GeoSierra Environmental Inc v. Nautilus Insurance Company Inc

CourtDistrict Court, W.D. Washington
DecidedMarch 24, 2023
Docket2:22-cv-00505
StatusUnknown

This text of GeoSierra Environmental Inc v. Nautilus Insurance Company Inc (GeoSierra Environmental Inc v. Nautilus Insurance Company Inc) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
GeoSierra Environmental Inc v. Nautilus Insurance Company Inc, (W.D. Wash. 2023).

Opinion

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3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE

9 10 GEOSIERRA ENVIRONMENTAL, CASE NO. 2:22-cv-00505-TL INC., 11 ORDER GRANTING PLAINTIFF’S Plaintiff, MOTION TO REMAND AND DENYING 12 v. DEFENDANT’S MOTION TO DISMISS

13 NAUTILUS INSURANCE COMPANY, INC., 14 15 Defendant.

16 17 Before the court are (1) Plaintiff GeoSierra Environmental, Inc.’s (“GeoSierra”) 18 motion to remand (MTR (Dkt. No. 14); MTR Reply (Dkt. No. 26)), and (2) Defendant 19 Nautilus Insurance Company, Inc.’s (“Nautilus”) motion to dismiss for lack of personal 20 jurisdiction (MTD (Dkt. No. 5); MTD Reply (Dkt. No. 22)). Nautilus opposes 21 GeoSierra’s motion to remand (MTR Resp. (Dkt. No. 24)), and GeoSierra opposes 22 Nautilus’s motion to dismiss (MTD Resp. (Dkt. No. 19).) The court has considered the 1 parties’ submissions, the relevant portions of the record, and the applicable law. Being 2 fully advised,1 the court GRANTS GeoSierra’s motion to remand and DENIES Nautilus’s

3 motion to dismiss. 4 I. BACKGROUND 5 In February 2020, New Hampshire Ball Bearing Company (“NHBB”) filed a 6 lawsuit against GeoSierra in the U.S. District Court for the State of New Hampshire 7 (“Underlying Lawsuit”). (See Am. Compl. (Dkt. No. 1-2) ¶ 2.8; see also Ver. of State Ct. 8 Records (Dkt. No. 17) at 5-14 (original complaint).2) GeoSierra subsequently tendered a

9 claim for defense and indemnity of the Underlying Lawsuit to three liability insurance 10 companies: Nautilus, Aspen Environmental Insurance Company (“Aspen”), and former 11 Defendant Certain Underwrites at Lloyds, London (“Lloyds”). (See Am. Compl. ¶ 2.9; 12 Ver. of State Ct. Records at 8.) Nautilus and Lloyds disclaimed any obligation to defend 13 or indemnify GeoSierra for the claims NHBB asserted against it in the Underlying

14 Lawsuit. (Ver. of State Ct. Records at 10.) 15 Thus, on February 24, 2021, GeoSierra commenced this action against Nautilus 16 and Lloyds in King County Superior Court.3 (See id. at 5.) In its original complaint, 17 GeoSierra sought declaratory relief and an award of damages based on Lloyds and 18 Nautilus’s denials of liability insurance coverage, including the denial of defense and

19 20

1 The parties request oral argument (see MTD at 1; MTD Resp. at 1), but the court has determined that oral 21 argument would not be helpful to its disposition of the motions, see Local Rules W.D. Wash. LCR 7(b)(4). 2 The court cites the page numbers in the CM/ECF header when referring to the state court records. 22 3 Because Aspen eventually agreed to defend GeoSierra, it was not named as a defendant in this action. (Ver. of State Ct. Records at 11.) 1 indemnity, for the claims asserted against it in the Underlying Lawsuit. (See generally id. 2 at 5-14.)

3 Nautilus and Lloyds were served on March 2, 2021,4 and Nautilus removed the 4 case to this court on the basis of diversity jurisdiction two weeks later. (Beatty Decl. 5 (Dkt. No. 15) ¶¶ 3-5, Exs. 2-4); see also NOR, GeoSierra Environmental, Inc. v. Nautilus 6 Insurance Company, Inc., C21-0366RSM (W.D. Wash. Mar. 17, 2021), Dkt. No. 1. 7 Nautilus then moved to dismiss for lack of personal jurisdiction, and GeoSierra moved to 8 remand for lack of subject matter jurisdiction. (See Beatty Decl. ¶ 7, Ex. 6 (motion to

9 dismiss); id. ¶ 8, Ex. 7 (motion to remand) (arguing that Nautilus had failed to establish 10 complete diversity between GeoSierra and each individual subscriber to Lloyds’s 11 policies).) While the two motions were pending, GeoSierra and Nautilus stipulated to a 12 45-day continuance of the initial case deadlines. (Id. ¶¶ 9-10, Exs. 8-9.) On October 18, 13 2021, District Court Judge Ricardo S. Martinez adopted Magistrate Judge Theresa L.

