Tabenaculo De Vida v. Nautilus Insurance Company et al, No. 4:2010cv01078 - Document 7 (S.D. Tex. 2010)
Court Description: 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 HOUSTON DIVISION TABENACULO DE VIDA , Plaintiffs, CIVIL ACTION H-10-1078 NAUTILUS INSURANCE COMPANY and THAD LAMAR ATKINS, Defendants . MEMOQAHDUM OPINION AND ORDER OF REMANR on February 27, 2009, in the 280th Judicial District Court of Harris County, Texas ( Civil Action No. 2009-12283), against defendants, Nautilus Insurance Company ( Nautilus) and Thad Lamar Atkins ( Atkins), for breach of contract, breach of the duty of good faith 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 ( Docket Entry No . Motion Pending before court Remand ( Docket Entry Plaintiff's Opposed which Nautilus has not responded . For the reasons stated below , the court concludes that Tabenaculo De Vida v. Nautilus Insurance Company et al Doc. 7 this action shou ld be remanded to state lsee Plaintiffs' Original Petition attached to Defendants' Notice of Removal, Docket Entry No . 1. Dockets.Justia.com Standard of Review UA party may remove 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 28 2002) ( citing 1441( a)). 'The jurisdictional facts that support ' removal must be judged at the time of the removal.' Gebbia v. Wa1' Mart Stores, Incw 233 F.3d 880, 883 ( 5th Cir. 2000). seeking nThe party assert federal jurisdiction, in this case E Nautilus), has the burden of proving by a preponderance of the evidence that subject matter jurisdiction exists.' New Orleans & Gulf Coast ' Railwav Co. v. Barrois, nBecause removal raises removal statute propriety F.3d 321, 327 significant ( 5th Cir. 2008). federalism concerns, strictly construed Aand any doubt as removal should be resolved favor the remand .'' ' Gutierrez v. Flores, 543 F.3d 248, 251 ( 5th Cir. 2008) ( quoting 1n re Hot-Hed, Inc w periods during F. 3d which 1446( b). 2007)). removal permitted The removal statutes are The time forth be construed strictly against removal and for remand because removal udeprives a state court of case properly before important federalism concerns.' ' F.3d 919, and thereby implicates Frank v . Bear Stears & co w 128 1997). See also Butler v. Polk, 592 F.2d 1293, 1296 ( 5th Cir. 1979) ( Almbiguities are generally construed nE against removal./). / - 2- II. Analvsis A. Applicable Law A defendant has the right remove an action from state federal court when federal subject-matter jurisdiction exists and the removal p rocedure has been properly followed . 5 1441. Nautilus invokes ' aqny civil action 'E court's diversity jurisdiction over founded on a claim or right arising under the Constitution , treaties U.S. 5 1446( C. a) See 28 laws the United States.' ' A federal court has subject-matter jurisdiction based on diversity of citizenship nwhere the matter in controversy exceeds the sum costs, and U.S.C. value between $75,000, exclusive citizens interest and different States.' ' 1332 ( a). The time for removing civil cases is governed by 28 5 1446( which provides: b) The notice of removal of a civil action or proceeding shall 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 upon which such action or proceeding is based , or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever p eriod is shorter . If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other 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 of this title more than 1 year after commencement of the action . 28 1446( b)) applies only The first paragraph actions which case stated the initial pleading second p aragraph applies only removable . which the initial pleading states civil civil actions case that New York Insurance Co . v . Deshotel, not removable .' ' F .3d 1998). Under the second paragraph, an initially nonremovable case must be removed within thirty days nafter receipt by the defendant copy of an amended p leading , motion , order paper from which may first be ascertained that the case other one which is or has become removable.' 28 U.S. 5 1446( ' C. b). Removal under this paragraph is further limited by the one-year limit on removal of diversity cases . Failure to remove within the one-year time limit of 5 1446 ( b) a ground for remand unless an equitable exception applies . The equitab le exception requires a finding that the nplaintiff has attempted manipulate the statutory rules for determining federal removal jurisdiction, thereby preventing the defendant from exercising its rights .' Tedford v . Warner-Lambert Co ., ' 428-29 determine F .3d cir. 2003). Courts examine the parties' conduct nwhether one-year limit .' Id . ' equitable exception, equitable 426. strictly apply the In determining whether to apply an court must balance the exception