Khalaf v. Berkshire Hathaway Assurance Corporation

• Court: District Court, S.D. California
• Decided: October 6, 2025
• Docket: 3:25-cv-02246
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 HAMDI ABDEL MUNIM ABU Case No.: 3:25-cv-02246-H-JLB KHALAF, et al., 12 ORDER DENYING PLAINTIFF’S Plaintiffs, 13 MOTION TO REMAND v. 14 [Doc. No. 10.] BERKSHIRE HATHAWAY 15 ASSURANCE CORPORATION, et al., 16 Defendants. 17 18 On September 8, 2025, Plaintiffs Hamdi Abdel Munim Abu Khalaf and Aladdin 19 Clairemont & MKT, Inc. (“Aladdin’s Café”) filed a motion to remand. (Doc. No. 10.) On 20 September 22, 2025, Defendant AmGuard Insurance Company (“AmGuard”) filed a 21 response in opposition to Plaintiff’s motion. (Doc. No. 12.) On September 26, 2025, 22 Plaintiff filed a reply. (Doc. No. 13.) 23 The Court set a hearing on Plaintiff’s motion for Monday, October 6, 2025 at 10:30 24 a.m. Pursuant to its discretion under Local Rule 7.1(d)(1), the Court determines that the 25 motion is fit for resolution without oral argument, submits the motion on the parties’ 26 papers, and vacates the hearing. For the reasons below, the Court denies Plaintiff’s motion 27 to remand. 28 / / / 1 Background 2 The following factual background is taken from the allegations in Plaintiff’s 3 complaint, Plaintiff’s memorandum of points and authorities in support of its motion to 4 remand, and various declarations. 5 Defendant AmGuard is in the business of selling insurance and evaluating, adjusting, 6 overseeing, and handling insurance claims. (Doc. No. 1-4, Compl. ¶ 7.) Plaintiff Aladdin’s 7 Café was insured under a commercial insurance policy issued by Defendant that provided 8 coverage for property damage and lost business income, with a policy period from October 9 1, 2022 to October 1, 2023 (Policy No. ALBP356464) (the “Policy”). (Id. ¶ 19.) Plaintiffs 10 are named insureds under the Policy. (Id. ¶ 20.) Plaintiffs allege an insurance bad faith 11 action arising out of a first-party commercial insurance policy claim made by Plaintiffs that 12 was wrongfully denied by Defendant on January 30, 2024. (Id. ¶ 18; Doc. No. 10-1 at 5.) 13 On July 8, 2025, Plaintiffs filed a complaint against AmGuard and Berkshire 14 Hathaway Assurance Corporation, a New York corporation; Berkshire Hathaway Guard 15 Insurance Companies, a Pennsylvania corporation; and Berkshire Hathaway Inc, a 16 California Corporation (collectively, “Berkshire Entities”) in the Superior Court of 17 California, County of San Diego, alleging claims for: (1) breach of contract and (2) breach 18 of covenant of good faith and fair dealing. (Id. ¶¶ 2-5, 60–83.) 19 On July 17, 2025, Defendant AmGuard met and conferred with Plaintiffs’ counsel 20 regarding dismissal of the Berkshire Entities from the State Action. (Doc. No. 10-2, Van 21 Ginneken Decl. ¶¶ 15-16; Doc. No. 12-1, Maghareh Decl. ¶ 2.) On July 18, 2025, Plaintiffs 22 filed and served a Request for Dismissal without prejudice as to the Berkshire Entities. (Id. 23 ¶ 3; Doc. No. 10-2, Van Ginneken Decl. ¶¶ 17-19; Doc. No. 10-3, Ex. A at 3.) 24 On August 1, 2025, dismissal of the Berkshire Entities was entered by the court’s 25 clerk. (Doc. No. 12-1, Maghareh Decl., ¶ 5, Ex. 3 at 16-18.) 26 On August 20, 2025, Defendant AmGuard filed an answer to Plaintiffs’ complaint. 27 (Doc. No. 1-12, Answer; Doc. No. 2, Answer) 28 On August 29, 2025, Defendant AmGuard removed the action from state court to 1 the United States District Court for the Southern District of California pursuant to 28 2 U.S.C. § 1441 on the basis of diversity jurisdiction under 28 U.S.C. § 1332(a). (Doc. No. 3 1, Notice of Removal.) By the present motion, Plaintiffs move to remand the action back 4 to state court on the basis that Defendant’s notice of removal was untimely. (Doc. No. 10- 5 1 at 11-14.) 6 Discussion 7 I. The Timeliness of Defendant’s Notice of Removal 8 Plaintiff argues that the case should be remanded back to state court because 9 Defendant’s notice of removal was untimely under 28 U.S.C. § 1446(b). (Doc. No. 10-1 10 at 5, 11.) The default rule is that the party seeking removal must remove “within 30 days 11 after the receipt . . . of a copy of the initial pleading.” 28 U.S.C. § 1446(b)(1). When the 12 case stated by the initial pleading is not removable, Section 1446(b)(3) provides that: 13 a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, 14 motion, order or other paper from which it may first be ascertained that the 15 case is one which is or has become removable. 