Shea v. Nationwide Prop. & Cas. Ins. Co.
| Decision Date | 01 March 2023 |
| Docket Number | Civil Ation 3:22-CV-00494 |
| Parties | PATRICK SHEA, Plaintiff, v. NATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY, et al., Defendants. |
| Court | U.S. District Court — Middle District of Pennsylvania |
REPORT AND RECOMMENDATION
Before the Court is a motion to remand to state court filed by Plaintiff Patrick Shea (“Shea”) on April 13 2022. (Doc. 5). Shea initiated this insurance coverage dispute in the Court of Common Pleas of Luzerne County on February 22, 2022, against Defendants Nationwide Property and Casualty Insurance Company (“Nationwide”) and Scott Davis (“Davis”) (collectively “Defendants”). (Doc. 1). Shea requests that the current matter be remanded back to the state court because (1) Davis is a necessary party under Pennsylvania's Declaratory Judgments Act; (2) Davis has a substantial interest in the outcome of this litigation; and (3) the Court should nevertheless decline to exercise its judgment consistent with its own precedent based on a consideration of the Reifer factors. (Doc. 6, at 9). For the following reasons, it is respectfully recommended that Shea's motion to remand be granted. (Doc. 5).
Shea initiated this action with the filing of a complaint on February 22, 2022. (Doc. 11, at 6). Shea completed service upon Nationwide on March 3, 2022; however, there is no evidence that Shea has completed service upon Davis and Davis has not appeared in this action. (Doc. 1, at 1). On April 1, 2022, Nationwide removed this matter to the United States District Court for the Middle District of Pennsylvania from the Court of Common Pleas for Luzerne County, Pennsylvania, pursuant to 28 U.S.C. § 1332 and 28 U.S.C. § 1446(b). (Doc. 1, at 1-2). In the notice of removal, Nationwide maintains that the citizenship of Davis “should be disregarded because Davis is a nominal party with no interest in the outcome of the dispute; or, alternatively, because Davis is fraudulently joined in this action for the purpose of defeating diversity jurisdiction.” (Doc. 1, at 3).
According to the complaint, Shea executed the original Nationwide insurance policy, Police No. 58E462085, with Nationwide for uninsured motorist (“UM”) and underinsured motorist (“UIM”) benefits for one vehicle on August 26, 2013 (the “2013 Nationwide Policy”). (Doc. 1-1, ¶ 7; Doc. 1-1, at 17-34). The 2013 Nationwide Policy provides bodily injury liability coverage of $100,000 per person and $300,000 per accident, as well as UM and UIM coverage of $50,000 per person and $100,000 per accident. (Doc. 1-1, ¶ 10; Doc. 1-1, at 24-25, 28). Shea rejected stacked UM/UIM coverage limits. (Doc. 1-1, at 26-27). On December 21, 2016, Shea was issued a new Nationwide insurance policy (the “2016 Nationwide Policy”) with a different policy number, this time Policy No. 58G035977. (Doc. 1-1, ¶¶ 10-11, Doc. 1-1, at 36-50). The 2016 Nationwide Policy provided the same bodily injury and UM/UIM limits for one vehicle as the previous 2013 Nationwide Policy. (Doc. 11, at 36-50). On February 19, 2018, Shea purchased new coverage by adding a vehicle onto his Nationwide insurance policy (the “2018 Nationwide Policy”), Policy No. 5837G035977, which changed in the following ways: (1) the addition of a “2016 GMC Sierra 1 ” to the policy; (2) “Changed Underinsured Motorists-Bodily Injury” coverage; and (3) “Changed Uninsured Motorists-Bodily Injury” Coverage. (Doc. 1-1, ¶¶ 12-14; Doc. 1-1, at 52). The 2018 Nationwide Policy provides bodily injury liability coverage of $100,000 per person and $300,000 per accident, as well as UM and UIM coverage of $50,000 per person and $100,000 per accident. (Doc. 1-1, at 52-58).
On June 3, 2021, Shea was the victim of a motor vehicle collision at the intersection of North Hunter Highway and Edge Rock Drive in Butler Township, Luzerne County, Pennsylvania. (Doc. 1-1, ¶ 22). At approximately 6:21 p.m., Shea was stopped at the stop sign on Edge Rock Drive waiting to turn onto North Hunter Highway. (Doc. 1-1, ¶ 23). At the same time and place, Davis was traveling north on North Hunter Highway, when he attempted to make a right-hand turn onto Edge Rock Drive. (Doc. 1-1, ¶ 24). As a result, Davis's vehicle collided with Shea's stopped vehicle and Shea sustained severe injuries. (Doc. 1-1, ¶¶ 25-26).
