Sterling and Wilson Solar Solutions Inc v. Liberty Mutual Insurance Company
Filing
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ORDER GRANTING 5 PLAINTIFF'S MOTION FOR REMAND. Case remanded to Klickitat County Superior Court. Plaintiff's request for attorney's fees and costs is DENIED. Signed by Judge Thomas O. Rice. (LTR, Case Administrator)
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FILED IN THE
U.S. DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON
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May 08, 2024
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SEAN F. MCAVOY, CLERK
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON
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STERLING AND WILSON SOLAR
SOLUTIONS, INC., a Delaware
corporation,
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Plaintiff,
ORDER GRANTING PLAINTIFF’S
MOTION FOR REMAND
v.
LIBERTY MUTUAL INSURANCE
COMPANY, Bond No. 1161556,
Defendant.
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NO. 1:24-CV-3022-TOR
BEFORE THE COURT is Plaintiff’s Motion for Remand and Attorney’s
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Fees (ECF No. 5). The matter was submitted for consideration without oral
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argument. The Court has reviewed the record and files herein and is fully
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informed. For the reasons discussed below, Plaintiff’s motion for remand (ECF
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No. 5) is GRANTED.
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BACKGROUND
Plaintiff Sterling and Wilson Solar Solutions, Inc. developed a solar power
ORDER GRANTING PLAINTIFF’S MOTION FOR REMAND ~ 1
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plant in Klickitat County, Washington, on behalf of Lund Hill Solar, LLC. ECF
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No. 5 at 1. When Lund Hill allegedly failed to pay Plaintiff upon completion of
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the work, Plaintiff filed a lien against the property for the amount due. Id.
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Defendant Liberty Mutual Insurance then intervened to release the property from
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the lien by filing Bond Number 1161556 with the Klickitat County Auditor’s
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Office. Id. at 2. Plaintiff subsequently filed a complaint to foreclose on the lien in
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Klickitat County Superior Court. Id.
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Pursuant to RCW 48.05.200, Plaintiff served Defendant via the Washington
State Office of the Insurance Commissioner. Id. at 2, ¶ 2. The Insurance
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Commissioner’s Office accepted service on behalf of Defendant on January 9,
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2024. Id. at 3, ¶ 3. Defendant confirmed receipt of the complaint on January 16,
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2024. Id. at ¶ 4. On February 16, 2024—31 days after the date of receipt and 38
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days after the date of service—Defendant removed the action to this Court
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pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Id. at ¶ 5; see also ECF No. 1 at 1.
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DISCUSSION
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Plaintiff argues remand is warranted because Defendant’s complaint was
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untimely. ECF No. 5 at 4-7. Defendant does not oppose Plaintiff’s motion to
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remand, but suggests that remand is warranted because Lund Hill, a non-diverse
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party, is apparently likely to intervene in this action and destroy complete
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ORDER GRANTING PLAINTIFF’S MOTION FOR REMAND ~ 2
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diversity. ECF No. 7 at 1-2. Defendant did not respond to Plaintiff’s discussion of
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timing or request for attorney’s fees.
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I.
Remand
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Under Article III, “[t]he judicial Power shall extend” to “[c]ontroversies . . .
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between citizens of different States.” U.S. Const. Art. III, § 2. Drawing from that
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authorization and beginning with the Judiciary Act of 1789, Congress has
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continuously permitted federal district courts “to exercise jurisdiction based on the
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diverse citizenship of parties.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).
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Under the current federal statute governing diversity jurisdiction, “[t]he district
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courts shall have original jurisdiction of all civil actions where the matter in
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controversy exceeds the sum or value of $75,000, exclusive of interests and costs
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and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1). For the
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court’s exercise of jurisdiction under § 1332(a) to be effective, diversity must be
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“complete,” meaning “each of the plaintiffs must be a citizen of a different state
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than each of the defendants.” Allstate Ins. Co. v. Hughes, 358 F.3d 1089, 1095
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(9th Cir. 2004) (citing Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th
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Cir. 2001)). Further, diversity is based upon the identities of the real parties in
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interest. Miss. Ex rel. Hood v. AU Optronics Corp., 571 U.S. 161, 174 (2014)
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(“We have . . . require[d] courts in certain contexts to look behind the pleadings to
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ensure that parties are not improperly creating or destroying diversity
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jurisdiction.”).
