Davis v. Owners Ins. Co.

• Decision Date: 09 July 2014
• Docket Number: Civil Action No. 5:14–cv–169–JMH.
• Citation: 29 F.Supp.3d 938
• Parties: Rodney G. DAVIS, Plaintiff, v. OWNERS INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Kentucky

29 F.Supp.3d 938

Rodney G. DAVIS, Plaintiff
v.
OWNERS INSURANCE COMPANY, Defendant.

Civil Action No. 5:14–cv–169–JMH.

United States District Court, E.D. Kentucky, Central Division, at Lexington.

Signed July 9, 2014.

29 F.Supp.3d 940

Daniel A. Simons, Simons, Dunlap & Fore, PSC, Jennie Y. Haymond, Davis Law, PSC, Richmond, KY, for Plaintiff.

Christopher Eric Hutchison, Schiller, Osbourn & Barnes, David K. Barnes, Schiller, Osbourn, Barnes & Maloney, PLLC, Louisville, KY, for Defendant.

MEMORANDUM OPINION AND ORDER

JOSEPH M. HOOD, Senior District Judge.

This matter is before the Court upon Plaintiff's Motion to Remand and For Leave to File Amended Complaint. [D.E. 3]. The Defendant filed a Response [D.E. 5], and Plaintiff failed to file a timely Reply. The time for briefing having run, and the Court being otherwise sufficiently advised, this matter is ripe for review.

I. Factual Background

Plaintiff was injured in an automobile accident when his automobile collided with an automobile being driven by Marvin Cazun. Cazun was an uninsured motorist. As a result of Plaintiff's injuries, Plaintiff brought suit against Cazun in Fayette Circuit Court. Defendant, Plaintiff's automobile insurer, filed an intervening complaint against Cazun for any amount Defendant might pay Plaintiff as a result of Plaintiff's underinsured motorist coverage. A default judgment was entered against Cazun in the amount of $644,984.67.

Defendant refused to pay the judgment entered against Cazun and Plaintiff filed suit in Madison Circuit Court seeking to recover the amount of the judgment pursuant to Plaintiff's uninsured motorist coverage with Defendant. Plaintiff filed a claim alleging breach of contract, a claim requesting a declaratory judgment, a claim alleging a violation of KRS 367.170, and a claim for punitive damages. [D.E. 1–1 at 5–8]. On April 25, 2014, Defendant removed the action to this Court on the basis of diversity jurisdiction. [D.E. 1]. Plaintiff has now filed a motion to remand and a motion for leave to file an amended complaint. [D.E. 3].

II. Standard of Review

A. Motion to Remand

“[A]ny 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.”28 U.S.C. § 1441(a). “The notice of removal of a civil action or proceeding shall be filed within 30 days after the

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receipt by the defendant, through service or otherwise, of a copy of the initial pleading.” Id. § 1446(b)(1). “[I]f the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.” Id. § 1446(b)(3).

Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant.... The presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.

Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing Gully v. First Nat'l Bank, 299 U.S. 109, 112–13, 57 S.Ct. 96, 81 L.Ed. 70 (1936) ). “The party seeking removal bears the burden of establishing its right thereto.” Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit, 874 F.2d 332, 339 (6th Cir.1989) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97–98, 42 S.Ct. 35, 66 L.Ed. 144 (1921) ). “The removal petition is to be strictly construed, with all doubts resolved against removal.” Id. (citations omitted).

B. Motion for Leave to File Amended Complaint

If a responsive pleading is required, “[a] party may amend its pleading once as a matter of course within ... 21 days after service of a responsive pleading....” Fed.R.Civ.P. 15(a)(1)(B). “In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Plaintiff filed his Motion for Leave to File an Amended Complaint more than 21 days after Defendant filed its Answer. Therefore, because Defendant objects to the filing of the amended complaint, Plaintiff may file an amended complaint only with the Court's leave.

“[W]here the underlying facts would support a claim leave to amend should be granted, except in cases of undue delay, undue prejudice to the opposing party, bad faith, dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, or futility.” Duggins v. Steak ‘N Shake, Inc., 195 F.3d 828, 834 (6th Cir.1999) (citing Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) ). “The decision to grant a motion to amend lies within the sound discretion of the district court....” Powermount, Inc. v. Techemet, L.L.P., No. 6:07–cv–371–DCR, 2008 WL 4889354, at *2 (E.D.Ky. Nov. 12, 2008).

III. Analysis

A. Motion to Remand

In its notice of removal, Defendant asserted that the Court had diversity jurisdiction pursuant to 28 U.S.C. § 1332. [D.E. 1 at 2]. Plaintiff has filed a motion to remand claiming that the parties are not diverse by operation of 28 U.S.C. § 1332(c)(1). For the Court to have diversity jurisdiction, Plaintiff and Defendant must be citizens of different states and the amount in controversy must exceed $75,000. 28 U.S.C. § 1332(a). Plaintiff concedes that the amount in controversy exceeds $75,000. [D.E. 3 at 3]. However, Plaintiff argues that diversity is destroyed by application of § 1332(c)(1) because Plaintiff brings a “direct action against the insurer of a policy or contract of liability insurance.”28 U.S.C. § 1332(c)(1). Plaintiff's argument that § 1332(c)(1) divests this Court of jurisdiction is without merit.

29 F.Supp.3d 942

[T]he typical direct action is one in which an injured party sues the insurer of a tortfeasor without joining the tortfeasor to the case. It is known as a ‘direct action’ because the plaintiff, who is not the insured, directly sues the party who will ultimately pay, the insurer, without joining the insured as a party-defendant.

Daugherty v. Chubb Grp. of Ins. Cos., 823 F.Supp.2d 656, 659 (W.D.Ky.2011). The present case does not present a direct action because Plaintiff, the insured, brings suit against his insurer. See id. (“Plaintiff Daugherty is not bringing a direct action against the insurer of a non-party insured. Instead, Daugherty, himself, is the insured...