Beritiech v. Metropolitan Life Ins. Co., Civ. A. No. 94-0934-BH-S

• Decision Date: 12 April 1995
• Docket Number: Civ. A. No. 94-0934-BH-S,94-0820-BH-C.
• Citation: 881 F. Supp. 557
• Parties: Joseph M. BERITIECH, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY and Joey Abston, Defendants. Glover ROBERTS, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY and Frederick D. Byrd, Sr., Defendants.
• Court: U.S. District Court — Southern District of Alabama

881 F. Supp. 557

Joseph M. BERITIECH, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY and Joey Abston, Defendants.

Glover ROBERTS, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY and Frederick D. Byrd, Sr., Defendants.

Civ. A. Nos. 94-0934-BH-S, 94-0820-BH-C.

United States District Court, S.D. Alabama, Southern Division.

April 12, 1995.

Wyman O. Gilmore, Jr., Grove Hill, AL, Sidney W. Jackson, III, Mobile, AL, for plaintiff.

Stephen C. Jackson, Tony G. Miller, Lee E. Bains, Jr., Maynard, Cooper & Gale, P.C., Birmingham, AL, for defendants.

ORDER

HAND, Senior District Judge.

These actions are before the court on the plaintiffs' motions to remand to the Circuit Court of Mobile County.

Plaintiffs Joseph M. Beritiech and Glover Roberts, both Alabama domiciliaries, filed their complaints separately in circuit court. The defendants in Beritiech are Metropolitan Life Insurance Company, a New York corporation with its principal place of business in New York, and Joey Abston, a Metropolitan insurance agent in Mobile and an Alabama domiciliary. The defendants in Roberts are Metropolitan Life and Frederick D. Byrd, Sr., also a Metropolitan insurance agent in Mobile and an Alabama domiciliary.

Plaintiff Beritiech alleges that defendant Abston told him in 1990 that if he converted the $10,000 accumulated cash value of his whole-life insurance policy, he could get $25,000 in flexible-premium life insurance for no additional premiums. Beritiech claims Abston stated the cash value accumulated in his whole-life policy would never decrease, and his flexible-premium policy would provide greater cash value than the whole-life policy. He further claims that from 1990 to 1994, Abston continually reassured him his policy was in good order, that there was sufficient money to pay the premiums, and that the policy would remain in effect if Beritiech paid $35 monthly premiums.

Now Beritiech claims he will have to pay $1,600 per year to keep his policy in effect and that the cash value from his whole-life policy is almost depleted.

Plaintiff Roberts alleges that in 1967 or 1968 he purchased a dividend policy from Metropolitan Life. Premiums were $38 per month. In 1986, he contacted the company to buy $50,000 in life insurance. Roberts alleges that defendant Byrd stated that for $38 per month, Roberts would have a dividend policy with a face amount of $50,000, which would go to his beneficiary upon his death, and that he would have to pay premiums only until he turned 65, although the policy would remain in effect through age 90.

Roberts claims that when he turned 65, in 1993, he learned that unless he increased his monthly premium to $65 and agreed to a reduction in the policy to $30,000, his policy would lapse, because Byrd had reduced the value of the original dividend policy and used $3,142 from it to pay for the life-insurance policy.

Both plaintiffs assert state-law claims for fraud, misrepresentation, suppression, deceit, malice, and oppression. Beritiech also alleges conspiracy, breach of fiduciary duty, conversion, and failure to maintain adequate procedures, while Roberts alleges negligence, wantonness, and breach of contract.

Metropolitan Life removed both actions before the plaintiffs had served the nondiverse defendants. It invokes the court's diversity jurisdiction. See 28 U.S.C. §§ 1332, 1441, 1446. Both plaintiffs have filed motions to remand. See id. § 1447(c). Beritiech did so after serving nondiverse defendant Abston, but Roberts did so before serving nondiverse defendant Byrd.

In opposing each motion to remand, Metropolitan Life sets forth several arguments, any one of which, if persuasive, would suffice to deny remand.

The court must construe removal jurisdiction narrowly to limit federal jurisdiction and prevent encroachment on the state court's right to decide actions properly before it, especially in diversity actions. The removing defendants bear the burden of establishing federal jurisdiction. Robinson v. Quality Ins. Co., 633 F.Supp. 572, 574 (S.D.Ala.1986) (citations omitted); Harris v. Huffco Petroleum, 633 F.Supp. 250, 253 (S.D.Ala.1986) (citations omitted).

I

Metropolitan Life's first argument is based on the first section of the removal statute:

(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded.

