Budnella v. USAA Gen. Idemnity Co.

• Decision Date: 01 June 2020
• Docket Number: Civil Action No. 20-cv-00944-KMT
• Parties: NICHOLAS BUDNELLA, Plaintiff, v. USAA GENERAL IDEMNITY COMPANY, Defendant.
• Court: U.S. District Court — District of Colorado

NICHOLAS BUDNELLA, Plaintiff, v. USAA GENERAL IDEMNITY COMPANY, Defendant.

Civil Action No. 20-cv-00944-KMT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

June 1, 2020

Magistrate Judge Kathleen M. Tafoya

ORDER

Before the court is Plaintiff's "Objection to Notice of Removal and Motion for Remand." (["Motion"], Doc. No. 11.) Defendant has responded in opposition to the Motion. (["Response"], Doc. No. 16.) No reply has been filed, and the time to do so has lapsed.

STATEMENT OF THE CASE

On June 9, 2017, Plaintiff Nicholas Budnella reportedly sustained "serious" injuries "when another driver crashed into [his] vehicle" at the intersection of Hancock Expressway and Boychuk Street in Colorado Springs, Colorado. (["Complaint"], Doc. No. 5 at 2 ¶¶ 6-8.) Plaintiff claims that his resulting "medical bills to date are in excess of $262,000.00[.]" (Id. at 2 ¶ 9.) At the time of the accident, Plaintiff reportedly held an automobile insurance policy with Defendant USAA General Indemnity Company ["USAA GIC"], which included $25,000 worth of coverage for medical payments ["MedPay"] benefits. (Id. at 1-2 ¶¶ 2, 10-11.) Budnella alleges that, subsequent to the accident, in 2019, he submitted certain of his "Medical Bills and Medical Records" to USAA GIC, made "several follow up requests for payment," and "sent additional information that [the insurer] requested." (Id. at 2 ¶ 12.) Plaintiff complains, however, that Defendant still "has refused to pay any of [his] Medical Bills regarding the June 9, 2017 accident," and "refused to reasonably reconsider its' denial" of his claim. (Id. at 2-3 ¶¶ 12, 18.)

Based on these allegations, on January 15, 2020, Plaintiff commenced this action in Colorado state court. (["Notice of Removal"], Doc. No. 1 at 1, Ex. A.) Budnella brings two claims against USAA GIC: (1) breach of contract for failure to pay MedPay benefits reportedly owed to him under his insurance policy; and (2) unreasonable delay or denial of payment of a claim for benefits, pursuant to Colorado Revised Statutes §§ 10-3-1115 and 10-3-1116. (Compl. 1-3 ¶¶ 1-20.) As relief, Plaintiff requests "the remaining balance of the medical payments coverage, plus damages pursuant to [Colo. Rev. Stat.] § 10-3-1116, interest from the date of occurrence, or as provided by law, attorney fees, costs in bringing this action, and any other relief which this Court might deem appropriate." (Id. at 3.) The civil case cover sheet, which was filed in the state court proceeding, indicates that Plaintiff seeks a monetary judgment of no more than $100,000. (Notice of Removal 2, Ex. E at ¶ 2.)

Service was effectuated upon USAA GIC, on January 28, 2020, and the insurer thereafter filed an answer to the state court complaint, on February 15, 2020. (Notice of Removal 1-2, Ex. B, Ex. C, Ex. D.) On April 3, 2020, Defendant filed a Notice of Removal, pursuant to 28 U.S.C. § 1441, asserting federal jurisdiction predicated upon diversity of citizenship. (Notice of Removal 2, 6-8.)

Upon removal, on April 7, 2020, Plaintiff filed a motion to remand the case to Colorado state court. (Mot. 1-3.) In his Motion, Budnella raises both jurisdictional and procedural challenges to removal. Plaintiff argues, first, that the court lacks subject matter jurisdiction over this matter, because Defendant failed to meet its burden to prove complete diversity of citizenship between the parties. (Id. at 1.) In addition, Plaintiff contends that the Notice of Removal, filed on April 3, 2020, was untimely. (Id.) Finally, Budnella argues, in the alternative, that USAA GIC "waived [its] right" to remove the case to federal court, given that it "forged ahead with state court litigation" for the two months preceding removal. (Id. at 2.)

STANDARD OF REVIEW

"Federal courts are courts of limited jurisdiction and, as such, much have a statutory basis to exercise jurisdiction." Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002). Pursuant to 28 U.S.C. § 1441(a), a civil action filed in state court is removable, only if the plaintiff could have originally brought the action in federal court. 28 U.S.C. § 1441(a); Firstenberg v. City of Santa Fe, N.M., 696 F.3d 1018, 1023 (10th Cir. 2012) (Removal is appropriate "if, but only if, federal subject-matter jurisdiction would exist over the claim.") (internal quotations omitted). "This jurisdictional prerequisite to removal is an absolute, nonwaivable requirement." Cunningham v. BHP Petroleum Gr. Brit. PLC, 427 F.3d 1238, 1245 (10th Cir. 2005) (quoting Brown v. Francis, 75 F.3d 860, 864 (3d Cir. 1996)). Remand to state court is, therefore, required "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c).

