Tanielian v. Travelers Insurance Company et al

Filing 15

MEMORANDUM DECISION AND ORDER ON THE COURT'S SUBJECT MATTER JURISDICTION-the Court finds diversity jurisdiction exists here and thus Travelers properly removed the case. See Memorandum Decision and Order for details. Signed by Judge Clark Waddoups on 8/24/16. (jmr)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

ASHKHEN TANIELIAN,

MEMORANDUM DECISION
AND ORDER ON THE COURT’S
SUBJECT MATTER JURISDICTION

Plaintiff,
v.

Case No. 2:16-cv-00442-CW

TRAVELERS INSURANCE COMPANY
(UIM) Policy #: 0CCH97-986382047-101-1,
Claim #: 292 PP HFS 4334 M-005; THE
TRAVELERS HOME AND MARINE
INSURANCE COMPANY (UIM) Policy #:
0CCH97-986382047-101-1, Claim #: 292 PP
HFS 4334 M-005,

Judge Clark Waddoups

Defendants.

Plaintiff Ashkhen Tanielian sued Defendants Travelers Insurance Company and The
Travelers Home and Marine Insurance Company (“Travelers”) in the Third Judicial District Court
of Salt Lake County, Utah under her underinsured motorist policy for damages resulting from her
involvement in a rear-end motor vehicle accident. (Am. Compl. 2–8, Dkt. No. 2-3.) Travelers
removed the action to federal court asserting diversity jurisdiction. (Notice of Removal of Action
(Notice) 3, Dkt. No. 2.) On June 16, 2016, the Court ordered Travelers to show cause why the
case should not be remanded to the state court for failure to establish the requirements for
diversity jurisdiction. (Dkt. No. 9; see 28 U.S.C. § 1332(a) (setting forth the requirements for
diversity jurisdiction); State Farm Mut. Auto. Ins. Co. v. Narvaez, 149 F.3d 1269, 1270–71 (10th
Cir. 1998) (recognizing that “a federal court must, sua sponte, satisfy itself of its power to
adjudicate in every case and at every stage of the proceedings”) (quoting Tafoya v. U.S. Dep’t of
Justice, 748 F.2d 1389, 1390 (10th Cir. 1984)).)
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Both parties responded to the Court’s order to show cause. (Dkt. Nos. 10 & 11.) The
responses indicate that the parties agree the amount in controversy in this case exceeds $75,000.
(See Pl.’s Mem. to the Ct. on Order to Show Cause (Pl.’s Mem.) 4, Dkt. No. 11.) However, Ms.
Tanielian argues the Court should remand the case for lack of complete diversity because Ms.
Tanielian, a Utah citizen, contends Travelers qualifies as a “corporate citizen” of Utah due to its
continuous license to conduct business in Utah since 1997. (Id.) 1 Ms. Tanielian also objects that
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removal to federal court places her at an unfair disadvantage and constitutes an act of bad faith by
Travelers that hinders the pursuit of her underinsured motorist claim. (Id. at 6.) Conversely,
Travelers asserts it is a Connecticut corporation with its principal place of business in
Connecticut. (Resp. to Order to Show Cause (Resp.) 4–5, Dkt No. 10; Decl. of Mitch Storey 3,
Ex. 1, Dkt. No. 10-1.) Travelers states it is not organized under the laws of the state of Utah.
(Resp. 4–5, Dkt No. 10.)
On August 24, 2016, the Court heard oral argument from the parties on the issue of its
subject matter jurisdiction over this case. After considering the parties’ memoranda and
arguments, the Court is satisfied that complete diversity exists here.
“Diversity jurisdiction requires complete diversity—no plaintiff may be a citizen of the
same state as any defendant.” Grynberg v. Kinder Morgan Energy, L.P., 805 F.3d 901, 905 (10th
Cir. 2015). “[A] party invoking diversity jurisdiction bears the burden of proving its existence by
a preponderance of the evidence.” Middleton v. Stephenson, 749 F.3d 1197, 1200 (10th Cir.
2014) (citation omitted). Here, Travelers bore that responsibility when it removed this case to
federal court.
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Travelers insists that “Travelers Insurance Company” does not exist, (Resp. 4, Dkt. No. 10), and
Plaintiff does not refute that contention. Rather, Plaintiff only addresses its argument to
Travelers. (See Pl.’s Mem., Dkt. No. 11.) Thus, the Court presumes Travelers Insurance
Company does not exist.
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“For diversity, a corporation is a citizen of its state of incorporation and the state where its
principal place of business is located.” Grynberg, 805 F.3d at 905 (citing 28 U.S.C. §
1332(c)(1)). While the complaint alleges that Travelers is an insurance company “organized”
under the laws of the State of Utah, (Am. Compl. 3, Dkt. No. 2-3), the notice of removal alleges
that Travelers is an insurance company incorporated in Connecticut, with its principal place of
business in Hartford, Connecticut. (Notice 3, Dkt. No. 2.) Travelers’ response to the Court’s
Order to Show Cause reiterates its incorporation and principal place of business exist in
Connecticut. (Resp. 4–5, Dkt No. 10; Storey Decl. 3, Ex. 1, Dkt. No. 10-1.) Ms. Tanielian
presents no evidence to the contrary.
Ms. Tanielian cites Utah’s “presumption of jurisdiction” statute, Utah Code Ann. § 31A-1105, to argue that by conducting business in Utah Travelers subjected itself to the jurisdiction of
its courts. (Pl.’s Mem. 5, Dkt. No. 11.) Utah Code Ann. § 31A-1-105(1) states, in relevant part,
“[a]ny insurer . . . that provides coverage of a resident of this state . . . is doing an insurance
business in this state and subject to the jurisdiction of the insurance commissioner and the courts
of this state . . . .” This statutory language implicates a federal court’s analysis of its general
personal jurisdiction over an insurer. See Daimler AG v. Bauman, 571 U.S. ___, 134 S. Ct. 746,
761 (2014) (holding that to assert general jurisdiction over an out-of-state corporate defendant,
the corporation must have business affiliations with the forum state “so ‘continuous and
systematic’ as to render [it] essentially at home in the forum State”) (quoting Goodyear Dunlop
Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). The statute has no relevance to a
federal court’s subject matter jurisdiction over an insurance case removed under diversity
jurisdiction. See Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701–04
(1982) (detailing how “[t]he concepts of subject-matter and personal jurisdiction, however, serve

