Radchyshyn v. Allstate Indemnity Company
MEMORANDUM OF DECISION AND ORDER denying 21 Motion to Remand to State Court. Signed by District Judge Martin Reidinger on 05/04/2015. (klb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CIVIL CASE NO. 1:14-cv-00169-MR-DLH
DECISION AND ORDER
THIS MATTER is before the Court on the Plaintiff’s Motion to Remand.
[Doc. 21]. The Defendant has filed its Response to that motion opposing the
remand of this case, [Doc. 23], and Plaintiff has filed a Reply thereto in
support of his motion. [Doc. 24].
BRIEF FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff asserts in his Complaint that he obtained an automobile
insurance policy from Defendant to cover a 2010 Mercedes vehicle
sometime prior to October 27, 2012. [Doc. 1-1 at 4, ¶¶ 5-6]. On October 27,
2012, the vehicle was damaged by fire. [Id. at 5, ¶ 8]. Plaintiff made a claim
upon Defendant under the insurance policy for damages to the vehicle
resulting from the fire. [Id., ¶ 9]. Defendant denied Plaintiff’s claim. [Id.].
Plaintiff filed his Complaint on May 28, 2014, in the Buncombe County,
North Carolina, Superior Court. [Id. at 2-7]. Plaintiff’s Complaint seeks
monetary damages from Defendant on claims for breach of contract and
unfair and deceptive trade practices stemming from Defendant’s refusal to
pay for Plaintiff’s vehicle loss. [Id.]. Defendant removed Plaintiff’s action to
this Court, by Notice filed July 2, 2014, based upon the diversity of the parties
and an amount in controversy exceeding $75,000. [Doc. 1]. On July 9, 2014,
Defendant filed an Answer and Counterclaim, as well as a Motion to Dismiss
Plaintiff’s second cause of action, the unfair and deceptive trade practices
claim. [Docs. 3; 4]. Plaintiff did not respond to Defendant’s motion. [Docket
On August 19, 2014, the Magistrate Judge issued a Memorandum and
Recommendation (M&R) thoroughly analyzing the merits of Defendant’s
motion and suggested the Court grant the Defendant’s motion and dismiss
Plaintiff’s second claim.
Plaintiff filed no objections to the
Magistrate Judge’s Memorandum and Recommendation. [Docket Sheet].
The Court carefully reviewed the Magistrate Judge’s M&R and accepted it,
and based thereon, dismissed Plaintiff’s unfair and deceptive trade practices
claim on September 8, 2014. [Doc. 7].
On September 17, 2014, new counsel for Plaintiff entered an
appearance and filed an Answer to the Defendant’s Counterclaim. [Doc. 9].
On September 19, 2014, Plaintiff filed a Motion for Leave to Amend
Complaint and a proposed amended Complaint which sought, ostensibly, to
resurrect the previously dismissed unfair and deceptive trade practices
claim. [Docs. 10; 10-1]. Defendant filed its Response to Plaintiff’s motion
opposing Plaintiff’s request to amend and Plaintiff replied thereto. [Docs. 14;
15]. On November 12, 2014, Magistrate Judge Howell reviewed the parties’
submissions and entered an Order denying the Plaintiff’s motion. [Doc. 16].
Plaintiff filed his objections to the Magistrate Judge’s Order on November 24,
2014, [Doc. 17] and Defendant responded thereto. [Doc. 18]. By Order
entered March 5, 2015, the Court affirmed the Magistrate Judge’s Order
denying Plaintiff’s motion to amend the Complaint. [Doc. 19]. Plaintiff now
seeks to remand this matter back to state court. [Doc. 21].
STANDARD OF REVIEW
In a civil matter removed pursuant to 28 U.S.C. § 1332(a), if some
event subsequent to the complaint reduces the amount in controversy below
the statutory threshold, the district court must then decide in its discretion
whether to retain jurisdiction over the remainder of the case. Shanaghan v.
Cahill, 58 F.3d 106, 112 (4th Cir. 1995).
As mentioned above, the Defendant removed Plaintiff’s action to this
Court by a Notice filed pursuant to 28 U.S.C. § 1332. [Doc. 1]. Cahill controls
the analysis of remand issues and teaches that the first step the district court
is to take is to determine whether it had subject matter jurisdiction for the
removal in the first instance. Id., 58 F.3d at 112. The parties do not dispute
that this case was properly removed to this Court based upon diversity and
an amount in controversy exceeding $75,000.
The parties’ agreement,
however, cannot confer jurisdiction on this Court, only Congress can do that,
and as appropriate here, it has done so if the requirements of § 1332(a) have
First, the Complaint sufficiently alleges diversity of the parties. [Doc.
1-1 at 4]. Second, with regard to the monetary requirement, the Plaintiff’s
Complaint prayed for relief in excess of $10,000 consistent with the thenapplicable North Carolina civil procedure rule under which it was filed. N.C.
Gen. Stat. § 1A-1, Rule 8(a)(2) (2013). [Doc. 1-1 at 5]. Looking behind North
Carolina’s $10,000 pleading amount limitation and to the facts alleged in the
Complaint, Plaintiff purchased an automobile for $30,000 and contends he
insured the same through Defendant’s agent. [Id. at 4-5]. When the vehicle
was damaged by fire and Defendant’s agent denied the damage claim,
Plaintiff filed suit asserting claims for breach of contract and for unfair and
deceptive trade practices. [Id.]. If the Plaintiff were to prevail on his claims
at the time of removal, his Complaint could be read to allege an amount in
controversy exceeding $75,000: a loss of the vehicle ($30,000) under the
breach of contract claim, thereafter trebled ($90,000) under the unfair and
deceptive trade practices claim. The Court, therefore, had subject matter
jurisdiction pursuant to 28 U.S.C. § 1332(a) at the time Defendant removed
the case here. Cahill’s first requirement has thus been met.
