Turner v. Paul Revere Life Insurance Company et al

Filing 21

ORDER that 8 Motion to Remand to State Court is DENIED. Signed by Judge James C. Mahan on 12/16/14. (Copies have been distributed pursuant to the NEF - TR)

1
2
3
4

UNITED STATES DISTRICT COURT

5

DISTRICT OF NEVADA

6

***

7

LEE R. TURNER,

8

Plaintiff(s),

9
10
11

Case No. 2:14-CV-1205 JCM (VCF)
ORDER

v.
THE PAUL REVERE LIFE INSURANCE
COMPANY, et al.,
Defendant(s).

12
13

Presently before the court is plaintiff Lee R. Turner’s motion to remand. (Doc. # 8).

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
James C. Mahan
U.S. District Judge

Defendants UNUM Group and Paul Revere Life Insurance Company (“Paul Revere”) filed a
response (doc. # 15), and plaintiff filed a reply (doc. # 16).
I.

Background
This action arises from an insurance dispute between two out-of-state insurers and a

Nevada resident. (See doc. # 1, Exh. A ¶¶ 1-3). Plaintiff has alleged that the amount in
controversy exceeds the jurisdictional amount. (See doc. # 1, Exh. E, p. 5). The only question in
this case is whether defendants’ removal was timely.
On or around April 24, 2014, plaintiff filed the summons and complaint in this action in
the Eighth Judicial District Court for Clark County, Nevada. (See doc. # 15). It is undisputed
that defendant UNUM Group was properly served on April 28, 2014, and defendant The Paul
Revere was properly served on April 30, 2014. (See docs. ## 8, 15).
In the complaint, the prayer for relief sought an award of general and special damages “in
an amount in excess of $10,000.00.” (See doc. # 1, Exh. A). The prayer for relief also sought an
award of “compensatory, consequential, statutory, exemplary and punitive damages in an amount

1

in excess of $10,000.00.” (See id.). The complaint sought costs and attorneys’ fees in an

2

unspecified amount. (See id.). Defendants answered the complaint on June 6, 2014. (See doc. #

3

15).

4

On June 26, 2014, plaintiff filed and served its request for exemption from arbitration.

5

(See docs. ## 8, 15). In this request, plaintiff claimed special damages totaling $2,946,184.74

6

and future medical expenses and punitive damages in an amount to be determined. (See doc. #

7

15). Defendants removed the case on July 24, 2014, twenty-eight days after receipt of plaintiff’s

8

request for exemption from arbitration. Defendants removed eighty-five days after serving the

9

last defendant with its complaint, fifty-five days past the deadline established in 28 U.S.C. §

10

1446(b)(1).

11

II.

Legal Standard

12

In deciding whether removal is proper, courts strictly construe the removal statute against

13

finding jurisdiction, and the party invoking federal jurisdiction bears the burden of establishing

14

the removal was appropriate. Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d

15

1083, 1087 (9th Cir. 2009); see also California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831,

16

838 (9th Cir. 2004) (“The removal statute is strictly construed against removal jurisdiction, and

17

the burden of establishing federal jurisdiction falls to the party invoking the statute”). “Where

18

doubt regarding the right to removal exists, a case should be remanded to state court.” Matheson

19

v. Progressive Specialty Ins, Co., 319 F.3d 1089, 1090 (9th Cir. 2003); see also Gaus v. Miles,

20

Inc., 980 F.2d 564, 566 (9th Cir. 1992).

21

A.

Timely Removal

22

Plaintiff argues that the court should remand this matter based on the defendants’

23

untimely petition for removal. Two clauses from the removal statutes govern the analysis of

24

timeliness.

25

Title 28 U.S.C § 1446(b)(1) states:

26

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.

27
28
James C. Mahan
U.S. District Judge

-2-

1

Title 28 U.S.C. § 1446(b)(3) states:

2

4

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 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.

