Boyd v. State Farm Fire and Casualty Company et al
Filing
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ORDER granting 7 Motion to Remand; denying 15 Motion for Discovery. Signed by Honorable Timothy D. DeGiusti on 8/4/2015. (mb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
BARBARA BOYD,
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Plaintiff,
v.
STATE FARM FIRE AND CASUALTY
COMPANY and ART BAIRD,
Defendants.
Case No. CIV-14-1098-D
(District Court of Oklahoma County,
Oklahoma, Case No. CJ-2013-5581)
ORDER
Before the Court is Plaintiff’s Motion to Remand [Doc. No. 7]. Defendant State Farm Fire
and Casualty (State Farm) has not responded to the motion but instead filed a Motion to Conduct
Jurisdictional Discovery and for Stay of Ruling on Plaintiff’s Motion to Remand [Doc. No. 15].1
These matters are fully briefed and ready for decision.2
I.
Case Background and Procedural History
This action arises out of a May 20, 2013 tornado near Moore, Oklahoma . Plaintiff suffered
damage to her home and property as a result of the tornado. A homeowners policy issued by State
Farm insured the property. Defendant Art Baird (Baird) is the agent who sold the insurance policy
to Plaintiffs.
On October 9, 2013, Plaintiff commenced this action in the District Court of Oklahoma
County, State of Oklahoma against Defendants. The Petition alleges six causes of action. The first
1
In State Farm’s Motion to Conduct Jurisdictional Discovery, State Farm addresses the
timeliness of removal and the issue of fraudulent joinder. Accordingly, the Court, in its discretion,
declines to deem Plaintiff’s Motion to Remand confessed due to State Farm’s failure to file a
response. See LCvR 7.1(g).
2
Plaintiff has also submitted Notices of Supplemental Authority [Doc. Nos. 26-28].
two causes of action are brought against State Farm and include breach of contract and bad faith.
The remaining four causes of action are brought against both State Farm and Baird and include
negligence in the procurement of insurance, constructive fraud and negligent misrepresentation,
negligence and breach of fiduciary duty. See Petition [Doc. No. 1-1].
The state court litigation proceeded for approximately one year before State Farm filed its
Notice of Removal [Doc. No. 1] on October 7, 2014.3 State Farm removed the action on grounds
of diversity jurisdiction claiming that Baird, a non-diverse defendant, has been fraudulently joined.
II.
Discussion
The procedures for removal are set forth in 28 U.S.C. § 1446 and include specific
requirements where removal is based on diversity of citizenship. As pertinent to the issues presented
here, section 1446(b)(3) provides that “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.” Id. § 1446(b)(3).
A.
Timeliness of Removal
In its Notice of Removal [Doc. No. 1], State Farm asserts the action is timely removed
utilizing the date of September 11, 2014. See id., ¶ 35 (“State Farm is filing this Notice of Removal
within thirty days of its receipt of Plaintiff’s September 11, 2014 correspondence and her failure to
3
Multiple actions filed in state court alleging similar claims against State Farm and its agents
were simultaneously proceeding in Cleveland County District Court. The state court consolidated
a number of these actions for discovery purposes. The present action appears to be the only action
filed in the District Court of Oklahoma County and discovery issues, therefore, were addressed
independently of the rulings made in the Cleveland County District Court consolidated proceedings.
The Court makes note of this fact because the parties reference aspects of discovery matters at issue
in the Cleveland County proceedings.
2
appear for her deposition.”). Pursuant to the September 11, 2014 correspondence, Plaintiff’s counsel
agreed that Plaintiff could be deposed on October 1, 2014. See correspondence [Doc. No. 1-23]. The
correspondence was precipitated by the state district court directing the parties to schedule Plaintiff’s
deposition prior to the expiration of the one-year removal period on October 9, 2014. See Transcript
of Proceedings [Doc. No. 1-22] at p. 5; see also 28 U.S.C. § 1446(c) (providing that a case founded
on diversity jurisdiction may not be removed under § 1446(b)(3) more than 1 year after
commencement of the action).
The parties now vigorously dispute whether Plaintiff appeared for her deposition as
scheduled on October 1, 2014. But there is no dispute that Plaintiff was never deposed. According
to State Farm, Plaintiff’s continued failure to appear for her deposition, in conjunction with
“concessions” made by Plaintiff’s counsel before the state court, establish that Baird has been
fraudulently joined. See Notice, ¶ 36. The question before this Court, therefore, is whether the
September 11, 2014 letter is sufficient to trigger removability. The Court finds it is not and,
therefore, that remand is required.
Under § 1446(b)(3), an “other paper” must provide clear and unequivocal notice of the right
to remove and should not be ambiguous. Akin v. Ashland Chemical Co., 156 F.3d 1030, 1035-36
(10th Cir. 1998). The correspondence provides no information regarding the viability of Plaintiff’s
claims against Baird. Moreover, even if Plaintiff failed to appear for her deposition, nothing about
her failure to appear establishes the absence of any viable claim against Baird so as to support
fraudulent joinder. The Court finds, therefore, that removability of this action was not triggered by
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the events relied upon by State Farm.4 Accordingly, State Farm’s removal was improper and
untimely under the provisions of 28 U.S.C. § 1446(b)(3).
B.
