Tabenaculo De Vida v. Nautilus Insurance Company et al

Filing 7

MEMORANDUM OPINION AND ORDER granting 4 Opposed MOTION to Remand. Case remanded to the 280th Judicial District Court of Harris County, Texas(Signed by Judge Sim Lake) Parties notified.(hcarr, )

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IN THE UN ITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HO USTON DIVISION TABENA CULO DE VIDA , P la int iffs , C IV IL ACTION N AUT ILU S INSURANCE COMPANY and THAD LAMAR ATKINS, H - 10-1078 De fe ndan ts . M EM OQ AHDUM OPINION AND ORDER OF REMANR on Febru ary 27 , 2009, in the 280th Judicial District Court of Harris County, Texas ( ivil Action No. 2009-12283), against defendants, C Nautilus Insurance Company ( autilus) and N Thad Lamar Atkins ( tkins), for breach of contract, breach of the duty of good faith A and fair dealing, violations of the Texas Insurance Code, and violations the Texas Deceptive Trade Practices Actx April 1, 2010, Nautilus filed Defendant's Notice of Removal ( ocket D Entr y No . Pending before court Plaintiff's Opposed Motion Tabenaculo De Vida v. Nautilus Insurance Company et al Rem and ( ocket Entry D Doc. 7 which Nautilus has not respon ded . For the reasons stated below , the court con clu de s that thi s action shou ld be remanded to state lsee Plaintiffs' Original Petition attached to Defendants' N otice of Removal, Docket Entry No . 1. Standard of Review UA party may rem ov e an action from state court to federal court if the action is one over which the federal court possesses subject matter jurisdiction .' ManGuno v. Prudential Propertv & ' Casualtv Insurance Cow 2002) ( iting c 28 1441( )). 'The jurisdictional facts that support a ' removal must be judged at the time of the removal.' Gebbia v. Wa1' Mart Stores, Incw 233 F.3d 880, 883 ( th Cir. 2000). 5 nThe party seeking assert federal jurisdiction, in this case E autilus), N has the burden of proving by a preponderance of the evidence that subject matter jurisdiction exists.' New Orleans & Gulf Coast ' Railwav Co. v. Barrois, nBe cause removal raises F.3d 321, 327 ( th Cir. 2008). 5 concerns, the significant federalism remov al statute p rop riet y strictly construed Aand any doubt as favor removal should be resolved remand .'' ' Gutierrez v. Flores, 543 F.3d 248, 251 ( th Cir. 2008) ( uoting 1n 5 q re Hot-Hed, Inc w pe riods during which F. d 3 removal permitted 2007)). are The time forth 1446 ( ). b The removal statutes be construed strict ly against removal and for remand because removal udeprives a state court of case properly before and thereby implicates 128 imp ortan t federalism concerns.' ' Frank v . Bear Stears & co w F.3d 919, 1997). See also Butler v. Polk, 592 F.2d 1293, 1296 ( th Cir. 1979) ( E lmbiguities are generally construed 5 nA against removal./). / - 2- II. Analvsis A. Ap p licab le Law A defendant has the right rem ove an action from state federal court when federal subject-matter jurisdiction exists and the removal p roced ure has been properly followed . See 28 5 1441. Nautilus invokes ' E qny civil action 'a court's diversity jurisdiction over founded on a claim or right arising under laws the United States.' ' the Constitution , treaties U.S . . 5 1446( ) C a A federal court has subject-matter jurisdiction b ased on diversity of citizenship nwhere the matter in controversy exceeds the sum cost s , and value $75,000, exclusive c iti zen s interest and 28 b etween d iffe ren t States.' ' U .S.C . 1332 ( ). a The time for rem ovin g civil cases is governed by 28 5 1446( ) which provides: b The notice of removal of a civil action or proceeding sha ll be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief up on which such action or proceeding is based , or within thi rty days after the service of summons upon the de fe ndan t if such initial pleading has then been filed in cou rt and is not required to be served on the defendant, w hi ch eve r p eriod is shorter . I f the case stated by the initial pleading is not rem ovab le , a notice of removal may be filed within thirty day s after receipt by the defendant, through service or oth erw ise , of a copy of an amended pleading, motion, ord er or other paper from which it may first be a sc erta in ed that the case is one which is or has become rem ovab le , except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this t it le more than 1 year after commencement of the action . The first paragraph action s removab le . 