Archila v. Integon National Insurance Company

Filing 11

MEMORANDUM AND ORDER denying 6 Motion for Attorney Fees; denying 6 Motion to Remand to State Court; denying 6 Motion to Strike ; denying 6 Motion to Clarify; and Extending time up to and including 12/11/17 for the filing of a Response to 9 MOTION to Sever And Stay Bad Faith Claim. So Ordered by Chief Judge William E. Smith on 11/21/2017. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
INTEGON NATIONAL INSURANCE COMPANY )
and/or Doe Corporation,
)
)
Defendant.
)
___________________________________)
JULIO H. ARCHILA,

C.A. No. 17-367 WES

MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
Before the Court is Plaintiff Julio H. Archila’s Objection To
Removal, Motion To Remand, and Motion for Attorney Fees (“Motion
To Remand”).

(ECF No. 6.)

This case arises from Plaintiff’s claim

for benefits coverage under an Uninsured Motorist Policy with
Defendant

Integon

National

Insurance

Company

(“Integon”),

following a car accident on or about March 13, 2015, in which
Plaintiff was injured.

(Compl. ¶¶ 7-15, ECF No. 1-2.)

On June

27, 2017, Plaintiff filed his Complaint in Kent County Superior
Court, asserting claims for breach of contract and bad faith.
(Id., Counts I-III.)
August 8, 2017.
Plaintiff

Defendant removed the case to this Court on

(Notice of Removal, ECF No. 1.)
asserts

that

removal

was

improper

because

Defendant’s filing of a notice of removal exceeded the requisite

thirty-day

clock

for

removal

under

28

U.S.C.

§

1446(b).

Alternatively, as a further basis to contest removal and endorse
remand, Plaintiff avers that the amount-in-controversy requirement
for diversity jurisdiction is not met.

Finally, based on his

remand request, Plaintiff seeks attorney’s fees and costs.
arguments fail.

These

After careful consideration of the parties’

submissions, Plaintiff’s Motion To Remand is DENIED for the reasons
outlined below.
The first issue before the Court is one of timing:

the

parties contest the point at which the clock begins to run for
removal purposes under § 1446(b). 1

This case presents a slightly

more convoluted timing question because Defendant is a foreign
insurance company; this means an intermediary agent, the Rhode
Island

Department

(“RIDBR”),

1

received

of

Business

service

Regulation,

of

process

on

Business

Division

Defendant’s

behalf

The removal statute, 28 U.S.C. § 1446(b)(1) provides:

The 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,
or within 30 days after the service of summons upon the
defendant if such initial pleading has then been filed
in court and is not required to be served on the
defendant, whichever period is shorter.
2

pursuant to Rhode Island General Laws § 27-2-13. 2

These facts

raise the more specific inquiry of whether the clock begins to run
upon receipt of service by RIDBR, or alternatively, as Defendant
suggests, when Defendant actually receives notice, forwarded from
RIDBR.
While this case poses an interesting question, it is not a
novel one; indeed, this court considered this precise scenario
including the interplay between the federal removal statute and
Rhode Island General Laws § 27-2-13 in Wilbert v. UNUM Life
Insurance Company, 981 F. Supp. 61 (D.R.I. 1997).

There, the

plaintiffs served process on the Rhode Island State Insurance
Commissioner, the in-state agent designated for service of process
by Rhode Island statute.

Id. at 62.

In turn, the Commissioner

forwarded the service-of-process materials to defendant UNUM Life
Insurance

Company.

arguments

to

those

Id.

After

volleyed

considering

here,

the

court

nearly
held:

identical
“When

a

statutory agent is served, the clock for removal does not begin
ticking as it would if defendant itself had been served but rather
starts when defendant receives actual notice of the service from
the statutory agent.”

