Steinberg v. Nationwide Mut. Ins. Co., 99CV7725(ADS).
| Court | United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York) |
| Citation | 91 F.Supp.2d 540 |
| Docket Number | No. 99CV7725(ADS).,99CV7725(ADS). |
| Parties | Stephen R. STEINBERG, individually and on behalf of a class of policyholders and members of Nationwide Mutual Insurance Company and derivatively on behalf of Nationwide Mutual Insurance Company, Plaintiffs, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Richard D. Crabtree, Gordon E. McCutcheon, and such other "Doe" defendants employed by Nationwide who participated or allowed the acts herein alleged, whose identities are presently unknown, Defendants. |
| Decision Date | 06 April 2000 |
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, Richard D. Crabtree, Gordon E. McCutcheon, and such other "Doe" defendants employed by Nationwide who participated or allowed the acts herein alleged, whose identities are presently unknown, Defendants.
Page 541
Stephen R. Steinberg, Southampton, NY, for Plaintiff pro se.
Hodgson, Russ, Andrews, Woods & Goodyear LLP, New York City, by Michael P. Murphy, Kevin M. Kearney, Elizabeth Dailey McManus, of counsel, for defendants.
SPATT, District Judge.
On October 13, 1999, the plaintiff Stephen R. Steinberg, Esq. (the "plaintiff" or "Steinberg"), commenced this action in New York Supreme Court, Suffolk County (Index No. 99-23926). On November 24, 1999, pursuant to 28 U.S.C. §§ 1441 and 1446, Nationwide Mutual Insurance Company ("Nationwide"), Richard D. Crabtree ("Crabtree"), and Gordon E. McCutcheon ("McCutcheon") (collectively, the "defendants") jointly filed a petition of removal to this Court. Presently before the Court is the plaintiff's motion to remand the case to the New York Supreme Court, Suffolk County.
The facts set forth below are taken from the plaintiff's complaint. On an unspecified date, Nationwide sold to the plaintiff a contract for automobile insurance for his leased 1999 BMW 7401, which provided: "COMPREHENSIVE COVERAGE. WE will pay for loss to your auto not caused by collision or upset. We will pay for the loss less your declared deductible." In September 1999, the plaintiff's BMW engine was damaged by water that was caused by flooding conditions in Bridgehampton, New York. On behalf of Nationwide, an adjuster consented to the replacement of the engine and agreed to pay the repairing dealer (the selling dealer of the car) approximately
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$10,400 for replacement of the engine block.
Nationwide confirmed the agreement it had made with the selling dealer by sending the plaintiff a document which indicated that it had agreed to replacement of the BMW engine block for a total payment of more than $14,000 to the dealer. Nationwide applied the insurance contract's deductible of $1,000 and then also deducted a "betterment" charge claiming that because the vehicle had approximately 10,000 miles on it and they had agreed to the installation of a new engine, the plaintiff was responsible for the increase in value of the vehicle as a result of the installation of a new engine in a car with almost 10,000 miles of use.
The plaintiff alleges that Nationwide misled him into believing that he was obtaining a new engine, when in fact, it was remanufactured. A remanufactured engine is a previously used engine which is remanufactured by BMW in Germany. After obtaining possession of the vehicle from the repairer-dealer and paying the deductible and betterment charges, the plaintiff learned that a remanufactured engine had been installed at Nationwide's request.
The plaintiff contends that it is Nationwide's course of conduct to arrange with repairers to install used or remanufactured parts without first advising its insureds. As a result, the plaintiff contends that Nationwide is saving millions of dollars annually, while it is simultaneously collecting premiums and charging "betterment" charges. The plaintiff alleges that he has been damaged in the sum of at least $15,000. As a result of this conduct, the plaintiff's complaint seeks damages for each member of the class who have incurred "betterment" charges for remanufactured parts. In addition, the complaint seeks an order enjoining Nationwide from continuing the practice of using remanufactured parts and imposing "betterment" charges on its insureds.
It should be noted that the plaintiff's reply memorandum of law indicates that he has voluntarily withdrawn his "derivative claim" and discontinued the action against the individual defendants.
A. Motion To Remand
A cause of action that was originally filed in the state court may be removed by the defendant where "the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). In order to remove a case from state to federal court the notice of removal must 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." 28 U.S.C. § 1446(b). There is no contention that the defendants failed to properly comply with Section 1446.
While Sections 1441 and 1446 permit removal to the federal courts in...
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