Cal Dive Int'l, Inc. v. Chartis Claims, Inc.
| Decision Date | 04 November 2011 |
| Docket Number | CIVIL ACTION NO. 1:11-CV-347 |
| Parties | CAL DIVE INTERNATIONAL, INC., Plaintiff, v. CHARTIS CLAIMS, INC., CHARTIS SPECIALTY INSURANCE COMPANY, RIGG INSURANCE MANAGERS, INC., d/b/a RISC, INC., and ORANGE COUNTY INSURANCE BROKERAGE, INC., d/b/a BEATY INSURANCE AGENCY, INC., Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
Pending before the court is Plaintiff Cal Dive International, Inc.'s ("Cal Dive") Motion to Remand (#10). Cal Dive seeks remand to state court due to the lack of complete diversity between the parties, rendering this court without subject matter jurisdiction. Having reviewed the pending motion, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that remand is warranted.
On June 3, 2011, Cal Dive filed its original petition in the 172nd Judicial District Court of Jefferson County, Texas, asserting claims for breach of contract, negligence, breach of the duty of good faith and fair dealing, and violations of the Texas Deceptive Trade Practices Act ("DTPA") and the Texas Insurance Code. Cal Dive filed an amended petition on June 16, 2011, re-alleging the above causes of action. It is undisputed that Cal Dive is a Delaware corporation,with its principal place of business in the State of Texas. Defendants Chartis Claims, Inc. ("Chartis Claims") and Chartis Specialty Insurance Company ("Chartis Insurance") (collectively, "Chartis Defendants") are foreign entities, with their principal places of business in the State of New York. Defendant Orange County Insurance Brokerage, Inc., doing business as Beaty Insurance Agency, Inc. ("Beaty"), is a Texas corporation with its principal place of business in Orange, Texas. RIGG Insurance Managers, Inc., doing business as RISC, Inc. ("RISC"), is a Texas corporation with its principal place of business in Dallas, Texas.
This case arises from the procurement of and denial of coverage under an insurance policy obtained by Stakes Electrical Service Company, Inc. ("Stakes"), a non-party to this lawsuit, from Chartis Insurance. Stakes was a subcontractor for Cal Dive, and the parties operated under a master service agreement which provided that Stakes was to defend and indemnify Cal Dive for any damages incurred for work performed under the agreement. Stakes was also obligated to obtain both primary and excess/umbrella insurance coverage for its services and to include Cal Dive as an additional insured under both policies. Stakes, through its insurance broker, Beaty, obtained a primary policy and a Commercial Umbrella Liability Policy (the "Chartis Policy") through Chartis Insurance and Chartis Insurance's agent, RISC. Beaty issued certificates of insurance to Cal Dive, naming Cal Dive an additional insured on both policies.
On October 7, 2009, Michael Miller ("Miller"), an employee of Stakes, was injured while working aboard a barge. As a consequence, Miller brought suit under the Jones Act against Cal Dive, which settled the lawsuit for $547,007.73. Chartis Claims denied coverage of the employee's claim under the Chartis Policy, asserting that the policy contained a marine liability claim exclusion that precluded coverage in this instance. Cal Dive now seeks reimbursement fromDefendants for its settlement payments made in the Miller litigation, alleging that coverage under the Chartis Policy was to follow coverage under the primary policy, which did not exclude marine liability claims.
On July 25, 2011, the Chartis Defendants removed the case to this court on the basis of diversity of citizenship, alleging that complete diversity exists among the real parties in interest and that the amount in controversy exceeds $75,000.00, exclusive of interest and costs. The Chartis Defendants assert that Beaty and RISC were improperly joined as defendants and, therefore, they should be dismissed as parties to this action and their citizenship ignored for jurisdictional purposes. On August 15, 2011, Cal Dive filed the instant motion to remand, contending that Beaty and RISC were properly joined and, as such, complete diversity does not exist, and federal jurisdiction is lacking. The Chartis Defendants, Beaty, and RISC (collectively "Defendants") each filed separate responses.
