Schmitt v. Insurance Co. of North America

• Citation: 845 F.2d 1546
• Decision Date: 06 May 1988
• Docket Number: No. 88-5503,88-5503
• Parties: Conrad SCHMITT; Charles Sackett; Daniel Martin; Michael Juneau; Plaintiffs-Appellees, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant-Appellant. INSURANCE COMPANY OF NORTH AMERICA, Cross-Complainant/Appellant, v. JUNEAU & MARTIN, INC. dba J.M. Auto Sales, a corporation, Juneau & Martin, Inc. dba Century Motors, a corporation; Cross-Defendants, and Michael Juneau, an individual, Daniel James Martin, an individual, Cross-Defendants/Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1546

845 F.2d 1546

Conrad SCHMITT; Charles Sackett; Daniel Martin; Michael

Juneau; Plaintiffs-Appellees, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant-Appellant.

INSURANCE COMPANY OF NORTH AMERICA, Cross-Complainant/Appellant, v. JUNEAU & MARTIN, INC. dba J.M. Auto Sales, a corporation,

Juneau & Martin, Inc. dba Century Motors, a

corporation; Cross-Defendants,

and

Michael Juneau, an individual, Daniel James Martin, an

individual, Cross-Defendants/Appellees.

No. 88-5503.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 8, 1988.

Decided May 6, 1988.

William R. Moore, Regal & Levy, Encino, Cal., for defendant-appellant.

Fred U. Hammett, Jr., Joseph W. Ruff, San Diego, Cal., for plaintiffs-appellees.

Appeal from the United States District Court for the Southern District of California.

Before HUG, ALARCON and KOZINSKI, Circuit Judges.

ALARCON, Circuit Judge:

Defendant/Appellant Insurance Company of North America (INA) appeals from an order remanding this matter to the state court and awarding attorney's fees to Plaintiffs/Appellees Conrad Schmitt, Charles Sackett, Daniel Martin, and Michael Juneau (collectively plaintiffs). We have concluded that 28 U.S.C. Sec. 1447(d) bars us from reviewing the order of remand. Accordingly, we dismiss the appeal from that order. We have jurisdiction, however, to review that portion of the order awarding attorney's fees, and we reverse it.

FACTS

On June 19, 1985, plaintiffs filed this action in the Superior Court of the State of California for the County of San Diego. The complaint named INA, DOES 1 through 10, and DOE CORPORATIONS 1 through 10 as defendants. The complaint sought compensatory and punitive damages for breach of a bond agreement, breach of a covenant of good faith and fair dealing, fraud, and constructive fraud.

On December 13, 1985, INA filed an answer to the complaint and a cross-complaint for indemnity and reimbursement against plaintiffs Juneau and Martin. Both sides thereafter conducted discovery.

On September 17, 1987, the scheduled trial date, counsel for both sides appeared in the master calendar department of the superior court. The court continued the matter because no courtroom was then available. On December 15, 1987, the matter was assigned to a trial department. When counsel for plaintiffs and INA appeared before the trial judge, they announced that they were ready for trial and submitted motions in limine. No other defendants appeared, either in person or through counsel.

On December 16, 1987, INA filed a petition for removal in the United States District Court for the Southern District of California and served a copy of the petition on the plaintiffs and the superior court. To support federal jurisdiction, INA alleged that diversity of citizenship existed between plaintiffs and INA and that the amount in controversy exceeded $10,000. Later that day, when the state court judge called the matter and began to rule on the parties' respective motions in limine, counsel for INA informed the judge that a petition for removal had been filed, whereupon the state court stayed any further proceedings.

Plaintiffs immediately filed a motion in the district court to remand the matter to state court. The following day, December 17, 1987, the district court held a hearing on plaintiffs' motion. During these proceedings, the district court judge questioned the timeliness of the petition for removal. The court stated: "I think you [INA] could have removed it a long time ago." Counsel for INA responded that under this court's decision in Bryant v. Ford Motor Co., 832 F.2d 1080 (9th Cir.1987) (en banc), modified, 844 F.2d 602 (9th Cir.1988) (en banc), the matter first became removable on December 15, 1987, when the plaintiffs announced ready for trial without having served any of the potentially nondiverse DOE defendants.

The district court judge stated that he was inclined to remand the matter to state court but would continue the hearing until December 21, 1987, to afford INA additional time to submit written opposition to the motion for remand. The district court suggested that INA address whether its petition for removal was timely and whether it had waived the right to remove by participating in the state court proceedings.

On December 21, 1987, the district court conducted further proceedings on plaintiffs' motion for remand. After hearing additional argument, the district court ordered the matter remanded to state court and awarded attorney's fees to plaintiffs in the amount of $750. The next day, December 22, 1987, the district court entered its written Opinion and Order remanding the matter to state court on the grounds that INA's petition for removal was untimely and that INA had waived its right to remove the case when it "voluntarily subjected itself to the jurisdiction of the state court by filing its permissive cross-complaint in December 1985."