14 Fricke’s recommendation that he grant GeoSierra’s motion to remand and decline to rule 15 on Nautilus’s motion to dismiss. (Id. ¶¶ 11-12, Exs. 10-11.) Although the case was 16 remanded back to King County Superior Court on November 2, 2021 (id. ¶ 13, Ex. 12), 17 the parties did not receive a new case assignment until January 2022 (id. ¶¶ 14-17, Exs. 18 13-15; see also id. ¶ 18, Ex. 16 (entering a new case schedule on February 11, 2022).)

19 On March 1, 2022, given Lloyds’s ongoing defense commitment to GeoSierra and 20 their willingness to contribute to a settlement in the Underlying Lawsuit, GeoSierra filed 21

22 4 Although Lloyds was properly served, they did not appear in this action. (See infra § III.A.2.) 1 a motion in King County Superior Court to amend its complaint to dismiss Lloyds as a 2 Defendant in this action. (Ver. of State Ct. Records at 76-78.) The motion was granted on

3 March 22, 2022, and GeoSierra filed the amended complaint on April 14, 2022. (See id. 4 at 98, 101-08.) Nautilus removed the case for the second time the following day, claiming 5 that GeoSierra acted in bad faith to prevent Nautilus from removing within one year of 6 the suit’s commencement. (NOR (Dkt. No. 1) ¶¶ 5.1-5.10.) Nautilus then moved to 7 dismiss for lack of personal jurisdiction (see MTD), and GeoSierra moved to remand the 8 case back to King County Superior Court (see MTR).

9 II. ANALYSIS 10 The court first addresses GeoSierra’s motion to remand before turning to 11 Nautilus’s motion to dismiss. 12 A. GeoSierra’s Motion to Remand 13 The court sets forth the relevant legal standard before evaluating GeoSierra’s

14 motion to remand. 15 1. Legal Standard for Motions to Remand 16 “A civil case commenced in state court may, as a general matter, be removed by 17 the defendant to federal district court, if the case could have been brought there 18 originally.” Martin v. Franklin Cap. Corp., 546 U.S. 132, 134 (2005); see 28 U.S.C.

19 § 1441(a); Ramirez v. Fox Television Station, Inc., 998 F.2d 743, 747 (9th Cir. 1993). 20 One such basis for removal is diversity jurisdiction, which exists if the suit is brought 21 between citizens of different states and the amount in controversy exceeds $75,000. See 22 28 U.S.C. § 1332(a)(1). If a case is not initially removable, the defendant may file a 1 notice of removal within 30 days of receiving a copy of an amended pleading or other 2 paper “from which it may first be ascertained that the case is one which is or has become

3 removable.” 28 U.S.C. § 1446(b)(3). However, a case may not be removed on the basis 4 of diversity jurisdiction more than one year “after commencement of the action, unless 5 the district court finds that the plaintiff has acted in bad faith in order to prevent a 6 defendant from removing the action.” 28 U.S.C. § 1446(c)(1). 7 “Although the Ninth Circuit has not defined a standard for district courts to use 8 when evaluating the 28 U.S.C. § 1446(c)(1) “bad faith” exception, district courts in the

9 Ninth Circuit have stated that ‘defendants face a high burden to demonstrate that a 10 plaintiff acted in bad faith to prevent removal.’” Kolova v. Allstate Ins. Co., 438 F. Supp. 11 3d 1192, 1196 (W.D. Wash. 2020) (quoting Heacock v. Rolling Frito-Lay Sales, LP, No. 12 C16-0829JCC, 2016 WL 4009849, at *2-3 (W.D. Wash. Jul. 27, 2016) (noting that 13 “district courts in this circuit have applied a strict standard” when evaluating bad faith in

14 the removal context)).

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GeoSierra Environmental Inc v. Nautilus Insurance Company Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/geosierra-environmental-inc-v-nautilus-insurance-company-inc-wawd-2023.