Foltz v. GEICO Indemnity Company ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JAMIE LYNN FOLTZ, No. 1:21-cv-00131-DAD-SAB 12 Plaintiff, 13 v. ORDER DENYING PLAINTIFF’S MOTION TO REMAND 14 GEICO INDEMNITY COMPANY, and Does 1 through 25, inclusive, (Doc. No. 9) 15 Defendants. 16 17 18 This matter is before the court on plaintiff Jamie Lynn Foltz’s motion to remand this 19 action to the Fresno County Superior Court. (Doc. No. 9.) Pursuant to General Order No. 617 20 addressing the public health emergency posed by the COVID-19 pandemic, on February 24, 21 2021, plaintiff’s motion was taken under submission on the papers. (Doc. No. 10.) The court has 22 considered the submissions of counsel, and for the reasons discussed below, will deny the motion 23 to remand. 24 BACKGROUND 25 On June 5, 2020, plaintiff filed the complaint against defendant in Fresno County Superior 26 Court asserting the following four claims: (1) breach of written contract, (2) breach of the 27 implied covenant of good faith and fair dealing, (3) fraud, and (4) breach of the California Unfair 28 Competition Law, Business and Professions Code § 17200, et seq., (“UCL”). (Doc. No. 1-2 at 1.) 1 The complaint alleges that plaintiff insured her vehicle with defendant GEICO Indemnity 2 Company (“GEICO”) and that defendant allegedly mishandled an insurance claim she submitted 3 after her car was damaged in an accident on or about April 10, 2020. (Id. at ¶¶ 5–21.) Plaintiff’s 4 complaint did not demand a specific sum, but the action was filed as an unlimited civil case, 5 which by statute means one involving damages exceeding $25,000. (Id. at 17; Cal. Civ. Proc. 6 Code § 85–86.1.) 7 Defendant removed the case to this federal court on January 29, 2021 on the basis of 8 diversity jurisdiction. (Doc. No. 1 at 2.) Defendant asserts that for the purposes of diversity: it 9 was a Maryland corporation at the time the action was commenced;1 and that plaintiff is a citizen 10 and resident of California. (Doc. Nos. 1 at 6; 5 at 2.) In its notice of removal, defendant asserts 11 that the removal is timely because it was not apparent the amount in controversy exceeded 12 $75,0000 until at least December 31, 2020, when plaintiff served her supplemental responses to 13 defendant’s first set of special interrogatories (“Supplemental Responses”). (Doc. No. 1 at 4.) 14 However, defendant contends that the Supplemental Responses provided “some information” as 15 to the amount in controversy, but they “did not clearly establish on their face that the amount in 16 controversy exceeds $75,000.” (Doc. No. 1 at 4.) In the opposition the pending motion, 17 defendant asserts that at some unspecified point after receiving the Supplemental Responses it 18 began to conduct its own research into the potential value of plaintiff’s claims and regrading jury 19 verdicts in cases involving similar claims, and this research caused defendant to conclude that the 20 amount in controversy in this case was in excess of $75,000. (Doc. No. 13 at 5–6.) 21 On February 23, 2021, plaintiff filed a motion to remand. (Doc. No. 9 at 1.) Therein 22 plaintiff argues that her original discovery responses to defendant’s first set of special 23 interrogatories, served on October 1, 2020 (“Original Responses”), showed that her damages and 24 request for attorneys’ fees brought the amount in controversy above the $75,000 threshold. (Doc. 25 1 By the time of removal, defendant had become a Nebraska corporation with its principal place of business in Chevy Chase, Maryland. (Doc. No. 5 at 2.) However, the domicile of a party “for 26 purposes of diversity is determined as of the time the lawsuit is filed.” Lew v. Moss, 797 F.2d 27 747, 750 (9th Cir. 1986) (internal citation omitted). When the complaint was filed in state court, defendant was a Maryland corporation (Doc. No. 5 at 2), thus for the purposed of diversity, the 28 court will consider defendant as domiciled in Maryland. 1 No. 9-1 at 2, 7, 12, 13.) Thus, according to plaintiff, defendant’s notice of removal needed to be 2 filed within thirty days of October 1, 2020, rendering defendant’s filing on January 29, 2021 3 untimely. (Id. at 2.) 4 On March 23, 2021, defendant filed its opposition to the pending motion, and plaintiff 5 filed her reply thereto on March 29, 2021. (Doc. Nos. 13, 14.) 6 LEGAL STANDARD 7 A suit filed in state court may be removed to federal court if the federal court would have 8 had original jurisdiction over the suit. 28 U.S.C. § 1441(a). Removal is proper when a case 9 originally filed in state court presents a federal question or where there is diversity of citizenship 10 among the parties and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 11 1332(a). An action may be removed to federal court on the basis of diversity jurisdiction only 12 where there is complete diversity of citizenship. Hunter v. Phillip Morris USA, 582 F.3d 1039, 13 1043 (9th Cir. 2009). For diversity purposes, a person is a citizen of a state if they are: (1) a 14 citizen of the United States and (2) domiciled in that state. Kantor v. Wellesley Galleries, Ltd., 15 704 F.2d 1088, 1090 (9th Cir. 1983). “[A] corporation [is] . . . a citizen of every State and foreign 16 state by which it has been incorporated and of the State or foreign state where it has its principal 17 place of business.” 