The federal removal statute, 28 U.S.C. § 1446, obligates a removing party to "file in the federal forum a notice of removal 'containing a short and plain statement of the grounds forremoval.'" Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 83 (2014) (quoting 28 U.S.C. § 1446(a)). The notice of removal must be timely filed. Paros Props. LLC v. Colo. Cas. Ins. Co., 835 F.3d 1264, 1268 (10th Cir. 2016) (citing 28 U.S.C. § 1446(b)(1)). "Because removal is entirely a statutory right, the relevant procedures to effect removal must be followed." Darr v. N.M. Dep't of Game & Fish, 403 F. Supp. 3d 967, 994 (D.N.M. 2019). A removal that does not comply with the express statutory requirements is defective, and the court may, upon request, remand the case to state court. See Miller v. Lambeth, 443 F.3d 757, 759 (10th Cir. 2006) ("The two categories of remand within § 1447(c) . . . are remands for lack of subject matter jurisdiction and for defects in removal procedure"); see also Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072, 1076-77 (10th Cir. 1999) (explaining that a procedural defect in removal, although proper grounds for removal, "does not involve the subject matter of the court and may be waived").

As the party invoking federal jurisdiction, USAA GIC bears the burden to prove its existence. Caballero v. Fuerzas Armadas Revolucionarias de Colombia, 945 F.3d 1270, 1273 (10th Cir. 2019) (citing Safe Streets All. V. Hickenlooper, 859 F.3d 865, 878 (10th Cir. 2017)); Baby C v. Price, 138 F. App'x 81, 83 (10th Cir. 2005) ("The removing party has the burden to demonstrate the appropriateness of removal from state to federal court."). Each jurisdictional fact must be established by a preponderance of the evidence. McPhail v. Deere & Co., 529 F.3d 947, 953 (10th Cir. 2008). "Removal statutes are to be strictly construed, and all doubts are to be resolved against removal." Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982) (citations omitted); see Grabel & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308,310 (2005) (explaining that strict construction serves the goal of "not distort[ing] any division of labor between the state and federal courts").

ANALYSIS

A. Subject Matter Jurisdiction

In this case, USAA GIC alleges subject matter jurisdiction predicated upon diversity of citizenship, which requires: (1) complete diversity among the parties; and (2) that "the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a)(1). In the Notice of Removal, Defendant states, as grounds for removal, that Budnella is a resident of Colorado, while USAA GIC is a Texas corporation with its principal place of business in San Antonio, Texas. (Notice of Removal 6-7.) In addition, Defendant states that its "investigation determined Plaintiff is seeking $25,000 in [MedPay] benefits, totaling $25,000." (Id. at 7.) Defendant further notes that Plaintiff's second cause of action is a statutory bad faith claim brought under Colo. Rev. Stat. §§ 10-3-1115 and 10-3-1116, and that, if successful, Plaintiff could recover an additional two times the covered benefit, i.e., $50,000, plus reasonable attorney's fees. (Id. at 7-8.) According to Defendant, "[w]hen combined with the claimed damages, and based on USAA GIC's investigation, Plaintiff is alleging more than $75,000 in damages." (Id. at 8.) Defendant contends, based on the foregoing, that complete diversity exists between the parties, and that the amount in controversy exceeds $75,000, excluding costs and interest. (Id.; Resp. 3.)

1. Amount in Controversy

If, as here, the plaintiff's complaint does not explicitly state the amount in controversy, the defendant may state the amount in the notice of removal. Dart Cherokee Basin OperatingCo. v. Owens, 574 U.S. 81, 84 (2014) (citing 28 U.S.C. § 1446(c)(2)(A)). Typically, the "notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold." Id. at 89. "Evidence establishing the amount is required . . . only when the plaintiff contests, or the court questions, the defendant's allegation." Id.

Here, Plaintiff does not dispute Defendant's contention that the amount in controversy exceeds $75,000, exclusive of costs and interest. (See generally Mot. 1-4.) Having reviewed the Notice of Removal, as well as related briefing, the court is likewise satisfied that the amount in controversy requirement is met. Therefore, given that the Notice of Removal plausibly alleges the amount in controversy to exceed the jurisdictional threshold, there is no need for the parties to submit evidence on the issue. See Dart Cherokee, 574 U.S. at 89; Johnson v. Safeco Ins. Co. of Am., No. 14-cv-03052-PAB-KLM, 2015 WL 2019395, at *2 (D. Colo. Apr. 29, 2015).

2. Diversity of Citizenship

Diversity jurisdiction exists, only if no plaintiff and no defendant are citizens of the same state. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005) (construing 28 U.S.C. § 1332 to require "complete diversity between all plaintiffs and all defendants") (citation omitted). For individuals, "state citizenship is the equivalent of domicile." Crowley v. Glaze, 710 F.2d 676, 678 (10th Cir. 1983); accord ...