Bishop v. Liberty Mutual Insurance Company

Filing 10

ORDER granting 5 Motion to Remand to State Court. Clerk's Notice: Attorneys are responsible for supplementing the State Record with all documents filed in Federal Court. Signed by Honorable Patrick Michael Duffy on October 19, 2015.(jmcg, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
George Bishop,
Plaintiff,
v.
Liberty Mutual Insurance Company,
Defendant.

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C.A. No.: 2:15-cv-2076-PMD

ORDER

This matter is before the Court on Plaintiff George Bishop’s Motion to Remand pursuant
to 28 U.S.C. § 1447 (ECF No. 5). For the reasons set forth herein, Plaintiff’s Motion to Remand
is granted.
BACKGROUND
This action arises out of an insurance dispute between Plaintiff and Defendant Liberty
Mutual Insurance Company. Plaintiff alleges that Defendant issued a commercial vehicle policy
covering Plaintiff’s Mack truck, and that Defendant wrongfully denied Plaintiff’s claim for
damage to the frame of his truck.
PROCEDURAL HISTORY
On March 31, 2015, Plaintiff commenced this action in the Charleston County Court of
Common Pleas, alleging breach of contract and bad faith refusal to pay benefits. Defendant filed
a Notice of Removal on May 20, 2015, asserting that this Court has diversity jurisdiction over
the matter. Defendant also filed a Motion to Dismiss that same day. Then, on June 15, 2015,
Plaintiff filed a Motion to Remand and a Motion for Extension of Time to answer Defendant’s
Motion to Dismiss. The Court granted Plaintiff’s Motion for Extension of Time pending its

ruling on Plaintiff’s Motion to Remand. Finally, on July 1, 2015, Defendant filed a Response in
Opposition to Plaintiff’s Motion to Remand. This matter is now ripe for consideration.
STANDARD OF REVIEW
The burden of demonstrating jurisdiction resides with “the party seeking removal.”
Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (citing Mulcahey v. Columbia
Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994)). District courts are obliged to construe
removal jurisdiction strictly because of the “significant federalism concerns” implicated. Id. “If
at any time before final judgment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.”

28 U.S.C. § 1447(c).

Therefore, “[i]f federal

jurisdiction is doubtful, a remand [to state court] is necessary.” Dixon, 369 F.3d at 816; see also
Hartley v. CSX Transp., Inc., 187 F.3d 422, 425 (4th Cir. 1999) (“[C]ourts should ‘resolve all
doubts about the propriety of removal in favor of retained state court jurisdiction.’” (quoting
Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993))).
ANALYSIS
Defendant removed this matter from state court pursuant to 28 U.S.C. §§ 1441 and 1446.
Section 1441 provides that “any civil action brought in a State court of which the district courts
of the United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district and division embracing the
place where such action is pending.” § 1441(a). Defendant avers that removal is proper in this
instance because the district court has original jurisdiction to hear Plaintiff’s case pursuant to 28
U.S.C. § 1332. Under § 1332, federal district courts have original jurisdiction over a case if the
action involves citizens of different states and the amount in controversy exceeds $75,000,
exclusive of interest and costs. § 1332(a). The complete diversity rule of § 1332 requires that

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the citizenship of each plaintiff be different from the citizenship of each defendant. See Athena
Auto., Inc. v. DiGregorio, 166 F.3d 288, 290 (4th Cir. 1999); see also § 1441(b)(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.”).
Additionally, “[t]o invoke the original jurisdiction of a federal court under § 1332, courts
require a corporate party to adequately demonstrate the existence of total diversity in light of its
capacity for multiple residency under § 1332(c).” Barnhill v. Ins. Co. of N. Am., 130 F.R.D. 46,
48 (D.S.C. 1990). “In other words, Rule 8(a) has been applied in this context to require that a
corporate party allege both its state of incorporation and its principal place of business in order to
invoke federal diversity jurisdiction.” Id. (citing Equitable Life Assurance Soc’y v. Alexander
Grant & Co., 627 F. Supp. 1023, 1025–26 (S.D.N.Y. 1985) (diversity jurisdiction inadequately
pled where corporate plaintiff fails to allege its principal place of business)); see also Simmons v.
Rosenberg, 572 F. Supp. 823, 825 (E.D.N.Y. 1983) (diversity jurisdiction must be alleged with
detail and certainty); Jizchak Bier Ltd. v. Wells, Inc., 310 F. Supp. 843, 843 (S.D.N.Y. 1970)
(jurisdictional averment patently insufficient under § 1332(c) where complaint does not contain,
among other things, an allegation of the corporate party’s principal place of business); John
Birch Soc’y v. Nat’l Broad. Co., 377 F.2d 194, 197 (2d Cir. 1967) (“diversity of citizenship must
be apparent from the pleadings”). “Because § 1441(a) provides only for removal of actions ‘of
which the district courts of the United States [would] have original jurisdiction,’ . . . the court is
constrained to apply these fundamental principles to [Defendant’s] attempted removal of this
matter on the basis of diversity jurisdiction.” Barnhill, 130 F.R.D. at 49 (quoting § 1441(a)).
Wright and Miller address the precise posture of this case in their treatise, stating, “a notice of

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removal that fails to contain an allegation of a defendant corporation’s dual citizenship—its state
of incorporation and the state of its principal place of business—is defective when complete
diversity of citizenship is the basis for removal.” 14C Charles Alan Wright, et al., Federal
Practice and Procedure § 3733 (4th ed. 2013).
Here, Defendant has failed to demonstrate the existence of complete diversity in its
Notice of Removal. Defendant, a corporate party, has failed to allege the state or states in which
it is incorporated, as well as the state in which it maintains its principal place of business.
Defendant’s citizenship is briefly mentioned in its Notice of Removal and is also mentioned in
Plaintiff’s complaint. Defendant asserts in its Notice of Removal that the action is “between
citizens of different states” and, “upon information and belief, exceeds the sum or value of
$75,000.00, exclusive of interest and costs.” (Def.’s Notice of Removal, ECF No. 1, at 2.)
Plaintiff’s complaint merely states that “Defendant is a corporation organized and existing under
the laws of a state other than South Carolina, licensed to do business in South Carolina, solicits
business in South Carolina, issue policies in South Carolina, and otherwise conducts business in
South Carolina.” (Pl.’s Compl., ECF No. 1-1, at 1.) Neither statement gives the Court any
guidance as to Defendant’s citizenship.

Thus, Defendant’s failure to allege its state of

incorporation and the state of its principal place of business is fatal to its attempt to remove the
present action. Accordingly, the Court need not address the amount in controversy.

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CONCLUSION
For the foregoing reasons, it is ORDERED that Plaintiff’s Motion to Remand is
GRANTED.
AND IT IS SO ORDERED.

October 19, 2015
Charleston, South Carolina

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