28 U.S.C. § 1332(c)(1); see also Breitman v. May Co. Cal., 37 F.3d 562, 564 18 (9th Cir. 1994) (“[A] corporation is typically a citizen of two states for determining the existence 19 of diversity jurisdiction: the state of incorporation and the state in which it has its principal place 20 of business.”). 21 The procedure for the removal of civil actions is outlined in 28 U.S.C. § 1446. Roth v. 22 CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1124 (9th Cir. 2013). A defendant has just 23 thirty days to remove a case from state court to federal court once either of the two possible 24 triggering events occurs: (1) from the service of an initial pleading that indicates that the case is 25 removable; or (2) if the pleading does not indicate the case is removable, then from the receipt 26 “through service or otherwise” of “a copy of an amended pleading, motion, order or other paper 27 from which it may first be ascertained that the case is one which is or has become removable.” 28 See 28 U.S.C. § 1446(b)(1), (3). Defendants “need not make extrapolations or engage in 1 guesswork; yet the statute ‘requires a defendant to apply a reasonable amount of intelligence in 2 ascertaining removability.’” Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1140 (9th 3 Cir. 2013) (quoting Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 206 (2d Cir. 2001)). If no 4 document triggers the 30-day deadlines, a defendant can remove a case on the basis of diversity 5 jurisdiction “anytime up to a year after service of the complaint based on its own information or 6 research.” Roth, 720 F.3d at 1125; 28 U.S.C. § 1446(c)(1). 7 “If at any time before final judgment it appears that the district court lacks subject matter 8 jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). Section 1447(c) “is strictly 9 construed against removal jurisdiction, and the burden of establishing federal jurisdiction falls to 10 the party invoking the statute.” Cal. ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 11 2004) (citation omitted); see also Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 12 1083, 1087 (9th Cir. 2009) (“The defendant bears the burden of establishing that removal is 13 proper.”). As such, a federal court must reject jurisdiction and remand the case to state court if 14 there is any doubt as to the right of removal. Matheson v. Progressive Specialty Ins. Co., 319 15 F.3d 1089, 1090 (9th Cir. 2003); see also Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1118 (9th 16 Cir. 2004). 17 ANALYSIS 18 Here, it is disputed whether defendant’s removal of this action to this federal court was 19 timely. Plaintiff argues that defendant’s removal was untimely because plaintiff contends that her 20 Original Responses triggered commencement of the 30-day deadline on October 1, 2020. (Doc. 21 No. 9-1 at 7, 12, 13.) Plaintiff’s overarching argument is that defendant GEICO had subjective 22 knowledge that the amount in controversy in this action exceeded $75,000 by October 1, 2020 at 23 the latest. (Id. at 7.) In support of this argument, plaintiff specifically asserts the following: 24 (1) defendant GEICO knew that plaintiff’s claims for emotional distress and punitive damages 25 could exceed $75,000 based on, inter alia, prior judgments against defendant GEICO; 26 (2) defendant knew that plaintiff’s recovery of attorney’s fees could exceed $75,000 because 27 plaintiff sought in a motion, and the state court had set, a jury trial of 12–15 days; and 28 (3) defendant knew that plaintiff’s disgorgement and restitution claim could exceed $192,000 1 based on multiplying the $16 annual premium plaintiff had claimed in her October 1, 2020 2 Original Responses by the 3,000 policyholders over a four-year time frame. (Id. at 12–13.) 3 In its opposition, defendant argues that the running of the thirty-day removal deadline was 4 never triggered because neither plaintiff’s complaint nor her discovery responses indicated that 5 the case was removable on the face of those documents. (Doc. No. 13 at 4–5.) Because 6 plaintiff’s Original Responses disclosed only claimed damages of approximately $2,500, much 7 less than the $75,000 threshold, defendant argues that the 30-day clock of § 1446(b)(3) was not 8 started by receipt of those Original Responses. (Id. at 10–11.) Defendant alleges that the “only 9 reason” it eventually ascertained the amount in controversy exceeded $75,000 was because 10 defendant conducted its own “additional research and analysis of verdicts, decisions, and 11 potential recovery under § 17200.” (Id. at 12.) 