"'Federal courts are courts of limited jurisdiction.'" Rasul v. Bush, 542 U.S. 466, 489 (2004) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)); accord Halmekangas v. State Farm Fire & Cas. Co., 603 F.3d 290, 292 (5th Cir. 2010); Johnson v. United States, 460 F.3d 616, 621 n.6 (5th Cir. 2006); McKee v. Kan. City S. Ry. Co., 358 F.3d 329, 337 (5th Cir. 2004). "'They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree.'" Rasul, 542 U.S. at 489 (quoting Kokkonen, 511 U.S. at 377 (citations omitted)). The court "must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking thefederal forum." Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.), cert. denied, 534 U.S. 993 (2001) (citing Kokkonen, 511 U.S. at 377); see also Hertz Corp. v. Friend, ___ U.S.___, ___, 130 S. Ct. 1181, 1194 (2010); Boone v. Citigroup, Inc., 416 F.3d 382, 388 (5th Cir. 2005). In an action that has been removed to federal court, a district court is required to remand the case to state court if, at any time before final judgment, it determines that it lacks subject matter jurisdiction. See 28 U.S.C. § 1447(c); Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 571 (2004); In re 1994 Exxon Chem. Fire, 558 F.3d 378, 392 (5th Cir. 2009); McDonal v. Abbott Labs., 408 F.3d 177, 182 (5th Cir. 2005).
When considering a motion to remand, "[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper." Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); accord DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006); Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008); In re Hot-Hed Inc., 477 F.3d 320, 323 (5th Cir. 2007); Guillory v. PPG Indus., Inc., 434 F.3d 303, 308 (5th Cir. 2005); Boone, 416 F.3d at 388. "'This extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute.'" Roth v. Kiewit Offshore Servs., Ltd., 625 F. Supp. 2d 376, 382 (S.D. Tex. 2008) (quoting Albonetti v. GAF Corp. Chem. Grp., 520 F. Supp. 825, 827 (S.D. Tex. 1981)); accord Crossroads of Tex., L.L.C. v. Great-West Life & Annuity Ins. Co. , 467 F. Supp. 2d 705, 708 (S.D. Tex. 2006); Smith v. Baker Hughes Int'l Branches, Inc., 131 F. Supp. 2d 920, 921 (S.D. Tex. 2001). "Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (citing 28 U.S.C. § 1441(a)); see Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004);Halmekangas, 603 F.3d at 294; Gutierrez, 543 F.3d at 251. "The removal statute ties the propriety of removal to the original jurisdiction of the federal district courts." Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997); see 28 U.S.C. § 1441(a); Hoskins v. Bekins Van Lines, 343 F.3d 769, 772 n.2 (5th Cir. 2003). Because removal raises significant federalism concerns, the removal statutes are strictly and narrowly construed, with any doubt resolved against removal and in favor of remand. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Gutierrez, 543 F.3d at 251; Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007); In re Hot-Hed Inc., 477 F.3d at 323.
Federal courts have subject matter jurisdiction and are authorized to entertain causes of action only where a question of federal law is involved or where there is diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, exclusive of interest and costs. See 28 U.S.C. §§ 1331, 1332; Arbaugh v. Y & H Corp., 546 U.S. 500, 513 (2006); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005); Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005); Halmekangas, 603 F.3d at 294; McDonal, 408 F.3d at 181. In order to determine whether jurisdiction is present in a removed action, the claims set forth in the state court petition are considered as of the date of removal. See Wis. Dep't of Corr. v. Schacht, 524 U.S. 381, 391 (1998); Campbell v. Stone Ins., Inc., 509 F.3d 665, 669 n.2 (5th Cir. 2007); McGowin v. ManPower Int'l, Inc., 363 F.3d 556, 558 n.1 (5th Cir. 2004); Manguno, 276 F.3d at 723. In removed cases where, as here, there is no suggestion that a federal question is involved, subject matter jurisdiction exists only if there is complete diversity among the parties and the amount in controversy exceeds $75,000.00. See 28 U.S.C. § 1332; Lincoln Prop. Co., 546 U.S. at 89; Exxon Mobil Corp., 545 U.S. at 552; Caterpillar Inc. v. Lewis, 519 U.S. 61, 68(1996); Halmekangas, 603 F.3d at 294; Heritage Bank v. Redcom Labs., Inc. , 250 F.3d 319, 323 (5th Cir.), cert. denied, 534 U.S. 997 (2001). Complete diversity requires that no plaintiff be a citizen of the same state as any defendant. See Exxon Mobil Corp. , 545 U.S. at 552; Caterpillar Inc., 519 U.S. at 68; Wallace v. La. Citizens Prop. Ins. Corp., 444 F.3d 697, 702 (5th Cir. 2006); Heritage Bank, 250 F.3d at 323. Furthermore, removal is appropriate only if none of the parties properly joined and served as defendants are citizens of the state in which the action was brought. See 28 U.S.C. § 1441(b); Lincoln Prop. Co., 546 U.S. at 89; Gasch, 491 F.3d at 281; Crockett v. R.J. Reynolds Tobacco Co., 436 F.3d 529, 531-32 (5th Cir.), cert. denied, 548 U.S. 907 (2006).
In the case at bar, there is no dispute that Cal Dive and the Chartis Defendants are...
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