Ortiz v. Biscanin
| Decision Date | 15 February 2002 |
| Docket Number | Nos. CIV.A. 01-2425-CM, CIV.A. 01-2294-CM.,s. CIV.A. 01-2425-CM, CIV.A. 01-2294-CM. |
| Citation | 190 F.Supp.2d 1237 |
| Parties | Maria ORTIZ, Plaintiff, v. John BISCANIN, Public Administrator and Administrator of the Estate of Theodoro Hernandez, Deceased, Defendant, v. Guaranty National Insurance Co., Garnishee. |
| Court | U.S. District Court — District of Kansas |
Christopher P. Sweeny, Turner & Sweeny, Kansas City, MO, for Maria Ortiz.
Donald W. Vasos, Law Offices of Donald W. Vasos, Shawnee Mission, KS, for John Biscanin.
J. Franklin Hummer, Med James, Inc., Shawnee Mission, KS, for Guaranty Nat. Ins. Co.
The court consolidated the above-captioned actions for pretrial purposes. In Ortiz v. Biscanin, No. 01-2425-CM ("the garnishment action"), plaintiff Maria Ortiz seeks to garnish Guarantee National Insurance Co. (GNIC) to obtain satisfaction of a state court wrongful death judgment against defendant John Biscanin.1 Ms. Ortiz is the widow of Gilberto Ortiz, who was killed in an automobile accident with Theodoro Hernandez, who also was killed. Mr. Hernandez was driving a car owned by Sandra Simental, who was insured by GNIC. Mr. Biscanin is the administrator of Mr. Hernandez's estate. In Guaranty National Insurance Co. v. Ortiz, et al., No. 01-2294-CM (), plaintiff GNIC seeks a declaratory judgment determining its rights and liabilities regarding the application of its obligations under the insurance policy to the wrongful death settlement. Pending before the court are motions to remand the garnishment action by plaintiff Ortiz (Doc. 4) and defendant Biscanin (Doc. 9). Also before the court are motions to stay or dismiss the declaratory judgment action by defendant Biscanin (Doc. 10), and a motion to dismiss the declaratory judgment action filed by Ms. Ortiz, who is a defendant in that action (Doc. 12). Finally, plaintiff GNIC has moved the court in the declaratory judgment action to stay the garnishment proceedings until the federal declaratory judgment action is adjudicated (Doc. 16).
For the reasons set forth below, the court grants plaintiff Ortiz and defendant Biscanin's motions to remand the garnishment action to the District Court of Wyandotte County, Kansas. The court grants in part and denies in part defendant Biscanin's motion to stay or dismiss the declaratory judgment action. Defendant Ortiz's motion to dismiss the declaratory judgment action is denied. Plaintiff GNIC's motion to stay the garnishment action is denied.
Both actions stem from a March 24, 1997, automobile accident in which Mr. Ortiz and Mr. Hernandez were killed. Mr. Hernandez was driving a car owned by Ms. Simental and insured by GNIC. On August 11, 1997, Med James, Inc., the managing general agent of GNIC, denied coverage under the policy based on allegations that Ms. Simental made material misrepresentations at the time of the application process. In August 1997, Med James, acting on behalf of GNIC, filed a declaratory judgment action (No. 97-C-3371) ("the state declaratory judgment action") in the District Court of Wyandotte County, Kansas. GNIC sought a declaration that the insurance policy covering the vehicle driven by Mr. Hernandez was void ab initio. Ms. Ortiz intervened in this action by agreement of the parties in December 1997. In March 1998, Ms. Ortiz filed a wrongful death action (No. 98-C-1309) ("the wrongful death action") in the District Court of Wyandotte County, Kansas, against Mr. Biscanin. GNIC refused to provide a defense. The state declaratory judgment and wrongful death actions were consolidated for discovery purposes. In July 1998, the declaratory judgment case was tried before the Hon. Daniel Duncan. In April 2000, Judge Duncan issued a memorandum decision in the state declaratory judgment action finding that GNIC's policy was in effect at the time of the accident and denying GNIC's petition for declaratory judgment.