12 In reply, plaintiff argues that defendant failed to use the required “reasonable amount of 13 intelligence” to ascertain from plaintiff’s papers that the case met the amount in controversy 14 requirement. (See, e.g., Doc. No. 14 at 1, 3, 5) (citing Kuxhausen v. BMW Fin. Servs. NA LLC, 15 707 F.3d 1136, 1140 (9th Cir. 2013)). The court addresses these arguments below. 16 Underlying plaintiff’s argument is the assumption that defendant had subjective 17 knowledge2 or otherwise should have been able to calculate that plaintiff’s claims for damages 18 and/or her request for attorneys’ fees would exceed $75,000. (Doc. No. 9-1 at 12.) Plaintiff 19 argues both that defendant independently had this information based on its past settling of similar 20 claims brought by others and that this information could be gleaned through statements made in 21 her Original Responses when combined with defendant’s knowledge. (Id. at 7.) However, 22 plaintiff’s own argument underscores the fact that not all of information needed to determine the 23 amount in controversy were contained in either plaintiff’s complaint or any of her discovery 24 responses. 25 ///// 26 27 2 Plaintiff elsewhere appears to contend that if defendant did not have the requisite subjective knowledge, it could have obtained that knowledge by conducting a modicum of research based on 28 the information plaintiff had provided. 1 Most importantly, the Ninth Circuit has rejected previous iterations of plaintiff’s 2 argument, and thus, the court must do so here. In this regard, the Ninth Circuit has held that the 3 thirty-day window for removal is triggered only when a defendant receives a pleading or paper 4 where it is clear on its face that the case is removable. Harris v. Bankers Life and Cas. Co., 425 5 F.3d 689, 693 (9th Cir. 2005). Removability is determined “through examination of the four 6 corners of the applicable pleadings, not through subjective knowledge or a duty to make further 7 inquiry.” Id. at 694; Roth, 720 F.3d at 1125. The court will not “inquire into the subjective 8 knowledge of the defendant, an inquiry that could degenerate into a mini-trial regarding who 9 knew what and when.” Harris, 425 F.3d at 695. A defendant does not have to refer to other 10 sources, such as business records or files, to determine if a pleading or paper indicates the case is 11 removable. Kuxhausen, 707 F.3d at 1141. Thus, in order to start the thirty-day clock, “the 12 ground for removal must be revealed affirmatively [by plaintiff].” Harris, 425 F.3d at 695. 13 Accordingly, plaintiff’s argument that defendant was required to independently research and/or 14 ascertain removability does not provide a basis to remand this action, and the only viable issue 15 before the court is whether plaintiff’s October 1, 2020 Original Responses, or another of 16 plaintiff’s “papers,” triggered the running of the thirty-day time period for removal. See, e.g., 17 Taylor v. United Road Servs., Inc., 313 F. Supp. 3d 1161, 1170 (E.D. Cal. 2018). 18 The court finds unpersuasive each of plaintiff’s three arguments as to why defendant 19 should have been on notice that the amount in controversy exceeding $75,000 based on her 20 Original Responses or other “papers.” First, plaintiff’s Original Responses do not reflect that her 21 claims for emotional distress damages could potentially exceed the minimum amount in 22 controversy required for this court’s diversity jurisdiction. In fact, the Original Responses only 23 affirmatively indicated that there was approximately $2,400 in controversy: $1,500 to be able to 24 make the vehicle [from the accident] useable” and $904.21 for rental car expenses. (See Doc. No. 25 9-2 at 15, 43, 52.) Although plaintiff points to several cases where courts have held that 26 allegations of emotional distress damages met the amount in controversy, even when plaintiff did 27 not plead a specific amount, those cases all involve serious physical injury. See, e.g., Moore v. 28 CVS Health Corp., No. EDCV 17-888 JGB, 2017 WL 2999021, at *2 (C.D. Cal. July 14, 2017) 1 (serious heart issues and respiratory problems resulting in emergency care and multiple hospital 2 stays); Hammarlund v. C.R. Bard, Inc., No. 2:15-cv-05506-SVW-JEM, 2015 WL 5826780, at *2 3 (C.D. Cal. Oct. 2, 2015) (a recurred umbilical hernia, small bowel obstruction, and kidney 4 damage, requiring surgery and a four-day hospital stay); Campbell v. Bridgestone/Firestone, Inc., 5 No. 2:05-cv-1499-FVS-DLB, 2006 WL 707291, at *2 (E.D. Cal. March 17, 2006) (head trauma, 6 a broken arm and wrist, and an injured collarbone); Calkins v. Southwest Airlines Co., No. 2:19- 7 cv-01215-SVW-MRW, 2019 WL 1553665, at *3 (C.D. Cal. April 10, 2019) (brain injury, injury 8 to the nervous system, and permanent disability, requiring surgery and other future treatment.) 