Sterling and Wilson Solar Solutions Inc v. Liberty Mutual Insurance Company

• Court: District Court, E.D. Washington
• Decided: May 8, 2024
• Docket: 1:24-cv-03022
• Status: Unknown

Opinion

1 FILED IN THE U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 2 May 08, 2024 3 SEAN F. MCAVOY, CLERK 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6

7 STERLING AND WILSON SOLAR SOLUTIONS, INC., a Delaware NO. 1:24-CV-3022-TOR 8 corporation, ORDER GRANTING PLAINTIFF’S 9 Plaintiff, MOTION FOR REMAND

10 v.

11 LIBERTY MUTUAL INSURANCE COMPANY, Bond No. 1161556, 12 Defendant. 13

14 BEFORE THE COURT is Plaintiff’s Motion for Remand and Attorney’s 15 Fees (ECF No. 5). The matter was submitted for consideration without oral 16 argument. The Court has reviewed the record and files herein and is fully 17 informed. For the reasons discussed below, Plaintiff’s motion for remand (ECF 18 No. 5) is GRANTED. 19 BACKGROUND 20 Plaintiff Sterling and Wilson Solar Solutions, Inc. developed a solar power 1 plant in Klickitat County, Washington, on behalf of Lund Hill Solar, LLC. ECF 2 No. 5 at 1. When Lund Hill allegedly failed to pay Plaintiff upon completion of

3 the work, Plaintiff filed a lien against the property for the amount due. Id. 4 Defendant Liberty Mutual Insurance then intervened to release the property from 5 the lien by filing Bond Number 1161556 with the Klickitat County Auditor’s

6 Office. Id. at 2. Plaintiff subsequently filed a complaint to foreclose on the lien in 7 Klickitat County Superior Court. Id. 8 Pursuant to RCW 48.05.200, Plaintiff served Defendant via the Washington 9 State Office of the Insurance Commissioner. Id. at 2, ¶ 2. The Insurance

10 Commissioner’s Office accepted service on behalf of Defendant on January 9, 11 2024. Id. at 3, ¶ 3. Defendant confirmed receipt of the complaint on January 16, 12 2024. Id. at ¶ 4. On February 16, 2024—31 days after the date of receipt and 38

13 days after the date of service—Defendant removed the action to this Court 14 pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Id. at ¶ 5; see also ECF No. 1 at 1. 15 DISCUSSION 16 Plaintiff argues remand is warranted because Defendant’s complaint was

17 untimely. ECF No. 5 at 4-7. Defendant does not oppose Plaintiff’s motion to 18 remand, but suggests that remand is warranted because Lund Hill, a non-diverse 19 party, is apparently likely to intervene in this action and destroy complete

20 1 diversity. ECF No. 7 at 1-2. Defendant did not respond to Plaintiff’s discussion of 2 timing or request for attorney’s fees.

3 I. Remand 4 Under Article III, “[t]he judicial Power shall extend” to “[c]ontroversies . . . 5 between citizens of different States.” U.S. Const. Art. III, § 2. Drawing from that

6 authorization and beginning with the Judiciary Act of 1789, Congress has 7 continuously permitted federal district courts “to exercise jurisdiction based on the 8 diverse citizenship of parties.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). 9 Under the current federal statute governing diversity jurisdiction, “[t]he district

10 courts shall have original jurisdiction of all civil actions where the matter in 11 controversy exceeds the sum or value of $75,000, exclusive of interests and costs 12 and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1). For the

13 court’s exercise of jurisdiction under § 1332(a) to be effective, diversity must be 14 “complete,” meaning “each of the plaintiffs must be a citizen of a different state 15 than each of the defendants.” Allstate Ins. Co. v. Hughes, 358 F.3d 1089, 1095 16 (9th Cir. 2004) (citing Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th

17 Cir. 2001)). Further, diversity is based upon the identities of the real parties in 18 interest. Miss. Ex rel. Hood v. AU Optronics Corp., 571 U.S. 161, 174 (2014) 19 (“We have . . . require[d] courts in certain contexts to look behind the pleadings to

20 1 ensure that parties are not improperly creating or destroying diversity 2 jurisdiction.”).