5

If, following removal, a federal court determines there was a defect in the removal

6

procedure or an absence of subject matter jurisdiction, it may remand the action to state court sua

7

sponte or on motion of a party. Emrich v. Touche Ross & Co., 846 F.2d 1190 (9th Cir. 1988).

8

The timing requirement of Section 1446(b) is “mandatory,” but it is not jurisdictional. See

9

Hones v. Young, 2013 WL 593401, No. 2:12-cv-1951-JCM-PAL, at *2 (D. Nev. Feb. 13, 2013)

10

quoting Lewis v. City of Fresno, 627 F. Supp. 2d 1179, 1182 (E.D. Cal. 2008); see also Dial–In,

11

Inc. v. Aro Corp., 620 F. Supp. 27, 29 (N.D. Ill. 1985) (“The thirty-day period set forth in §

12

1446(b) is mandatory and cannot be extended by consent of the parties or by court orders.”).

3

13

Under § 1446(b), two separate thirty-day windows exist for when a case may be

14

removed: (1) after the defendant receives the initial pleading; and (2) after the defendant receives

15

a paper “from which it may first be ascertained that the case is one which is or has become

16

removable” if “the case stated by the initial pleading is not removable.” Harris v. Bankers Life

17

and Cas. Co., 425 F.3d 689, 692 (9th Cir. 2005). “[N]otice of removability under § 1446(b) is

18

determined through examination of the four corners of the applicable pleadings, not through

19

subjective knowledge or a duty to make further inquiry.” Id. at 694.1

20

III.

Discussion

21

As § 1446(b)(1) states, the defendant had thirty days to file its petition for removal.

22

Plaintiff served defendants on April 28, 2014 and April 30, 2014, allowing for a timely petition

23

for removal if filed on or before May 30, 2014. The defendants filed the petition for removal on

24

July 24, 2014. This filing occurred eighty-five days after service of the last defendant, and fifty-

25
26
1

27
28
James C. Mahan
U.S. District Judge

In Harris, the court found that “Harris’s initial pleading did not affirmatively reveal
information to trigger removal based on diversity jurisdiction because the initial pleading only
stated Brown’s 1972 residency, not his citizenship, and certainly not his citizenship as of the
filing of the complaint.” Id. at 695.

-3-

1

five days past the deadline established in 28 U.S.C. § 1446(b)(1). Thus for removal to be

2

procedurally proper, the court must look to 28 U.S.C. § 1446(b)(3).

3

Under 28 U.S.C. § 1446(b)(3), the second thirty-day window for removal begins “after

4

the defendant receives a paper ‘from which it may first be ascertained that the case is one which

5

is or has become removable’ if ‘the case stated by the initial pleading is not removable.’”

6

Harris, 425 F.3d at 692.

7

Plaintiff argues that the complaint adequately pled the amount in controversy to trigger

8

the timeline for removal under 28 U.S.C. § 1446(b)(1), thirty days from service of the complaint

9

on the final defendant.

To support this assertion, plaintiff points to the first page of his

10

complaint, which states “Arbitration Exemption: 1. Damages in Excess of $50,000.” (See doc. #

11

16). Plaintiff believes this statement, combined with plaintiff’s three claims for relief: (1) breach

12

of contract, (2) breach of covenant of good faith and fair-dealing – bad faith under common law,

13

and (3) a violation of the Nevada Unfair Practices Act, clearly put defendants on notice that the

14

amount in controversy requirement had been satisfied. (See id.).

15
16
17

Further, plaintiff argues he factually put defendants on notice that his damages exceeded
$75,000 based on allegations in the complaint including:
-

maximize their own financial gains.

18
19

-

As a result of defendants’ breach of contract, Dr. Turner suffered from consequential
damages due to his inability to meet his own financial obligations.

20
21

Defendants have engaged in a pattern and practice of bad faith conduct in an effort to

-

Defendants placed their own pecuniary interests above their insured’s interests even

22

though they knew, or should have known, that Plaintiff was totally disabled under the

23

policy.