On June 7, 2021, Shea notified Nationwide of the June 3, 2021, collision. (Doc. 1-1, ¶ 27). On July 27, 2021, a representative for Nationwide informed Shea that Davis did not have insurance coverage on the date of loss, June 3, 2021, and provided Shea with a certified copy of the Nationwide Policy. (Doc. 1-1, ¶ 29). The Nationwide Policy contained two sign-down forms, one for UM coverage and one for UIM coverage. (Doc. 1-1, ¶ 34; Doc. 1-1, at 57-58). These sign-form forms contain the putative signature: “P. Shea.” (Doc. 1-1, ¶ 35; Doc. 1-1, at 57-58). Shea contends he did not request lower UM/UIM limits, did not execute those forms, and did not authorize anyone on his behalf to execute the sign-down forms. (Doc. 1-1, ¶ 36). Shea contends Section 1734 of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”) provides that an individual may request the issuance of UM/UIM coverage in amounts equal to or less than the limits for bodily injury. (Doc. 1-1, ¶ 39). Such request must be made in writing using “sign-down” forms approved by the Pennsylvania Department of Insurance. (Doc. 1-1, ¶ 39). In the absence of such forms, Shea claims the policyholder is presumed to maintain UM/UIM coverage in an amount total to his bodily injury limits. (Doc. 1-1, ¶ 40).
Accordingly, Shea asserts that because the sign-down forms are void, “the Nationwide Policy should provide for UM coverage in the amounts of $300,000 per person, stacked across two vehicles, for $600,000 per person, consistent with the bodily injury coverage maintained under the [2013] Nationwide policy and consistent with Section 1734 of the MVFRL.” (Doc. 1-1, ¶ 41). As a result of Nationwide refusing to reform Shea's insurance policy to recognize UM coverage with a policy limit of $600,000, Shea initiated this declaratory judgment action. (Doc. 1-1, ¶ 49). As relief, Shea seeks the following declaratory judgment as relief: (1) the March 2018 sign-down is a forgery and invalid; (2) the previously executed sign-down forms are not valid; and (3) Shea “has $600,000 in uninsured motorist coverage available under the Nationwide Policy at the time of the subject collision;” (4) “Defendant Scott Davis is an uninsured motorist;” and (5) the 2018 Nationwide Policy is reformed consistent with the above declarations. (Doc. 1-1, at 13-14).
On April 13, 2022, Shea filed the motion to remand. (Doc. 5). The motion has been fully briefed and is ripe for disposition. (Doc. 6; Doc. 8; Doc. 10).
The removal of cases from state courts to federal courts is governed by 28 U.S.C. §§ 1441-1455. Under § 1441(a), a defendant may remove “any civil action brought in a state court of which the district courts of the United States have original jurisdiction . . . 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). District courts “have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between [ ] citizens of different states.” 28 U.S.C. § 1332(a)(1). The removal statute is strictly construed and all doubts are to be resolved in favor of remand. Johnson v. SmithKline Beecham Corp., 724 F.3d 337, 346 (3d Cir. 2013).
Section 1446 of the removal statute further sets forth the procedures for removal, explaining that a defendant seeking removal of an action must file a petition for removal with the proper district court that contains “a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants” in the state court action. 28 U.S.C. § 1446(a). In addition, a notice of removal “shall be filed within 30 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.” 28 U.S.C. §§ 1446(b). After a case has been removed, a plaintiff may move to remand the action back to state court under 28 U.S.C. § 1447(c) for “(1) lack of district court subject matter jurisdiction or (2) a defect in the removal procedure.” Ramos v.Quien, 631 F.Supp.2d 601, 607 (E.D. Pa. Nov. 18, 2008) (quoting PAS v. Travelers Ins. Co., 7 F.3d 349, 352 (3d Cir. 1993)). However, a “motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal.” 28 U.S.C. § 1447(c).
In the case at bar, Nationwide filed a Notice of Removal pursuant to 28 U.S.C. § 1441(b), invoking diversity of citizenship under 28 U.S.C. § 1332(a). (Doc. 1, at 1-2). This provision states that a district court “shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs,” between “citizens of different states.” 28 U.S.C. § 1332(a)(1). Here, it is not disputed that the amount in controversy exceeds $75,000. (Doc. 1-1, at 13-14). Thus, the Court's analysis focuses on whether the parties are of diverse citizenship.
To determine whether there is before the district court a controversy between “citizens of different States,” as is required by 28 U.S.C. § 1332(a)(1) and by Article III of the United States Constitution, the Supreme Court has stated that the...
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