1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 MARIA BADIN, an individual, on behalf Case No.: 25-cv-163-RSH-AHG of herself and all others similarly 13 situated, ORDER DENYING PLAINTIFF’S 14 MOTION TO REMAND
15 Plaintiff,
16 v. [ECF No. 8] 17 LIBERTY MUTUAL INSURANCE 18 COMPANY, et al., 19 20 Defendants. 21 22 On February 24, 2025, plaintiff Maria Badin filed a motion to remand this action to 23 state court. ECF No. 8. Defendants Liberty Mutual Fire Insurance Company (“LMFIC”) 24 and Liberty Mutual Insurance Company (“LMIC”) (collectively “Liberty Mutual Group”) 25 filed their opposition on March 17, 2025. ECF No. 11. Plaintiff filed a reply brief on March 26 24, 2025. ECF No. 13. 27 // 28 // 1 I. BACKGROUND 2 On December 19, 2024, Plaintiff filed a class action lawsuit in the Superior Court 3 of California, County of San Diego, against LMFIC, LMIC, and Doe defendants. ECF No. 4 1-2 (the “Complaint”). The Complaint brings claims for: (1) breach of contract under 5 California law; (2) violation of the California Unfair Competition Law (“UCL”); and (3) 6 breach of the implied covenant of good faith and fair dealing under California law. Id. ¶ 7 41–64. The Complaint defines the putative class as “all owners of Defendants’ 8 homeowners’ insurance policies who were denied renewal based on a condition of their 9 property that was misrepresented by Defendants.” Id. ¶ 22. 10 On January 23, 2025, Plaintiff filed in Superior Court a one-page “Amendment to 11 Complaint,” stating that the true name of the person previously identified in the Complaint 12 as “Doe 1” was instead Liberty Insurance Corporation (“LIC”).1 ECF No. 8-5 at 1. That 13 same day, Plaintiff caused LIC’s registered agent to be served with a copy of the one-page 14 amendment. ECF No. 13-5 at 1. 15 Defendants timely filed a notice of removal on January 23, 2025, asserting that this 16 Court has original subject matter jurisdiction under the Class Action Fairness Act 17 (“CAFA”), because the size of the putative class exceeds 100 members, the parties are 18 minimally diverse, and the amount in controversy exceeds $5 million as required under 19 CAFA, 28 U.S.C. § 1332(d). ECF No. 1 ¶¶ 12, 13, 19. In support of its notice of removal, 20 Defendant attached a declaration of Kevin Crowley, V.P. Underwriting at Liberty Mutual 21 Group. ECF No. 1-3. 22 Plaintiff moves the Court to remand this action to state court on the grounds that: (1) 23 Defendants’ notice of removal was procedurally non-compliant; (2) Defendants failed to 24 prove the parties are minimally diverse; and (3) Defendants failed to prove CAFA’s amount 25 in controversy requirement is met. ECF Nos. 8 at 1–2; 13 at 2–3. 26 27 28 1 II. LEGAL STANDARD 2 The Class Action Fairness Act (“CAFA”) confers jurisdiction on federal district 3 courts over class actions, when, among other things, the amount in controversy exceeds $5 4 million, exclusive of interest and costs, and there is minimal diversity between the parties. 5 28 U.S.C. § 1332(d)(2); see also Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 396 (9th 6 Cir. 2010); Ehrman v. Cox Commc’ns, Inc., 932 F.3d 1223, 1226 (9th Cir. 2019). Minimal 7 diversity exists in CAFA actions where “any member of a class of plaintiffs is a citizen of 8 a State different from any defendant.” 28 U.S.C. § 1332(d)(2). 9 To remove a case from a state court to federal court under CAFA, “a defendant must 10 file in the federal forum a notice of removal containing a short and plain statement of the 11 grounds for removal.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 12 83 (2014) (quotations omitted). The burden of establishing removal jurisdiction rests on 13 the removing party. Washington v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th Cir. 2011) 14 (citing Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 686 (9th Cir. 2006)). 