In May 2000, the District Court of Wyandotte County approved a settlement of $500,000 in the wrongful death action to be paid to Ms. Ortiz by Mr. Hernandez's estate. GNIC then intervened in the case, and appealed it to the Kansas Court of Appeals on June 12, 2000. GNIC then dismissed the appeal on July 11, 2000, and the clerk of the court entered the dismissal of the appeal on July 14, 2000. In the declaratory judgment action, the Kansas Court of Appeals affirmed Judge Duncan's decision denying declaratory judgment on June 1, 2001. On June 13, 2001, GNIC paid Ms. Ortiz $25,000 in partial satisfaction of the $500,000 wrongful death judgment. The balance remains unsatisfied.
Also on June 13, 2001, GNIC filed the federal declaratory judgment action in this court, seeking a judgment that GNIC has no obligation to pay in excess of its policy limits on the settlement obtained by Ms. Ortiz against Mr. Biscanin in the state wrongful death action. The following day, June 14, 2001, Ms. Ortiz filed a request for garnishment in the wrongful death action, and filed an order of garnishment on July 12, 2001. On July 16, 2001, Kansas Insurance Commissioner Kathleen Sebelius received the order of garnishment and answer. The office of the Insurance Commissioner mailed the garnishment order to GNIC on July 17, 2001, and GNIC's mail courier signed for it as certified mail on July 19, 2001. GNIC filed a notice of removal of the state garnishment action on August 20, 2001. This court granted garnishee GNIC's motion to consolidate the garnishment action with the federal declaratory judgment action for pretrial purposes because adjudication of the merits of the disputes would require examination of common issues of law and fact (Doc. 18).
Plaintiff Ortiz filed a motion on August 28, 2001, to remand the garnishment action to the District Court of Wyandotte County, and defendant Biscanin filed a motion on September 12, 2001, to remand the action. Defendant Biscanin filed a motion to stay or dismiss the federal declaratory judgment action pending resolution of the garnishment action, which he claims was improperly removed to federal court. Defendant Ortiz also seeks dismissal of the federal declaratory judgment action. Finally, garnishee GNIC has moved the court to stay the garnishment action pending resolution of the federal declaratory judgment action. The court considers each motion in turn.
Plaintiff Ortiz asserts several bases upon which the court should remand this action to state court: (1) that garnishee GNIC failed to file the notice of removal within thirty (30) days as required by 28 U.S.C. § 1446(b); (2) that because the wrongful death action which gave rise to the garnishment action was pending in state court for more than one year, the garnishment action is nonremovable under 28 U.S.C. § 1446(b); (3) that garnishee GNIC failed to obtain defendant Biscanin's consent to removal; and (4) that removal was improper because the court lacks diversity jurisdiction under 28 U.S.C. § 1332(a).2 In his motion to remand, defendant Biscanin incorporates all of plaintiff Ortiz's arguments.3
The court notes at the outset that because federal courts are courts of limited jurisdiction, there is a presumption against removal jurisdiction. Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir.1974). The party seeking removal carries the burden of proving to the court that removal is proper and that the court had original jurisdiction of the case. Dresser-Rand v. N. Natural Gas Co., No. 99-4165-SAC, 2000 WL 286733, at *1 (D.Kan. Jan.19, 2000) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)). Because "federal removal jurisdiction is statutory in nature, the governing statutes are to be strictly construed." Dresser-Rand, 2000 WL 286733, at *1 (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)); see also Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir.1995) (requiring strict construction). Finally, all doubts must be resolved in favor of remand. Dresser-Rand, 2000 WL 286733, at *1 (citing Laughlin, 50 F.3d at 873).
In its notice of removal, garnishee GNIC asserts that the court has original jurisdiction pursuant to 28 U.S.C. § 1332 because the parties are citizens of different states and the amount in controversy exceeds $75,000. Thus, according to garnishee GNIC, removal is proper under 28 U.S.C. § 1441(a) ().
A. Timeliness of Removal
First, plaintiff Ortiz contends garnishee GNIC failed to file the notice of removal within thirty (30) days as required by 28 U.S.C. § 1446(b). This statute provides:
The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter....
28 U.S.C. § 1446(b). Plaintiff Ortiz argues that the garnishment order was served on garnishee GNIC, for purposes of commencing 28 U.S.C. § 1446(b)'s thirty-day period, on July 17, 2001, when the order of garnishment was served on Insurance Commissioner Sebelius. Kansas Statutes Annotated § 40-218 provides that in garnishment proceedings against insurance companies,
Every insurance company ... shall file in the insurance department its written consent, irrevocable, that any action or garnishment proceeding may be commenced against such company ... by the service of process on the...
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