Sean Stoddard v. Philadelphia Indemnity Insurance Company

O [1] JS-6 [7] United States District Court [8] Central District of California [10] 11 SEAN STODDARD, Case №. 5:20-cv-00386-ODW (KKx) 12 Plaintiff, ORDER GRANTING 13 v. MOTION TO REMAND [8]; AND PHILADELPHIA INDEMNITY 14 DENYING AS MOOT MOTION TO INSURANCE COMPANY; and DOES 1 15 through 50, inclusive, DISMISS AND MOTION TO STRIKE [6][7] 16 Defendants. [17] 18 I. INTRODUCTION 19 On February 26, 2020, Defendant Philadelphia Indemnity Insurance Company 20 (“Defendant”) removed this action based on diversity jurisdiction. (Notice of 21 Removal ¶¶ 3–5, ECF No. 1.) Plaintiff Sean Stoddard moves to remand, arguing that 22 Defendant’s removal is untimely (“Motion”). (See Mot. to Remand (“Mot.”), ECF 23 No. 8.) After reviewing the papers filed in connection with the Motion, the Court 24 deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; 25 C.D. Cal. L.R. 7-15. Accordingly, the Court VACATES the hearing on April 13, 26 2020. For the reasons discussed below, the Court GRANTS Stoddard’s Motion and 27 REMANDS this matter to the Superior Court of California, County of Riverside. [28] 1 II. BACKGROUND 2 This case concerns the theft of a classic car, the subsequent insurance claim, 3 and the resulting alleged breach of insurance contract. On October 2, 2017, Stoddard 4 bought a classic car. (Notice of Removal, Ex. B (“First Am. Compl.”) ¶ 11, ECF 5 No. 1-2.) On October 4, 2017, he requested that Defendant add the new vehicle to his 6 Collector Vehicle Insurance Policy, which Defendant did the next day. (First Am. 7 Compl. (“FAC”) ¶¶ 8, 13–14.) Under the policy, the vehicle was valued at $120,000. 8 (FAC ¶ 13.) 9 On October 6, 2017, Stoddard took the vehicle to Las Vegas for a car show. 10 (FAC ¶ 15.) The vehicle was stolen in Las Vegas on October 9, 2017. (FAC ¶ 16.) 11 Stoddard immediately reported the theft, a loss under the policy, to Defendant. (FAC 12 ¶¶ 10, 17.) Defendant investigated Stoddard’s claim and, despite continuing to 13 dispute issues respecting the vehicle’s title, sent Stoddard a check for $30,000 in 14 December 2018. (Compl. ¶¶ 19–20.) 15 On October 10, 2019, Stoddard initiated this action in the Superior Court of 16 California, County of Riverside. (See Notice of Removal Ex. A (“Compl.”), ECF 17 No. 1-1.) Stoddard served the complaint on Defendant on October 16, 2019. (Decl. 18 of Sagi Schwartzberg (“Schwartzberg Decl.”) ¶ 3, Ex. 2 (“Proof of Service”), ECF 19 No. 8-1.) In his complaint, Stoddard alleged that he is a California resident and 20 Defendant is a Pennsylvania corporation. (Compl. ¶¶ 1–2.) He asserted two causes of 21 action, first for breach of contract with damages in the amount of $90,000, and second 22 for breach of the implied covenant of good faith and fair dealing. (Compl. ¶¶ 18–30.) 23 In a November 8, 2019 correspondence concerning the initial complaint, 24 Defendant notified Stoddard of its intent to remove the matter to federal court based 25 on diversity jurisdiction. (Schwartzberg Decl. ¶ 4, Ex. 3 (“November Letter”).) 26 However, rather than remove, Defendant demurred to the initial complaint in 27 December 2019. (Schwartzberg Decl. ¶ 5.) On January 28, 2020, Stoddard amended 28 his complaint to add specific insurance policy language, facts concerning the breach 1 of implied covenant cause of action, and a declaratory relief cause of action. 2 (Schwartzberg Decl. ¶ 6, Ex. 4 (“FAC”).) Then, on February 26, 2020, Defendant 3 removed this matter to federal court based on diversity jurisdiction. (Notice of 4 Removal ¶¶ 3–5.) 5 Stoddard now moves to remand the action on the grounds of Defendant’s 6 untimely removal. (See Mot.) 7 III. LEGAL STANDARD 8 Federal courts are courts of limited jurisdiction and have subject matter 9 jurisdiction only as authorized by the Constitution and Congress. U.S. Const. art. III, 10 § 2, cl. 1; see also Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 , 377 11 (1994). A suit filed in state court may be removed to federal court only if the federal 12 court would have had original jurisdiction over the suit. 28 U.S.C. § 1441 (a). Federal 13 courts have original jurisdiction where an action arises under federal law or where 14 each plaintiff’s citizenship is diverse from each defendant’s citizenship and the 15 amount in controversy exceeds $75,000. Id. §§ 1331, 1332(a). The removal statute is 16 strictly construed against removal, and “[f]ederal jurisdiction must be rejected if there 17 is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 18 F.2d 564, 566 (9th Cir. 1992). The party seeking removal bears the burden of 19 establishing federal jurisdiction. Id. A plaintiff objecting to removal may move for 20 remand due to lack of subject matter jurisdiction or another defect, such as the 21 timeliness of removal. See 28 U.S.C. § 1447 (c). 