with the general rule that removal jurisdiction is to be construed strictly because removal ndeprives a state court of - 4- case properly before and thereby implicates important federalism concerns .' Frank, ' 128 F .3d at 922 . B. Arguments of the Parties Notice of Remand, Nautilus states ( dlefendant Nautilus Insurance Company was served with the suit on March 9, 2009. Although this case was not removable when originally filed , it became removable on March 19, 2010, because Defendant, Thad Lamar Atkins provided Nautilus Insurance Company with an affidavit attesting he has been a citizen of Indiana since 2005 . See Exhibit A . The undersigned counsel was not m ade aware that Thad Lamar Atkins was not a citizen of Texas until March 11, 2010 . See Exhib it B . Nautilus Insurance Company files this notice of removal within 30 days after receiving the affidavit and its counsel becoming aware that Thad Lamar Atkins was not a citizen of Texas . Although Nautilus Insurance Company did not file this notice of removal within one year of commencement of the suit, Nautilus Insurance Company is entitled to an equitable extension because plaintiff manipulated the rules for determining federal removal jurisdiction. Plaintiff purposefully plead Thad Lamar Atkins was a resident and citizen of Texas. See Exhib it 'C' ' '. Thad Lamar Atkins has been a resident and citizen of Indiana since 2005. See Exhibit nA ' '. Plaintiff knew or should have known that Thad Lamar Atkins was not a citizen of Texas. This constitutes fraudulent joinder. z affidavit Thad Lamar Atkins states : My name is Thad Lamar Atkins. I am over the age of 18 years of age . I am of sound mind and in a11 respects competent to make this Affidavit . I have been a citizen of Indiana since 2005 . I currently reside at 656 Cielo Vista 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 Notice of Removal, Docket Entry pp . 3 Affidavit of Thad Lamar Atkins, Exhibit A Defendant's Notice of Removal, Docket Entry No . 1. attached Nautilus contends that ( rlemoval is proper because Plaintiff joined Thad Lamar Atkins solely to defeat diversity jurisdiction . There is outright 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 nondiverse or local defendant .4 Plaintiff argues that ng nqo equitable exception exempts Nautilus from the one year limitation because Plaintiff's pleadings are based on the fact that Defendant, Atkins, listed Texas as h is state of residence with the Texas Department of Insurance and Defendant Nautilus knew or should have known the state 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 Plaintiff explains that E his action was commenced on February 27, 2009. tl At that time , Plaintiff filed suit against Nautilus Insurance Company and Thad Lamar Atkins . Defendant, Thad Lamar Atkins was named as a Defendant who was a resident of Harris County, Texas and who could be served with process by certified mail, return receipt requested at 12600 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, 2009. Mr . Atkins listed his address with the Texas Department of Insurance as 12600 Mistletoe Trail, Manchaca, Texas 78651. Nautilus utilized Mr . Atkins as a claims representative, adjuster and estimator for the Plaintiff's Hurricane Ike c1aim .6 4 Notice of Removal, Docket Entry No . at p . % 5. s plaintiff's Opposed Motion to Remand , Docket Entry No . p . 2. 6Id . at 1-2 . plaintiff submits an 'agent profile' ' ' printed from the Texas Department of Insurance web site on February 2009, showing Thad Lamar Atkins as address C. licensed adjuster whose 12600 Mistletoe Trail, Manchaca, Texas 78651.7 Application of the Law to the Party 's Arguments Nautilus acknowledges that on the face of plaintiff's original state-court petition, the case was not removable under 5 1441( b). Nautilus argues that the case became removable in March when Atkins provided citizen an affidavit stating that he has been Indiana since 2005, and that Pursuant to 28 2010 resides Indiana . 5 1446( b), when an action is not initially removable, the defendant has 30 days after receives copy 'other 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 year after commencement of the action .' ' of this title more than The Fifth Circuit stated that the 'other paper' requires ' ' S.W .S. Erectors, Inc . v . Infax , Inc w & F.3d 489, 494 ( 5th Cir. 1996) ( citing Gaitor v. Peninsular Occidental S .S. Co ., F .2d 1961) ( specifically noting that an initially non-removable case ncannot be converted into a V Exhib it A attached Docket Entry No . 