Hawke v. State Farm Fire & Casualty Company et al

Filing 23

ORDER granting 8 Plaintiff's Motion to Remand; denying 15 Defendant State Farm Fire and Casualty Companys Alternative Motion to Conduct Jurisdictional Discovery and for Stay of Ruling on Plaintiffs Motion to Remand; copy of order mailed to Cleveland Co. Courthouse. Signed by Honorable Robin J. Cauthron on 11/24/14. (lg)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
CHERLYN HAWKE,
Plaintiff,
vs.
STATE FARM FIRE AND CASUALTY
COMPANY and ED DATER,
Defendants.

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Case Number CIV-14-1032-C

MEMORANDUM OPINION AND ORDER
Plaintiff’s home was insured by Defendant State Farm. Plaintiff had purchased her
insurance policy through Defendant Dater, an agent for Defendant State Farm. On May 20,
2013, Plaintiff’s home was damaged by a tornado. Plaintiff sought coverage for the damage
from Defendant State Farm. Unable to agree on the amount of compensation to which she
was entitled, Plaintiff filed this action against Defendant State Farm, asserting claims for
breach of contract and bad faith. Plaintiff also named Dater, asserting claims for negligence
in procurement of the policy and misrepresentation. Plaintiff’s action was filed in the District
Court of Cleveland County, Oklahoma, on September 30, 2013. On September 22, 2014,
Defendant State Farm removed the action to this Court, asserting diversity of citizenship as
its basis for jurisdiction. Plaintiff now seeks remand, arguing that Defendant State Farm’s
removal was untimely.

The timeliness of Defendant’s Notice of Removal is governed by 28 U.S.C. § 1446(b).
In pertinent part, subparagraph one of that statute states: “[t]he 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, . . .” Here, Defendant argues this time limit is
inapplicable as removeability could not be determined on the face of Plaintiff’s Petition.
To understand Defendant’s argument some consideration of the parties’ positions is
necessary. As noted above, Plaintiff has made claims against the agent who sold her
insurance policy. That agent, Defendant Dater, is a citizen of Oklahoma. Thus, if he remains
a party the Court lacks subject matter jurisdiction as complete diversity is lacking. For its
part, Defendant State Farm argues that Defendant Dater has been fraudulently joined and
therefore should be disregarded for purposes of determining diversity. “‘To establish
[fraudulent] joinder, the removing party must demonstrate either: (1) actual fraud in the
pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action
against the non-diverse party in state court.’” Dutcher v. Matheson, 733 F.3d 980, 988 (10th
Cir. 2013) (quoting Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir.
2011)).
Plaintiff’s claims against Defendant Dater were set forth in her Petition. Defendant
State Farm argues that Plaintiff agrees that the propriety of removal could not be determined
on the face of the Petition and therefore some other document was required. However,
Defendant misstates Plaintiff’s position. Plaintiff’s position regarding the Petition is not an
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admission that it was so ambiguous that whether Defendant Dater was fraudulently joined
could not be ascertained on its face. Rather, when Plaintiff agrees the case was not
removeable on the face of the Petition, Plaintiff restates her belief that she has a valid and
prosecutable claim against Defendant Dater. Thus, whether or not the Petition was sufficient
to provide Defendant with a basis for removal remains an open question.
Assuming for the sake of argument that Defendant is correct and the Petition was
insufficient, consideration of the applicability of subparagraph (3) of § 1446(b) is the next
step. That portion of the statute states:
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.
According to Defendant, the “other paper’ that finally confirmed the case was removeable
was Plaintiff’s September 15, 2014, Motion to Quash. Defendant State Farm argues that
when Plaintiff sent its Motion to Quash Plaintiff’s deposition, it became apparent that
Plaintiff agreed that her deposition would clarify she had no valid claim against Defendant
Dater. Thus, Defendant State Farm argues, the Motion to Quash provided its first notice that
the matter was removable.

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Defendant State Farm’s leap in analysis is simply too great. There are numerous valid
reasons for Plaintiff to seek to quash her deposition that have nothing to do with the validity
of her claims against Defendant Dater. The most obvious is that stated by Plaintiff, that her
counsel’s schedule did not permit the deposition on the date set by Defendant State Farm.
The Court finds the Motion to Quash does not qualify as an “other paper” as contemplated
by § 1446(b)(3). Accordingly, Defendant may not rely on that document to demonstrate
timely removal. Assuming, without deciding, that the propriety of removal was not apparent
on the face of the Petition, Defendant has failed to demonstrate the existence of any other
paper or other knowledge that would trigger its right to remove. Consequently, the Court
finds removal was improper and remand is required.
Defendant State Farm requests leave for additional discovery in the event the Court
is unable to determine whether Defendant Dater was fraudulently joined. Because the Court
has determined Defendant State Farm’s removal was untimely, any issue related to
Defendant Dater is immaterial. Therefore, Defendant State Farm’s Motion will be denied.
Plaintiff requests fees in the event the Court grants its Motion to Remand. The
Supreme Court has held that “courts may award attorney’s fees under § 1447(c) only where
the removing party lacked an objectively reasonable basis for seeking removal.” Martin v.
Franklin Capital Corp., 546 U.S. 132, 141 (2005). It cannot be said that Defendant lacked
an objectively reasonable basis for its removal. Accordingly, Plaintiff’s request for fees will
be denied.

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For the reasons set forth herein, Plaintiff’s Motion to Remand (Dkt. No. 8) is
GRANTED. Defendant State Farm Fire and Casualty Company’s Alternative Motion to
Conduct Jurisdictional Discovery and for Stay of Ruling on Plaintiff’s Motion to Remand
(Dkt. No. 15) is DENIED. The Clerk of Court shall take the necessary steps to remand this
matter to the District Court of Cleveland County, Oklahoma.
IT IS SO ORDERED this 24th day of November, 2014.

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