Hoggins v. Mid-Continent Cas. Co.

• Decision Date: 30 January 2013
• Docket Number: CASE NO. 12-81159-CIV-MARRA
• Parties: EDDIE HOGGINS, Plaintiff, v. MID-CONTINENT CASUALTY COMPANY a/k/a MID-CONTINENT GROUP, Defendant.
• Court: U.S. District Court — Southern District of Florida

EDDIE HOGGINS, Plaintiff,

v.MID-CONTINENT CASUALTY COMPANY a/k/a MID-CONTINENT GROUP, Defendant.

CASE NO. 12-81159-CIV-MARRA

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Dated: January 30, 2013

OPINION AND ORDER

This cause is before the Court upon Plaintiff Eddie Hoggins' Motion to Remand (DE 5). Defendant responded. (DE 12). No reply was filed. The Court has considered the briefs of the parties and is otherwise advised in the premises.

I. Background

_On July 20, 2005, Plaintiff was electrocuted while working construction. He brought a state court negligence action for damages against the project's general contractor on April 23, 2009 (DE 12, Attach. 1: Underlying Complaint), but the general contractor's insurer, Defendant Mid-Continent Casualty Company, denied coverage for Plaintiff's claim and refused to defend it.

On May 8, 2012, Plaintiff and the general contractor entered into a settlement agreement that included a stipulation of a reasonable sum for Plaintiff's damages, entry of a consent judgment against the general contractor in the stipulated amount, an agreement that Plaintiff would not execute the consent judgment against the general contractor, and an assignment to Plaintiff of all claims that thegeneral contractor had against Defendant Mid-Continent.¹ (DE 1, Attach. 2 at 82-86: Coblentz Agreement). Under the terms of the Coblentz agreement, the state trial court entered the consent judgment against the general contractor on June 21, 2012. (DE 1, Attach. 2 at 87). The court subsequently granted Plaintiff's motion for leave to amend to file a supplemental complaint on September 20, 2012 (DE 1, Attach. 2 at 45), and the complaint that was attached to Plaintiff's motion was deemed filed as of that date. The supplemental complaint brought a breach of contract claim against Defendant Mid-Continent. (DE 1, Attach. 2 at 46-55: Supplemental Complaint).

Mid-Continent removed the action to this Court on October 19, 2012 based on diversity of citizenship. (DE 1). Plaintiff now moves to remand on the ground that, among other things, Defendant's removal was untimely because it was over a year after the filing of Plaintiff's initial complaint. (DE 5). For the reasons that follow, the Court agrees with Plaintiff that Defendant's removal was untimely.

II. Legal Standard

"The rule of construing removal statutes strictly and resolving doubts in favor of remand is well-established." See Miedema v. Maytag Corp., 450 F.3d 1322, 1328-29 (11th Cir.2006) (citing Syngenta Crop Prot. Inc. v. Henson, 537 U.S. 28, 32 (2002); Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941); and Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir.1994)). "[A]ll doubts about jurisdiction should be resolved in favor of remand to state court." Univ. of S. Ala. v. Am.Tobacco Co., 168 F.3d 405, 411(11th Cir. 1999). "A removing defendant," in this case Mid-Continent, "bears the burden of proving proper federal jurisdiction." Leonard v. Enter. Rent a Car, 279 F.3d 967, 972 (11th Cir.2002) (citing Williams v. Best Buy Co., 269 F.3d 1316, 1319-20 (11th Cir.2001)).

III. Analysis

As a threshold matter, "a case may not be removed on the basis of jurisdiction conferred by [28 U.S.C. § 1332 (diversity of citizenship)] more than one year after commencement of the action." 28 U.S.C. § 1446(b) (2009).² Here, Plaintiff filed his initial complaint on April 23, 2009. Mid-Continent did not remove the action until October 19, 2012—over three years later. "To avoid the clear restriction articulated in § 1446(b)," see Potts v. Harvey, 11-80495-CIV, 2011 WL 4637132 (S.D. Fla. Oct. 6, 2011), Mid-Continent asserts that its removal was timely because the filing of Plaintiff's supplemental complaint "instituted a new and separate action, and the removal period did not accrue until [Mid-Continent] was served with the [s]upplemental [c]omplaint on September 27, 2012." (DE 12 at 3). This Court has rejected that argument before.

The thrust of Mid-Continent's argument is that, while the supplemental complaint is not a "separate and independent" action removable under 28 U.S.C. § 1441(c),³ this Court should follow several district court decisions that have applied an analysis similar to the "separate and independent" test to "bad faith" insurance claims and have held that the one-year provision is inapplicable to post-judgment claims against an insurer. (DE 12 at 4-13) (citing Sinni v. Scottsdale Ins. Co., 676 F. Supp.2d 1319 (M.D. Fla. 2009); Barnes v. Allstate Ins. Co., No. 8:10-cv-2434-T-30MAP, 2010 WL 5439754 (M.D. Fla. Dec. 28, 2010); Love v. Prop. & Cas. Ins. Co. of Hartford, No. 8:10-CV-649-T-27EAJ, 2010 WL 2836172 (M.D. Fla. July 16, 2010); Ball v. Cont'l Cas. Co., No. 3:09 CV 1252, 2009 WL 2151781 (N.D. Ohio July 15, 2009); and Lahey v. State Farm Mut. Aut. Ins. Co., No. 8:06-CV-1949-T27-TBM, 2007 WL 2029334 (M.D. Fla. July 11, 2007). These cases have all treated the claims at issue as independently removable notwithstanding that the removal was effected over one year after the initial claim was initiated.

