United States District Court, E.D. Virginia, Richmond Division
EULERIC EVANS, by his Assignee, CRAIG L. COLES Plaintiff,
GEICO GENERAL INSURANCE COMPANY, et al., Defendants.
JAMES R. SPENCER, Senior District Judge.
THIS MATTER is before the Court on a Motion for Leave to Amend Notice of Removal ("Motion to Amend") (ECF No. 16) filed by Defendants Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company, GEICO Casualty Company, GEICO Advantage Insurance Company, and GEICO Choice Insurance Company (collectively "GEICO") and Eric Rappaport, Tony Parkes, and Jesse Jones (collectively "the individual defendants"). Plaintiff Euleric Evans ("Evans"), by his assignee, Craig L. Coles ("Coles'") opposes the Motion to Amend. For the following reasons, the Motion for Leave to Amend will be GRANTED. ECF No. 16.
I. Factual and Procedural Background
This action arises out of a motor vehicle accident on April 9, 2010, involving both Coles and Evans. As a result of the collision, Coles sustained serious bodily injury.
Evans purchased an automobile liability insurance policy from GEICO. See ECF No. 1 Ex. 1 Complaint ("Compl.") ¶1; see also id. Ex. L ("Assignment"). First, on October 8, 2010, Coles filed suit against Evans in the Circuit Court of Henrico County seeking compensation for the injuries he sustained in the crash. See Compl. ¶ 14. Prior to trial, Coles attempted to settle his claims against Evans through negotiations with several GEICO adjusters- i.e., the individual defendants- who have been individually named in the instant lawsuit. Compl. ¶¶ 15-16. 20, 22-31. On March 20, 2012, the case was tried on damages and the jury returned a verdict of $275, 000.00. Compl. ¶ 32. On October 7, 2013, Evans assigned and transferred his rights, claims, and causes of actions against "GEICO General Insurance Company, " Compl. Ex. L. ("Assignment"), "to the [p]laintiff in the instant action, Craig L. Coles, " Compl. ¶ 33.
Then, on August 25, 2014, Coles filed this case in the Circuit Court for the City of Richmond, Virginia, against GEICO and the individual defendants seeking to collect on an insurance policy they issued to Evans. Memorandum in Support of Defendants' Motion for Leave to Amend Notice of Removal ("Defs.' Mem. Supp. Mot. to Amend") at 2. The Complaint, essentially arising out of the $275, 000 jury verdict, alleges the following: Breach of Contract ("Count I"); Breach of the Implied Covenant of Good Faith and Fair Dealing ("Count II"); Unfair Claim Settlement Practice Under Va. Code Ann. § 38.2-510 ("Count III"); and Bad Faith Failure to Pay a Motor Vehicle Insurance Claim of More Than $3, 500.00 Under Va. Code Ann. § 8.01-66.1(D)(1) ("Count IV"). GEICO and the individual defendants were served with the Complaint on September 2, 2014 and September 3, 2014, respectively. Id.
On September 25, 2014, GEICO and the individual defendants filed a Notice of Removal, with the initial Complaint and other exhibits attached, pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. ECF No. 1 ("Notice of Removal").
On October 10, 2014, Coles moved to remand this case. ECF No. 4. On October 17, 2014, GEICO and the individual defendants, together, filed a memorandum in opposition, ECF No. 9, to Plaintiff's Motion to Remand. Coles filed a Reply on October 22, 2014. ECF No. 14.
On October 24, 2014, GEICO and the individual defendants, together, filed the instant Motion to Amend. ECF No. 16. On November 4, 2014, Coles opposed the Motion to Amend. ECF No. 22. Finally, GEICO and the individual defendants replied on November 7, 2014. ECF No. 23.