15 III. DISCUSSION 16 a. Procedural Compliance 17 Plaintiff argues that Defendants’ notice of removal is “procedurally noncompliant 18 with 28 U.S.C. § 1446,” because it is not clear “which parties were, or were not, seeking 19 removal of this action.” ECF No. 8-1 at 4. 20 Section 1446(b)(2)(A) provides that: 21 When a civil action is removed solely under section 1441(a) [28 USCS 22 § 1441(a)], all defendants who have been properly joined and served must join in or consent to the removal of the action. 23 24 28 USCS § 1446(b)(2)(A). LMFIC and LMIC have sought to remove this case, ECF No. 25 1 at 1, but Plaintiff argues that the third entity that it seeks to sue, LIC, was also required 26 to join in or consent to the removal of the action. 27 “[V]iolation of the defendant unanimity rule – i.e., the failure to obtain the joinder 28 or consent of all properly served defendants – is a procedural defect.” Atlantic Nat’l Trust 1 LLC v. Mt. Hawley Ins. Co., 621 F.3d 931, 938 (9th Cir. 2010) (emphasis added). Where a 2 case is removed from California Superior Court, the California Code of Civil Procedure 3 governs disputes about pre-removal service of process. See Garcia v. PNC Bank, N.A., No. 4 C 14-3543 PJH, 2014 WL 12658955, at *1 (N.D. Cal. Sep. 29, 2014) (applying California 5 Rules of Civil Procedure to a pre-removal service dispute); Lastra v. PHH Mortg. Corp., 6 No. 10CV2571 JLS (NLS), 2011 U.S. Dist. LEXIS 39594, at *2 (S.D. Cal. Apr. 12, 2011) 7 (same). Under California law, service of process requires service of a summons and 8 complaint. Cal. Civ. Proc. Code § 415.10. 9 Here, LIC has not yet been adequately served. Plaintiff has filed a proof of service 10 reflecting she caused a copy of the “Amendment to Complaint” to be served on LIC’s 11 registered agent, ECF No. 13-5 at 1, but there is no indication that LIC was also served 12 with a summons and complaint. LIC therefore need not join or consent to the removal. 13 b. Minimal Diversity 14 Plaintiff argues that 28 U.S.C. § 1332(c)(1) operates to defeat the Court’s diversity 15 jurisdiction. Section 1332(c)(1) provides: 16 [A] corporation shall be deemed to be a citizen of any State by which it 17 has been incorporated and of the State where it has its principal place 18 of business, except that in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or 19 unincorporated, to which action the insured is not joined as a party- 20 defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State by which the insurer has 21 been incorporated and of the State where it has its principal place of 22 business. 23 28 U.S.C. § 1332(c)(1).
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1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 MARIA BADIN, an individual, on behalf Case No.: 25-cv-163-RSH-AHG of herself and all others similarly 13 situated, ORDER DENYING PLAINTIFF’S 14 MOTION TO REMAND
15 Plaintiff,
16 v. [ECF No. 8] 17 LIBERTY MUTUAL INSURANCE 18 COMPANY, et al., 19 20 Defendants. 21 22 On February 24, 2025, plaintiff Maria Badin filed a motion to remand this action to 23 state court. ECF No. 8. Defendants Liberty Mutual Fire Insurance Company (“LMFIC”) 24 and Liberty Mutual Insurance Company (“LMIC”) (collectively “Liberty Mutual Group”) 25 filed their opposition on March 17, 2025. ECF No. 11. Plaintiff filed a reply brief on March 26 24, 2025. ECF No. 13. 27 // 28 // 1 I. BACKGROUND 2 On December 19, 2024, Plaintiff filed a class action lawsuit in the Superior Court 3 of California, County of San Diego, against LMFIC, LMIC, and Doe defendants. ECF No. 4 1-2 (the “Complaint”). The Complaint brings claims for: (1) breach of contract under 5 California law; (2) violation of the California Unfair Competition Law (“UCL”); and (3) 6 breach of the implied covenant of good faith and fair dealing under California law. Id. ¶ 7 41–64. The Complaint defines the putative class as “all owners of Defendants’ 8 homeowners’ insurance policies who were denied renewal based on a condition of their 9 property that was misrepresented by Defendants.” Id. ¶ 22. 