a party to the case.’”100 Thus, Defendants who have settled
are not required to join a removal petition.
Here, Defendant presents Plaintiff’s statements in the petition for concursus as evidence of
an existing settlement.101 Plaintiff acknowledges not only that Plaintiff settled with Louisiana
Citizens, but also that Plaintiff “has recovered” the settlement amount.102 Plaintiff also does not
dispute that a settlement has been reached with Louisiana Citizens in either the motion to remand
or in the reply to Defendant’s opposition. Instead, Plaintiff argues that a petition for concursus is
dissimilar to an amended pleading, but it is unnecessary for the Court to address that argument due
to the settlement that preceded the petition for concursus. Consequently, Plaintiff has committed
voluntary acts which have “effectively eliminated” Louisiana Citizens from the case, and the
remaining parties are diverse. Moreover, since Louisiana Citizens has settled and is no longer a
party to the case, its consent for removal is unnecessary pursuant to the nominal party exception.103
B. Whether Defendant Seeks to Partially Remove the Action Improperly
Plaintiff argues that Defendant seeks to remove “the concursus action only, as opposed to
the entire underlying lawsuit.”104
Taco Tico of New Orleans, 2009 WL 2160436, at *2 (citing Robinson v. Nat’l Cash Register Co., 808 F.2d 1119,
1123 (5th Cir. 1987)).
Id. (citing Estate of Martineau, 203 F.3d at *2).
See Rec. Doc. 10 at 10; see also Rec. Doc. 1-1 at 372 ¶ 4.
See Rec. Doc. 1-1 at 376 ¶ 8.
See Taco Tico of New Orleans, 2009 WL 2160436, at *2 (citing Robinson, 808 F.2d at 1123).
Rec. Doc. 7-1 at 5.
The Fifth Circuit has held that “the civil action’s removability is determined as to its
entirety, not as to particular claims or parties.”105
Here, Defendant does request “that the aforementioned Petition for Concursus” be removed
to this Court in the closing paragraph of its notice of removal.106 However, in the opening of the
notice of removal, Defendant states it is seeking to remove civil action “Suit No. 710-057.”107
Defendant has also properly attached the entire state court record, including the petition for
damages, to its notice of removal.108 As stated above, Defendant does argue that the petition for
concursus should be viewed as a separate action from the petition for damages for the
commencement of the suit, but Defendant seeks to remove the civil action as a whole. Accordingly,
Plaintiff’s argument that remand is proper because Defendant partially removed the action fails.
C. The One-Year Time Limit for Removal Has Tolled
Plaintiff argues that the one-year time limit on removal has tolled in the present case, so
removal is improper.
Defendant argues that the one-year time limit on removal has not tolled, since, it avers, the
petition for concursus ought to be considered a separate action, and, or, Plaintiff acted in bad faith.
Defendant’s arguments that the petition for concursus ought to be considered a separate action can
be grouped into three categories: the petition for concursus is similar to a third-party demand, the
petition for concursus is similar to a garnishment action, and the petition for concursus is defined
as a separate action by the Louisiana Civil Code. Moreover, Defendant argues that Plaintiff acted
Arango v. Guzman Travel Advisors Corp., 621 F.2d 1371, 1376 (5th Cir. 1980).
Rec. Doc. 1 at 7.
Id. at 1.
Rec. Doc. 1-1 at 1.
in bad faith in “attempting to improperly bootstrap the Petition for Concursus to the damages action
and deny Nationstar a federal forum.”109 As the removing party, Defendant has the burden to prove
either of these arguments.
28 U.S.C. § 1446(c)(1) provides, “A case may not be removed under subsection (b)(3) on
the basis of jurisdiction conferred more than 1 year after the 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.”
In the notice of removal, Nationstar first argues that Plaintiff improperly filed his petition
for concursus into the “underlying action” against Louisiana Citizens.110 Citing Davenport v.
Hamilton, Brown & Babst, L.L.C.,111 Defendant argues that other courts have permitted actions to
be removed under similar circumstances. Defendant asserts that one district court in the Middle
District of Louisiana, “noting that the Fifth Circuit has recognized that garnishment actions against
third-parties are generally construed as independent suits removable under § 1441, denied a motion
to remand the attorneys’ petition for intervention to state court.” 112 As a result, Nationstar argues,
the Court should apply an equitable exception to the 28 U.S.C. § 1446(b) one-year limit on
Here, Defendant presents no binding authority, and the Court finds none, where removal
has been granted under similar circumstances. In Davenport, the court determined that removal
Rec. Doc. 10 at 13.