Cahill next teaches that “if some event subsequent to the complaint
reduces the amount in controversy, such as the dismissal of one count[,]” the
district court must exercise its discretion and decide whether to retain
jurisdiction over the remainder of the case. Id., 58 F.3d at 112. Cahill has
anticipated precisely what has come to pass here. The Court’s two most
recent Orders affirmed the Magistrate Judge’s: (1) dismissal of Plaintiff’s
unfair and deceptive trade practices claim [Doc. 7], and, (2) denial of
Plaintiff’s motion to amend the Complaint. [Doc. 19]. The cumulative effect
of these Orders eliminated one of Plaintiff’s claims and thereby diminished
the amount in controversy below the statutory threshold. Accordingly, the
Court must decide whether to retain jurisdiction over what remains. Cahill
lists several factors this Court should consider when arriving at its decision
on whether to remand a case under these circumstances: (1) an evaluation
of the convenience and fairness to both parties if the case is kept or
remanded, taking into consideration the interests of judicial economy; (2) the
amount of time and energy that the federal court already has expended in
connection with the case, and whether it might be more efficient to just keep
it; and (3) whether the case presents some significant issue of state law best
decided in state court. Id. The Court will address each of these factors.
Beginning with the first factor, the Court concludes that retaining
jurisdiction over this matter here would be no less convenient to the parties
than remanding it to state court. Both this Court and the Buncombe County
Superior Court are situated in the City of Asheville, so there is no geographic
inconvenience. In addition, this Court adopted, nearly a decade ago, the
Case Management/Electronic Case Files (CM/ECF) system which requires
all documents (other than the document upon which an action is
commenced) to be filed by counsel electronically in Portable Document
Format (PDF). [Doc. 19 at 6-7 n.1]. Similarly, the North Carolina legislature
has concluded that electronic filing of documents in its State’s courts “may
be a more economical, efficient, and satisfactory procedure” and granted the
North Carolina Supreme Court the authority to adopt rules governing efiling.
N.C. Gen. Stat. § 7A-49.5. The North Carolina Supreme Court has
promulgated electronic filing rules.
Supp’l Rules of Prac. and Pro. for the
N.C. Efiling Pilot Project. However, the “pilot eFiling System is currently
limited to Alamance, Chowan, Davidson and Wake counties[.]” N.C. Court
Information System, available at: https://www.efiling.nccourts.org/reg?page
Action=SignIn (last visited April 28, 2015). Since the Buncombe County
Superior Court does not, as of yet, permit electronic filing and this Court
does, either side may file documents at any hour of the day or night by
computer if the Court retains jurisdiction. Filing documents electronically in
this manner is a more efficient and easy endeavor than dispatching paper
documents to the Buncombe County Clerk’s office during normal business
hours. On the same basis retention of jurisdiction would not cause any
unfairness to either side. For these reasons this factor weighs slightly in
favor of retaining jurisdiction.
Turning to the second factor, the Court concludes that it, too, weighs
in favor of retaining this matter. Given the proceedings thus far that have
taken place before the Magistrate Judge and the Court, the amount of time
and energy already expended in this forum by all involved is substantial.
Further, should the Court remand this matter, the state Superior Court would
retrace the same issues that this Court has already addressed in an effort to
familiarize itself with all that has transpired. With only the breach of contract
claim remaining, this matter may proceed into the discovery stage and
mediation process expeditiously. In the words of Cahill, it would “be more
efficient to simply retain jurisdiction.” Id., 58 F.3d at 112.
Finally, with regard to the last factor, this matter presents no significant
issue of state law best decided in state court. Plaintiff’s remaining claim is a
simple action alleging the breach of an insurance contract and the
Defendant’s counterclaim is a declaratory judgment action seeking the final
interpretation of the same insurance contract. There is nothing unusual
about the parties before the Court or anything state-centric about the subject
matter of this litigation that would militate in favor of remand.
In his Reply, however, Plaintiff states that, after filing his remand
motion herein, he instituted an action in state court against Defendant’s
agent, Michael Christopher Tolley d/b/a Chris Tolley Agency. [Doc. 24 at 3].
“In the Tolley [sic] action, Plaintiff asserts claims against the defendant Tolley
arising out of the same transactions and course of events at issue in this
case.” [Id.]. Having now sued Mr. Tolley, Plaintiff argues that since Tolley
is a North Carolina resident upon information and belief, this Court cannot
exercise supplemental jurisdiction over the Tolley case without divesting
itself of diversity jurisdiction. 28 U.S.C. § 1367(b). Therefore, according to
Plaintiff, a remand is necessary to consolidate this matter with the Tolley
case in state court. [Doc. 24 at 5-6]. Plaintiff, however, had the opportunity
to “consolidate” any such claims at the outset. It was Plaintiff who chose not
to sue Mr. Tolley at that time.1 For Plaintiff to bring such an action now only
serves to make his procedural contortions appear to be a contrived attempt
to defeat proper jurisdiction in this Court. The Court feels compelled to
exercise its discretion in such manner as to discourage such tactics. The
Court declines to take the bait.
IT IS, THEREFORE, ORDERED that the Plaintiff’s Motion to Remand
[Doc. 21] is DENIED.
IT IS SO ORDERED.
Signed: May 4, 2015
The Court need not opine as to whether Plaintiff’s new state court action against Mr.
Tolley would be subject to a plea in abatement.
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