9 Here, plaintiff alleges exclusively emotional distress injuries related to defendant’s alleged failure 10 to resolve her insurance claim. (Doc. No. 1-2 at ¶ 33) (“As a direct and proximate result of 11 GEICO’s conduct, Plaintiff has suffered mental and emotional distress and discomfort in an 12 amount not yet fully ascertained.”) Those allegations of emotional distress are clearly 13 distinguishable from the severe bodily injury claims that might make a pleading or paper 14 removable on its face. (See Doc. No. 9-2 at 11–13.) Consequently, this court concludes that the 15 emotional distress allegations in plaintiff’s Original Responses did not contain enough 16 information on their face for defendant to ascertain that the $75,000 amount in controversy 17 requirement was met. 18 Second, with respect to attorneys’ fees, plaintiff did not provide a specific amount in her 19 Original Responses. (Id. at 73–74.) In the pending motion, plaintiff argues that plaintiff should 20 have read the Original Responses in conjunction with a motion in which plaintiff stated she 21 “anticipated a jury trial [that would last] 12–15 days.” (Doc. No. 9-1 at 12.) But this argument 22 underscores the point that the Original Responses alone did not indicate that attorneys’ fees 23 would exceed $75,000—especially given that the entirety of plaintiff’s damages sought to date 24 were only a few thousand dollars. (See Doc. No. 9-2 at 15, 43, 52.) It was not until the 25 Supplemental Responses that plaintiff stated, for the first time, that she had accrued $27,400 in 26 attorneys’ fees as well as $873.00 in costs to date, and that such fees and costs were ongoing. 27 (Doc. No. 13-2 at 29, 47–50.) Thus, plaintiff’s attorneys’ fees and costs sought in the Original 28 Responses also did not contain enough information on its face for defendant to ascertain the 1 removability of this action as required by § 1446. 2 Finally, plaintiff claims that her discovery responses started the clock for removal because 3 defendant could conduct a “math calculation” to estimate her potential restitution and 4 disgorgement damages as $192,000 by using the $16 premium amount provided in plaintiff’s 5 Original Responses. (Doc. No. 9-1 at 13.) Plaintiff alleges that her Original Responses provided 6 defendant with the $16 premium amount, and that “nothing more was required to be provided by 7 the Plaintiff after [defendant] received her declarations page to make the calculation that her 8 claimed damages could potentially reach $192,000 on her fourth cause of action alone.” (Id.) 9 The governing case law does not support this argument. 10 While the Ninth Circuit has held that a defendant has to multiply figures “clearly stated” 11 in a paper to determine removability, the Ninth Circuit has also determined that performance of 12 this task by a party is required only if all of those such figures are actually provided in the paper. 13 Kuxhausen, 707 F.3d at 1140–41. A defendant does not have to look outside the paper to 14 determine the amount in controversy within thirty-days. Id. at 1141; see also Carvalho v. Equifax 15 Information Services, LLC., 629 F.3d 876, 887 (9th Cir. 2010) (holding that defendant could 16 reasonably determine the amount in controversy once provided the number of class members by 17 the complaint and estimation of damages per class member in a deposition); Garcia v. Wal-Mart 18 Stores, Inc., 207 F. Supp. 3d 1114, 1127 (C.D. Cal. 2016) (holding that the paper triggered 19 removal because all of defendant’s “calculations were based on plaintiffs’ own allegations”). 20 Here, the calculation plaintiff asserts defendant should have performed involves three 21 figures: (1) the $16 annual insurance premium; (2) the estimated 3,000 policyholders; and (3) the 22 four-year time period within the statute of limitations for the Business & Professions Code 23 § 17200. (Doc. No. 1 at 10.) Plaintiff attests that the $16 figure came from her Original 24 Responses. (Doc. Nos. 9-1 at 13, 9-2 at 39.) However, plaintiff does not even suggest that she 25 provided the 3,000 policyholders figure needed to complete the calculation she argues defendant 26 should have made. (Doc. No. 9-1 at 13.) Indeed, defendant’s motion to remove and supporting 27 exhibits indicate that defendant itself, not plaintiff, produced the policyholders figure through a 28 rather complicated claims search. (See Doc. Nos. 1 at 10, 1-12.) Consequently, it appears that 1 | plaintiff did not actually provide all of the information necessary for defendant to complete the 2 | multiplication to ascertain the potential amount in controversy. Thus, plaintiff's restitution and 3 | disgorgement damages in the Original Responses also failed to demonstrate removability on their 4 | face. 5 CONCLUSION 6 For all of the reasons explained above, plaintiff's motion to remand (Doc. No. 9) is 7 | denied. 8 | IT IS SOORDERED. a “ 9 ji je Ff; Dated: _ August 19, 2021 wae 10 UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28