16 28 U.S.C. § 1446(b)(3). “The removal statute is strictly construed, and any doubt about 17 the right of removal requires resolution in favor of remand.” Moore–Thomas v. Alaska 18 Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (citing Gaus v. Miles, Inc., 980 F.2d 19 564, 566 (9th Cir. 1992)). This presumption against removal “means that ‘the defendant 20 always has the burden of establishing that removal is proper.’” Id. (quoting Gaus, 980 F.2d 21 at 566). 22 As Plaintiff notes, courts interpret the reference to “other paper” broadly. Rice v. 23 Equifax Info. Svcs., LLC 2010 WL 128369, *2 (C.D. Cal. Jan. 11, 2010) (citing Schwarzer, 24 Tashima & Wagstaffe, Cal. Prac. Guide: Fed. Civ. Pro. Before Trial §§ 2:914-20 (The 25 Rutter Group 2009)). “Starting the 30-day clock under § 1446(b)(3) is more difficult than 26 under § 1446(b)(1).” Blumberger v. Tilley, 115 F.4th 1113 (9th Cir. 2024) (citing Dietrich 27 v. Boeing Co., 14 F.4th 1089, 1093 (9th Cir. 2021) (recognizing that § 1446(b)(3) “seems 28 to require a greater level of certainty or that the facts supporting removability be 1 stated unequivocally”). The clock runs only upon receipt of a “paper from which it may 2 first be ascertained that the case is one which is or has become removable.” 28 U.S.C. § 3 1446(b)(3). The Ninth Circuit has held that the “other paper must make a ground for 4 removal unequivocally clear and certain” and provide information from which “a ground 5 for removal may be ‘ascertained’” to trigger § 1446(b)(3). Dietrich, 14 F.4th at 1093, 1095. 6 This high bar “avoids bad-faith gamesmanship” by “preventing plaintiffs from strategically 7 starting the removal clock without the defendants’ realization.” Blumberger, 115 F.4th at 8 1122 (citing Dietrich, 14.F4th at 1094). 9 Plaintiffs allege that Defendant AmGuard was “in possession of enough facts to 10 support removal on at least two separate occasions.” (Doc. No. 10-1 at 14.) Plaintiffs 11 allege that the first occurred on July 17, 2025 when counsel for both parties conferred and 12 Plaintiffs’ counsel agreed to voluntarily dismiss the Berkshire Entities, and the second 13 occurred on July 18, 2025 when Defendant was served with Plaintiffs’ Request for 14 Dismissal through One Legal. (Id.; Doc. No. 10-2, Van Ginneken Decl. ¶¶ 17-18 , Ex. D.) 15 Because Defendant had notice from these two occasions, Plaintiffs allege that Defendant 16 filed its removal two weeks too late, missing the deadline of August 17, 2025, by filing on 17 August 28, 2025. (Doc. No. 10-1 at 14; see also Doc. No. 1, Notice of Removal.) 18 In their response, Defendant alleges that their removal was timely given that the 19 thirty-day period of removability only started when the dismissal of the Berkshire Entities 20 was entered by the court’s clerk on August 1, 2025. (Doc. No. 12 at 7; Doc. No. 12-1, 21 Maghareh Decl., ¶ 5, Ex. 3 at 16-18.) 22 Plaintiffs’ July 17, 2025 conference and July 18, 2025 Request for Dismissal did not 23 provide “unequivocally clear and certain” support for removal under § 1446(b)(3). First, 24 the July 17, 2025 conference did not trigger the thirty-day clock since the “other paper” 25 providing grounds for removal must be one filed in state court. Peabody v. Maud Van 26 Cortland Hill Schroll Trust, 892 F.2d 772, 775 (9th Cir.1989) (“The record of the state 27 court is considered the sole source from which to ascertain whether a case originally not 28 removable has since become removable”). Second, the July 18, 2025 Request for 1 Dismissal did not trigger the thirty-day clock since a state action “may not be removed 2 until those [non-diverse] parties have been dismissed.” Local Union 598, Plumbers & 3 Pipefitters Industry Journeymen & Apprentices Training Fund v. J.A. Jones, 846 F.3d 1213 4 (9th Cir. 1988) (citing American Car & Foundry Co. v. Kettelhake, 236 U.S. 311 (1915)). 5 Without the State Court’s entry of dismissal, the Berkshire Entities were still active parties 6 on the State Action docket. See Mertan v. E.R. Squibb & Sons, Inc., 581 F.Supp. 751, 753 7 (finding removal improper where a defendant had not yet been dismissed from the State 8 action due to the State Court not having signed or filed a written Dismissal). Defendant 9 could not have known “unequivocally” or with “certainty” that Plaintiff’s Request for 10 Dismissal would be granted by the State Court until it was signed and entered. Because 11 Plaintiffs’ Request for Dismissal was not signed and entered by the clerk until August 1, 12 2025, the thirty-day clock for removal was not triggered until August 1, 2025, meaning 13 Defendant had until September 1, 2025 to file for removal. Here, Defendant’s notice of 14 removal was filed on August 28, 2025. Thus, Defendant’s notice of removal was timely. 