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Hinerman v. Jumba

United States District Court, N.D. West Virginia

January 29, 2019

RAYMOND A. HINERMAN, Plaintiff,
v.
JEFFREY JUMBA and STATE FARM FIRE & CASUALTY COMPANY, Defendants.

          MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF'S MOTION TO REMAND

          FREDERICK P. STAMP, JR. UNITED STATES DISTRICT JUDGE.

         The plaintiff, Raymond A. Hinerman (“Hinerman”), originally filed his complaint in the Circuit Court of Hancock County, West Virginia, against the defendants, Jeffrey Jumba (“Jumba”) and State Farm Fire & Casualty Company (“State Farm”). ECF No. 1 at 1. Defendant State Farm removed the case to this Court citing diversity jurisdiction. Id. The plaintiff then filed a motion to remand. ECF No. 5. The parties filed a joint motion for extension of time to file and serve memoranda regarding plaintiff's motion to remand. ECF No. 7. This Court granted the joint motion for such an extension. ECF No. 9. The defendant then filed a response in opposition to plaintiff's motion to remand. ECF No. 15. The plaintiff filed a reply to the defendant's response. ECF No. 17. For the reasons set forth below, plaintiff's motion to remand (ECF No. 5) is denied.

         I. Background

         Plaintiff Hinerman and his wife allegedly purchased and maintained an insurance contract from State Farm, which specifically provided underinsured motorist coverage. ECF No. 1-1 at 3-4. The plaintiff alleges in his complaint that on or about April 17, 2011, the plaintiff's wife was traveling westbound on SR 22 in Allegheny County, Pennsylvania in a construction zone when defendant Jumba, who was also traveling westbound on SR 22, struck the plaintiff's vehicle on the left side. ECF No. 1-1 at 4. The plaintiff further alleges that, on the date of the accident, his wife was the registered owner and operator of the car at issue and that the plaintiff was a passenger. Id. The plaintiff then alleges that defendant Jumba was negligent and careless in: (1) failing to maintain control of the vehicle he was operating; (2) failing to drive at a safe and appropriate speed given the circumstances and conditions within the construction zone; (3) failing to keep a proper lookout for surrounding traffic conditions; (4) exceeding the posted speed limit for the construction area in question; and (5) failing to exercise due and proper reasonable care required under the circumstances. Id. at 4-5. Plaintiff Hinerman asserts that as a direct and proximate result of the collision, he sustained injuries to his neck, shoulder, back, and other parts of his body, and was forced to undergo multiple back surgeries and other medical treatment. Id. at 5. The complaint alleges that plaintiff Hinerman has incurred: (1) medical expenses in excess of $184, 000.00 and will incur additional medical expenses in the future as his injuries are permanent in nature; (2) significant lost wages in an undetermined amount, and will suffer a loss of earning capacity in the future, as a result of his permanent injuries. Id. The plaintiff also alleges that he suffered mental anguish, emotional distress, physical pain and suffering, loss of enjoyment of life, and other bodily injuries, and that he will continue to suffer due to the permanent nature of those injuries. Id. at 5-6. Moreover, the plaintiff asserts that defendant Jumba is an underinsured motorist; and therefore, plaintiff Hinerman is seeking underinsured motorist coverage benefits from State Farm. Id. at 5.

         The defendant removed this civil action to this Court on November 20, 2018. ECF No. 1. In the notice of removal, the defendant asserts that this Court has jurisdiction over the matter pursuant to 28 U.S.C. § 1332 because the parties are of diverse citizenship and the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. ECF No. 1 at 2-4. The defendant states that there is complete diversity because the plaintiff is a citizen of West Virginia, defendant Jumba is a citizen of Pennsylvania, and State Farm is an Illinois corporation with its principal place of business in Illinois. Id. at 3. The defendant states that the amount in controversy exceeds $75, 000.00, exclusive of interest and costs, based on the plaintiff's allegations as pled in the complaint. Id. at 6.

         The plaintiff then filed a motion to remand, in which he argues that defendant State Farm has failed to satisfy its burden of proving complete diversity of citizenship. ECF No. 5 at 2. The plaintiff argues that the action is a “direct action, ” within the meaning of 28 U.S.C. § 1332(c)(1), against State Farm. Id., ECF No. 6 at 3-6. The plaintiff contends that “[a]s such, the plaintiff and State Farm are not diverse, removal is improper, and this matter should be remanded[.]” Id. (emphasis omitted). Moreover, plaintiff Hinerman asserts that the “rule of unanimity” requires all defendants to consent to removal; however, defendant Jumba, an indispensable party, has not consented to or joined in the removal of the matter. ECF No. 5 at 3, ECF No. 6 at 6-10. Plaintiff Hinerman concludes that because there is not complete diversity, and because the defendants did not strictly comply with the rule of unanimity, removal is improper, and remand should be granted. ECF No. 5. at 5, ECF No. 6 at 10.

