Aguayo v. AMCO Ins. Co.

CourtUnited States District Courts. 10th Circuit. District of New Mexico
Citation59 F.Supp.3d 1225
Docket NumberNo. CIV 14–0400 JB/KBM.,CIV 14–0400 JB/KBM.
PartiesJohn AGUAYO, Sr.; Denis Aguayo and John Aguayo, Jr., Plaintiffs, v. AMCO INSURANCE COMPANY, Defendant.
Decision Date31 October 2014

59 F.Supp.3d 1225

John AGUAYO, Sr.; Denis Aguayo and John Aguayo, Jr., Plaintiffs

No. CIV 14–0400 JB/KBM.

United States District Court, D. New Mexico.

Filed Oct. 31, 2014.

59 F.Supp.3d 1228

Matthew L. Garcia, Mary E. Schmidt–Nowara, Garcia Ives Nowara LLC, Albuquerque, NM, for the Plaintiffs.

David M. Wesner, Dixon, Scholl & Bailey, PA, Lisa E. Pullen, Civerolo, Gralow, Hill & Curtis, PA, Gregory L. Biehler, Jill M. Collins, Beall & Biehler, Albuquerque, NM, for the Defendant.


JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Plaintiffs' Motion to Remand, filed May 28, 2014 (Doc. 12)(“Motion”). The Court held a hearing on August 7, 2014. The primary issue is whether the Court should grant the Motion and remand this case to state court, because it was pending there for “more than 1 year” at the time of removal; or deny the Motion and keep the case on the ground that the Plaintiffs “acted in bad faith in order to prevent [Defendant AMCO Insurance Company] from removing the action.” 28 U.S.C. § 1446(c)(1). The Court interprets the bad-faith exception—which is only two years old and which no court has yet comprehensively construed—to require an inquiry into whether the plaintiff kept a removal-spoiling party in the case only for the purpose of preventing removal. The Court construes this inquiry to entail a two-step standard. First, the Court assesses whether the plaintiff actively litigated its case against the removal spoiler in state court. A finding that the plaintiff did not actively litigate against the removal spoiler constitutes bad faith, and the Court will retain jurisdiction over the case. If, on the other hand, the Court finds that the plaintiff actively litigated against the removal

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spoiler, that finding creates a rebuttable presumption that the plaintiff acted in good faith. Second, the defendant may rebut the good-faith presumption, with evidence already in the defendant's possession, that the plaintiff kept the removal spoiler in the case to defeat removal; the defendant will not, however, receive discovery or an evidentiary hearing in federal court to obtain such evidence. The Court adopts an expansive view of active litigation: the plaintiff need not expect to recover damages from the removal-spoiling defendant; if the plaintiff keeps the removal spoiler joined to obtain discovery from him or her, to force a settlement, to pressure the removal spoiler to testify on the plaintiff's behalf against other defendants, or to obtain a judgment against the removal spoiler that the plaintiff knows the removal spoiler cannot pay, the Court will consider the plaintiff to have actively litigated against the removal spoiler, and unless the removing defendant can adduce other evidence of bad faith, such as communications from the plaintiff directly attesting to bad faith, the Court will presume good faith and remand the case. In this case, the Plaintiffs actively litigated both against Defendant Michael Trujillo, whom the Plaintiffs twice deposed, and against Defendants Trace Spoonhoward, the New Mexico State Police (“NMSP”), and the State of New Mexico (collectively, “the State Defendants”), with whom the Plaintiffs settled, thus entitling them to a rebuttable presumption of good faith. AMCO Insurance has introduced no direct or convincing circumstantial evidence of bad faith, and has therefore failed to rebut the presumption. The Court, accordingly, grants the Motion and remands the case to state court.


The Court takes its facts from the Third Amended Complaint for Damages, filed in state court December 6, 2013, removed to federal court April 29, 2014 (Doc. 11–8, at 7–22)(“Complaint”).1 This case arises out of the July, 2010, murder of a young man, Christopher Aguayo, by another young man, Michael Trujillo, using a gun belonging to Trujillo's surrogate father, Spoonhoward, an officer with the NMSP. Complaint ¶¶ 12–24, at 3–4. All events occurred in Santa Fe, New Mexico, see Complaint ¶ 2, at 2, and all persons involved are New Mexico citizens with the exception of AMCO Insurance, which is a foreign corporation,2 see Complaint ¶¶ 3, 5–11, at 2–3.

