Jacqueline M. Eparvier v. Fortis Insurance Company

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 07-14923 ELEVENTH CIRCUIT
JUNE 3, 2008
Non-Argument Calendar
THOMAS K. KAHN
________________________
CLERK
D.C. Docket No. 07-01491-CV-ORL-31UAM
JACQUELINE M. EPARVIER,
Plaintiff-Appellee,
versus
FORTIS INSURANCE COMPANY,
a.k.a. Time Insurance Company,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(June 3, 2008)
Before MARCUS, WILSON and COX, Circuit Judges.
PER CURIAM:
I. OVERVIEW
This appeal raises jurisdictional questions regarding the propriety of the district
court’s sua sponte remand of the case to state court based on a perceived procedural
defect. We exercise our appellate jurisdiction and hold that the district court
improperly remanded the case.
II. FACTS AND PROCEDURAL HISTORY
On December 1, 2004, Plaintiff Jacqueline M. Eparvier filed a complaint in the
Circuit Court of Orange County, Florida, against Defendant Fortis Insurance
Company (“Fortis”), seeking damages for breach of contract, a declaratory judgment,
and attorney’s fees for Fortis’s failure to pay medical benefits to Eparvier. The case
settled in March 2006, mooting all Eparvier’s claims except her claim for attorney’s
fees. On April 3, 2006, Eparvier filed a motion for leave to amend her complaint to
assert additional claims against Fortis for fraud in the inducement, fraud, reformation,
and bad faith. Fortis objected, and the court denied Eparvier’s motion. On May 23,
2007, Eparvier filed a second motion for leave to amend her complaint to assert the
same proposed additional claims, in addition to breach of fiduciary duty and civil
conspiracy. On August 30, 2007, the court granted her motion for leave to amend her
complaint. Fortis filed a notice of removal on September 18, 2007, with the United
States District Court for the Middle District of Florida.1
On October 1, 2007, the district court issued an Order to Show Cause as to why
Fortis did not remove the case within thirty days of May 23, 2007, the date on which
1
Fortis filed a Motion to Dismiss Eparvier’s complaint on September 19, 2007. (R.1-6.)
2
Eparvier filed a motion for leave to amend her complaint. Fortis timely filed its
response to this order on October 12, 2007, arguing that the thirty-day time period for
removal did not commence until August 30, 2007, when the state court granted
Eparvier’s second motion for leave to amend her complaint. On October 15, 2007, the
district court entered a sua sponte order, remanding the case to state court based on
Fortis’s perceived untimely removal (“the Remand Order”).2 Fortis timely filed a
Notice of Appeal.
III. CONTENTIONS OF THE PARTIES
Eparvier contends that we do not have jurisdiction over this appeal, because we
generally have no appellate jurisdiction over remand orders. She says that the
Remand Order was not sua sponte, since she had already given Fortis and the court
notice that she intended to object to removal. And, Eparvier argues that Fortis’s
notice of removal was untimely because (1) Fortis waived the right to remove the
case, because it has always been removable, (2) Fortis removed the case more than
one year after it commenced, (3) Fortis’s right to remove was not revived, and (4)
even if Fortis’s right to remove had been revived, Fortis’s motion to remove was
untimely because it was filed more than thirty days of Fortis being served with
2
On October 18, 2007, Eparvier filed a Motion to Remand, which the district court ruled was
moot in light of its October 15, 2007 Remand Order. (R.2-28.)
3
Eparvier’s motion to amend her state court complaint. Eparvier further argues that,
if we determine that we do have appellate jurisdiction, the appropriate action is to
vacate the order on review and remand with the instruction that the district court
decide the remand issue on full briefing by the parties.
Fortis contends that we should exercise jurisdiction over this appeal and
reverse the Remand Order because it was made sua sponte and was based on a
perceived procedural defect. Fortis argues that it timely filed its notice of removal.