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

28 U.S.C. §§ 1441(a, b) (emphasis added).

Citing the second sentence of § 1441(b), Metropolitan Life urges the court to disregard the domicile of the nondiverse defendants in determining the propriety of removal, because they were not "properly joined and served" before removal.

In Pullman Co. v. Jenkins, 305 U.S. 534, 541, 59 S.Ct. 347, 350, 83 L.Ed. 334 (1939) (citations omitted), the Supreme Court held that

where a non-separable controversy involves a resident defendant, the fact that the resident defendant has not been served with process does not justify removal by the non-resident defendant. It may be said that the non-resident defendant may be prejudiced because his co-defendant may not be served. On the other hand there is no diversity of citizenship, and the controversy being a nonseparable one, the non-resident defendant should not be permitted to seize an opportunity to remove the cause before service upon the resident co-defendant is effected. It is always open to the non-resident defendant to show that the resident defendant has not been joined in good faith and for that reason should not be considered in determining the right to remove.

Pullman relied on 28 U.S.C. § 71, an earlier removal statute. Id. at 538, 59 S.Ct. at 349; Pecherski v. General Motors Corp., 636 F.2d 1156, 1159, 1159 n. 2 (8th Cir.1981) (quoting 28 U.S.C. § 71). After Pullman, Congress amended the removal statute to add § 1441. Pecherski, 636 F.2d at 1159.

The immediate issue before the court is whether in determining the propriety of removal the court may consider the domicile of Abston, a nondiverse defendant served after removal but before the filing of a motion to remand, or the domicile of Byrd, a nondiverse defendant served after the filing of a motion to remand. The underlying issue is whether § 1441(b) supersedes Pullman. Over this underlying issue the courts are divided. Compare Mask v. Chrysler Corp., 825 F.Supp. 285, 289 (N.D.Ala.1993),¹aff'd without opinion, 29 F.3d 641 (11th Cir. 1994),²and South Panola Consol. School Dist. v. O'Bryan, 434 F.Supp. 750, 754 (N.D.Miss.1977) (citing Pacific S.S. Co. v. Sutton, 7 F.2d 579, 581 (9th Cir.1925)),³with Pecherski, 636 F.2d at 1160-61 (Jane Doe defendant unserved), Kelly v. Drake Beam Morin, Inc., 695 F.Supp. 354, 356-57 (E.D.Mich.1988) (nondiverse defendant unserved), and Schwegmann Bros. Giant Super Markets, Inc. v. Pharmacy Reports, Inc., 486 F.Supp. 606, 614-15 (E.D.La.1980) (nondiverse defendant served after removal) (citing Clarence E. Morris, Inc. v. Vitek, 412 F.2d 1174 (9th Cir.1969)).

With due regard for the Northern District of Alabama's admonition to construe unambiguous statutory language exactly as written, Mask, 825 F.Supp. at 289, the court respectfully submits that Pecherski, Kelly, and Schwegmann Brothers construe the removal statute correctly. Title

28 U.S.C. § 1441(b), which must be read in conjunction with § 1441(a), ... limits the removal of suits where jurisdiction is based on diversity of citizenship, by providing that such actions are removable only if none of the "properly joined and served" defendants is a citizen of the state in which the suit is brought. Title 28 U.S.C. § 1441(b) does not change the general rule of § 1441(a), that a civil action is not removable unless the district court would have original jurisdiction over the suit.

Kelly, 695 F.Supp. at 356-57. Only when the district court has original jurisdiction

will the provisions of Section 1441(b) become operative. In other words, the provision in Section 1441(b) does not qualify the requirement of Section 1441(a) that there must be complete diversity between the named opposing parties; it merely adds the requirement in removal cases based on diversity that the joined and served defendants cannot include one from the state in which the action is brought.

Schwegmann Bros., 486 F.Supp. at 614; see also Harris, 633 F.Supp. at 253 (citing 28 U.S.C. § 1441(b); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806); Martin v. Snyder, 148 U.S. 663, 13 S.Ct. 706, 37 L.Ed. 602 (1893)). Section 1441(b) therefore "did not change the removal requirement set forth in Pullman that a court, in determining the propriety of removal based on diversity of citizenship, must consider all named defendants, regardless of service." Pecherski, 636 F.2d at 1160.

The court reaches this conclusion not for any policy reasons, however meritorious they may be, see, e.g., Pecherski, 636 F.2d at 1161 n. 6,⁴ but rather because the plain meaning of the statute requires this result. See, e.g., id. at 1160; Kelly, 695 F.Supp. at 356-57; Schwegmann Bros., 486 F.Supp. at 614-15; but see, e.g., Mask, 825 F.Supp. at 289;⁵ South Panola, 434 F.Supp. at 754.

A nondiverse defendant's having been served either (1) after removal but before...