Comella v. St. Paul Mercury Ins. Co., No. 1:00cv2664.

CourtU.S. District Court — Northern District of Ohio
Writing for the CourtO'Malley
Citation177 F.Supp.2d 704
PartiesThomas M. COMELLA, et al., Plaintiffs, v. ST. PAUL MERCURY INSURANCE COMPANY, et al., Defendants.
Decision Date11 December 2001
Docket NumberNo. 1:00cv2664.
177 F.Supp.2d 704
Thomas M. COMELLA, et al., Plaintiffs,
v.
ST. PAUL MERCURY INSURANCE COMPANY, et al., Defendants.
No. 1:00cv2664.
United States District Court, N.D. Ohio, Eastern Division.
December 11, 2001.

Claudia R. Eklund, Lowe Eklund & Wakefield, Cleveland, OH, James A. Lowe, Lowe Eklund & Wakefield, Cleveland, OH, for plaintiffs.

Catherine A. Davis, Gallagher, Sharp, Fulton & Norman, Cleveland, OH, Vincent A. Feudo, Nicola, Gudbranson & Cooper, Cleveland, OH, Richard Hodyl, Jr., Chicago, IL, Gary L. Nicholson, Gallagher, Sharp, Fulton & Norman, Cleveland, OH, John D. Sayre, Nicola, Gudbranson & Cooper, Cleveland, OH, Hilary S. Taylor, Weston, Hurd, Fallon, Paisley & Howley, Cleveland, OH, Gary A. Vick, Weston, Hurd, Fallon, Paisley & Howley, Cleveland, OH, for defendants.

MEMORANDUM & ORDER

O'MALLEY, District Judge.


Plaintiffs Thomas and Patricia Comella originally filed this action in state court. The case was then removed to this Court, based on diversity of citizenship. The Comellas now move to remand this action (docket no. 76). For the reasons stated below, the motion is GRANTED, and this case is REMANDED to the Cuyahoga County, Ohio Court of Common Pleas, where it was originally filed.

I.

In their original complaint, the Comellas, who are Ohio residents, sued two defendants: (1) St. Paul Mercury Insurance Company ("St. Paul"), and (2) Guaranty National Insurance Company ("Guaranty National"). St. Paul is a citizen

Page 705

of Minnesota, while Guaranty National is a citizen of Colorado. The defendants removed the action to this Court based on diversity jurisdiction. Subsequently, the Comellas amended the complaint to add two additional defendants: (3) the City of Highland Hts., Ohio ("Highland"); and (4) the Northern Ohio Risk Management Agency Self-Insurance Pool, Inc. ("NORMA"). Although both of these new defendants are Ohio residents, the Court retained jurisdiction because diversity of citizenship is determined at the time the action is originally filed and removed. See Easley v. Pettibone Michigan Corp., 990 F.2d 905, 908 (6th Cir. 1993) ("Under section 1441(b), diversity of citizenship must exist as to a party both at the time the state action is commenced and at the time the defendant files the petition for removal"); Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d 904, 907 (6th Cir.1999) (examining diversity jurisdiction in a case where the defendant "filed its notice of removal ... one day after [the plaintiff] had filed its amended complaint naming a [new,] non-diverse defendant").

In their complaint, the Comellas allege that, on June 25, 1999, Thomas was operating a vehicle in the scope of his employment as an employee and elected official of Highland. Betty Doran rear-ended Thomas, causing him catastrophic spinal cord injuries, leaving him a quadriplegic. Doran had an automobile insurance policy, issued by GEICO, that provided liability coverage in the amount of $50,000; as such, Doran was underinsured. Meanwhile, St. Paul had issued a $1 million liability insurance policy to Highland and NORMA (of which Highland was a member), and Guaranty had issued a $9 million umbrella liability insurance policy to Highland and NORMA. The Comellas made claims for underinsured motorists coverage under both policies, but the claims were denied. Accordingly, the Comellas state claims for: (1) breach of contract; and (2) a judgment declaring they are "insureds" under the St. Paul and Guaranty insurance policies, and that they are due benefits pursuant to underinsured motorists coverage. Guaranty and St. Paul filed mirror-image counterclaims, asking the Court for a judgment declaring they do not owe any coverage to the Comellas under the insurance policies.