15 II. Defendant’s Alleged Gamesmanship 16 Plaintiffs argue that the Court should be wary of Defendant’s removal due to it being 17 “a weapon of procedural gamesmanship.” (Doc. No. 10-1 at 15.) In particular, Plaintiffs 18 allege that Defendant’s removal “frustrated Plaintiffs’ ability to develop their case” by 19 “asserting that, due to removal, Plaintiff Aladdin’s Café’s discovery requests were no 20 longer in effect.” (Id.) Defendant responds that there are no facts to indicate any 21 gamesmanship, especially since Defendant’s assertion that “discovery must be reissued” 22 adheres to federal procedural rules. (Doc. No. 12 at 13-14.) Plaintiffs rely on Roth v. CHA 23 Hollywood Medical Center, L.P., 720 F.3d 1121 (9th Cir. 2013). 24 In Roth, the Ninth Circuit concluded that “a defendant should not be able to ignore 25 pleadings or other documents from which removability may be ascertained and 26 seek removal only when it becomes strategically advantageous for it to do so.” Id. at 1125. 27 Here, Defendant did not ignore pleadings or other documents from which removability 28 could be ascertained. Rather, Defendant waited for the clerk’s entry of dismissal before 1 filing its removal. (Doc. No. 12-1 at 13, Ex. 2.) Plaintiffs cannot show 2 defendants' removal is untimely. Accordingly, although “the theoretical possibility of 3 abusive gamesmanship remains,” Roth, 720 F.3d at 1126, that is not what has happened in 4 this case. As such, the Court denies Plaintiff’s motion to remand the action back to state 5 court. 6 III. Plaintiff’s Request for Costs 7 As part of Plaintiffs’ motion to remand, Plaintiffs request an award of the costs and 8 expenses incurred in bringing a motion to remand pursuant to 28 U.S.C. § 1447(c). (Doc. 9 No. 10-1 at 15-16.) Section 1447(c) provides: “An order remanding the case may require 10 payment of just costs and any actual expenses, including attorney fees, incurred as a result 11 of the removal.” 28 U.S.C. § 1447(c). Absent unusual circumstances, a court may award 12 costs and attorney’s fees under § 1447(c) only where the removing party lacked an 13 objectively reasonable basis for seeking removal. Grancare, LLC v. Thrower by & through 14 Mills, 889 F.3d 543, 552 (9th Cir. 2018) (citing Martin v. Franklin Capital Corp., 546 U.S. 15 132, 141 (2005)). “Removal is not objectively unreasonable ‘solely because the removing 16 party’s arguments lack merit, or else attorney’s fees would always be awarded whenever 17 remand is granted.’” Id. 18 “The appropriate test for awarding fees under § 1447(c) should recognize the desire 19 to deter removals sought for the purpose of prolonging litigation and imposing costs on the 20 opposing party, while not undermining Congress’ basic decision to afford defendants a 21 right to remove as a general matter, when the statutory criteria are satisfied.” Martin, 546 22 U.S. at 140. The decision to award attorneys’ fees under § 1447(c) is left to the district 23 court’s discretion. Moore v. Permanente Med. Grp., Inc., 981 F.2d 443, 446 (9th Cir. 24 1992). 25 Plaintiffs contend that they are entitled to fees and costs because Defendant lacked 26 an objectively reasonable basis for seeking removal and removal was “wrong as a matter 27 of law.” (Doc. No. 10-1 at 15-16.) In response, Defendant contends that Plaintiff’s request 28 for costs and fees should be denied because removal was appropriate and compliant with 1 ||the law. (Doc. No. 12 at 14.) Specifically, Defendant asserts that Plaintiffs’ fee request 2 |}improperly assumes that Defendant should have speculatively removed the State Action 3 || before the dismissal of the Berkshire Entities had legal effect. (Id.) 4 Based on the record currently before the Court, the Court cannot conclude that 5 || Defendant lacked an objectively reasonable basis for removing the case to federal court. 6 ||In fact, the Court finds Defendant’s removal to be appropriate and timely. As such, the 7 Court, exercising its sound discretion, declines to award Plaintiff fees and costs under § 8 1447(c). 9 Conclusion 10 For the reasons above, the Court denies Plaintiff's motion to remand. 11 IT IS SO ORDERED. 12 |} DATED: October 6, 2025 |. 14 UNITED STATES DISTRICT COURT 15 16 17 18 19 20 21 22 23 24 25 26 27 28