Trujillo lived with his mother and Spoonhoward, who was not Trujillo's biological father, but to whom Trujillo would commonly refer as his “dad.” Complaint ¶ 23, at 4. See id. ¶ 26, at 4. Trujillo had disciplinary problems: in 2006, he was caught taking a pellet gun from his home to his school; in 2007, he was involved in a fight with another student at his high school; in 2009, his mother had reported him missing, and, when police found him, they reported that he was “belligerent, verbally abusive and that he referred to an officer as a pig.” Complaint ¶ 27, at 5 (internal quotation marks omitted) (quotation unattributed). See id. ¶¶ 28–29, at 5. Trujillo's mother acknowledges that she had “extreme difficulties with her son” and worried that he might be in a gang. Complaint ¶ 28, at 5 (internal quotation marks

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omitted)(quotation unattributed). See id. ¶ 26, at 4–5. It is unclear what role Spoonhoward played in Trujillo's life over the years, but Spoonhoward was aware of Trujillo's disciplinary issues and of his possible gang affiliation. See Complaint ¶ 30, at 5.

The NMSP had issued Spoonhoward a .357 Smith & Wesson pistol. See Complaint ¶ 17, at 3; id. ¶¶ 23–24, at 4. Pursuant to New Mexico Department of Public Safety (“NMDPS”) policy, Spoonhoward was required to safely secure the firearm at all times, whether he was on-or off-duty. See Complaint ¶¶ 31–32, at 5–6. The policy provides:

When not secured on the officer's person or other department approved locking storage device or locked truck of an issued service vehicle, officers are to ensure that their service weapon is secured and/or stored in a safe manner; and
The service weapon shall be secured so as to be inaccessible to children or unauthorized personnel at all times.

Complaint ¶ 32, at 6 (quotation unattributed).

Trujillo was able to get his hands on this pistol, and, on July 8, 2010, he had his girlfriend arrange a meeting at the Santa Fe Place Mall between him and C. Aguayo. See Complaint ¶ 12, at 3. Trujillo was angry at C. Aguayo about cellular telephone communications that C. Aguayo had engaged in with Trujillo's girlfriend, and, when C. Aguayo arrived at the mall, Trujillo drove up to him, got out of the car, and shot him four or five times with the pistol. See Complaint ¶¶ 13–18, at 3. C. Aguayo collapsed to the ground, and Trujillo walked up to within three feet of him and emptied the rest of the gun's magazine into C. Aguayo. See Complaint ¶ 18, at 3. Trujillo and his girlfriend fled the scene, but Trujillo was picked up by police less than an hour after the shooting. See Complaint ¶ 19, at 3; id. ¶ 22, at 4. Immediately upon apprehension, Trujillo told police that he “ha[d] to tell you guys I got the gun from my dad[;] he's a state cop.” Complaint ¶ 23, at 4.

C. Aguayo was bleeding, and slipping in and out of consciousness, when officers arrived at the scene. See Complaint ¶ 20, at 3. He was in great pain and at one point asked officers to shoot him to end his suffering. See Complaint ¶ 20, at 4. Officers rushed him to the hospital, but, shortly after his arrival, he succumbed to his injuries and died. See Complaint ¶ 21, at 4.

At the time C. Aguayo was murdered, the Aguayo family had an AMCO Insurance policy that provided them with uninsured motorist benefits. See Complaint ¶ 60, at 9. Because Trujillo used a vehicle in his commission of the crime, the Aguayo family submitted an insurance claim for the full amount of the policy limit. See Complaint ¶ 62, at 9. AMCO Insurance denied the claim without interviewing any witnesses or speaking with the Aguayo family. See Complaint ¶ ¶ 63–64, at 9–10.


This case involves the Plaintiffs' Motion to remand the case to state court after AMCO Insurance removed it to federal court, arguing that, because the case was pending in state court “more than 1 year,” AMCO Insurance's removal was improper. 28 U.S.C. § 1446(c)(1). AMCO Insurance, for its part, contends that removal was justified under the recently passed bad-faith exception to the one-year limitation, which requires that the Plaintiffs' actions in state court were “in bad faith in order to prevent a defendant from removing the action.” 28 U.S.C. § 1446(c)(1). As such, the relevant background to the resolution of this Motion are the parties' procedural

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actions while litigating this case in state court. The parties vary widely in the motives they ascribe to their own and each other's actions; the objective facts of how the litigation unfolded, however, are not in dispute.

1. The Plaintiffs File Their Case in State Court.

The Plaintiffs—C. Aguayo's family members and his personal...

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