See Rec. Doc. 1 at 5.
624 F. Supp. 2d 542 (M.D. La. 2008).
Rec. Doc. 1 at 6.
was appropriate when the petition of intervention “was brought by non-parties, i.e., the plaintiffsin-intervention, and seeks relief from non-parties, i.e., the defendants-in-intervention.”114
Consequently, the present matter is distinguishable from Davenport, since Nationstar is not
attempting to remove a third-party demand.
Moreover, although Nationstar notes that “the Fifth Circuit has recognized that
garnishment actions against third-parties are generally construed as independent suits removable
under § 1441,”115 a concursus action is distinguishable from a garnishment action. A concursus
action apportions money already recovered, whereas a garnishment action prospectively recovers
money not yet acquired.
Furthermore, in its memorandum in opposition to the motion to remand, Nationstar argues
that a state’s own procedural rules govern when an action is commenced.116 Nationstar then avers
that the petition for concursus has created a new civil action per the Louisiana Code of Civil
Procedure Article 421. Article 421 provides, “A civil action is a demand for the enforcement of a
legal right. It is commenced by the filing of a pleading presenting the demand to a court of
competent jurisdiction.” Additionally, citing the Louisiana Supreme Court, Nationstar states that
a lawsuit’s demand “is better defined as ‘the object of the suit.’”117 Nationstar points to Gore v.
Robertson, a case from the Middle District of Louisiana, to support its argument that the instant
case “present[s] two different demands that should be construed as having two different
624 F. Supp. 2d at 545.
Rec. Doc. 1 at 6.
Rec. Doc. 10 at 11 (citing Braud v. Transp. Serv. Co. of Ill., 445 F.3d 801, 801 (5th Cir. 2006)).
Id. (citing Nat. Sur. Corp. v. Standard Acc. Ins. Co., 175 So.2d 263, 266 (La. 1965)).
commencement dates.”118 Finally, Nationstar again asserts that the equitable tolling exception
codified in Section 1446(c) applies, as “Plaintiff is attempting to improperly bootstrap the Petition
for Concursus to the damages action and deny Nationstar a federal forum.”119
Here, Nationstar cites the Fifth Circuit decision of Braud to support its argument that
Louisiana’s procedural rules govern when an action has been commenced.120 However, in Braud,
the Fifth Circuit specifically held that “when a lawsuit is initially ‘commenced’ for purposes of
CAFA is determined by state law.”121 Since this action is not pursuant to CAFA, it is unclear
whether the holding in Braud applies to the present situation. Defendant does not cite any binding
authority, nor does the Court find any, mandating that state law necessarily determines when an
action has been commenced for the purposes of removal. Although Defendant cites at least one
district court case in the Fifth Circuit in support of the proposition that state law governs the date
of commencement in terms of removal,122 there is also persuasive authority that conflicts with that
position. For example, in Robinson v. General Motors Corp., a court in the Northern District of
Texas held that “Congress did not intend for state law to control the definition of commencement
under § 1446(b).”123 The court reasoned, “Ultimately, defining the word ‘commencement’ is an
issue of federal law, if nothing else, for the reason that § 1446 is a federal statute.”124
Id. at 12 (citing Gore, 2015 WL 5749459 at *3).
Rec. Doc. 10 at 13.
Id. at 11.
Braud, 445 F.3d at 803 (emphasis added).
See Gore, 2015 WL 5749459, at *2.
601 F. Supp. 2d 833, 837 (N.D. Tex. 2008).
Furthermore, even if Louisiana Code of Civil Procedure Article 421 applies to the present
situation, the instant matter is distinguishable from authority cited by Defendant. In Gore, the court
found that there were two different demands, as the plaintiff first sought “enforcement of the right
to be free under a negligence theory against defendants . . . The second demand sought enforcement
of the right to be free from injury under a products liability theory against defendant . . . .”125
Moreover, the court noted that the second defendant “had no prior knowledge of the action.”126
Thus, the plaintiff was seeking two different sets of damages from different defendants. Here, the
actual object remains the same, as Plaintiff is seeking to recover the same funds that Louisiana
Citizens has already provided. Defendant Nationstar acknowledges that the petition for concursus
is to determine “who has a superior interest to two sets of insurance proceeds.”127 Since the first
petition was to recover the same “insurance proceeds,” Plaintiff is not seeking to recover two sets
of damages, as in Gore. Moreover, although Nationstar explains in detail the two different
demands in Gore, it fails to provide an analogy of this case to Gore.128
Considering these factors above, the Court finds that Defendant fails to meet its burden
that the petition for concursus ought to be viewed as a separate lawsuit from the petition for
damages. Accordingly, Defendant is attempting to remove a civil action more than one year after
its commencement, since the petition for damages was filed on January 5, 2012.129 Pursuant to §
Gore, 2015 WL 5749459, at *3.