24

-

In breaching the covenant of good faith and fair dealing, Defendants acted without a

25

reasonable basis in handling Dr. Turner’s claim under his Policy and/or in terminating

26

his claims for benefits.

27

(See doc. # 8 quoting doc. # 1, Exh. 1 at ¶¶ 65, 83, 93, 95).

28
James C. Mahan
U.S. District Judge

-4-

1

Finally, plaintiff alleges that defendants completely ignore plaintiff’s punitive damages

2

claim in excess of $10,000, which is included in the amount in controversy requirement.

3

Therefore, plaintiff argues that defendant could tell the $75,000 jurisdictional threshold had been

4

met based on the plain face of the complaint. Accordingly, 28 U.S.C. § 1446(b)(1) applies and

5

defendants had thirty days after receipt by or service of the initial pleading or summons – until

6

May 30, 2014 – to file the notice of removal. (See doc. # 8). Defendants did not remove until

7

July 24, 2014. (See doc. # 8). Therefore, plaintiff argues that removal was not timely as it was

8

filed eighty-five days after service. (See id.).

9

Defendants counter that plaintiff’s complaint was not immediately removable, because

10

the complaint did not clearly allege an amount in controversy exceeding the jurisdictional

11

requirement of $75,000. Accordingly, the thirty-day time limit for removal did not begin to run

12

until defendants received the paper from which it could first ascertain that the case was

13

removable – the exemption from arbitration form alleging $2,946,184.74 in special damages.

14

Because plaintiff’s exemption from arbitration document, filed on June 26, 2014, was the first

15

document alleging that the amount in controversy exceeded $75,000, defendants assert that the

16

July 24, 2014 removal of this action was timely. (See doc. # 15). Defendants removed this

17

action on July 24, 2014, twenty-eight days after they allegedly first became aware that the

18

amount in controversy standard had been met. (See id.).

19

The court finds that plaintiff’s initial complaint did not affirmatively reveal information

20

to trigger removal based on diversity jurisdiction. The clues of “Arbitration Exemption: 1.

21

Damages in Excess of $50,000,” claims for relief “in excess of $10,000” for three claims, and

22

factual allegations highlighted by plaintiff were not concrete enough, separately or together, to

23

inform defendants that the jurisdictional standard had been met on the face of the complaint.

24

Defendants could only conclude by certainty that plaintiff was seeking damages in excess of

25

$50,000, and could not be sure that the $75,000 threshold requirement was met.

26

Because the court does not recognize a duty to make further inquiry, see Harris, 425 F.3d

27

at 694, 696-98, the defendant’s removal after receipt of plaintiff’s exemption from arbitration

28

document was proper under 28 U.S.C. § 1446(b)(3). Though Nevada state courts require that

James C. Mahan
U.S. District Judge

-5-

1

demand be made only for damages “in excess of $10,000” without further specification of

2

amount where a claimant seeks damages of more than $10,000, there are ways for a plaintiff to

3

put a defendant on notice of the specific amount in controversy alleged, such as with an exhibit

4

demonstrating the breakdown of claimed damages. See Nev. R. Civ. P. 8(a). As of the date of

5

the petition for removal, no amended pleading, motion, order or other paper was filed stating that

6

the alleged amount in controversy exceeded $75,000. The first paper from which defendants

7

were on notice that the alleged amount in controversy did in fact exceed $75,000 was the

8

exemption from arbitration form filed on June 26, 2014. Therefore, the defendant’s July 24,

9

2014 petition for removal was timely.

10
11
12

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that plaintiff Lee R.
Turner’s motion to remand (doc. # 8) be, and the same hereby is, DENIED.
DATED December 16, 2014.

13
14

__________________________________________

15

UNITED STATES DISTRICT JUDGE

16
17
18
19
20
21
22
23
24
25
26
27
28
James C. Mahan
U.S. District Judge

-6-