OLD BRIDGE MUNICIPAL UTILITIES AUTHORITY v. WESTCHESTER FIRE INSURANCE COMPANY et al

Filing 14

OPINION. Signed by Judge Joel A. Pisano on 3/25/2013. (gxh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
____________________________________
OLD BRIDGE MUNICIPAL UTILITIES
AUTHORITY,
Plaintiff,
v.
WESTCHESTER FIRE INSURANCE
COMPANY; ACE WESTCHESTER
SPECIALTY GROUP; and Fictitious
Corporations 1 through 10,
Defendants.

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Civil Action No. 12-06232 (JAP)
OPINION

PISANO, District Judge.
This action was brought in the Superior Court of New Jersey, Middlesex County, by
Plaintiff Old Bridge Municipal Utilities Authority (“Plaintiff”) against Defendants Westchester
Fire Insurance Company (“Westchester Fire”), Ace Westchester Specialty Group1 and unnamed
defendants (collectively, “Defendants”). It arises out of a coverage dispute over the parties’
rights and obligations under a Municipal Advantage Public Entity Liability Policy issued to
Plaintiff by Westchester Fire. The action was removed to this Court by Defendants on October
4, 2012. Presently before the Court is the Plaintiff’s Motion to Remand [docket entry no. 7].
Defendants oppose the motion. The Court decides the matter without oral argument pursuant to
Federal Rule of Civil Procedure 78. For the reasons set forth herein, the Motion to Remand will
be denied.
1

ACE Westchester Specialty Group is merely a trade name denominating a business division of
ACE and not a separate legal entity.
1

Plaintiff is a municipal utilities authority and a political subdivision of the State of New
Jersey. In connection with an insurance policy that Westchester Fire issued to Plaintiff, Plaintiff
filed a complaint in Middlesex County Superior Court, alleging three causes of action against
Defendants: (1) breach of contract; (2) specific performance; and (3) declaratory relief. In the
counts for breach of contract and specific performance, Plaintiff’s Complaint seeks, inter alia,
monetary damages from Defendants.2 Defendants removed this case based on diversity
jurisdiction pursuant to 28 U.S.C. § 1441(a), and Plaintiff now seeks remand, arguing that it is
only seeking a declaration of rights under the New Jersey Declaratory Judgment Act, rather than
a monetary amount, and therefore the Court does not have jurisdiction over the action. Because
the parties do not dispute diversity of citizenship or the amount in controversy, the sole issue to
be addressed in this case is whether the Court has jurisdiction over the state law claims at issue,
particularly the claim for a declaratory judgment.
This Court has jurisdiction over “all civil actions where the matter in controversy exceeds
the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different
states.” 28 U.S.C. § 1332(a) (emphasis added). It is well-settled that the Court’s jurisdiction
encompasses state law claims in a diversity action. See Werwinski v. Ford Motor Co., 286 F.3d
661, 666 (3d Cir. 2002) (“A district court has subject matter jurisdiction over state law claims if
there is complete diversity of citizenship between the parties and the amount in controversy
exceeds $ 75,000 for each plaintiff.”); Cruz v. Pennsylvania, 277 Fed. Appx. 160, 162 (3d Cir.
2008) (same); Curtiss-Wright Corp. v. CNA Fin. Corp., 2012 U.S. Dist. LEXIS 42720, at *5
(D.N.J. 2012) (same). See also Khan v. Bank of Am. Home Loan Servicing L.P., 2012 U.S. Dist.

2

Plaintiff did not specify the amount of damages sought in the Complaint, but it does not dispute
that the amount in controversy is likely to exceed $75,000.
2

LEXIS 71677 (D.N.J. 2012) (finding that district court had jurisdiction over state law claims in
case where amount in controversy and diversity requirements were met).
The Court is mindful that “removal statutes ‘are to be strictly construed against removal
and all doubts should be resolved in favor of remand.’” Boyer v. Snap-On Tools Corp., 913 F.2d
108, 111 (3d Cir. 1990) (citing Steel Valley Auth. v. Union Switch and Signal Div., 809 F.2d
1006, 1010 (3d Cir. 1987)). However, the Plaintiff in this case alleges three separate causes of
action, including claims for breach of contract and specific performance. Neither of these claims
is governed by the New Jersey Declaratory Judgment Act and Plaintiff has not proffered any
argument as to why these two claims cannot be heard by this Court.3 The Court’s review of the
record makes clear that it has jurisdiction over such claims. Indeed, it is axiomatic that the Court
has jurisdiction to hear state law claims such as these in a diversity action. See Werwinski, 286
F.3d at 666; Khan, 2012 U.S. Dist. LEXIS 71677, at * 2-3 (D.N.J. 2012) (finding that district
court had jurisdiction over state law claims in diversity case).
Moreover, this fundamental principle of law applies equally to the Plaintiff’s third claim,
which seeks declaratory relief rather than monetary damages. See Yellowbird Bus Co., Inc. v.
Lexington Ins. Co., 450 Fed. Appx. 213, at *7 (3d Cir. 2011) (finding that district court properly
exercised jurisdiction over diversity case where plaintiff sought declaratory relief and damages
from insurance company); Manze v. State Farm Ins. Co., 817 F.2d 1062 (3d Cir. 1987) (holding
that district court retained jurisdiction over diversity action where plaintiff sought to compel
arbitration in the underlying action); see also UE Grp., LLC v. J&B Holding Co., et al., 2010
3

Plaintiff does not address these claims in any way, instead asserting that this case is solely
about its request for a declaratory judgment, which arises under the New Jersey Declaratory
Judgment Act. However, Plaintiff cannot achieve remand based on a new characterization of his
case once a Defendant has properly removed it based on the pleadings. Wis. Dep’t of Corr. v.
Schacht, 524 U.S. 381, 390 (1998) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.
283, 293 (1938)); Keene Corp. v. United States, 508 U.S. 200, 208 (1993) (same).
3

U.S. Dist. LEXIS 106059 (D.N.J. 2010) (district court had jurisdiction over diversity case
seeking damages and specific performance of a real estate contract); Jeffrey Press, Inc. v.
Hartford Cas. Ins. Co., 326 F. Supp. 2d 626, 630-31 (E.D. Pa. 2004) (holding that district court
had diversity jurisdiction over case seeking damages and declaratory judgment because the
amount in controversy was likely to exceed $75,000). Here, the parties are diverse, the amount
in controversy will likely exceed $75,000 and the Court plainly has jurisdiction over the state law
claims at issue. Accordingly, the Defendants having properly removed this case, Plaintiff’s
Motion for Remand will be denied. An appropriate Order accompanies this Opinion.

Dated: March 25, 2013

4

/s/ Joel A. Pisano
JOEL A. PISANO, U.S.D.J.