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Rockwell v. State Farm Mutual Automobile Insurance Co.

United States District Court, E.D. Virginia, Richmond Division

June 28, 2019

KENNETH L. ROCKWELL, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant

          MEMORANDUM OPINION

          M. HANNAH LAUCK JUDGE.

         This matter comes before the Court on Plaintiff Kenneth L. Rockwell's Motion to Remand, (ECF No. 5.), and Defendant State Farm Mutual Automobile Insurance Company's ("State Farm") Motion to Dismiss Count II. (ECF No. 3.) Rockwell seeks remand of this case to the Circuit Court of Chesterfield County ("Chesterfield Circuit Court") for lack of subject matter jurisdiction. State Farm opposes remand. (ECF No. 6.) Rockwell does not oppose the Motion to Dismiss Count II. The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. The matter is ripe for disposition. The Court exercises jurisdiction pursuant to 28 U.S.C. § 1332.[1] For the reasons that follow, the Court will deny the Motion to Remand and grant the Motion to Dismiss Count II.

         I. Procedural and Factual Background

         A. Summary of Allegations in the Complaint

         This breach of contract action arises from a May 13, 2015 automobile accident. On that date, Rockwell was involved in a motor vehicle collision and sustained injuries resulting in medical expenses totaling $267, 539.66. (Compl. ¶ 2-4, ECF No. 1-1.) At the time of the accident, Rockwell "was the listed operator and owner of an automobile policy provided by State Farm, policy number 081 -9245-B11 -48J." (Id. ¶ 1.)

         Rockwell alleges that the policy provided for "Medical Expense Benefits payments up to $50, 000.00" to be paid out for injuries resulting from an accident. (Id. ¶ 7.) According to Rockwell, State Farm ignored repeated letters requesting the payout and has paid Rockwell only $7, 027.39. (Id. ¶ 8-11.) Rockwell seeks the remaining $42, 972.61. (Id. ¶ 13.)

         In his Complaint, Rockwell also brings a claim for "Arbitrary Refusal of Motor Vehicle Insurance Claim" under Virginia Code § 8.01-66.1[2] for State Farm's failure to effectuate its duty to act in good faith. (Id. ¶ 14-16.) Rockwell avers that State Farm's arbitrary refusal to pay the full amount on his insurance claim entitles him to an additional $100, 000 in damages. (Id. 3-4.) Rockwell also states "he is entitled to recover his attorney fees and costs pursuant to Va. Code Ann. § 38.2-209." (Id. ¶ 18.)

         B. Procedural History

         On March 5, 2019, Rockwell filed the Complaint in the Chesterfield Circuit Court. The Complaint identifies two causes of action: (1) breach of contract; and, (2) arbitrary refusal of motor vehicle insurance. (Id. 1-3.) On March 14, 2019, Rockwell served State Farm. State Farm filed various responsive pleadings at the state level.[3] On April 4, 2019, State Farm timely removed this action from the Chesterfield Circuit Court to this Court, asserting diversity jurisdiction under 28 U.S.C. § 1332(a). (ECFNo. 1.)

         On April 5, 2019, Rockwell filed this Motion to Remand, claiming that the "direct action" provision of 28 U.S.C. § 1332(c)(1)(A) deems State Farm a citizen of Virginia.[4] (Mot. Remand 2, ECF No. 5.) Rockwell asks the Court to remand the case to the Chesterfield Circuit Court for lack of subject matter jurisdiction. (Id.) State Farm responded in opposition to the Motion to Remand, countering that the direct action provision of 28 U.S.C. § 1332(c)(1) does not apply when a plaintiff is suing her or his own insurance company. (Mem. Opp. Mot. Remand 1, ECF No. 6.)

         Following removal, State Farm filed a Motion to Dismiss Count II of the Complaint. (ECF No. 3.) Rockwell filed a document purporting to represent both a Response to State Farm's Motion to Dismiss Count II and a renewed Motion to Remand.[5] (ECF No. 7.) In his Response, Rockwell agrees to dismiss Count II of the Complaint, which reduces the amount in controversy to $42, 972.61. (Resp. Mot. Dismiss 1, ECF No. 7.) Rockwell then asserts that because the new amount in controversy does not exceed $75, 000, the Court must remand the case for failure to satisfy the amount in controversy requirement of 28 U.S.C. § 1332(a). (Id.) State Farm filed a reply to Rockwell's Response to the Motion to Dismiss Count II and Renewed Motion to Remand-again opposing remand-claiming that post-removal action does not defeat jurisdiction for the purposes of 28 U.S.C. § 1332(a). (Reply Mot. Dismiss 2, ECF No. 8.)

         II. Standard of Review for Removal and Remand

         Under 28 U.S.C. § 1441(a), [6] a defendant may remove a civil action to a federal district court if the plaintiff could have originally brought the action in federal court. 28 U.S.C. § 1441(a). Section 1446 delineates the procedure for removal, including the requirement that the defendant file a notice of removal in the federal district court and the state court. See 28 U.S.C. § 1446(a), (d). The state court loses jurisdiction upon the removal of an action to federal court. 28 U.S.C. § 1446(d) ("[T]he State court shall proceed no further unless and until the case is remanded."). The removability of a case "depends upon the state of the pleadings and the record at the time of the application for [] removal" Ala. Great S. Ry. v. Thompson, 200 U.S. 206, 216 (1906) (emphasis added); see also Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939) ("the right to remove ... [is] determined according to the plaintiffs' pleading at the time of the petition for removal.").

         "The party seeking removal bears the initial burden of establishing federal jurisdiction." Abraham v. Cracker Barrel Old Country Store, Inc., No. 3:1 lcvl82, 2011 WL 1790168, at *1 (E.D. Va. May 9, 2011) (citing Mulcahey v. Columbia Organic Chem. Co., 29 F.3d 148, 151 (4th Cir. 1994)). No. presumption favoring the existence of federal subject matter jurisdiction exists because federal courts have limited, not general, jurisdiction. Id. (citing Pinkley Inc. v. City of Frederick, 191 F.3d 394, 399 (4th Cir. 1999)). In deference to federalism concerns, courts must construe removal jurisdiction strictly. Id. (citing Mulcahey, 29 F.3d at 151). "If federal jurisdiction is doubtful, a remand is necessary." Id. (quoting Mulcahey, 29 F.3d at 151).

         A federal district court has diversity jurisdiction over "all civil actions where the matter in controversy exceeds ... $75, 000 ... and is between ... [c]itizens of different States." 28 U.S.C. § 1332(a)(1). When diversity of citizenship provides the grounds for removal, then "the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy" 28 U.S.C. § 1446(c)(2) (emphasis added).

         III. Analysis: State Farm Properly Removed the Action to this Court

         The parties' jurisdictional disagreement pertains to whether diversity of citizenship exists and whether conceding dismissal of Count II of the Complaint (thereby reducing the amount in controversy below $75, 000 post-removal) destroys this Court's jurisdiction. The Court finds that parties are diverse and the amount in controversy exceeded $75, 000 at the time of removal. Because State Farm properly removed the case to this Court, the Court will deny the Motion to Remand.

         A. The Parties Are Diverse Pursuant to 28 ...


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