Abadi v. Best Meridian Ins. Co.

• Decision Date: 24 August 2015
• Docket Number: CASE NO. 14-22798-CIV-LENARD/GOODMAN
• Parties: VIVIAN AMKIE ABADI, Plaintiff, v. BEST MERIDIAN INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Florida

VIVIAN AMKIE ABADI, Plaintiff,
v.
BEST MERIDIAN INSURANCE COMPANY, Defendant.

CASE NO. 14-22798-CIV-LENARD/GOODMAN

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

August 24, 2015

ORDER ADOPTING IN PART THE REPORT OF THE MAGISTRATE JUDGE (D.E. 25) AND GRANTING IN PART PLAINTIFF'S VERIFIED MOTION FOR ATTORNEY'S FEES (D.E. 21)

THIS CAUSE is before the Court on the Report of Magistrate Judge Jonathan Goodman ("Report," D.E. 25), filed June 24, 2015, recommending the Court deny Plaintiff's Verified Motion for Attorney's Fees ("Motion," D.E. 21), or, alternatively, to award an amount lower than that requested. Plaintiff Vivian Amkie Abadi filed Objections to the Report on July 8, 2015, ("Objections," D.E. 26), to which Defendant Best Meridian Insurance Company ("BMIC") filed a Response on August 4, 2015, ("Response," D.E. 29). Upon review of the Report, Objections, Response, and the record, the Court finds as follows.

I. Background

On June 24, 2014, Abadi, a citizen of Mexico, filed this action in Florida state court alleging that BMIC wrongfully stopped providing coverage for her multiple

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sclerosis treatments. (See Compl., D.E. 1-2 ¶¶ 9, 12.) On July 30, 2014, BMIC, a Florida corporation, filed a Notice of Removal on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332(a). (D.E. 1 ¶ 2.) Noting that BMIC was a resident defendant and removal was barred under 28 U.S.C. § 1441(b)—otherwise known as the "forum defendant rule"—Abadi's counsel contacted BMIC's counsel on August 7, 2014, to ask whether she would oppose remand. (Report at 2.) BMIC's counsel, who was out of the jurisdiction on vacation, did not agree to remand at that time, explaining that she would need to first discuss the matter with her client. (Id.)

On August 11, 2014, BMIC's counsel contacted Abadi's counsel and conditionally agreed not to oppose the motion to remand in exchange for Abadi not pursuing attorneys' fees. (Id.) Abadi did not agree to the condition.¹ (Id.) The next day, Abadi's counsel contacted BMIC's counsel to inquire whether it would agree not to oppose the motion even if Abadi sought attorneys' fees. (Id.) BMIC agreed not to oppose the motion to remand if it had the right to review the motion prior to filing. (Id.) On August 13, 2014, Plaintiff filed her Unopposed Motion to Remand, invoking the forum defendant rule. (See D.E. 11.)

On August 14, 2014, the Court entered an Order granting the Unopposed Motion for Remand under 28 U.S.C. § 1447(c) because the removal was procedurally barred under Section 1441(b). (D.E. 12.) However, the Court retained jurisdiction "for the

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limited purpose of considering an award of costs and attorney's fees to Plaintiff pursuant to 28 U.S.C. section 1447(c)[.]" (Id.)

II. Report and Objections

a. Report and Recommendation

On June 24, 2015, Judge Goodman issued his Report and Recommendations. He initially noted that, in general, an attorneys' fee award under 28 U.S.C. § 1447(c) is warranted "'only where the removing party lacked an objectively reasonable basis for seeking removal.'" (Report at 3 (quoting Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005)).) He further noted that the forum defendant rule, 28 U.S.C. § 1441(b), prohibits removal where, as here, diversity is the only basis for federal jurisdiction and the defendant is a citizen of the state in which the action was brought. (Id. at 3, 5.) However, Judge Goodman concluded that BMIC "had an objectively reasonable basis for seeking removal as Plaintiff and Defendant are diverse parties under 28 U.S.C. § 1332(a)." (Id. at 5.) Judge Goodman reasoned that although removal was barred by the forum defendant rule, the defect is not "jurisdictional" but "procedural"—that is, Plaintiff could have or waived the defect and stayed in federal court. (Id. at 7.) Judge Goodman concluded that "[a] procedural defect does not render removal objectively unreasonable and therefore give a plaintiff the right to recover fees." (Id. at 8 (citing Plombco Inc. v. TBC Retail Grp., Inc., No. 13-81026-CIV, 2013 WL 5863571, at *2 (S.D. Fla. 2013); Ferrari v. Safeco Surplus Lines Ins. Co., No. 09-80152-Civ, 2009 WL 1738350, at *1 (S.D. Fla. 2009)). Accordingly, he recommends the Court deny Plaintiff's Motion for Attorney's Fees. (Id. at 10.)

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Judge Goodman further recommended that in the event the Court finds that Abadi is entitled to an award of attorneys' fees, the following reasonable hourly rates should apply: $150 per hour for Attorney Claudette Fornuto (down from the $200 requested);² $325 per hour for Attorney Jay Walker (down from the $375 requested); and $275 per hour for Attorney Adam Butkus, as requested. (Id. at 12-13.) Judge Goodman further found that Ms. Fornuto reasonably expended 24.6 hours (down from the 40 reported); Mr. Butkus reasonably expended the 8.4 hours reported; and Mr. Walker reasonably expended the 1.8 hours reported. (Id. at 16.) Accordingly, Judge Goodman recommends that in the event that the Court finds that Plaintiff is entitled to attorneys' fees, the amount awarded should be $6,585. (Id.)

b. Objections

First, Abadi argues that although a violation of the forum defendant rule is a defect that can be waived, there is no allegation that she ever waived it; therefore, BMIC cannot establish that the removal was objectively reasonable at the time of removal. (Objections at 3-4.) Second, she argues that an award of attorneys' fees does not hinge on whether a violation of the forum defendant rule is deemed "procedural" or "jurisdictional." (Id.) Third, she argues that the reasonableness of removal must be analyzed at the time of removal, (id. at 5 (citing Lowery v. Ala. Power Co., 483 F.3d 1184, 1211 (11th Cir. 2007); Destel v. McRoberts Protective Agency, Inc., 2004 WL 746293 (S.D. Fla. 2004)); however, the Report would suggest that the law allows BMIC to rely on an unknown,

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post-removal waiver of deficiency which would allow the Court to ignore the removing documents and absolve a defendant of any obligation to comply with the forum defendant rule. (Id.) Fourth, Abadi argues that the Report does not take any policy considerations into account, and that such considerations weigh in favor of a fee award. (Id. at 6-7.) Finally, she objects to Judge Goodman's determination that a reasonable hourly rate for Attorney Fornuto is $150, and instead argues that $200 is reasonable. (Id. at 3.)

III. Legal Standard

Upon receipt of the Magistrate Judge's Report and Petitioner's Objections, the Court must "make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1); accord Fed. R. Civ. P. 72(b)(3). The court must conduct a de novo review of any part of the Report that has been "properly objected to." Fed. R. Civ. P. 72(b)(3); see 28 U.S.C. § 636(b)(1) (providing that the district court "shall make a de novo determination of those portions of the [R & R] to which objection is made"). "Parties filing objections to a magistrate's report and recommendation must specifically identify those findings objected to. Frivolous, conclusive, or general objections need not be considered by the district court." Marsden v. Moore, 847 F.2d 1536, 1548 (11th Cir. 1988). The Court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the...