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different purposes, and these different purposes affect the legal character of the two
requirements”). A defendant may remove “those cases ‘that originally could have been filed in
federal court.’” Hunt v. Lamb, 427 F.3d 725, 726 (10th Cir. 2005) (quoting Caterpillar Inc. v.
Williams, 482 U.S. 386, 392 (1987)); see 28 U.S.C. §1441 (governing removal of civil actions).
Moreover, “federal courts have a strict duty to exercise the jurisdiction that is conferred upon
them by Congress.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). Thus, where
Travelers has established the requirements of this Court’s diversity jurisdiction arising under 28
U.S.C. § 1331, it may remove the case to federal court. See 28 U.S.C. § 1441(b); Huffman v. Saul
Holdings Ltd. P’ship, 194 F.3d 1072, 1078 (10th Cir. 1999) (noting that a defendant has a
“congressionally bestowed right to remove” a case where the case meets federal jurisdictional
requirements). The Court is satisfied that Travelers has carried its burden to show the parties are
diverse, i.e., that Ms. Tanielian is a citizen of Utah and Travelers a citizen of Connecticut. The
Court sees no evidence of bad faith in Travelers’ removal of this case.
Ms. Tanielian also suggests that litigating in federal court will disadvantage her because
she must prove her case to a unanimous jury of twelve and because state courts stand in a better
position to resolve these types of claims. (Pl.’s Mem. 6, Dkt. No. 11.) However, strategic
considerations have no effect on this Court’s subject matter jurisdiction over the case. Under 28
U.S.C. § 1447(c), a federal court will remand a case for lack of subject matter jurisdiction
discovered at any time before final judgment, or “on the basis of any defect other than subject
matter jurisdiction” identified in a motion to remand made within thirty days of removal. Ms.
Tanielian identifies no defect in removal––jurisdictional or otherwise––that would defeat removal
at this stage.

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In sum, the Court finds diversity jurisdiction exists here and thus Travelers properly
removed the case.
SO ORDERED this 24th day of August, 2016.
BY THE COURT:
______________________________
Clark Waddoups
United States District Court Judge

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