State Farm’s Request for Jurisdictional Discovery
The Court turns to State Farm’s request to conduct jurisdictional discovery. Whether to grant
the request is a matter within the Court’s discretion. See, e.g., McPhail v. Deere & Co., 529 F.3d
947, 954 (10th Cir. 2008). The Court finds adequate grounds for conducting such discovery have
not been presented. State Farm casts blame on Plaintiff for the inability to depose her prior to the
expiration of the one-year period.5 However, the Court finds the record supports fault on the part
of both parties regarding her deposition.6 Moreover, State Farm fails to demonstrate that it utilized
other available methods to obtain the information necessary to ascertain the viability of Plaintiff’s
claims against Baird while the case was still pending in state court and during the requisite one-year
4
The Court rejects State Farm’s argument that removal is nonetheless proper because
Plaintiff waived any defects in State Farm’s compliance with the removal procedures set forth in 28
U.S.C. § 1446(b). See State Farm’s Memorandum [Doc. No. 16] at p. 16. State Farm fails to cite
authority properly supporting its argument and has not demonstrated any unequivocal conduct by
Plaintiffs that would support a waiver.
5
State Farm does not invoke 28 U.S.C. § 1446(c) as a basis for deeming removal of the action
timely. That provision requires a finding that “the plaintiff has acted in bad faith in order to prevent
a defendant from removing the action.” Id. Even had State Farm relied upon § 1446(c), on the
present record, the Court does not find a sufficient showing of any bad faith.
6
The parties do not dispute that Plaintiff’s deposition was to commence at 9:00 a.m. on
October 1, 2015, that Plaintiff notified her counsel she was ill that morning, and that by agreement
of the parties, the deposition would commence instead at 11:00 a.m. State Farm’s counsel states that
when Plaintiff did not present in the conference room at 11:00 a.m., he made a record of her nonappearance at 11:01 a.m. and left 3-4 minutes later. See Transcript of Record [Doc. No. 1-25]; See
also Transcript of Proceedings [Doc. No. 7-6] at pp. 4-5. Plaintiff, however, was present at the office
of her counsel where the depositions were to take place and a record was made of that fact at 11:08
a.m. See Videotaped Transcript of Record [Doc. No. 7-3] at p. 3. It is unclear why Defendant’s
counsel left in such a hurry. Both parties appear to be engaging in significant gamesmanship.
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period.
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Instead, State Farm focuses almost exclusively on its inability to secure Plaintiff’s
deposition – and in particular, on the events of October 1, 2014. See, e.g.,, State Farm’s
Memorandum [Doc. No. 16] at p. 16 (“[T]he event that triggered the right to removal here was
Plaintiff’s orchestrated non-appearance at her deposition.”). State Farm now impermissibly seeks
to conduct jurisdictional discovery to support a Notice of Removal that has already been filed.
Defendant should have conducted the necessary investigation in state court.8
C.
Plaintiff’s Request for Attorney’s Fees and Costs
As a final matter, Plaintiffs request an award of attorney’s fees and costs as a result of State
Farm’s improper removal pursuant to 28 U.S.C. § 1447(c). Plaintiffs’s request is denied. Although
the Court has determined remand is proper, the Court finds State Farm had an objectively reasonable
basis upon which to remove this action. See Martin v. Franklin Capital Corp., 546 U.S. 132, 141
(2005). Therefore, an award of attorney’s fees and costs is not warranted.
7
State Farm concedes that from the time the action commenced, the viability of claims
against Baird constituted grounds for pursuing the issue of fraudulent joinder and, necessarily,
therefore, removability. See, e.g., Notice of Removal, ¶¶ 13, 16. As State Farm contends, the
petition itself was “indeterminate” as to these issues. See also State Farm’s Memorandum [Doc. No.
16] at p. 1 (“State Farm has believed from the outset that there is no factual basis for Plaintiff’s
purported claims against Baird, who was retired in 2013, and that he was fraudulently joined as a
defendant in this action in order to defeat diversity jurisdiction.”).
8
The Court is aware of its decision in a related case, Misner v. State Farm Fire & Cas. Co.,
No. CIV-14-873-D, 2014 WL 6879094 (W.D. Okla. Dec. 4, 2014), in which the Court permitted
limited jurisdictional discovery on the issue of fraudulent joinder. Contrary to this case, there – prior
to removal – the state district court set a deadline to complete depositions of the plaintiffs after the
one-year deadline of § 1446(c)(1). The court did so based on the belief, albeit erroneous, that State
Farm could remove based on the existing record and then ask to supplement its filing after
depositions were taken. In Misner, after this Court permitted discovery, the matter was remanded
as the Court determined State Farm failed to carry its heavy burden of establishing fraudulent
joinder. See id. Order [Doc. No. 38] (Feb. 24, 2015).
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IT IS THEREFORE ORDERED that Plaintiff’s Motion to Remand [Doc. No. 7] is
GRANTED.
IT IS FURTHER ORDERED that State Farm’s Motion to Conduct Jurisdictional Discovery
and for Stay of Ruling on Plaintiffs’ Motion to Remand [Doc. No. 15] is DENIED.
IT IS FURTHER ORDERED that this matter is REMANDED to the District Court of
Oklahoma County, State of Oklahoma.
IT IS SO ORDERED this 4th day of August, 2015.
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