2

Id. at 63; see also Gordon v. Hartford Fire

R.I. Gen. Laws § 27-2-13 provides that foreign (out-ofstate) insurance companies conducting business in Rhode Island
must appoint the Rhode Island Insurance Commissioner as their agent
for service of process.
3

Ins. Co., 105 F. App’x 476, 480 (4th Cir. 2004) (joining conclusion
reached by “overwhelming majority of district courts” that in the
context of service upon statutory agents, the time-for-removal
clock does not begin to run until the defendant actually receives
a copy of the complaint); Renaissance Mktg., Inc. v. Monitronics
Int’l, Inc., 606 F. Supp. 2d 201, 206 (D.P.R. 2009) (joining
consistent holding of district courts that “in cases in which
service is made on a statutory agent . . . the thirty-day statutory
period for removal runs from the day the defendant receives notice
of summons and the complaint”); 14C Charles Alan Wright, Arthur R.
Miller & Edward H. Cooper, Fed. Prac. and Proc. Juris. § 3731 (4th
ed.) (“[S]tatutory agents are not true agents but merely a medium
for transmitting the relevant papers.

Accordingly, it now appears

to be settled law that the time for removal begins to run only
when the defendant or someone who is the defendant’s agent-in-fact
receives

the

notice

via

service . . . .”).

This

consistent

holding “makes abundant sense, as the defendant’s right to a
federal forum ought not to depend upon the rapidity and accuracy
with

which

statutory

agents

inform

their

commencement of litigation against them.”

principals

of

the

Cygielman v. Cunard

Line Ltd., 890 F. Supp. 305, 307 (S.D.N.Y. 1995).
Here, Defendants filed a Notice of Removal on August 8, 2017,
which was within thirty days of when Defendant Integon received
4

notice and copies of the summons and complaint from RIDBR on July
11, 2017. 3

Thus, removal was timely.

Next, the Court considers Plaintiff’s argument that removal
was improper for failure to meet the requisite $75,000 amount-incontroversy threshold.

Defendants removed this action based on

diversity of citizenship pursuant to 28 U.S.C. 1332(a).

To be

satisfied that the amount in controversy suffices here, the Court
need look no further than the statute that outlines the procedure
for the removal of civil actions, 28 U.S.C. § 1446.
1446(c)(2) specifies:

Section

“If removal of a civil action is sought on

the basis of the jurisdiction conferred by section 1332(a), the
sum demanded in good faith in the initial pleading shall be deemed
to be the amount in controversy . . . .”

See also Dart Cherokee

Basin Operating Co. v. Owens, 135 S. Ct. 547, 551 (2014) (“If the
plaintiff’s complaint, filed in state court, demands monetary
relief of a stated sum, that sum, if asserted in good faith, is
‘deemed to be the amount in controversy.’” (quoting 28 U.S.C. §
1446(c)(2))); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.
283, 291 (1938) (“[T]he status of the case as disclosed by the

3

Although it is unclear based on exhibits attached to
Defendants’ Notice of Removal whether Integon received copies of
the summons and complaint on July 11 or July 12, Defendants’
removal was timely regardless of which date is used. (ECF No. 11.)
5

plaintiff’s complaint is controlling in the case of a removal . .
.”); CE Design Ltd. v. Am. Economy Ins. Co., 755 F.3d 39, 43 (1st
Cir. 2014) (“A plaintiff’s good faith allegation of damages meeting
the required amount in controversy is usually enough.”).
This case lands in federal court after a unique syntax:
Plaintiff filed a complaint in state court but expressly alleged
an amount in controversy in excess of $75,000.

In such a setting,

where a plaintiff brings his case in state court but alleges
damages in excess of the federal jurisdictional amount, the court
applies

the

“legal

certainty

test,”

i.e.,

the

court

accepts

plaintiff’s damages pronouncement in the complaint unless it is
demonstrated to a legal certainty that the jurisdictional amount
cannot be recovered.

See, e.g., Freeman v. Blue Ridge Paper

Products, Inc., 551 F.3d 405, 409 (6th Cir. 2008) (“In ‘a suit
instituted in a state court and thence removed,’ plaintiffs’ claim
of damages exceeding the federal amount in controversy is presumed
correct unless shown to a legal certainty that the amount is
actually

less

than

the

federal

standard.”

(quoting

St.