10 On January 23, 2025, Plaintiff filed in Superior Court a one-page “Amendment to 11 Complaint,” stating that the true name of the person previously identified in the Complaint 12 as “Doe 1” was instead Liberty Insurance Corporation (“LIC”).1 ECF No. 8-5 at 1. That 13 same day, Plaintiff caused LIC’s registered agent to be served with a copy of the one-page 14 amendment. ECF No. 13-5 at 1. 15 Defendants timely filed a notice of removal on January 23, 2025, asserting that this 16 Court has original subject matter jurisdiction under the Class Action Fairness Act 17 (“CAFA”), because the size of the putative class exceeds 100 members, the parties are 18 minimally diverse, and the amount in controversy exceeds $5 million as required under 19 CAFA, 28 U.S.C. § 1332(d). ECF No. 1 ¶¶ 12, 13, 19. In support of its notice of removal, 20 Defendant attached a declaration of Kevin Crowley, V.P. Underwriting at Liberty Mutual 21 Group. ECF No. 1-3. 22 Plaintiff moves the Court to remand this action to state court on the grounds that: (1) 23 Defendants’ notice of removal was procedurally non-compliant; (2) Defendants failed to 24 prove the parties are minimally diverse; and (3) Defendants failed to prove CAFA’s amount 25 in controversy requirement is met. ECF Nos. 8 at 1–2; 13 at 2–3. 26 27 28 1 II. LEGAL STANDARD 2 The Class Action Fairness Act (“CAFA”) confers jurisdiction on federal district 3 courts over class actions, when, among other things, the amount in controversy exceeds $5 4 million, exclusive of interest and costs, and there is minimal diversity between the parties. 5 28 U.S.C. § 1332(d)(2); see also Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 396 (9th 6 Cir. 2010); Ehrman v. Cox Commc’ns, Inc., 932 F.3d 1223, 1226 (9th Cir. 2019). Minimal 7 diversity exists in CAFA actions where “any member of a class of plaintiffs is a citizen of 8 a State different from any defendant.” 28 U.S.C. § 1332(d)(2). 9 To remove a case from a state court to federal court under CAFA, “a defendant must 10 file in the federal forum a notice of removal containing a short and plain statement of the 11 grounds for removal.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 12 83 (2014) (quotations omitted). The burden of establishing removal jurisdiction rests on 13 the removing party. Washington v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th Cir. 2011) 14 (citing Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 686 (9th Cir. 2006)). 15 III. DISCUSSION 16 a. Procedural Compliance 17 Plaintiff argues that Defendants’ notice of removal is “procedurally noncompliant 18 with 28 U.S.C. § 1446,” because it is not clear “which parties were, or were not, seeking 19 removal of this action.” ECF No. 8-1 at 4. 20 Section 1446(b)(2)(A) provides that: 21 When a civil action is removed solely under section 1441(a) [28 USCS 22 § 1441(a)], all defendants who have been properly joined and served must join in or consent to the removal of the action. 23 24 28 USCS § 1446(b)(2)(A). LMFIC and LMIC have sought to remove this case, ECF No. 25 1 at 1, but Plaintiff argues that the third entity that it seeks to sue, LIC, was also required 26 to join in or consent to the removal of the action. 27 “[V]iolation of the defendant unanimity rule – i.e., the failure to obtain the joinder 28 or consent of all properly served defendants – is a procedural defect.” Atlantic Nat’l Trust 1 LLC v. Mt. Hawley Ins. Co., 621 F.3d 931, 938 (9th Cir. 2010) (emphasis added). Where a 2 case is removed from California Superior Court, the California Code of Civil Procedure 3 governs disputes about pre-removal service of process. See Garcia v. PNC Bank, N.A., No. 4 C 14-3543 PJH, 2014 WL 12658955, at *1 (N.D. Cal. Sep. 29, 2014) (applying California 5 Rules of Civil Procedure to a pre-removal service dispute); Lastra v. PHH Mortg. Corp., 6 No. 10CV2571 JLS (NLS), 2011 U.S. Dist. LEXIS 39594, at *2 (S.D. Cal. Apr. 12, 2011) 7 (same). Under California law, service of process requires service of a summons and 8 complaint. Cal. Civ. Proc. Code § 415.10. 