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Additionally, any notice of removal must comport with various procedural
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requirements. Among them is the condition that the notice of removal must be
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filed within 30 days after the defendant’s receipt of a copy of the initial pleading or
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within 30 days after the service of the summons, whichever period is shorter. 28
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U.S.C. § 1446(b)(1). Likewise, any motion to remand “on the basis of any defect
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other than lack of subject matter jurisdiction must be made within 30 days after the
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filing of the notice of removal.” 28 U.S.C. § 1447(c).
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In this case, Defendant’s notice of removal was untimely. Defendant filed
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the notice of removal on February 16, 2024—over 30 days past service upon the
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Office of the Insurance Commissioner on January 9, 2024. Under § 1446(b)(1),
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the case should have been removed by at least February 8, 2024. By contrast,
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Plaintiff’s motion for remand was timely filed on March 18, 2024. See § 1447(c).
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Because the notice of removal was untimely, remand is warranted in this
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case. See Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1253 (9th Cir. 2006)
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(remand is appropriate when the defendant’s notice of removal is untimely); Boggs
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v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988) (“This court strictly construes the
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removal statute against removal jurisdiction.”) (emphasis added). Defendant, who
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does not oppose removal, has alternatively suggested that this Court’s exercise of
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subject-matter jurisdiction under § 1332(a) may be in issue because Lund Hill, a
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non-diverse party, may seek to intervene at some future time. At this stage, the
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Court declines to speculate about whether it would have subject-matter jurisdiction
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if Lund Hill were to join in this action. It is sufficient to find that the notice of
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removal was defective as a procedural matter.
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II.
Attorney’s Fees
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Plaintiff requests attorney’s fees and costs for the expenses incurred in
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bringing this motion under 28 U.S.C. § 1447(c). ECF No. 5 at 8-9. Defendant did
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not respond to this argument. The Court retains jurisdiction to decide this
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collateral matter. Moore v. Permanente Med. Grp., Inc., 981 F.2d 443, 448 (9th
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Cir. 1992) (“[B]ecause the award of attorney’s fees pursuant to 28 U.S.C. §
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1447(c) is collateral to the decision to remand, the district court retained
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jurisdiction after remand to entertain Plaintiffs’ motion for attorney’s fees.”).
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Although Defendant’s notice of removal was overdue, it was not premised
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on an objectively unreasonable basis. As it stands so far, there is complete
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diversity between the parties and the parties are in apparent agreement that over
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$75,000 is at stake; in other words, the error which requires remand is procedural,
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not jurisdictional. Thus, Defendant presented an objectively reasonable basis for
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removal, and the Court declines to award attorney’s fees and costs. See Martin v.
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Franklin Capital Corp., 546 U.S. 132, 136 (2005) (“[A]bsent unusual
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circumstances, attorney’s fees should not be awarded when the removing party has
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an objectively reasonable basis for removal.”).
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ACCORDINGLY, IT IS HEREBY ORDERED:
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1. Plaintiff’s Motion for Remand (ECF No. 5) is GRANTED. The matter
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is hereby REMANDED to the Superior Court of Washington for
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Klickitat County for all further proceedings (cause number 24-2-00007-
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2. Plaintiff’s request for attorney’s fees and costs is DENIED.
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The District Court Executive is directed to enter this Order, furnish copies to
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counsel, mail a certified copy to the Clerk of the Klickitat County Superior Court,
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and CLOSE the file.
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DATED May 8, 2024.
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THOMAS O. RICE
United States District Judge
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ORDER GRANTING PLAINTIFF’S MOTION FOR REMAND ~ 6
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