The Comellas' claims against the insurance companies rest on two Ohio Supreme Court cases: Scott-Pontzer v. Liberty Mut. Fire Ins. Co., 85 Ohio St.3d 660, 710 N.E.2d 1116 (1999), and Linko v. Indemnity Ins. Co. of N. Am., 90 Ohio St.3d 445, 739 N.E.2d 338 (2000). Both of these cases examine and interpret Ohio Rev. Code § 3937.18, the insurance statute that sets out uninsured/underinsured ("UM/UIM") coverage requirements in Ohio. Put in extremely simple terms, Scott-Pontzer and Linko stand for the propositions that, unless an insured business and its insurer agree otherwise, and unless their agreement meets very specific requirements: (1) UM/UIM automobile coverage automatically exists in favor of the insured business, by operation of law; and (2) the business insured's employees also automatically receive this UM/UIM automobile coverage. See Order at 7-26 (July 24, 2001) (analyzing Scott-Pontzer and Linko in detail). The Comellas claim that, pursuant to Scott-Pontzer and Linko, they are "insureds" under both the St. Paul and Guaranty liability insurance policies, and are eligible to receive UM/UIM coverage.

Although this action was removed to this Court over a year ago, the Comellas now move for remand. This motion is premised on a recent decision by Judge Daniel A. Polster, who concluded that, in Scott-Pontzer cases, the insurance company must be deemed a citizen of the state of

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which the insured is a citizen. Kormanik v. St. Paul Fire and Marine Ins. Co., slip op. at 2-6, case no. 5:01-CV-2122 (Oct. 19, 2001) (examining 28 U.S.C. § 1332(c)(1)). If the reasoning of Kormanik is applied to this case, St. Paul and Guaranty (the insurance companies) would be deemed a citizen of the same state as Highland and NORMA (the insureds), which is Ohio. This would defeat diversity because, even at the time the action was originally filed, the Comellas and the two original defendants (St. Paul and Guaranty) would be deemed citizens of the same state (Ohio).

The defendants oppose the Comellas' motion to remand, arguing that Kormanik was wrongly decided. The Court examines this jurisdictional question below.

II.

As an initial matter, the Court notes that the passage of over a year's time since this case was removed to this Court does not preclude remand. "Unlike other issues not involving the merits of a case, subject-matter jurisdiction may be raised at any time, by any party or even sua sponte by the court itself." Franzel v. Kerr Mfg. Co., 959 F.2d 628, 630 (6th Cir.1992); see Fed.R.Civ.P. 12(h)(3) ("[w]henever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action"). While a motion to remand "on the basis of any defect in removal procedure must be made within 30 days after the filing of the notice of removal," a remand on the basis of lack of subject matter jurisdiction is required if the jurisdictional failure appears "any time before final judgment." 28 U.S.C. § 1447(c) (emphasis added). Indeed, the issue of whether diversity jurisdiction exists may be raised sua sponte by a court of appeals, after a trial court has already entered judgment. See Ford Motor Co. v. Insurance Co. of N. Am., 669 F.2d 421, 423 (6th Cir.1982) ("[t]his court raised the jurisdiction issue sua sponte at oral argument"). In this case, the possible jurisdictional failure came to light after the Comellas learned of Judge Polster's opinion in Kormanik.

In Kormanik, the Court analyzed 28 U.S.C. § 1332(c)(1), which addresses this Court's diversity jurisdiction in certain cases involving insurance companies. Specifically, the statute states:

In any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as any state by which the insurer has been incorporated and of the State where it has its principle place of business.

This statute is most often cited in cases where "a party suffering injuries or damage for which another is legally responsible is entitled to bring suit against the other's liability insurer without joining the insured or first obtaining a judgment against him." Rosa v. Allstate Ins. Co., 981 F.2d 669 (2nd Cir.1992). If state...