Paul

Mercury, 303 U.S. at 290-92)); Sanchez v. Monumental Life Ins.
Co., 102 F.3d 398, 402 (9th Cir. 1996) (extending “legal certainty”
test to cases “brought in the state court in which the plaintiff
has filed any complaint alleging damages in excess of the required
federal jurisdictional minimum”); De Aguilar v. Boeing Co., 47
6

F.3d 1404, 1409 (5th Cir. 1995) (“[T]he legal certainty test ‘is
explicitly

premised

on

the

assumption

that

the

amount

in

controversy is met by the express allegations of the plaintiff’s
complaint and is limited in utility to cases in which the plaintiff
himself

has

placed

the

requisite

jurisdictional

amount

in

controversy by requesting damages in excess of the jurisdictional
amount.’” (quoting Garza v. Bettcher Indus., Inc., 752 F. Supp.
753, 755 (E.D. Mich. 1990))).
Indeed, in this context, “it is proper to presume that the
plaintiff’s prayer is an appropriate presentation of potential
damages because the damages sought are against the plaintiff’s
forum-selection interests.”

Gafford v. Gen. Elec. Co., 997 F.2d

150, 160 (6th Cir. 1993), abrogated on other grounds, Hertz Corp.
v. Friend, 559 U.S. 77 (2010).

“After all, the plaintiff is both

the author and the master of its complaint.”

Connectu LLC v.

Zuckerberg, 522 F.3d 82, 93 (1st Cir. 2008); see also Standard
Fire Ins. Co. v. Knowles, 568 U.S. 588, 595 (2013) (“[F]ederal
courts permit individual plaintiffs, who are the masters of their
complaints, to avoid removal to federal court, and to obtain a
remand to state court, by stipulating to amounts at issue that
fall below the federal jurisdictional requirement.”); St. Paul
Mercury, 303 U.S. at 294 (“If [a plaintiff] does not desire to try
his case in the federal court he may resort to the expedient of
7

suing for less than the jurisdictional amount, and though he would
be justly entitled to more, the defendant cannot remove.”).
Here, in its complaint filed in state court, Plaintiff set
forth, “[t]he amount of Plaintiff’s damages will be established at
the time of trial, but are estimated to be over $100,000.00
Dollars.”
motion,

(ECF No. 1-2.)
Plaintiff

Although now, for purposes of this

backtracks

and

suggests

the

amount

in

controversy is not satisfied, 4 he has failed to demonstrate “to a
legal

certainty

jurisdictional

that

the

amount.”

(emphasis added).

claim
St.

is

Paul

really
Mercury,

for

less

303

than

U.S.

at

the
289

Thus, Plaintiff’s express declaration in his

Complaint that the amount in controversy exceeds $100,000 is
presumed correct.

Accordingly, remand is not appropriate in this

instance.

4

To argue that the amount-in-controversy requirement has not
been satisfied, Plaintiff cites, for example, evidence of
settlement offers for less than $75,000 prior to his initiation of
this suit.
However, “[w]hile a settlement demand is relevant
evidence of the amount in controversy, it is not dispositive.”
Hogan v. Wal-Mart Stores East, L.P., No. 13-603 S, 2014 WL 66658,
at *4 (D.R.I. Jan. 8, 2014).
In any event, the standard for
measuring the amount in controversy is not one of guaranteed
recovery; it is instead measured by “the damages that the plaintiff
might recover, assuming that the allegations in the complaint are
true.” Id. (emphasis added). Indeed, because Plaintiff alleged
damages in excess of $75,000 in his Complaint, Defendant need not
show to a legal certainty that Plaintiff can recover more than the
requisite amount; instead, Plaintiff must demonstrate to a legal
certainty that he cannot. With this in mind, Plaintiff’s post hoc
declarations cannot carry the day.
8

As a necessary consequence, attorney’s fees are not warranted
at this juncture.

See Martin v. Franklin Capital Corp., 546 U.S.

132, 141 (2005) (“[T]he standard for awarding fees should turn on
the reasonableness of the removal. . . . [W]hen an objectively
reasonable basis [for removal] exists, fees should be denied.”).
Therefore, Plaintiff’s Motion To Remand is hereby DENIED.
IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: November 21, 2017

9