Id. at *5.
Rec. Doc. 10 at 1.
Id. at 12. Nationstar states, “Similarly, this case present [sic] two different demand [sic] that should be construed
as having two different commencement dates. As such, Nationstar’s removal is timely.”
See Rec. Doc. 1-1 at 1.
1446(c)(1), such an action can only be removed if the district court finds that the plaintiff has acted
in bad faith to prevent removal.
Further, Nationstar argues, the exception to the one year limit should be applied here
because Plaintiff has “improperly bootstrap[ped]” the petition for concursus to the petition for
However, Nationstar does not assert that Plaintiff has acted in bad faith.131 None of the
cases cited by Nationstar hold it is improper to “bootstrap” a petition for concursus after an award
of damages as an act of bad faith.132 Although Defendant argues that cases exist where “[r]emoval
was allowed where plaintiffs similarly attempted to deny a defendant the federal forum to which
it was entitled,” Nationstar provides no explanation as to how the present situation is comparable
to those cases.133
Thus, Defendant fails to meet its burden to show that Plaintiff acted in bad faith to prevent
the removal of the action. Since Defendant filed its notice of removal more than one year after the
commencement of the action, and fails to prove that Plaintiff acted in bad faith, the Court grants
Plaintiff’s motion to remand.
D. Nationstar Does Not Owe Costs and Attorney’s Fees
Plaintiff argues that Nationstar should be ordered to pay Plaintiff’s costs, including
attorney’s fees, as 28 U.S.C. § 1447(c) authorizes the Court to impose such fees.
Pursuant to 28 U.S.C. § 1447(c), “an order remanding the case may require payment of just
Id. at 13.
See id. at 13–14.
costs and any actual expenses, including attorney fees, incurred as a result of the removal.” The
decision to award attorney’s fees under Section 1447(c) is in the sound discretion of the Court, and
should “recognize the desire to deter removals sought for the purpose of prolonging litigation and
imposing costs on the opposing party, while not undermining Congress’ basic decision to afford
defendants a right to remove as a general matter, when the statutory criteria are satisfied.”134
Toward that end, the “mere determination that removal was improper” does not
automatically entitle a plaintiff to an award of fees.135 Rather, in the absence of “unusual
circumstances,” this Court may award attorney’s fees under Section 1447(c) “only where the
removing party lacked an objectively reasonable basis for seeking removal.”136
The Court has found Defendant’s arguments in support of removal unavailing. However,
a party’s mere advancement of unsuccessful arguments in support of removal does not warrant the
imposition of attorney’s fees.137 Here, Plaintiff does not argue that Defendant’s arguments for
removal lacked an objectively reasonable basis. Moreover, Plaintiff does not argue Defendant
removed this action in order to “prolong litigation and impos[e] costs.”138 Therefore, although
the Court will remand the instant action to state court, it will not award attorneys’ fees or costs
Based on the foregoing,
Darville v. Tidewater Marine Serv., Inc., No. 15-6441, 2016 WL 1402837, at *8 (E.D. La. Apr. 11, 2016) (Brown,
J.) (citing Martin v. Franklin Capital Corp., 546 U.S. 132, 140 (2005)).
Id. (citing Am. Airlines, Inc. v. Sabre, Inc., 694 F.3d 539, 541–42 (5th Cir. 2012)).
Martin, 546 U.S. at 141.
IT IS HEREBY ORDERED that “Plaintiff’s Motion to Remand”139 is GRANTED IN
PART to the extent that the case is remanded to state court and DENIED IN PART to the extent
that Plaintiff requests an award for costs and expenses, including attorney’s fees.
IT IS FURTHER ORDERED that the case is remanded to the 24th Judicial District Court
for Parish of Orleans, State of Louisiana.
NEW ORLEANS, LOUISIANA, this ______ day of November, 2017.
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE
Rec. Doc. 7.
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