Ruybal v. Liberty Mutual Fire Insurance Company et al

Filing 22

AMENDED ORDER that Plaintiff's 9 Motion to Remand to State Court is Denied. Signed by Chief Judge Gloria M. Navarro on 6/16/2015 (Nunc Pro Tunc 6/12/2015). (Copies have been distributed pursuant to the NEF - SLD)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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SHAWN RUYBAL,

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NOTE: This Order is amended only to correct reference to the parties in the opening and

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conclusory paragraphs of this Order being reversed. It was “Plaintiff’s” Motion to

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Remand (ECF No. 9) and not Defendant’s motion. All other paragraphs in the Order

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remain unchanged.

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Plaintiff,

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vs.
LIBERTY MUTUAL FIRE INSURANCE
COMPANY, a Wisconsin corporation;
DOES I through XX, inclusive and ROE
CORPORATIONS I through XX, inclusive,

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Defendants.

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Case No.: 2:15-cv-00508-GMN-NJK
AMENDED ORDER

Pending before the Court is the Motion to Remand (ECF No. 9) filed by Plaintiff Shawn

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Ruybal (“Plaintiff”). Defendant Liberty Mutual Fire Insurance Company (“Liberty Mutual”)

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filed a Response (ECF No. 12), and Plaintiff filed a Reply (ECF No. 14).

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I.

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BACKGROUND
Plaintiff claims he was injured by a third-party driver in a car accident on June 1, 2012.

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(Compl. ¶ 7, ECF No. 1-1). Plaintiff alleges the third-party driver paid his policy limit to

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Plaintiff, which was insufficient to cover the costs of Plaintiff’s treatment. (Id. at ¶¶ 9–10).

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When Plaintiff demanded the uninsured/underinsured policy limit under the policy he had

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purchased from Liberty Mutual, Plaintiff claims Liberty Mutual failed to perform its duties. (Id.

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at ¶¶ 11–13).

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Plaintiff filed his Complaint on February 9, 2015, in the Clark County District Court

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asserting breach of contract, breach of covenant of good faith and fair dealing, unjust

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enrichment, and unfair practices in settling claims. (Id. ¶¶ 20–41). Liberty Mutual removed the

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case to this Court under diversity jurisdiction. (Pet. for Removal, ECF No. 1). In response,

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Plaintiff filed the instant Motion to Remand. (ECF No. 9).

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II.

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LEGAL STANDARD
If a plaintiff files a civil action in state court, a defendant may remove that action to a

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federal district court if the district court has original jurisdiction over the matter. 28 U.S.C.

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§ 1441(a). Removal statutes are strictly construed against removal jurisdiction. Ritchey v.

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Upjohn Drug Co., 139 F.3d 1313, 1317 (9th Cir. 1998). “Federal jurisdiction must be rejected

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if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, 980 F.2d

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564, 566 (9th Cir. 1992) (quoting Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th

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Cir. 1979)). The removing defendant always has the burden of establishing that removal is

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proper. Gaus, 980 F.2d at 566. “If at any time before final judgment it appears that the district

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court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

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Under 28 U.S.C. § 1332, complete diversity of citizenship is required, and each plaintiff must

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be a citizen of a different state than each defendant. Morris v. Princess Cruises, Inc., 236 F.3d

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1061, 1067 (9th Cir. 2001).

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III.

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DISCUSSION
For the reasons discussed below, the Court finds that the removing Defendant has

established that this Court has jurisdiction over the instant action.

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A.

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Under 28 U.S.C. § 1332(a)(1), “[t]he district courts shall have original jurisdiction of all

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civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of

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interest and costs, and is between citizens of different States,” and under § 1332(c)(1), barring

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exceptions, “a corporation shall be deemed to be a citizen of every State and foreign state by

Diversity Jurisdiction

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which it has been incorporated and of the State or foreign state where it has its principal place

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of business….”

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Liberty Mutual asserts that “Plaintiff was and is a resident and citizen of the State of

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Nevada.” (Statement Regarding Removal, 2:9–10, ECF No. 7). Moreover, Liberty Mutual

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asserts that it is and was at all relevant times incorporated in Wisconsin with its principal place

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of business in Massachusetts, which makes it a citizen of both Wisconsin and Massachusetts

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and satisfies the diverse citizenship requirement. (Id. 2:10–15). Furthermore, Defendant asserts

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that the amount in controversy exceeds the $75,000 jurisdictional minimum because the policy

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limits at issue are $500,000 per accident, and Plaintiff also requests attorneys’ fees and punitive

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damages. (Id. 2:17–3:1). Altogether, these facts satisfy the diversity jurisdiction requirements,

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barring exceptions.

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B.

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However, “in any direct action against the insurer of a policy or contract of liability

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insurance…to which action the insured is not joined as a party-defendant,” corporations are

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also citizens of “every State and foreign state of which the insured is a citizen.” 28 U.S.C. §

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1332 (emphasis added).

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Diversity Jurisdiction Exceptions

Plaintiff asserts that from a public policy perspective and under the plain language of §

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1332(c)(1), direct actions should include any action taken against an insurer in which the

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insured member is not joined as a defendant and thus render the insurer a citizen of the state

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where the insured member resides. (Mot. to Remand, 8:12–23, ECF No. 9). Because Plaintiff,

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Liberty Mutual’s insured, was not joined as a defendant in the instant action against Liberty

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Mutual, Plaintiff argues that the Court should recognize Liberty Mutual as a citizen of

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Nevada—where Plaintiff resides. (Id. 4:6–9).

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However, the Ninth Circuit has rejected Plaintiff’s interpretation of Section 1332(c)(1):
“a bad faith action against a plaintiff's own insurer is not a ‘direct action’ within the meaning of

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§ 1332(c)(1).” Searles v. Cincinnati Ins. Co., 998 F.2d 728, 728-29 (9th Cir. 1993) (citing

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Beckham v. Safeco Ins. Co., 691 F.2d 898, 902 (9th Cir. 1982)). This Court cannot ignore

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binding Ninth Circuit precedent. Dixon v. United States, 548 U.S. 1, 4 (2006) (trial court

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correctly found itself bound by circuit precedent); Panetti v. Quarterman, 551 U.S. 930, 961

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(2007) (district court was “of course” bound by circuit precedent); Citizens For Better Forestry

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v. U.S. Dep't of Agr., 567 F.3d 1128, 1134 (9th Cir. 2009) (Ninth Circuit holding was binding

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on the district court). Because this Court is bound by Ninth Circuit precedent, this Court must

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reject Plaintiff’s interpretation of the statute in light of the Ninth Circuit’s holding. Therefore,

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because this case does not constitute a “direct action” and Defendant has satisfied all other

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criteria to establish diversity jurisdiction, this Court has diversity jurisdiction under § 1332.

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IV.

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CONCLUSION
IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand (ECF No. 9) is

DENIED.

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DATED this 16th day of June, 2015.

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NUNC PRO TUNC DATE: 06/12/2015.

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___________________________________
Gloria M. Navarro, Chief Judge
United States District Court

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