IV. DISCUSSION
A. Appellate Jurisdiction
As a threshold matter, we must determine whether we possess appellate
jurisdiction to review the district court’s Remand Order. We review de novo a district
court’s decision to remand a case following removal. Poore v. American-Amicable
Life Ins. Co. of Texas, 218 F.3d 1287, 1289 (11th Cir. 2000), abrogated on other
grounds by Alvarez v. Uniroyal Tire Co., 508 F.3d 639 (11th Cir. 2007). Generally,
we cannot review a district court’s remand order: “An order remanding a case to the
State court from which it was removed is not reviewable on appeal or otherwise . . .
.” 28 U.S.C. § 1447(d).
A case which has been removed may be remanded to state court because of a
procedural defect in the removal process: “A motion to remand the case on the basis
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of any defect other than lack of subject matter jurisdiction must be made within 30
days after the filing of the notice of removal . . . .” 28 U.S.C. § 1447(c). Section
1447(c) contemplates remand based on a motion, not based on the sua sponte order
of the district court.
The Supreme Court has held that §§ 1447(c) and (d) must be construed
together. See Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 345, 96 S. Ct.
584, 590 (1976), abrogated on other grounds by Quackenbush v. Allstate Ins. Co.,
517 U.S. 706, 116 S. Ct. 1712 (1996). This means that “only remand orders issued
under § 1447(c) and invoking the grounds specified therein–that removal was
improvident and without jurisdiction–are immune from review under § 1447(d).” Id.
at 346, 96 S. Ct. at 590.
“[A] remand order is reviewable if and only if it is openly based on grounds
other than (1) lack of district court subject matter jurisdiction; or (2) a motion to
remand the case filed within 30 days of the notice of removal which is based upon a
defect in the removal procedure.” In re Bethesda Mem’l Hosp., Inc., 123 F.3d 1407,
1409 (11th Cir. 1997). “[T]he district court must wait for a party’s motion before
remanding a case based on procedural defect.” Whole Health Chiropractic &
Wellness, Inc. v. Humana Medical Plan, Inc., 254 F.3d 1317, 1321 (11th Cir. 2001).
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Ҥ 1447(c) does not authorize any sua sponte remand order not based on subject
matter jurisdiction—even if made within the thirty day period. . . .” Id. at 1319.
Eparvier attempts to distinguish Whole Health, arguing that the reason the
Whole Health court exercised appellate jurisdiction was because allowing the district
court to remand sua sponte would prevent the plaintiff from acquiescing in federal
jurisdiction. Eparvier argues that she gave Fortis and the court notice of her intent to
file a motion to remand when she filed her Motion for Extension of Time to Oppose
Defendant’s Motion to Dismiss: “Plaintiff . . . advises the Court and Defendant . . .
of her intent to timely file a motion to remand this matter . . . Plaintiff intends to file
her own motion to remand this matter as having been improvidently removed from
state court.” (R.2-20 at 1-2.)
Eparvier cites Velchez v. Carnival Corp., 331 F.3d 1207 (11th Cir. 2003), to
support her position that Whole Health does not apply here. In Velchez, the district
court remanded a case based on an entirely different rationale than the one advanced
in the plaintiff’s motion to remand. We held that Whole Health was inapplicable,
because (1) the remand order was not sua sponte (“dictionary definition of sua sponte
does not fit these circumstances, because the court was prompted by Velchez to
remand”), and (2) there was no doubt that the plaintiff did not acquiesce in federal
jurisdiction. Id. at 1210.
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Velchez does not limit our appellate jurisdiction in this case. Here, unlike in
Velchez, Eparvier did not file a motion to remand prior to the Remand Order. And,
Velchez held that the district court’s remand order was not sua sponte because
Velchez’s motion to remand “prompted” the court to remand. There was no such
“prompting” here. The district court remanded without a motion from Eparvier. The
court’s action therefore falls within Velchez’s meaning of “sua sponte.”
The district court remanded this case sua sponte, based on a perceived
procedural defect. This falls squarely within Whole Health. Because we decide that
we have jurisdiction over this appeal, we proceed to examine the merits of the
Remand Order.
B. Remand Order
When we can exercise appellate jurisdiction over a district court’s remand
order, we review it de novo. Yusefzadeh v. Nelson, Mullins, Riley & Scarborough,
LLP, 365 F.3d 1244, 1245 (11th Cir. 2004).
