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, )

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.

Dockets.Justia.com

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