3 Additionally, any notice of removal must comport with various procedural 4 requirements. Among them is the condition that the notice of removal must be 5 filed within 30 days after the defendant’s receipt of a copy of the initial pleading or

6 within 30 days after the service of the summons, whichever period is shorter. 28 7 U.S.C. § 1446(b)(1). Likewise, any motion to remand “on the basis of any defect 8 other than lack of subject matter jurisdiction must be made within 30 days after the 9 filing of the notice of removal.” 28 U.S.C. § 1447(c).

10 In this case, Defendant’s notice of removal was untimely. Defendant filed 11 the notice of removal on February 16, 2024—over 30 days past service upon the 12 Office of the Insurance Commissioner on January 9, 2024. Under § 1446(b)(1),

13 the case should have been removed by at least February 8, 2024. By contrast, 14 Plaintiff’s motion for remand was timely filed on March 18, 2024. See § 1447(c). 15 Because the notice of removal was untimely, remand is warranted in this 16 case. See Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1253 (9th Cir. 2006)

17 (remand is appropriate when the defendant’s notice of removal is untimely); Boggs 18 v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988) (“This court strictly construes the 19 removal statute against removal jurisdiction.”) (emphasis added). Defendant, who

20 does not oppose removal, has alternatively suggested that this Court’s exercise of 1 subject-matter jurisdiction under § 1332(a) may be in issue because Lund Hill, a 2 non-diverse party, may seek to intervene at some future time. At this stage, the

3 Court declines to speculate about whether it would have subject-matter jurisdiction 4 if Lund Hill were to join in this action. It is sufficient to find that the notice of 5 removal was defective as a procedural matter.

6 II. Attorney’s Fees 7 Plaintiff requests attorney’s fees and costs for the expenses incurred in 8 bringing this motion under 28 U.S.C. § 1447(c). ECF No. 5 at 8-9. Defendant did 9 not respond to this argument. The Court retains jurisdiction to decide this

10 collateral matter. Moore v. Permanente Med. Grp., Inc., 981 F.2d 443, 448 (9th 11 Cir. 1992) (“[B]ecause the award of attorney’s fees pursuant to 28 U.S.C. § 12 1447(c) is collateral to the decision to remand, the district court retained

13 jurisdiction after remand to entertain Plaintiffs’ motion for attorney’s fees.”). 14 Although Defendant’s notice of removal was overdue, it was not premised 15 on an objectively unreasonable basis. As it stands so far, there is complete 16 diversity between the parties and the parties are in apparent agreement that over

17 $75,000 is at stake; in other words, the error which requires remand is procedural, 18 not jurisdictional. Thus, Defendant presented an objectively reasonable basis for 19 removal, and the Court declines to award attorney’s fees and costs. See Martin v.

20 Franklin Capital Corp., 546 U.S. 132, 136 (2005) (“[A]bsent unusual 1 || circumstances, attorney’s fees should not be awarded when the removing party has 2|| an objectively reasonable basis for removal.”’). ACCORDINGLY, IT IS HEREBY ORDERED: 4 1. Plaintiffs Motion for Remand (ECF No. 5) is GRANTED. The matter 5 is hereby REMANDED to the Superior Court of Washington for 6 Klickitat County for all further proceedings (cause number 24-2-00007- 7 20). 8 2. Plaintiff's request for attorney’s fees and costs is DENIED. 9 The District Court Executive is directed to enter this Order, furnish copies to 10|| counsel, mail a certified copy to the Clerk of the Klickitat County Superior Court, and CLOSE the file. 12 DATED May 8, 2024. ie 0 Ket 14 Sane THOMAS O. RICE <> United States District Judge 15 16 17 18 19 20