1446( )) applies only b civil wh ich ca se stated th e initial pleading secon d p aragrap h applies only ca se that civ il actions n ot removable .' ' w hich the initial pleading states N ew York Insurance Co . v . Deshotel, F .3d 1998). Under the second paragraph, an initially nonremovable case m ust be removed within thirty days nafter receipt by the defendant cop y of an amended p le ading , motion , order p ape r from which may first be ascertained that the case other one which is or has become removable.' 28 U.S. . 5 1446( ). Removal ' C b unde r this paragraph is further limited by the one-year limit on remov al of diversity cases . Failure to remove within the one-year time limit of 5 1446 ( ) b ex cep tion applies . a ground for remand unless an equitable The equitab le exception requ ires a finding that the nplaintiff ha s attempted manipulate the statutory rules for determining federal removal jurisdiction, thereby preventing the defendant from exe rci sin g its rights .' Tedford v . Warner-Lambert Co ., ' F .3d 42 8-2 9 d ete rm ine cir. 2003). Courts examine the parties' conduct nwhether 42 6 . equ itab le str ic tly apply the on e-yea r limit .' Id . ' equ itab le exception, In determining wh eth er to apply an court must balance the exception with the general rule that removal jurisdiction is to be construed strictly b ecau se removal ndeprives a state court of case properly before - 4- and thereby implicates important federalism concerns .' Frank, ' 128 F .3d at 922 . B. Arguments of the Parties N ot ice of Remand, Nautilus states ( lefendant Nautilus Insurance Company was served with d the suit on March 9, 2009. Although this case was not rem ovab le when originally filed , it became removable on M a rch 19, 2010, because Defendant, Thad Lamar Atkins p rovid ed Nautilus Insurance Company with an affidavit a ttest in g he has been a citizen of Indiana since 2005 . See Exhibit A . The undersigned counsel was not m ade awa re that Thad Lamar Atkins was not a citizen of Texas un til March 11, 2010 . See Exhib it B . Nautilus Insurance Comp an y files this notice of removal within 30 days after re ceiv in g the affidavit and its counsel becoming aware tha t Thad Lamar Atkins was not a citizen of Texas . A lthou gh Nautilus Insurance Company did not file this no tice of removal within one year of commencement of the su it , Nautilus Insurance Company is entitled to an equ itab le extension because plaintiff manipulated the rules for determining federal removal jurisdiction. P laint iff purposefully plead Thad Lamar Atkins was a re siden t and citizen of Texas. See Exhib it 'C ' . Thad '' L am a r Atkins has been a resident and citizen of Indiana sin ce 2005. See Exhibit nA ' . Plaintiff knew or should ' h av e known that Thad Lamar Atkins was not a citizen of Texas. This constitutes fraudulent joinder. z a ffidav it Thad Lamar Atkins states : M y name is Thad Lamar Atkins. I am over the age of 18 y ear s of age . I am of sound mind and in a11 respects com pe tent to make this Affidavit . I have been a citizen o f Indiana since 2005 . I currently reside at 656 Cielo V ista Drive , Greenwood , Indiana, 46143 . I worked in Texas as an independent adjuster for a brief time in 2008, adjusting claims resulting from Hurricane Ike.3 z ot ice of Removal, Docket Entry N pp . 3 f fid av it of Th ad Lamar Atkins, Exhibit A A De fend ant 's Notice o f Removal, Docket Entry No . 