United States District Court, E.D. Virginia, Richmond Division
KENNETH L. ROCKWELL, Plaintiff,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
HANNAH LAUCK JUDGE
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. For the reasons that follow, the Court
will deny the Motion to Remand and grant the Motion to
Dismiss Count II.
Procedural and Factual Background
Summary of Allegations in the Complaint
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.)
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.)
Complaint, Rockwell also brings a claim for "Arbitrary
Refusal of Motor Vehicle Insurance Claim" under Virginia
Code § 8.01-66.1 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.)
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. 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). (ECF No. 1.)
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. (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,
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. (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.)
Standard of Review for Removal and Remand
28 U.S.C. § 1441(a),  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.").
party seeking removal bears the initial burden of
establishing federal jurisdiction." Abraham v.
Cracker Barrel Old Country Store, Inc., No. 3:llcvl82,
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 PinMey 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).
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
Analysis: State Farm Properly Removed the Action to this
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
The Parties Are Diverse Pursuant to 28 ...