9 Here, LIC has not yet been adequately served. Plaintiff has filed a proof of service 10 reflecting she caused a copy of the “Amendment to Complaint” to be served on LIC’s 11 registered agent, ECF No. 13-5 at 1, but there is no indication that LIC was also served 12 with a summons and complaint. LIC therefore need not join or consent to the removal. 13 b. Minimal Diversity 14 Plaintiff argues that 28 U.S.C. § 1332(c)(1) operates to defeat the Court’s diversity 15 jurisdiction. Section 1332(c)(1) provides: 16 [A] corporation shall be deemed to be a citizen of any State by which it 17 has been incorporated and of the State where it has its principal place 18 of business, except that in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or 19 unincorporated, to which action the insured is not joined as a party- 20 defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State by which the insurer has 21 been incorporated and of the State where it has its principal place of 22 business. 23 28 U.S.C. § 1332(c)(1). Plaintiff suggests that pursuant to this statute, Defendants should 24 be deemed to be citizens of every state in which Plaintiff or any class member resides, 25 destroying minimal diversity. ECF No. 8-1 at 7. 26 Section 1332(c)(2) addresses certain “direct action[s]” against insurers. The Ninth 27 Circuit defines the term “direct action” as used in this statute as comprising “those cases in 28 which a party suffering injuries or damage for which another is legally responsible is 1 entitled to bring suit against the other’s liability insurer without joining the insured or first 2 obtaining a judgment against him.” Nantes v. New London Cnty. Mut. Ins. Co., 441 F. 3 App’x 517, 518 (9th Cir. 2011) (citing Beckham v. Safeco Ins. Co. of Am., 691 F.2d 898, 4 901–02 (9th Cir. 1982)). Thus, “unless the cause of action urged against the insurance 5 company is of such a nature that the liability sought to be imposed could be imposed against 6 the insured, the action is not a direct action.” Searles v. Cincinnati Ins. Co., 998 F.2d 728, 7 729 (9th Cir. 1993) (citing Beckham, 691 F.2d at 901–02). 8 This lawsuit is not a “direct action” as defined by 28 U.S.C. § 1332(c)(1), because 9 Plaintiff does not seek to impose liability on Defendants for the actions of a party insured 10 by Defendants. Rather, Plaintiff’s action seeks to impose liability on Defendants for 11 Defendants’ own actions, i.e., Defendants’ refusal to renew homeowners’ insurance 12 policies. See Beckham, 691 F.2d at 902. “Such liability could not be imposed against” any 13 other insured party. See id. Defendant LMIC is a citizen of Massachusetts where it is 14 incorporated and maintains its principal place of business; and defendant LMFIC is a 15 citizen of Illinois, where it is incorporated, and Massachusetts, its principal place of 16 business. ECF No. 11 at 3. Plaintiff is a citizen of California. Accordingly, minimal 17 diversity under CAFA is satisfied. 18 c. Amount in Controversy 19 Plaintiff argues for the first time in her reply brief that the Liberty Mutual Defendants 20 “failed to establish that they meet the dollar value threshold to remove the matter.” ECF 21 No. 13 at 3. 22 When a CAFA defendant removes a class action to federal court, its “notice of 23 removal need include only a plausible allegation that the amount in controversy exceeds 24 the jurisdictional threshold.” Dart Cherokee, 574 U.S. at 89. “[T]he amount in controversy 25 includes all relief claimed at the time of removal to which the plaintiff would be entitled if 26 she prevails.” Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 417-18 (9th Cir. 2018). In 27 a class action, “the claims of the individual class members shall be aggregated to 28 determine” the amount in controversy. 