Allstate Insurance v. Bourland

758 S.W.2d 700, 296 Ark. 488, 1988 Ark. LEXIS 412
CourtSupreme Court of Arkansas
DecidedOctober 10, 1988
Docket88-26
StatusPublished
Cited by8 cases

This text of 758 S.W.2d 700 (Allstate Insurance v. Bourland) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allstate Insurance v. Bourland, 758 S.W.2d 700, 296 Ark. 488, 1988 Ark. LEXIS 412 (Ark. 1988).

Opinions

David Newbern, Justice.

This is a unique default judgment case. The appellee, Ken Bourland, sued the appellant, Allstate Insurance Company, alleging entitlement to uninsured motorist coverage with respect to an accident in which his daughter, Jodi Bourland, was killed. He sued as administrator of the daughter’s estate and individually for damages to a car owned by him. Allstate denied coverage, claiming it had notified Mr. Bourland of cancellation. As Allstate is a nonresident corporation, it had 30 days to answer the complaint. Ark. R. Civ. P. 12(a). The complaint was filed April 22, 1987. On May 21, 1987, an answer and removal petition were filed in a federal court. Nothing further was filed in the circuit court until June 17, 1987, when copies of the removal documents were filed. Mr. Bourland moved for default judgment in the circuit court on June 19, 1987. The federal court remanded the case to the circuit court on June 24, 1987, after finding that Allstate had failed to file the removal documents with the circuit court “promptly” as required by 28 U.S.C.A. § 1446(e) to effect removal. Thereafter, the circuit court entered a default judgment against Allstate. The principal question is whether the circuit court should have refused default judgment because an answer had been filed in the federal court within the time prescribed by Rule 12(a) for answering in the circuit court. Mr. Bourland cross-appeals from the circuit court’s ruling that he is not entitled to an attorney fee and penalty pursuant to Ark. Code Ann. § 23-79-208 (1987). We hold the court correctly entered the default judgment and that it was not error to refuse the fee and penalty. We affirm on appeal and on cross-appeal.

At a hearing on the default judgment motion, the attorney representing Allstate testified that copies of the removal documents were prepared for filing with the circuit clerk and that she directed her secretary to place them in the mail to the circuit clerk. An affidavit of the secretary to the effect that she did so on May 21, 1987, was presented. The attorney testified that file-marked copies of the pleadings were returned to her by mail from the federal court, but there was no testimony that any such copies were returned to her from the circuit clerk’s office. Counsel for Mr. Bourland presented a copy of a letter from Allstate’s attorney to a lawyer representing a plaintiff in a companion case, which was removed to the federal court, arising out of the same accident. The letter showed copies of the removal petition and related documents were being sent to the circuit clerk with a copy of the letter to counsel. By a similar letter, dated May 21, 1987, Allstate’s lawyer gave notice to Mr. Bourland’s lawyer of the attempted removal. However, it contained no indication that a copy of the letter and copies of the documents it enclosed were mailed to the circuit clerk. By comparison of these letters, Mr. Bourland sought to show that the mailing to the circuit clerk had not taken place.

An affidavit from the circuit clerk was presented, in which she stated that she received no answer in the case before June 16, 1987, and received only the “documentation . . .to be filed. . . on June 17,1987.” In the order declaring Allstate in default, the circuit judge found as a matter of fact that no notice of removal was filed with the circuit clerk until June 17, 1987.

Allstate contends the circuit court erred in failing to consider the answer filed in the federal court sufficient to satisfy the requirement of Ark. R. Civ. P. 12(a) that an answer be filed within 30 days. Alternatively, Allstate contends the default should have been set aside pursuant to Ark. R. Civ. P. 55(c) due to “excusable neglect, unavoidable casualty, or other just cause.”

1. Default

Allstate is unable to cite, and we have been unable to find, any case in which there was a remand from the federal to the state court where it was held that a state court must treat a pleading filed in the federal court as having been filed in the state court for any purpose. Mr. Bourland has been unable to cite any authority, and we know of none, holding that a default judgment must be entered where a case has been remanded from the federal court to the state court after, and by reason of, a failure to comply with the requirement of 28 U.S.C.A. § 1446(e) that removal papers be promptly filed in the state court in order to effect the removal.

Prior to a change in the federal law which occurred in 1949, an order of the federal court to which removal was sought was required to complete removal. A party seeking to remove was required to meet state court filing requirements until the removal was approved by the federal court or run the risk of being in default in the state proceedings if removal were refused by the federal court. The leading case discussing this change in the law is Hopson v. North American Ins. Co., 71 Idaho 461, 233 P.2d 799 (1951). See also Allen v. Hatchett, 91 Ga. App. 571, 86 S.E.2d 662 (1955). The enactment of § 1446(e) made it clear that removal was effected by the removing party’s compliance with the statute, and no federal court order was required to effect removal. The party seeking to remove has it in his or her power to deprive the state court of jurisdiction merely by compliance with the provisions of § 1446(e). While there is no longer a need to comply with state court filing deadlines to avoid default if the case is removed to the federal court, it is clear that removal is not effected unless the removal documents are filed promptly with the state court.

In each of the cases cited by Allstate on this point, removal was effected by a proper filing in the federal and state court, but the case was remanded because the federal court found that it lacked jurisdiction. They hold that the time period in which responsive pleadings are due in the state court is tolled from the time the removal petition is filed until the case is remanded to the state court. The Allen and Hopson cases, cited above, are typical of such holdings. Another case cited by Allstate is a reported trial court decision, Edward Hansen, Inc. v. Kearny Post Office Associates, 166 N.J. Super. 161, 399 A.2d 319 (1979), in which the question was whether, after remand of a properly removed case, the state court could permit the pleadings previously filed in the federal court to stand in the subsequent state court proceedings. Citing Ayres v. Wiswall, 112 U.S. 187 (1884), the judge noted that, “[f] olio wing a remand the effect to be given to pleadings filed in the federal court is a matter of state policy and is not subject to federal determination.” 166 N.J. Super, at 165, 99 A.2d at 321. He then held he could accept the federal court pleadings as it would not prejudice the parties and would save duplication of effort.

As noted above, the case before us is not like the New Jersey case or the others cited because here no removal had been effected. We therefore cannot say that the filing deadline in the circuit court was tolled. We agree with the New Jersey judge that the question presented is one of state policy.

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Allstate Insurance v. Bourland
758 S.W.2d 700 (Supreme Court of Arkansas, 1988)

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Bluebook (online)
758 S.W.2d 700, 296 Ark. 488, 1988 Ark. LEXIS 412, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allstate-insurance-v-bourland-ark-1988.