Riley v. Ohio Casualty Insurance

855 F. Supp. 2d 662, 2012 WL 692132, 2012 U.S. Dist. LEXIS 27913
CourtDistrict Court, W.D. Kentucky
DecidedMarch 2, 2012
DocketCase No. 5:11-CV-00156-R
StatusPublished
Cited by3 cases

This text of 855 F. Supp. 2d 662 (Riley v. Ohio Casualty Insurance) is published on Counsel Stack Legal Research, covering District Court, W.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Riley v. Ohio Casualty Insurance, 855 F. Supp. 2d 662, 2012 WL 692132, 2012 U.S. Dist. LEXIS 27913 (W.D. Ky. 2012).

Opinion

MEMORANDUM OPINION

THOMAS B. RUSSELL, Senior District Judge.

This matter comes before the Court on Plaintiffs motion to remand (DN 7). Defendant has responded (DN 12) and Plaintiff has replied (DN 13). This matter is now ripe for adjudication. For the reasons that follow, Plaintiffs motion is GRANTED. This case will be remanded to the Christian County Circuit Court.

BACKGROUND

This lawsuit has its genesis with a motor vehicle accident in August of 2007. Plain[664]*664tiff Jeneen Riley was injured when the vehicle she was in collided with another operated by Douglas Pennycuff. Litigation ensued in the Christian County Circuit Court on July 23, 2009. Riley asserted state-law claims of negligence against Pennycuff and his employer Houchens Industries Inc. (“Houchens”), for whom he had been working at the time of the accident. Defendant Ohio Casualty Insurance Company (“OCIC”) provided insurance coverage for Houchens and was tasked with adjusting Riley’s claim prior to and throughout the litigation. Riley, Houchens, and Pennycuff are all citizens of Kentucky, thereby precluding the removal to federal court.

The parties amicably settled the matter in mediation on July 11, 2011. On or about August 17, 2011, Riley moved to amend her complaint in the Christian County Circuit Court to add OCIC as a defendant, proposing new violations of Kentucky’s Unfair Claims Settlement Practices Act (“UCSPA”) and the state’s common law of bad faith. DN 12-3. Concurrently, Riley agreed to dismiss the negligence claims against Houchens and Pennycuff pursuant to the settlement agreement.

On August 24, 2011, the Christian County Circuit Court simultaneously granted Riley’s motion to amend her complaint and an agreed order of dismissal for Houchens and Pennycuff. OCIC removed the action on September 13, 2011, citing 28 U.S.C. §§ 1332(a)(1) and 1446(b). Riley now moves to remand because under 28 U.S.C. § 1446(b) (1994), an action pending in state court for more than a year may not be removed to federal court.

STANDARD

A federal district court has original diversity jurisdiction when a suit is between citizens of different states and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). Generally, any civil action brought in a state court may be removed by a defendant to federal court if it could have been brought there originally. 28 U.S.C. § 1441(a). But because removal statutes implicate federalism concerns, they must be narrowly construed. Long v. Bando Mfg. of Am., Inc., 201 F.3d 754, 757 (6th Cir.2000). “A defendant desiring to remove a case has the burden of proving the diversity jurisdiction requirements.” Gafford v. Gen. Elec. Co., 997 F.2d 150, 155 (6th Cir.1993).

Section 1446(b) establishes two temporal bars for removal from state courts where the initial pleadings do not allow for removal. A defendant has thirty days to file for removal after the receipt of “a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.” 28 U.S.C. § 1446(b) (1994). The defendant’s right to remove under § 1332 may also be revoked where more than a year has elapsed since the “commencement of the action.” Id.

DISCUSSION

The parties are in accord on a number of issues. Both concede that when the suit was first filed it was not removable since Riley, Pennycuff, and Houchens were not diverse. They agree that OCIC was not a party to the suit until Riley amended her complaint on August 24, 2011, and only then did the parties satisfy diversity under § 1332. The parties admit the action, as it currently stands, is removable to the extent that Riley is a citizen of Kentucky or Illinois, OCIC is a citizen of Ohio and Massachusetts, and the amount in controversy exceeds $75,000.

The true point of controversy involves a textual interpretation of the “commencement of the action” under 28 U.S.C. § 1446 (1994), and whether this case was removed more than a year after it “com[665]*665menced.” Riley argues the suit began the day it was filed in the Christian County Circuit Court, July 23, 2009. By this logic, there was a two-year delay between the action’s commencement and removal to this Court. OCIC responds that the amended complaint, adding it as a defendant, constitutes the commencement of a new action and thus the proper date by which to measure removability is August 24, 2011. Removal by OCIC would be timely was the Court to adopt this rationale.

The dispositive issue is whether the date of commencement under § 1446(b) resets when a later-added defendant is brought into a lawsuit pending in state court. This is not a novel issue. Courts around the country have addressed the possibility of multiple commencement dates and largely decided against this statutory construction. However, some cases in the Western District of Kentucky have permitted later-added defendants to remove year-old lawsuits by relying on § 1441(e)’s separable-controversy test. See Ryan v. Discover Prop. & Cas. Insur. Co., No. 3:10-cv-00320-H, 2010 WL 3001517 (W.D.Ky. July 27, 2010); Meador v. Indiana Insur. Co., No. 1:05-cv-00206, 2006 WL 250475 (W.D.Ky.2006). Riley encourages the Court to reject these opinions and adopt the precedent of other jurisdictions, while OCIC extols the virtues of consistency with the district’s earlier decisions. A review of these cases in light of the law from other jurisdictions causes the Court to reconsider Ryan and Meador.

To better assess this motion and the district’s law on removal, the Court has examined the interplay between §§ 1446(b) and 1441(c), the district’s analogous decisions on removal, and the possibility of an equitable exception to § 1446(b)’s one-year bar. Each follows in turn below.

I. Sections 1446(b) and 1441(c)

Section 1446(b) sets forth a number of temporal limitations on removal that defendants must abide by if they wish to remove an action from state to federal court. The statute reads as follows:

The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant through services or otherwise a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or -within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, which period is shorter.

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Cite This Page — Counsel Stack

Bluebook (online)
855 F. Supp. 2d 662, 2012 WL 692132, 2012 U.S. Dist. LEXIS 27913, Counsel Stack Legal Research, https://law.counselstack.com/opinion/riley-v-ohio-casualty-insurance-kywd-2012.