4 . Plaintiff's Opposed Motion Remand , Fifth M oreov er , Circuit has held defendant's subjective knowledge cannot convert a case into a removable action. Id. ( citing Chapman v. Powermatic, Incw 1992), cert. denied, F. 2d 160, 1402 ( 1993)) Because the Atkins 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) removable action into Atkins' affidavit removable action . Moreover, even if the an nother paper' for purposes ' 5 1446( b), be removable because an action cannot action would still be removed on the basis of diversity jurisdiction more than one year after the action is commenced . Nautilus acknowledges that more than one year after U.S. C. 1446( b). notice of removal was filed state Nautilus contends that it is entitled court action was filed . equitable extension of 5 1446's one-year limit because plaintiff manipulated the rules for determining federal removal jurisdiction by pleading that Atkins was citizen Texas when plaintiff knew or should have known that Atkins was a citizen Indianax be valid if the plaintiff uattempted rules for determining 8. Jd An equitable exception may manipulate the statutory federal removal jurisdiction, thereby rights .' ' preventing E Nautilusl from exercising Tedford , F .3d at 428 . Tedford two p laintiffs filed suit against a pharmaceutical company and named physician . Id . single 424. nondiverse defendant , treating The claim against the treating physician discovery, the was not cognizable under Texas law . Id . at 427. pharmaceutical company learned that the doctor treated only one of the patients. Id . at 424-25. The trial court severed plaintiffs' claims and transferred one plaintiff's case county. plaintiff had been another the order severing the Id . at 425 . Prior to the entry case , the the informed pharmaceutical manufacturer's intent to remove; three hours after that notice, the p laintiff amended her petition to name her treating physician as non-diverse defendant . Id . The pharmaceutical company removed asserting that b0th treating physicians were fraudulently joined. Id . Id . The district court granted the plaintiff's motion After the case was remanded plaintiffs signed and postdated remand . state court, one notice the nonsuit against the treating physician before the one-year anniversary of the filing of the suit but did expiration of the not inform one-year the defendant period . until Id . The after the pharmaceutical defendant again removed . Id . The district court held that removal was p roper spite of the one-year deadline . affirmed held and that time limit Fifth Circuit removal jurisdictional and is subject to equitable tolling, and that under those facts, nE eqquity demands E the plaintiff) be estopped from seeking remand the case on the basis of the one-year limit 5 1446( b),' id. at 428, ' part because the defendants 'vigilantly ' sought federal court .' Id . ' try the case Nautilus contends that ' pllaintiff knew or should have known 'E Atkins was that citizen of Texas,zg but Nautilus fails ' make any argument plaintiff knew cite evidence showing why should have known that Atkins was not of Texas when plaintiff filed commenced this action . how citizen the state court petition that submitted any Moreover, Nautilus has evidence disputing plaintiff's contention that when this action was initially filed state records maintained by the Texas Department of Insurance identified Atkins as an insurance adjustor licensed Texas whose address was as stated original petition , i.e ., ' 'Fraud' ' plaintiff's Manchaca, Texas. defined as knowing misrepresentation truth or concealment of a material fact induce another to act to his or her detriment.' Black's Law Dictionarv ' 2004). ( 8th Absent any evidence that plaintiff knew known that Atkins was not citizen should have Texas when filed state court petition that commenced this action , the court has no fraudulently alleged that Atkins was citizen uattempted Texas g Notice of Removal, Docket Entry No . - 10- manipulate the p . 2 % 4. statutory rules determining federal removal jurisdiction, thereby preventing the defendant from exercising rights .' ' Tedford, 327 F .3d at 428-29 . Accordingly, the court concludes that Nautilus has failed carry burden showing that entitled to the equitable exception recognized in Tedford . 111 . Conclusions and Order of Remand For the reasons stated above , the court concludes that removal case to federal court was improper because removal was not timely filed accordance notice of with 28 5 1446( b). Accordingly, Plaintiff's Motion to Remand, Docket Entry No. 4 is GRANTED . This action is REMAHDED to the 280th Judicial District Court of Harris County, Texas . The Clerk copy of this Memorandum Opinion and Order of Remand provide the District Clerk of Harris County, Texas. SIGNED at Houston, Texas, on this day of J ne, 2010 . r r SIM LAKE UNITED STATES DISTRICT JUDGE
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