After removal, the district court issued an Order to Show Cause, on its “own
initiative,” as to why it should not remand the case (R.1-15 at 1.) The court assumed
that “the time for removal was revived when the amended complaint was filed on
May 23, 2007” and stated that “even if this Court were to find that Defendant’s time
for removal was revived with the filing of Plaintiff’s amended complaint, Defendant
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did not remove this action within 30 days of May 23, 2007.”3 (Id.) However, May 23
was the date of Eparvier’s motion for leave to file her amended complaint. Eparvier’s
motion was granted on August 30, and the amended complaint was also filed on
August 30, fewer than thirty days before Fortis’s notice of removal. The district
court’s Order to Show Cause was based on the false premise that Fortis’s time for
removal may have been revived on May 23, rather than August 30.4
Fortis addressed the district court’s concerns in its Response to the Order to
Show Cause. Fortis contended that the thirty-day time period for removal did not
begin to run until August 30, and that retaining federal jurisdiction would not waste
judicial resources.
The district court remanded the case to state court. (R.2-23.) While
acknowledging that “[t]here appears to be no debate that this case meets the
requirements of diversity jurisdiction under 28 U.S.C. § 1332”, the court stated that
“because this case was filed almost three years ago, the timeliness of Defendant’s
removal is in question.” (Id. at 3.) The court acknowledged Fortis’s argument that
August 30 was the proper date from which to measure the thirty-day removal
3
28 U.S.C. § 1446(b) requires that a case be removed within thirty days after the time at
which it may be first ascertained “that the case is one which is or has become removable.”
4
The court added that removal “would require duplication of all the efforts already
undertaken by the state court judge.” (R.1-15 at 2.)
8
window, but it did not address the merits of this argument. All the court did address
was Fortis’s argument that Lahey v. State Farm Mut. Auto. Ins. Co., No. 08-06-CV-
1949-T27-TBM, 2007 WL 2029334 (M.D. Fla. July 11, 2007), applies.5 The court
distinguished Lahey by pointing out that, in that case, the original action had been
resolved. In this case, the original action was still pending (specifically, the motion
for attorney’s fees). Finally, the district court said that “all doubts regarding the
propriety of removal should be resolved in favor of remand” and that removal “would
result in a very inefficient use of judicial resources.” (R.2-23 at 4.)
On this appeal, we only address the Remand Order. The Remand Order is
grounded upon two conclusions: first, that “removal jurisdiction [is] suspect due to
the timing of removal,” and second, that removal “would result in a very inefficient
use of judicial resources.” (R.2-23 at 4.) Neither conclusion adequately supports
remand. To say that jurisdiction is “suspect” only suggests that there is a
jurisdictional question that should be decided. The court did not decide it. And,
concerns about judicial efficiency do not support remand.
The district court did not remand this case based on the rationale suggested in
its Order to Show Cause. Nor did the court address Fortis’s main contention, that the
5
Lahey held that a case becomes removable when the state court grants a plaintiff’s motion
to amend, and never sooner. Fortis cited more than a dozen cases supporting this position, but the
district court only mentioned Lahey.
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thirty-day window to remove was revived on August 30. Whole Health informs
today’s decision: “We hold that the district court exceeded its authority under §
1447(c) by remanding this case because of a perceived procedural defect in the
removal process without waiting for a party’s motion.” 254 F.3d at 1321. Eparvier
argues that Fortis waived its argument that remand was an inappropriate sua sponte
act, because it did not argue this to the district court. We reject this contention. The
district court’s Order to Show Cause only asked Fortis to address the substantive legal
issue of why it did not file its notice of removal within thirty days of May 23. Fortis
squarely addressed this issue, and need not have assumed that the district court would
improperly enter a sua sponte order.
We decline to address any of the arguments advanced on this appeal in support
of remand to state court, preferring that the district court address in the first instance
Eparvier’s motion to remand.
V. CONCLUSION
We vacate the Remand Order and remand to the district court for further
proceedings consistent with this opinion.
VACATED AND REMANDED.
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