ENCOMPASS INSURANCE COMPANY v. STONE MANSION RESTAURANT, INCORPORATED

Filing 12

MEMORANDUM ORDER denying 3 Motion to Remand. Signed by Judge Arthur J. Schwab on 2/9/2017. (lmt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
ENCOMPASS INSURANCE COMPANY,
Plaintiff,

17cv0125
ELECTRONICALLY FILED

v.
STONE MANSION RESTAURANT,
INCORPORATED,
Defendant.

MEMORANDUM ORDER
Before the Court is Plaintiff’s Motion to Remand. Doc. no. 3. Plaintiff filed an
accompanying brief (doc. no. 4) and Defendant filed a Response in Opposition to the Motion to
Remand (doc. no. 9) to which Plaintiff filed a Reply. Doc. no. 11. The matter is now ripe for
adjudication. Plaintiff’s Motion to Remand (doc. no. 4) will be denied for the reasons set forth in
greater detail.
I.

Standard of Review

By statute, a defendant has the right to remove a civil action from state court if the case
could have been brought originally in federal court. 28 U.S.C. § 1441(a); see also, In re
Briscoe, 448 F.3d 201, 215 (3d Cir. 2006). For a removal predicated upon diversity of
citizenship, a proper exercise of federal jurisdiction requires satisfaction of the amount in
controversy requirement as well as complete diversity between the parties, that is, every plaintiff
must be of diverse state citizenship from every defendant. Id., citing Grand Union Supermarkets
of the Virgin Islands, Inc. v. H.E. Lockhart Mgmt., Inc., 316 F.3d 408, 410 (3d Cir. 2003).

II.

Background

This case is essentially a subrogation matter. Plaintiff is an insurance carrier which paid
$600,000.00 on a personal injury claim. Plaintiff’s insured was the cause of one-car motor
vehicle accident which left the insured dead and the passenger injured. After paying
$600,000.00 to the injured party, Plaintiff attempted to recover some of the $600,000.00 from
Defendant claiming that Defendant was responsible for the cause of the accident.
Prior to filing a lawsuit in the Court of Common Pleas of Allegheny County in the
Commonwealth of Pennsylvania, Plaintiff, through his counsel attempted to resolve this
subrogation matter amicably – meaning without filing a lawsuit. Defendant’s counsel and
Plaintiff’s counsel communicated via email, before and after Plaintiff’s Complaint was filed in
state court. See doc. no. 1-2 (Complaint filed in the Court of Common Pleas of Allegheny
County) and doc. nos. 4-1 through 4-8 (email correspondence between now opposing counsel).
The majority of the correspondence between the two attorneys after the Complaint was filed in
state court primarily concerned service of process. See doc. nos. 4-3 to 4-8.
It is indisputable from the email correspondence that counsel for Defendant agreed to
accept service of the Complaint on behalf of his client, and even agreed to do so via electronic
proof of filing. After agreeing to accept service but prior to actually doing so, counsel for
Defendant notified counsel for Plaintiff that he would be removing this matter to Federal Court
in the Western District of Pennsylvania, and only after doing so, would he accept service. Doc.
no. 4-8

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Stated another way, despite the promises and assurances Defendant’s counsel gave to
Plaintiff’s counsel indicating that he would accept service of the state court Complaint,
Defendant’s counsel did not do so until after he removed the case to this Court.1
III.

Discussion

Defendant filed its Notice of Removal (doc. no. 1) and alleged that this Court had
jurisdiction over this matter based upon diversity. This Court has original jurisdiction over
matters when the matter in controversy exceeds the sum or value of $75,000.00, exclusive of
interest and costs, and is between citizens of different States. 28 U.S.C. § 1332 (a)(1).
There is no dispute between the parties that this matter concerns an amount in
controversy in excess of $75,000.00, and that Plaintiff and Defendant are citizens of different
states. The only issue before the Court concerns Defendant’s counsel’s written agreement to
accept electronic service of the Complaint on his client’s behalf, followed by Defendant’s
counsel’s written notice that service would not be accepted until after the case was removed to
Federal Court.
Plaintiff argues that the “forum defendant rule” prevents the removal of this particular
matter to Federal Court because Defendant is a citizen of Pennsylvania, and Pennsylvania was
the state forum where the original lawsuit was filed. Defendant disagrees with this argument.
The removal of a civil action from state to Federal Court is governed by 28 U.S.C.
§ 1441, which reads in pertinent part, “(b) Removal based on diversity of citizenship. . . . (2) A
civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of
this title may not be removed if any of the parties in interest properly joined and served as
defendants is a citizen of the State in which such action is brought.” As noted above, despite his
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The Court highlights this fact, because not accepting service prior to removal is germane to the Court’s
determination on the removal issue. However, the Court also notes that it does not condone this conduct
between and among legal practitioners here, in the Western District of Pennsylvania.

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promise, Defendant’s counsel did not accept service of Plaintiff’s Complaint until after he filed a
Notice of Removal. Thus, the “forum defendant rule” as set forth in 28 U.S.C. § 1441(b) is
inapplicable here.
IV.

Conclusion

The Motion to Remand will be denied because Defendant had not accepted service prior
to filing a Notice of Removal. Thus, 28 U.S.C. § 1441(b) will not preclude the removal of this
action to this Court.

ORDER OF COURT
AND NOW, this 9th day of February, 2017, the Court hereby DENIES Plaintiff’s Motion
to Remand (doc. no. 3).
s/ Arthur J. Schwab
Arthur J. Schwab
United States District Judge
cc:

All ECF counsel of record

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