Family Tacos LLC v. Auto Owners Insurance Company

CourtDistrict Court, N.D. Ohio
DecidedJanuary 12, 2021
Docket5:20-cv-01922
StatusUnknown

This text of Family Tacos LLC v. Auto Owners Insurance Company (Family Tacos LLC v. Auto Owners Insurance Company) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Family Tacos LLC v. Auto Owners Insurance Company, (N.D. Ohio 2021).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

FAMILY TACOS, LLC, ) Case No. 5:20-cv-01922 ) Plaintiff, ) Judge J. Philip Calabrese ) v. ) Magistrate Judge Kathleen B. Burke ) AUTO OWNERS INSURANCE ) COMPANY, ) ) Defendant. ) )

OPINION AND ORDER Plaintiff Family Tacos, LLC filed a lawsuit on behalf of a putative class against Defendant Auto Owners Insurance Company in State court, which Defendant removed to federal court on the basis of diversity jurisdiction under the Class Action Fairness Act of 2005 and 28 U.S.C. § 1332. Plaintiff moves to remand. (ECF No. 7.) For the following reasons, the Court DENIES Plaintiff’s Motion to Remand. STATEMENT OF THE CASE Plaintiff is an Ohio limited liability company that operates two restaurants in Portage County. (ECF No. 1-1, PageID #16.) Defendant is a property and casualty insurer, which issued a commercial business insurance policy to Plaintiff. (Id., PageID #16–17.) Plaintiff claims it lost business income because of the COVID-19 pandemic and that the insurance policy covers the loss. (Id., PageID #18–20.) Further, Plaintiff alleges that Defendant has or will wrongly deny insurance claims for losses caused by the COVID-19 pandemic. (Id., PageID #21–22.) In doing so, Plaintiff alleges Defendant denied claims in bad faith by failing adequately to investigate the claims and by applying an inapplicable “virus/bacteria exclusion.” (Id., PageID #33–35.) Plaintiff’ seeks to bring its claims on behalf of (1) a nationwide class seeking

declaratory relief; (2) a nationwide sub-class seeking restitution and monetary damages; and (3) an Ohio sub-class for insurance bad faith under Ohio law. (Id., PageID #24–25.) On behalf of itself and these classes, Plaintiff alleges three claims: (1) declaratory judgment; (2) breach of contract; and (3) breach of the covenant of good faith and fair dealing (bad faith). (Id., PageID #29–35.) Plaintiff asks the Court to enter several declarations related to the scope of the policy coverage regarding the

losses the complaint describes. (Id., PageID #30–31.) In addition to declaratory relief, Plaintiff seeks monetary damages for Defendant’s alleged breaches of contract and punitive damages, costs, and attorney fees. (Id., PageID #35.) LEGAL STANDARD To remove a case from state court to federal court, a defendant “must file in the federal forum a notice of removal ‘containing a short and plain statement of the grounds for removal.’” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S.

81, 83, (2014) (quoting 28 U.S.C. § 1446(a)). Defendants “may remove a civil case from state court to federal court if the action could have originally been brought in federal court.” Nessel ex rel. Mich. v. AmeriGas Partners, L.P., 954 F.3d 831, 834 (6th Cir. 2020) (citations omitted); see also 28 U.S.C. § 1441. “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 USC § 1447(c). Removal 2 statutes are strictly construed, and “‘all doubts should be resolved against removal.’” Mays v. City of Flint, 871 F.3d 437, 442 (6th Cir. 2017) (quoting Harnden v. Jayco, Inc., 496 F.3d 579, 581 (6th Cir. 2007)). Where a party removes a case under the

Class Action Fairness Act, however, courts need not presume that removal is improper. Nessel, 954 F.3d at 834 (citing Dart Cherokee, 574 U.S. at 89). ANALYSIS Defendant removed this case based on diversity jurisdiction under Section 1332 and the Class Action Fairness Act. “The removing defendant has the burden to establish federal subject-matter jurisdiction.” Tennial v. Bank of America, N.A., No. 17-6377, 2020 WL 2530872, at *1 (6th Cir. Apr. 15, 2020).

I. Federal Jurisdiction In general, “[f]ederal courts have original jurisdiction over two types of cases: cases that involve a federal question . . . and cases in which there is complete diversity of citizenship between the parties and the amount in controversy requirement is satisfied.” Nessel, 954 F.3d at 834 (citing 28 U.S.C. §§ 1331, 1332(a)). Diversity jurisdiction exists under Section 1332 where the dispute is between citizens of different states and where the amount in controversy exceeds $75,000. 28 U.S.C.

§ 1332. I.A. Diversity Jurisdiction “[F]or diversity jurisdiction to be proper under § 1332, no plaintiff and no defendant can be the citizen of the same state.” Tennial, 2020 WL 2530872, at *1. A corporation, like Defendant, has the citizenship of its state of incorporation and its 3 principal place of business. Roberts v. Mars Petcare US, Inc., 874 F.3d 953, 956 (6th Cir. 2017). As a limited liability company, Plaintiff “has the citizenship of each of its members.” Tennial, 2020 WL 2530872, at *1. Where the members of an LLC are

individuals, citizenship is based on the person’s domicile. Id. “‘Domicile,’ a legal term of art, requires that a person both be present in a state and have “the intention to make his home there indefinitely or the absence or an intention to make his home elsewhere.” Prime Rate Premium Fin. Corp. v. Larson, 930 F.3d 759, 765 (6th Cir. 2019). (quoting Stifel v. Hopkins, 477 F.2d 1116, 1120 (6th Cir. 1973)). Defendant is a citizen of Michigan because it is a Michigan corporation with

its principal place of business in Michigan. (ECF No. 1, PageID #5; ECF No. 1-1, PageID #16.) According to Defendant’s notice of removal, Plaintiff has ten members. (Id.) However, Defendant lists the names of thirteen individuals as members. (ECF No. 1, PageID #5.) Seven of the named individuals are domiciled in Ohio; two in Maryland; and one in Illinois. (Id.) Defendant asserts that last three individuals “are not believed to be domiciled in Michigan.” (Id.) Plaintiff does not challenge this allegation, which suffices for Defendant to invoke and the Court to exercise diversity

jurisdiction. Because the statute requires only a short and plain statement of the grounds for removal, tracking the general pleading standard of Rule 8, Dart Cherokee, 574 U.S. at 87, this allegation negates grounds that would defeat diversity and suffices to establish federal jurisdiction, see, e.g., Lincoln Benefit Life Co. v. AEI Life, LLC, 800 F.3d 99, 107 (3d Cir. 2015).

4 I.B. The Class Action Fairness Act Under the Class Action Fairness Act, a relaxed form of diversity jurisdiction applies. Nessel, 954 F.3d at 841. The Act gives federal courts jurisdiction over

interstate class actions where “(1) there is minimal diversity of citizenship between the parties; (2) the aggregate amount in controversy exceeds $5 million; and (3) the proposed class contains at least 100 members.” Nessel, 954 F.3d at 834 (citations omitted). Minimal diversity under the Act allows a federal court to exercise jurisdiction where “any member of a class of plaintiffs is a citizen of a State different from any defendant.” 28 U.S.C.

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Family Tacos LLC v. Auto Owners Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/family-tacos-llc-v-auto-owners-insurance-company-ohnd-2021.