1. attached Nautilus contends that ( lemoval is proper because Plaintiff joined Thad Lamar r Atkins solely to defeat diversity jurisdiction . There is out right fraud in the Plaintiff's pleading of jurisdictional facts. In removal cases, under the doctrine of nfraudulent joinder,' the court can disregard ' a non-diverse or local defendant when the plaintiff has fraudulently pleaded jurisdictional facts to add the nondiv erse or local defendant .4 Plaint iff argues that n g qo equitable exception exempts Nautilus from the one n yea r limitation because Plaintiff's pleadings are based on the fact that Defendant, Atkins, listed Texas as h is sta te of residence with the Texas Department of Insurance and Defendant Nautilus knew or should have known the st ate of residence of Defendant Atkins at the time the suit was filed. The removal based upon subject matter jurisdiction is therefore not timely and this case should be remandedx Plaint iff explains that E l is action was commenced on February 27, 2009. th At th at time , Plaintiff filed suit against Nautilus In su rance Company and Thad Lamar Atkins . Defendant, Thad L am a r Atkins was named as a Defendant who was a resident o f Harris County, Texas and who could be served with p roce ss by certified mail, return receipt requested at 1260 0 Mistletoe Trailr Manchaca , Texas 78651 . Thad Lamar Atkins was an active licensed a11 lines adjuster in the State of Texas. Mr. Atkins' Texas adjusters license was in effect from September 15, 2005 until September 15, 2 00 9 . Mr . Atkins listed his address with the Texas Dep a rtm ent of Insurance as 12600 Mistletoe Trail, M anch aca , Texas 78651. Nautilus utilized Mr . Atkins as a claims representative, adjuster and estimator for the Pla in ti ff 's Hurricane Ike c1aim .6 4 o tice of Removal, Docket Entry No . N at p . % 5. s laint iff 's Opposed Motion to Remand , Docket Entry No . p p . 2. 6Id . at 1-2 . p lain ti ff submits an 'ag ent profile' ' ' p rinte d from the Texas Department of Insurance web site on February 2009, showing Thad Lamar Atkins as add re ss licensed adjuster whose 12600 Mistletoe Trail, Manchaca, Texas 78651.7 C. Application of the Law to the Party 's Arguments N aut ilus acknowledges that on the face of plaintiff's original state-court petition, the case was not removable under 5 1441( ). b N aut ilu s argues that the case became removable in March when Atkins provided 2010 an affidavit stating that he has been c it izen Indiana since 2005, and that resides Indiana . Pursuant to 28 5 1446( ), when an action is not initially b receives copy rem ovab le , the defendant has 30 days after 'oth er paper from which it may first be ascertained that the case ' is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 o f this title more than The Fifth Circuit ye ar after commencement of the action .' ' stated that the 'o the r paper' requires ' ' S .W .S . Erectors, Inc . v . Infax , Inc w F .3d 489, 494 ( th Cir. 1996) ( iting Gaitor v. Peninsular 5 c S .S . Co ., F .2d & Occidental 1961) ( p eci fical ly noting that an initially n on- rem ov ab le case ncannot s be converted into a V xh ib it A attached E Docket Entry No . 4 . Plaintiff's Opp o sed Motion R emand , M oreov er , Fi fth Circuit has held de fe ndan t 's subjective knowledge cannot convert a case into a removable action. Id . ( iting Chapman v. Powermatic, Incw c 1992), cert. denied, F. d 160, 2 Because the 1402 ( 993)) 1 A tkin s affidavit on which Nautilus relied to remove this action is an affidavit created by defendant based on the defendant's subjective knowledge, the court concludes that it is not an nother paper' under 5 1446( ) capable of converting this initially non' b remov ab le action into A tkin s ' affidavit removable action . Moreover, even if the an nother paper' for purposes ' 5 1446( ), b act ion would still b e removable because an action cannot be removed on the basis of diversity jurisdiction more than one year after the action is commenced . N aut ilu s acknowledges that m ore than one year after U.S. . C 1446( ). b notice of removal was filed state court action was filed . Naut ilus contends that it is entitled e qui tab le extension of 5 1446's one-year limit because plaintiff manipulated the rules for determining federal removal jurisdiction by pleading that Atkins was c iti zen Texas when plaintiff knew or should have known that Atkins was a citizen Indianax An equitable exception may manipulate the statutory b e valid if the plaintiff uattempted rules for determining federal removal jurisdiction, thereby 8. Jd preventing E autilusl from exercising N F .3d at 428 . right s .' ' Tedford , Ted ford two p la int iffs filed suit against a pharmaceutical comp an y and named single nondiverse defendant , treating p hys ician . Id . 