         The defendant filed a response in opposition to plaintiff's motion to remand first arguing that the “direct action” provision does not apply to plaintiff's underinsured motorist claim against State Farm. ECF No. 15 at 1-2. The defendant cites Etchison v. Westfield Ins. Co., 2005 U.S. Dist. LEXIS 27553, 2005 WL 2740607 (N.D. W.Va. Oct. 24, 2005), among other cases, for support that since the plaintiff is not suing the tortfeasor's insurance carrier directly, but is suing his own insurance company, this is not a tort claim in which State Farm stands in the shoes of the tortfeasor. Id. at 3-7. In addition, the defendant State Farm alleges that plaintiff Hinerman's underinsured motorist claim is not a policy or contract of liability insurance, but rather is a claim to recover uninsured motorist benefits under his own policy. Id. at 7. Accordingly, defendant State Farm concludes, plaintiff Hinerman may not invoke § 1332(c)(1)(a)'s “direct action” provision. Id. at 7-9. Defendant State Farm further asserts that the “nominal party” exception to the rule of unanimity applies to defendant Jumba, and that therefore, his consent was not required for removal to this Court. Id. at 9. Specifically, defendant State Farm alleges that defendant Jumba is a nominal party because plaintiff Hinerman gave him a full and complete release and covenant not to execute, including plaintiff Hinerman's dismissal of all claims asserted against defendant in a Pennsylvania litigation that arose from the same vehicle accident that gave rise to the claims brought in this civil action. Id. at 10. Thus, the defendant concludes that defendant Jumba has no stake in this litigation and is joined only in name. Id. In summary, defendant State Farm concludes that there is complete diversity and that defendant Jumba's consent was not necessary; therefore, remand would be improper. Id. at 18.

         The plaintiff filed a reply to defendant's response arguing that: (1) the “direct action” provision applies to this case, and (2) defendant Jumba, who is not a nominal party, did not consent in removal. ECF No. 17 at 1-2. The plaintiff admits that plaintiff's interpretation of “direct action” does not find significant support in federal district courts; however, plaintiff argues that “citizenship has taken on a broader definition over the years for purposes of diversity jurisdiction, and that plaintiff's action against State Farm should be considered a [‘]direct action['] for diversity jurisdiction purposes given the unique and limited nature of the action, and by a plain reading, falls completely within the language of [28 U.S.C.] § 1332(c).” Id. at 5. Plaintiff Hinerman further argues that the policy of insurance at issue is “liability insurance, ” within the context of 28 U.S.C. § 1332(c)(1)(a), citing plaintiff Hinerman's policy coverage and West Virginia Code § 33-1-10(e)(2). Id. at 5-6. Moreover, the plaintiff asserts that defendant Jumba is not nominal because this civil action attempts to recover underinsured benefits, and that in order to do so plaintiff seeks to obtain a judgment against defendant Jumba, whose acts or omissions are integral to State Farm's liability. Id. at 8-11. Therefore, the plaintiff concludes that remand is proper since State Farm has not satisfied its burden of proof regarding diversity jurisdiction. Id. at 11.

         II. Applicable Law

         A defendant may remove a case from state court to a federal court with original jurisdiction. 28 U.S.C. § 1441. Under 28 U.S.C. § 1332(a), district courts have original jurisdiction where the dispute is between citizens of different states and the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. The parties must be completely diverse, meaning that “the citizenship of each plaintiff must be different from the citizenship of each defendant.” Hoschar v. Appalachian Power Co., 739 F.3d 163, 170 (4th Cir. 2014). Diversity is “assessed at the time the action is filed.” Freeport-McMoRan, Inc. v. K N Energy, Inc., 498 U.S. 426, 428 (1991).

         The party seeking removal bears the burden of establishing federal jurisdiction. See In re Blackwater Security Consulting, LLC, 460 F.3d 576, 583 (4th Cir. 2006). When removal is challenged, the defendant must establish jurisdiction by a preponderance of the evidence. Strawn v. AT&T Mobility LLC, 530 F.3d 293, 297-98 (4th Cir. 2008). Further, this Court must strictly construe its removal jurisdiction and remand if federal jurisdiction is doubtful. Hartley v. CSX Transp., Inc., 187 F.3d 422, 425 (4th Cir. 1999). However, courts are not required “to leave common sense behind” when determining the amount in controversy. Mullens v. Harry's Mobile Homes, 861 F.Supp. 22, 24 (S.D. W.Va. 1994). When the amount in controversy is not apparent on the face of the plaintiff's complaint, the court must attempt to ascertain the amount in controversy by considering the plaintiff's cause of action as alleged, the notice of removal, and any other relevant materials in the record at the time of removal. 14C Charles Allen Wright & Arthur R. Miller, Federal Practice and Procedure § 3725.1 (4th ed. 2013). Typically, removal jurisdiction should be evaluated based solely on the filings available when the notice of removal was filed. Tamburin v. Hawkins, No. 5:12CV79, 2013 WL 588739, *1 (N.D. W.Va. Feb. 13, 2013) (citing Chase v. Shop ‘N Save Warehouse Foods, Inc., 110 F.3d 424, 428 (7th Cir. 1997)). However, it may be proper for the court to consider other evidence in the record where the amount in controversy is not readily ascertainable from the pleadings. See Wright & Miller, supra § 3725.1; Mullins, 861 F.Supp. at 23.

         III. Discussion

         There is no dispute in this civil action that the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. The main issues pertain to: (1) whether the “direct action” provision applies to this case, and, therefore, § 1332(c)(1)'s residency determination for direct action suits apply and (2) whether defendant Jumba must consent in removal. This Court addresses those issues below.

         A. The “direct action” provision of 28 U.S.C. § 1332(c)(1) does not apply to plaintiff's underinsured motorist ...


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