In Potts v. Harvey, however, this Court rejected the rationale of these courts and—by extension—the precise argument that Mid-Continent advances:

Here, [the defendant] attempts to do precisely what Congress set out to prohibit through its 1990 amendment to § 1441(c): apply the "separate and independent" test to diversity cases. [The defendant's] underlying argument is that because a bad faith claim in Florida is a "separate and independent" cause of action, the one-year limitation imposed by § 1446(b) commences anew when the "separate and independent" claim is asserted in the lawsuit. However, whether a bad faith claim is "separate and independent" from an underlying claim in negligence is a question that Congress has deemed irrelevant when a party seeks to exercise its statutory right to removal in diversity cases. Accordingly, [the defendant's] ability to remove this matter from state to federal court is barred by the one-year limitation imposed by § 1446(b).

The Court recognizes that other courts have reached different conclusions when considering the issue of whether a bad faith claim raised in Florida is tantamount to a new claim warranting a circumvention of the one-year time bar imposed by § 1446(b). Compare Love v. Prop. & Cas. Ins. Co. of Hartford, 2010 WL 2836172 (M.D. Fla. 2010), Curran v. State Farm Mut. Auto. Ins. Co., No. 6:09-cv-463-Orl-28DAB, 2009 WL 2003157 (M.D. Fla. 2009), and Lahey v. State Farm Mut. Aut. Ins. Co., 2007 WL 2029334 (M.D. Fla. 2007) (denying motions to remand bad faith claims raised more than one year after the underlying action) with Arroyave v. State Farm Mut. Auto. Ins. Co., No. 08-14125-cv-Graham/Lynch (S.D. Fla. 2008), Daggett v. Am. Sec. Ins. Co., No. 2:08-cv-46-FtM-29DNF, 2008 WL 1776576 (M.D. Fla. 2008), Suncoast Country Clubs, Inc. v. U.S. Fire Ins. Co., No. 8:06-cv-1238-T-23MSS, 2006 WL 2534197 (M.D. Fla. 2006), and McCreery v. State Farm Mut. Auto. Ins. Co., No. 07-80489-CIV-Hurley/Hopkins (S.D. Fla. Sept. 4, 2007) (granting motions to remand bad faith claims raised more than one year after the underlying action).

The progeny of cases that have favored removal, however, fail to discuss whenit is appropriate to apply a "separate and independent" analysis in the removal context, let alone the statutory prohibition against such an application in the diversity context. In Lahey, the plaintiffs amended their initial complaint five years later to seek, for the first time, damages for insurer bad faith pursuant to Florida law. See 2007 WL 2029334 at *1. In deciding whether removal was appropriate pursuant to § 1446(b), the Middle District of Florida discussed whether a bad faith claim is "separate and independent of" an underlying uninsured motorist claim. See id. at *1-*2. After answering this question in the affirmative, the Middle District concluded its analysis by stating [that] "[s]ince Plaintiffs' bad faith claim is a separate and distinct cause of action, Defendant was entitled to remove the bad faith claim within 30 days of when it was filed and was not precluded from filing it more than one year after the original UM claim was filed." 28 U.S.C. § 1446(b). Id. at *2. The Lahey court, however, failed to provide any rationale for its application of a "separate and independent" analysis to § 1446(b). Love and Curran, the two other relevant cases relied on by [the defendant] that support removal, each simply cite to Lahey without providing any independent analysis for why a "separate and independent" analysis should be applied to a diversity case governed by § 1446(b). See Love v. Prop. & Cas. Ins. Co. of Hartford, 2010 WL 2836172; Curran v. State Farm Mut. Auto. Ins. Co., 2009 WL 2003157. Like Lahey, both of those cases simply discuss whether actions for bad faith are "separate and independent" from an underlying action, failing to provide any basis for applying that test to diversity cases.

Potts, 2011 WL 4637132, at *2-*3. Of the cases Mid-Continent cites in support of its position, Potts explicitly rejected Love and Lahey, and implicitly rejected the others because they are based on the same rationale. Moreover, the Court sees no reason why the rationale of Potts—which would foreclose Mid-Continent's argument in the "bad faith" insurance claim context—should not apply in the context of a defendant insurer's attempt to remove a new claim brought pursuant to a Coblentz agreement.

IV. Conclusion

Consistent with Potts and the courts that have cited it approvingly, see Moultrop v. Geico Gen. Ins. Co., 858 F. Supp. 2d 1342, 1347 (S.D. Fla. 2012); and Riley v. Ohio Cas. Ins. Co., 855 F. Supp. 2d 662, 664-70 (W.D. Ky. 2012), the Court concludes that whether a third party claim brought under the terms of a Coblentz agreement is "separate and independent" from an underlying claim in negligence "is a question that Congress has deemed irrelevant when a party seeks to exercise its statutory right toremoval...