Later the same day, INA filed a petition for writ of mandamus in this court, seeking relief from the district court's order of remand. By order entered January 5, 1988, a motions panel of this court denied INA's petition on the ground that INA had an adequate remedy by way of direct appeal. The panel elected to construe the petition as a notice of appeal, fixed an expedited briefing schedule, and stayed the district court's order of remand pending disposition of the present appeal.

By order entered January 21, 1988, the same panel declared: "The question of jurisdiction, provisionally decided by the motions panel, is referred to the merits panel. The parties shall address the issue in their remaining briefs."

DISCUSSION

I. DOES THIS COURT HAVE JURISDICTION OVER INA'S APPEAL FROM THE DISTRICT COURT'S REMAND ORDER?

As noted above, the motions panel denied INA's petition for writ of mandamus on the ground that relief was available by means of appeal. The motions panel stated: "The district court's order remanding the case to state court was based upon a theory of waiver or estoppel. That determination is subject to review on appeal. See Clorox v. United States District Court, 779 F.2d 517 (9th Cir.1985). Because petitioner has an adequate remedy by way of direct appeal, the writ of mandamus is denied."

As the panel assigned to adjudicate the merits of this appeal, we must determine for ourselves whether we have jurisdiction to hear the matter. We are not bound by the motions panel's summary determination that relief is available to INA by means of direct appeal. See Schlegel v. Bebout, 841 F.2d 937, 941 (9th Cir.1988) ("While we give deference to motions panel decisions made in the course of the same appeal, this court has an independent duty to decide whether we have jurisdiction."); United States v. Houser, 804 F.2d 565, 568-69 (9th Cir.1986) (merits panel must decide whether it has jurisdiction and is not bound by motions panel's summary denial of motion to dismiss appeal for lack of jurisdiction). Moreover, in its subsequent order dated January 21, 1988, the motions panel expressly stated that "[t]he question of jurisdiction, provisionally decided by the motions panel, is referred to the merits panel." Accordingly, we proceed to consider de novo our jurisdiction to entertain INA's appeal.

Under 28 U.S.C. Sec. 1447(c) (1982), a district court must remand any case that has been removed "improvidently and without jurisdiction." ¹ With one exception not relevant here, an order of remand issued pursuant to section 1447(c) is "not reviewable on appeal or otherwise." 28 U.S.C. Sec. 1447(d) (1982); see Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 343, 96 S.Ct. 584, 589, 46 L.Ed.2d 542 (1976) (section 1447(d) "prohibits review of all remand orders issued pursuant to Sec. 1447(c)"); Kunzi v. Pan American World Airways, Inc., 833 F.2d 1291, 1293 (9th Cir.1987) (same). Such an order is immune from review even if the district court erred in determining that the case was removed improvidently and without jurisdiction. Thermtron, 423 U.S. at 343, 96 S.Ct. at 589; Kunzi, 833 F.2d at 1293.

In cases where the basis or authority for remand is unclear, we look to the substance of the order to determine whether it was issued pursuant to section 1447(c). A remand order issued pursuant to section 1447(c) is immune from appellate review even if the district court does not expressly state that the matter was "removed improvidently and without jurisdiction." Kunzi, 833 F.2d at 1293.

A remand order based on the untimeliness of a petition for removal is within the purview of section 1447(c). See State Farm Mut. Auto. Ins. Co. v. Baasch, 644 F.2d 94, 96 (2d Cir.1981) (dismissing, for want of appellate jurisdiction, appeal from district court order remanding action on ground of untimely removal); London v. United States Fire Ins. Co., 531 F.2d 257, 260 (5th Cir.1976) ("[T]he failure to comply with the statutory time requirements is the sort of defect which the District Court was entitled to consider and which caused this case to be improvidently removed within the meaning of Sec. 1447(c), and accordingly Sec. 1447(d) divests this Court of jurisdiction to hear this appeal."); Schmidt v. National Organization for Women, 562 F.Supp. 210, 213 (N.D.Fla.1983) (untimely removal is "improvident" under section 1447(c)); Kaib v. Pennzoil Co., 545 F.Supp. 1267, 1269 (W.D.Pa.1982) ("An improvident removal is one that is legally defective, such as failure to comply with the time requirements....").

Likewise, an order remanding a case on the ground that the defendant waived the right to remove by seeking relief in the state court is governed by the requirements of section 1447(c). See In re Weaver, 610 F.2d 335, 337 (5th Cir.1980) (district court order remanding case on ground that petitioner had sought relief in state court was an order pursuant to section 1447(c), even though district court did not refer to section 1447(c) or mention phrase "removed improvidently and without...