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10 practice notes
  • Dolly v. Old Republic Ins. Co., No. 5:00CV1685.
    • United States
    • U.S. District Court — Northern District of Ohio
    • May 8, 2002
    ...(Polster, J.); Kohus v. Hartford Ins. Co., 2001 WL 1850889 (N.D.Ohio Nov. 19, 2001) (Matia, J.); Comella v. St. Paul Mercury Ins. Co., 177 F.Supp.2d 704 (N.D.Ohio 2001) (O'Malley, J.), appeal dismissed 2002 WL 467940, 33 Fed.Appx. 737 (6th Cir.2002); Stubbins v. Nationwide Agribusiness, 181......
  • Peterson v. Tig Specialty Ins. Co., No. C-2-02-311.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • July 26, 2002
    ...Scott-Pontzer. Id. Several more Northern District decisions have followed Kormanik's holding. In Comella v. St. Paul Mercury Ins. Co., 177 F.Supp.2d 704 (N.D.Ohio 2001), Judge O'Malley likewise relied on Ford to hold that the case was a direct action. The court drew upon the statement in Fo......
  • Estate of Taylor v. St. Paul Fire and Marine Inc., No. 1-00-02397-AA.
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Northern District of Ohio
    • September 19, 2002
    ...J.); Stubbins v. Nationwide Agribusiness Ins. Co., 181 F.Supp.2d 805 (N.D.Ohio 2002) (Carr, J.); Cornelia v. St. Paul Mercury Ins. Co., 177 F.Supp.2d 704 (N.D.Ohio 2001) (O'Malley, J.); Reese v. Fid. & Guar. Ins. Underivriters, Inc., Case No. 1:01CV2633 (N.D.Ohio Mar. 22, 2002) (Oliver, J.)......
  • Tatar v. Liberty Mut. Fire Ins. Co., No. C2-01-1211.
    • United States
    • U.S. District Court — Southern District of Ohio
    • April 15, 2002
    ...result, plaintiffs cite to an unreported decision from the Northern District of Ohio, Comella v. St. Paul Mercury Insurance Company, 177 F.Supp.2d 704 (N.D.Ohio 2001) (holding that Scott-Pontzer suits meet the requirements of the § 1332 proviso to destroy diversity). In Comella, the court d......
  • Request a trial to view additional results
10 cases
  • Dolly v. Old Republic Ins. Co., No. 5:00CV1685.
    • United States
    • U.S. District Court — Northern District of Ohio
    • May 8, 2002
    ...(Polster, J.); Kohus v. Hartford Ins. Co., 2001 WL 1850889 (N.D.Ohio Nov. 19, 2001) (Matia, J.); Comella v. St. Paul Mercury Ins. Co., 177 F.Supp.2d 704 (N.D.Ohio 2001) (O'Malley, J.), appeal dismissed 2002 WL 467940, 33 Fed.Appx. 737 (6th Cir.2002); Stubbins v. Nationwide Agribusiness, 181......
  • Peterson v. Tig Specialty Ins. Co., No. C-2-02-311.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • July 26, 2002
    ...Scott-Pontzer. Id. Several more Northern District decisions have followed Kormanik's holding. In Comella v. St. Paul Mercury Ins. Co., 177 F.Supp.2d 704 (N.D.Ohio 2001), Judge O'Malley likewise relied on Ford to hold that the case was a direct action. The court drew upon the statement in Fo......
  • Estate of Taylor v. St. Paul Fire and Marine Inc., No. 1-00-02397-AA.
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Northern District of Ohio
    • September 19, 2002
    ...J.); Stubbins v. Nationwide Agribusiness Ins. Co., 181 F.Supp.2d 805 (N.D.Ohio 2002) (Carr, J.); Cornelia v. St. Paul Mercury Ins. Co., 177 F.Supp.2d 704 (N.D.Ohio 2001) (O'Malley, J.); Reese v. Fid. & Guar. Ins. Underivriters, Inc., Case No. 1:01CV2633 (N.D.Ohio Mar. 22, 2002) (Oliver, J.)......
  • Tatar v. Liberty Mut. Fire Ins. Co., No. C2-01-1211.
    • United States
    • U.S. District Court — Southern District of Ohio
    • April 15, 2002
    ...result, plaintiffs cite to an unreported decision from the Northern District of Ohio, Comella v. St. Paul Mercury Insurance Company, 177 F.Supp.2d 704 (N.D.Ohio 2001) (holding that Scott-Pontzer suits meet the requirements of the § 1332 proviso to destroy diversity). In Comella, the court d......
  • Request a trial to view additional results

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