22 IV. DISCUSSION 23 Stoddard does not contest that diversity jurisdiction exists under 28 U.S.C. 24 § 1332. (Mot. 5.) Instead, Stoddard challenges Defendant’s removal as untimely, 25 filed more than thirty days after service of the initial complaint. (Mot. 5.) 26 Timeliness of removal is governed by 28 U.S.C. § 1446 (b). That section 27 requires “that a notice of removal be filed within thirty days of receipt from the 28 plaintiff of an initial pleading or other document from which it is ascertainable that the 1 case is removable.” Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121 , 1124 2 (9th Cir. 2013) (citing 28 U.S.C. §§ 1446 (b)(1) & (b)(3)). Section 1446(b) “place[s] 3 strict limits on a defendant who is put on notice of removability by a plaintiff.” Id. at 4 1125. 5 Defendant does not contest that Stoddard’s initial complaint, served on October 6 16, 2019, put Defendant on notice that this case was removable. (See generally Opp’n 7 to Mot., ECF No. 11.) Indeed, Defendant cannot, as Defendant confirmed in its 8 November Letter to Stoddard that it intended to remove the case based on diversity 9 jurisdiction, “[b]ecause the parties are of diverse citizenship, and the amount in 10 controversy exceeds $75,000.” (November Letter 2.) Thus, Defendant had notice of 11 the removability of the action from the initial complaint. 12 Defendant appears to argue that its time period to remove restarted following 13 Stoddard’s amended complaint, pursuant to section 1446(b)(3). (See Opp’n 3 14 (arguing that section 1446(c)(1), which specifically concerns section 1446(b)(3), 15 permits a party to remove up to one year after commencement of the action).) 16 However, section 1446(b)(3) applies when a defendant cannot ascertain from the 17 initial pleading that the case is removable or “the case only becomes removable 18 sometime after the initial commencement of the action.” Ritchey v. Upjohn Drug Co., [19] 139 F.3d 1313, 1316 (9th Cir. 1998); Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 20 876, 885 (9th Cir. 2010). Section 1446(b)(3) does not apply when the defendant has 21 notice of removability from the initial pleading. See Dunn v. Gaiam, Inc., 166 F. 22 Supp. 2d 1273, 1278 n.6 (C.D. Cal. 2001) (noting that section 1446(b)(3) is 23 inapplicable where the defendants believed the action was removable based on the 24 initial complaint.) Such is the case here, where Defendant confirmed in its November 25 Letter that it understood the action was removable based on the initial complaint. 26 Accordingly, the removal period began to run on October 16, 2019, when 27 Stoddard served Defendant with the initial complaint. Defendant had thirty days from 28 that date, until November 15, 2019, to file its removal. Yet, Defendant did not remove 1 || until February 26, 2020, well beyond this deadline. Consequently, Defendant’s 2 | removal is untimely. 3 Construing the removal statute strictly against removal, and in view of 4|| Defendant’s correspondence confirming it had notice of removability from Stoddard’s 5 || initial complaint, the Court finds Defendant’s removal untimely and remand proper. 6 || Accordingly, the Court GRANTS Stoddard’s motion for remand. 7 V. CONCLUSION 8 For the reasons discussed above, the Court GRANTS Stoddard’s Motion and REMANDS the action to the Superior Court of California, County of Riverside, 10 | Riverside Hall of Justice, 4100 Main Street, Riverside, CA 92501, Case 11 || No. RIC1905137. (ECF No. 8.) Accordingly, the Court DENIES as moot 12 || Defendant’s Motion to Strike and Motion to Dismiss. (ECF Nos. 6, 7.) The Clerk of 13 || the Court shall close the case. [14] 15 IT IS SO ORDERED. [16] 17 March 31, 2020 18 wus i Gieddioid 30 OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE