Moultrop v. GEICO Gen. Ins. Co.

• Decision Date: 25 April 2012
• Docket Number: Case No. 12–80234–CIV–HURLEY.
• Citation: 858 F.Supp.2d 1342,23 Fla. L. Weekly Fed. D 257
• Parties: Thomas A. MOULTROP and Patricia Guy Moultrop, plaintiffs, v. GEICO GENERAL INSURANCE COMPANY, defendant.
• Court: U.S. District Court — Southern District of Florida

858 F.Supp.2d 1342

23 Fla. L. Weekly Fed. D 257

Thomas A. MOULTROP and Patricia Guy Moultrop, plaintiffs,

v.GEICO GENERAL INSURANCE COMPANY, defendant.

Case No. 12–80234–CIV–HURLEY.

United States District Court,

S.D. Florida.

April 25, 2012.

Todd Stephen Stewart, The Law Offices of Todd S. Stewart, PA, Jupiter, FL, William Eugene Johnson, William E. Johnson, P.A., West Palm Beach, FL, for plaintiffs.

Seth Brian Burack, Rory Eric Jurman, Fowler White Burnett, P.A., Fort Lauderdale, FL, for defendant.

ORDER REMANDING ACTION TO THE FIFTEENTH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA & CLOSE–OUT

DANIEL T.K. HURLEY, District Judge.

THIS CAUSE is before the court upon the Moultrop plaintiffs' motion for remand [DE # 3]. After carefully reviewing the motion, together with the response in opposition by defendant GEICO General Insurance Company (“GEICO”) [DE # 7], GEICO's supplemental response [DE# 9–1] and plaintiffs' reply [DE # 10], the court concludes that this action was improvidently removed from state court and accordingly must be remanded.

I. Background

Plaintiff Thomas Moultrop, a citizen of Florida, was injured in an automobile accident on June 15, 2009. On December 22, 2009, Mr. Moultrop filed suit in Florida state court against Ansel Pericles, the underinsured driver of the other vehicle involved in the accident, and GEICO, a citizen of Maryland, which at the time of the accident insured plaintiff under an automobile insurance policy providing $50,000.00 of uninsured/underinsured (UM) coverage. Mr. Moultrop's wife, Patricia Guy Moultrop, was also named as party plaintiff in this suit.

On January 28, 2010, the Moultrops voluntarily dismissed the tortfeasor (Pericles) from the suit. [Although complete diversity of citizenship then existed between the remaining parties, at that juncture the amount in controversy presumably corresponded to the $50,000.00 limits of insurance available under the policy, and hence did not meet the $75,000.00 threshold for diversity jurisdiction in federal court.]

On August 4, 2010, the jury returned a verdict on the Moultrops' UM claim against GEICO, fixing the plaintiffs' damages at $403,005.00. After adjustment for a 10% comparative negligence finding, the net verdict amounted to $362,704.50.

On August 13, 2010, GEICO filed a motion for new trial. On August 20, 2010, plaintiffs moved to amend their complaint to add a first party bad faith claim against GEICO.

On August 23, 2010, the state court entered a partial final judgment against GEICO in the amount of $50,000.00, the limits of UM insurance benefits available under the Moultrops' policy.

Also on August 23, 2010, the state court granted the Moultrops' motion to amend their complaint, with proviso that “any cause of action for bad faith shall be abated until all appellate remedies have been exhausted.” The plaintiffs accordingly filed an amended complaint adding their bad faith claim against GEICO on August 26, 2010.

On August 31, 2010, the state trial court denied GEICO's motion for new trial. GEICO appealed, and on January 25, 2012, the Florida Fourth District Court of Appeal issued its order affirming the trial court's denial of GEICO's motion for new trial. GEICO General Ins. Co. v. Moultrop, 2012 WL 208751 (Table), 77 So.3d 1273 (Fla. 4th DCA 2012). On February 10, 2012, the Fourth District Court of Appeal issued its corresponding mandate affirming the judgment of the trial court.

On March 1, 2012, GEICO removed the bad faith claim to this court pursuant to 28 U.S.C. § 1441 on the basis of diversity jurisdiction. The case is now before the court on the Moultrops' motion for remand.

II. Discussion

Because federal courts are courts of limited jurisdiction, the removal statutes are strictly construed, University of S. Ala. v. American Tobacco Co., 168 F.3d 405, 411 (11th Cir.1999), with all doubts resolved in favor of remand. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Univ. of S. Ala., 168 F.3d at 411.

As the removing party, GEICO bears the burden of proving that this Court has federal jurisdiction. Williams v. Best Buy Co., 269 F.3d 1316 (11th Cir.2001). This includes establishing compliance with the removal statute requirements.

In this case, it is uncontested that the parties are of diverse citizenship and that the amount in controversy on the remaining insurance bad faith claim now exceeds $75,000.00, thus satisfying the twin predicates for the exercise of diversity jurisdiction under 28 U.S.C. § 1332. The key issue is whether GEICO has satisfied the procedural requirements for removal.

The Moultrops contend that removal was untimely under the repose provision of 28 U.S.C. § 1446(b) because GEICO did not remove the action within one year after commencement of plaintiff's original lawsuit against GEICO which was filed on December 22, 2009.

At all times relevant to this action, the second paragraph of Section 1446(b) provided:

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title [diversity jurisdiction] more than 1 year after commencement of the action.¹

In an effort to avoid the repose language of § 1446(b), GEICO contends that the Moultrop's bad faith claim is “separate and independent” from plaintiff's underlying first-party claim which derives from GEICO's contractual obligation to perform under its policy. Because a statutory bad faith claim does not exist until the underlying first party action on the policy has been resolved in favor of the insured, Dadeland Depot, Inc. v. St. Paul Fire & Marine Ins. Co., 945 So.2d 1216, 1235 (Fla.2006); Blanchard v. State Farm Mutual Auto. Ins. Co., 575 So.2d 1289 (Fla.1991), it contends that a different commencement date should apply to the Moultrops' later added bad faith claim, thereby permitting its removal within 30 days of the time the judgment on the underlying contract claim became final through exhaustion of appellate processes.

More specifically, GEICO contends that plaintiff's bad faith action commenced on February 10, 2012, the date on which the Fourth District Court of Appeals issued its mandate affirming the state court's judgment on the underlying UM contract claim, and that its notice of removal, filed March 1, 2012, was timely filed in this court within thirty days of that event.

A. One–Year Limitation on Removal in 28 U.S.C. § 1446(b)

The second paragraph of Section 1446(b) provides:

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty 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, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title [diversity of citizenship] more than 1 year after commencement of the action.

28 U.S.C. § 1446(b). Where, as in this case, the initial pleading does not contain a jurisdictional basis for removal, § 1446(b) prescribes two distinct time requirements. The first requirement is that a notice of removal must be filed in federal district court within thirty days after it is first ascertained that the case is removable. The second requirements is that, in those cases in which removal is based on diversity of citizenship, a notice of removal may not be filed more than one year “after commencement of the action.” 28 U.S.C. § 1446(b).

It is the second requirement ² on which the legal dispute in this case hinges. GEICO effectively contends that language in § 1446(b) is claim specific, and that for removability purposes, the bad faith action at issue here commenced after plaintiffs filed their amended complaint in state court and the underlying judgment on the UM contract claim became final through exhaustion of appellate remedies, thereby resetting § 1446(b)'s one-year repose period.

The court disagrees. In general, when an action is “commenced” for purposes of the removal statutes is determined by the law of the state where a removed action originally was filed. See Schorsch v. Hewlett–Packard Co., 417 F.3d 748, 750–51 (7th Cir.2005), citing Pace v. DiGuglielmo, 544 U.S. 408, 125 S.Ct. 1807, 161 L.Ed.2d 669 (2005); Winkels v. George A. Hormel & Co., 874 F.2d 567, 570 (8th Cir.1989). Under the law of Florida, where this action was initially filed, a civil action is deemed to have “commenced” on the date the initial complaint is filed. SeeFla. R. Civ. P. 1.050 (“Every action of a civil nature shall be deemed commenced when the complaint ... is filed....”); Szabo v. Essex Chemical Corp., 461 So.2d 128 (Fla. 3d DCA 1984)(action is commenced in Florida by the filing of a complaint); James Estate by James v. Martin Memorial Hospital, 422 So.2d 1043 (Fla. 4th DCA 1982). See alsoFed.R.Civ.P. 3 (“A civil action is commenced by filing a complaint with the court.”).

Further, “[e]ven when an action includes multiple claims by various plaintiffs against multiple defendants, the commonly understood meaning of the “commencement of the action” is when the original complaint is filed that sets in motion the resolution of all claims, even though an action often includes the addition of new claims and parties as the action progresses.” Lopez v. Robinson Aviation (RVA), Inc., 2010 WL 3584446 (S.D.Fla.2010). Thus, the plain language of § 1446(b) suggests that “commencement of the action” means the filing of the original complaint that sets in motion the resolution of all claims that may be properly disposed of in the action. Id. at...