28 U.S.C. §1332(d)(6). If the party seeking removal 1 makes factual allegations regarding the amount in controversy, and the other party disputes 2 them, the party seeking removal bears the burden of demonstrating the amount in 3 controversy by a preponderance of the evidence. See Perez v. Rose Hills Co., --- F.4th ---, 4 2025 WL 811096 (9th Cir. Mar. 14, 2025). 5 Here, Defendants assert in their notice of removal that the “out of pocket damages” 6 of Plaintiff and each prospective class member are approximately $450 per person. ECF 7 No. 1 ¶ 16–17. Defendants assert that based on their records, more than 9,600 homeowners 8 would likely fall within the class definition within the last four years, totaling $4,320,000. 9 Id. ¶ 17. Plaintiff also seeks awards for emotional distress and punitive damages, treble 10 damages, and attorney’s fees and costs under state law. ECF No. 1 at 5. Grant v. Cap. 11 Mgmt. Servs., L.P., 449 F. App’x 598, 600 (9th Cir. 2011) (noting that courts may consider 12 statutory damages, including state law authorized treble damages and punitive damages, 13 for purposes of calculating amount in controversy); Chess v. CF Arcis IX LLC, No. 20-cv- 14 01625-CRB, 2020 WL 4207322, *4 (N.D. Cal. July 22, 2020) (same); Arias v. Residence 15 Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019) (noting that if attorney fees are 16 recoverable by statute or contract, the fee claim is also included in determining the amount 17 in controversy). Including these additional damages and attorney’s costs, the amount in 18 controversy exceeds $5 million. See Greene v. Harley-Davidson, Inc., 965 F.3d 767, 774, 19 n.4. (9th Cir. 2020) (noting that it is “reasonable to assume plaintiff’s counsel would seek 20 fees equal to 25% of possible compensatory and punitive damages”); Leander v. Accent 21 Controls, Inc., No. 24-cv-01821-GPC-SBC, 2025 WL 301294, *8 (S.D. Cal. Jan. 24, 2025) 22 (collecting cases and accepting 25% estimate for attorneys’ fees as reasonable). 23 Plaintiff does not contest these factual allegations—set forth by Defendants in their 24 notice of removal—in her motion or in her reply brief. Instead, Plaintiff argues that the 25 amount in controversy is not met because Defendants “do not allege which entity meets 26 the $5,000,000 threshold.” ECF No. 13 at 3. However, it is clear that the amount in 27 controversy here applies to each of LMFIC and LMIC. 28 // l The Complaint refers to the two named defendants collectively as “Liberty Mutual.” 2 ||Complaint at 1. It makes no distinction of any kind between them, but in all respects treats 3 them as identical. Based on the factual allegations and the nature of the claims, the Court 4 ||infers that Plaintiff is pursuing a theory that both defendants are identically liable for the 5 ||damages sought. The amount in controversy that defendants have established is therefore 6 || “in controversy” as to each of the Defendants. In the context of this pleading, it makes no 7 ||sense to fault Defendants for failing to specify “which entity meets the $5,000,000 8 || threshold.” ECF No. 13 at 3. Although only one defendant is required to satisfy the amount 9 ||in controversy, both defendants satisfy the amount in controversy here. See Exxon Mobil 10 || Corp., 545 U.S. 546, 559 (2005) (“When the well-pleaded complaint contains at least one 11 |}claim that satisfies the amount-in-controversy requirement .. . the district court . . . has 12 || original jurisdiction.’”). Defendants have adequately established that the relief claimed at 13 || the time of removal meets the CAFA jurisdictional threshold. 14 CONCLUSION 15 For the foregoing reasons, Plaintiffs motion to remand, ECF No. 8, is DENIED. 16 IT SO ORDERED. □□□ 7 Lowe 17 Dated: April 2, 2025 18 Hon. Robert S. Huie United States District Judge 19 20 21 22 23 24 25 26 27 28