II. Legal Standard
"Federal courts are courts of limited jurisdiction... [and] possess only that power authorized by Constitution and statute." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Federal district courts have original jurisdiction over civil actions that arise under the Constitution, laws, or treaties of the United States pursuant to 28 U.S.C. § 1331, where the amount in controversy exceeds $75, 000.00, and the matter is between citizens of different states pursuant to 28 U.S.C. § 1332. Federal diversity jurisdiction only exists under § 1332 where there is complete diversity, that is, "when no party shares common citizenship with any party on the other side." Mayes v. Rapport, 198 F.3d 457, 461 (4th Cir. 1999) (internal citations omitted). A defendant may remove a case from state to federal court if the federal court has original jurisdiction over the matter, but if a case is removable based solely on diversity jurisdiction, the case may not be removed if any of the defendants is a citizen of the state where the action was brought. 28 U.S.C. §§ 1441(a), (b). The party seeking removal has the burden of establishing federal jurisdiction. Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). Because removal of a case from state court implicates "significant federalism concerns, " removal jurisdiction must be strictly construed, and "if federal jurisdiction is doubtful, a remand is necessary." Mulcahey, 29 F.3d. at 151. If at any time before final judgment it appears the district court lacks jurisdiction, the court must remand the case. 28 U.S.C. § 1447(c). "[R]emoval jurisdiction raises significant federalism concerns." Mulcahey, 29 F.3d at 151. "Subject-matter jurisdiction cannot be conferred by the parties, nor can a defect in subject-matter jurisdiction be waived by the parties. Accordingly, questions of subject-matter jurisdiction may be raised at any point during the proceedings and may (or, more precisely, must) be raised sua sponte by the court." Brickwood Contractors, Inc. v. Datanet Eng'g, Inc., 369 F.3d 385, 390 (4th Cir. 2004) (en banc) (citation omitted).
To remove to federal court, the defendant must file "a notice of removal... containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant... in such action." 28 U.S.C. § 1446(a). Additionally, "when diversity of citizenship is a basis of removal jurisdiction, it must exist both at the time the original action is filed in the state court and at the time the removal is sought." Hubbard v. Tripp, 611 F.Supp. 895, 896 (E.D. Va. 1985) (quoting 14A Charles Alan Wright et al., Federal Practice and Procedure, Jurisdiction 2d § 3723 (1985)) (internal quotation marks omitted).
Further, "a corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business." 28 U.S.C. §1332(c)(1). Accordingly, properly alleging the citizenship of a corporation for purposes of removal requires alleging four temporally and geographically distinct facts: the corporation's (1) state of incorporation and (2) principal place of business at the time the complaint is filed and the corporation's (3) state of incorporation and (4) principal place of business at the time the notice of removal is filed.
Even though "there is no statutory definition of an individual's state of citizenship, courts have held that it is the state of the individual's domicile, i.e. the state he considers his permanent home." Dyer v. Robinson, 853 F.Supp. 169, 172 (D. Md. 1994) (citing Gilbert v. David, 235 U.S. 561, 569 (1914); Galva Foundry Co. v. Heiden, 924 F.2d 729, 730 (7th Cir. 1991)). In the State of Virginia, "[d]omicile is residence or physical presence accompanied by an intention to remain for an unlimited time." Smith v. Wellberg ( In re Wellberg), 12 B.R. 48 (Bankr. E.D. Va. 1981) (citing Smith v. Smith, 122 Va. 341 (1918); Layton v. Pribble, 200 Va. 405, 105 S.E.2d 864 (1958)). Domicile is distinguished from residence, in that an individual may have more than one residence but only one domicile. Comm'r of Internal Revenue v. Nubar, 185 F.2d 584, 587 (4th Cir. 1950) (citing In re Newcomb's Estate, 192 N.Y. 238, 84 N.E. 950, 954 (1908)). Thus, the concept of "citizenship" is the same, except in name, as "domicile." Further, the Fourth Circuit has recognized that a removal petition containing an allegation regarding citizenship made upon information and belief is "sufficient as a matter of law to allege subject matter jurisdiction." SunTrust Bank v. Vill. at Fair Oaks Owner, LLC, 766 F.Supp.2d 686, 693 (E.D. Va. 2011) ( quoting Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192 (4th Cir. 2008)). Accordingly, properly alleging the citizenship of an individual for purposes of removal requires specifying his domicile (1) at the time of filing the complaint and (2) at the time removal is sought.
Coles argues that GEICO and the individual defendants insufficiently alleged the citizenship of all of the parties in the Notice of Removal because the removal notice omits allegations establishing the double designation requirement. Therefore, says Coles, that defect as to all parties involved is fatal, and necessitates remand of the case to the state court. Furthermore, Coles raises an issue concerning whether GEICO and the individual defendants may amend its removal notice, as the 30-day removal period has expired. See 28 U.S.C. §1446(b). Therefore, Coles' contention raises two questions: first, whether GEICOs' and the individual defendants' Notice of Removal sufficiently alleged the basis or ground for removal, and ...