424. The claim against the treating physician di scove ry , the was not cognizable under Texas law . Id . at 427. p harm aceu tica l company learned that the doctor treated only one of th e patients. Id . at 424-25. The trial court severed the p lain tif fs ' claims and transferred on e plaintiff's case an oth er count y . case , Id . at 425 . Prior to the entry p lain ti ff had been informed th e order severing the th e pharmaceutical m anu factu rer 's intent to remove; th ree hours after that notice, the p la in tif f amended her petition to name h er treating physician as non-d iver se defendant . Id . The ph a rm aceu tica l company removed asserting that b0th treating physicians were fraudulently joined. Id . Id . The district court granted the p lain tif f's motion After the case was remanded state court, one notice reman d . the p la in tif fs signed and postdated n on su it against the trea ting physician before the one-year anniversary of the filing of the suit but did of the not inform the defendant until after the exp iration one-year period . Id . The pharmaceutical de fend ant again removed . Id . The district court held that removal was p rop er sp ite of the one-year deadline . held that t ime limit Fi fth Circuit removal a ffirm ed and jurisdictional and is subject to equitable tolling, and that under those facts, nE qquity demands E he plaintiff) be estopped from e t seek in g remand the case on the basis of the one-year limit 5 1446( ),' id. at 428, b' sough t try the case part because the defendants 'vigilantly ' fede ral court .' Id . ' Nautilus contends that ' E llaintiff knew or should have known 'p that A tk in s was cit izen of Texas,zg but Nautilus fails ' m ake any argument p lain tif f knew cite ev iden ce showing why h ow citizen should have known that Atkins was not o f Texas when plaintiff filed commen ced this action . the state court petition that subm it ted any Moreover, Nautilus has eviden ce disputing plaintiff's contention that when this action was in itia lly filed state records maintained by the Texas Department of Insurance identified Atkins as an insurance adjustor licen sed Texas whose address was as stated Manchaca, Texas. knowing misrepresentation ind uce another to act to plaintiff's o rig ina l petition , i.e ., 'Fraud ' ' ' defined as tru th or concealment of a material fact his or her detriment.' Black's Law Dictionarv ' 2004). Absent any evidence that plaintiff knew citizen Texas when ( th 8 should have filed know n that Atkins was not state court petition that commenced this action , the court has no fraudu len t ly alleged that A tk in s was ci ti zen Te xa s uat temp ted manipulate the g o tice of Removal, Docket Entry No . N - p . 2 % 4. 10- statutory rules determining federal removal jurisdiction, rights .' ' the reb y preventing the defendant from exercising Ted ford , 327 F .3d at 428-29 . Accordingly, the court concludes that Nau tilus has failed carry burden showing that ent itled to the equitable exception recognized in Tedford . 11 1 . Conclusions and Order of Remand Fo r the reasons stated above , the court concludes that removal ca se to federal court was improper because rem ova l was not timely filed accordance with notice of 28 5 1446( ). Accordingly, Plaintiff's Motion to Remand, Docket Entry b N o . 4 is GRANTED . This action is REMAHDED to the 280th Judicial D istrict Court of Harris County, Texas . The Clerk p r ovide the District cop y of this Memorandum Op in ion and Order of Remand C lerk of Harris County, Texas. S IGNE D at Houston, Texas, on this d ay of J ne, 2010 . r r SIM LAKE UN ITE D STATES DISTRICT JUDGE

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