United States District Court, N.D. Alabama, Southern Division
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE
matter comes before the court on “Plaintiff's
Motion to Remand and Request for Attorneys Fees.” (Doc.
5). On June 25, 2018, Defendant Cincinnati Indemnity Company
removed this case from the Circuit Court of Jefferson County,
Alabama to this court. (Doc. 1). Cincinnati Indemnity
properly alleged diversity of citizenship jurisdiction in its
timely notice of removal. (Doc. 1). Plaintiff EHD
Technologies, LLC does not contest jurisdiction or timing.
EHD instead argues that Cincinnati Indemnity waived its right
to remove by manifesting an intent to litigate the case in
state court. For the reasons set out below, this court finds
that Cincinnati Indemnity did not manifest its intent to
litigate this case in state court, and so denies
Plaintiff's motion to remand.
filed this action, styled as EHD Technologies, LLC v.
Cincinnati Indemnity Co. (hereinafter EHD case), against
Cincinnati Indemnity in the Circuit Court of Jefferson
County, Alabama on June 6, 2018 at 1:10 pm. (Doc. 5 at 2).
EHD claimed that Cincinnati Indemnity failed to indemnify EHD
pursuant to the insurance policy issued by Cincinnati
Indemnity when EHD was previously sued for a slip-and-fall
accident. (Doc. 1 at Exhibit A). The policy at issue was EPP
013 70 32. (Id.). EHD's causes of action
included (1) breach of contract, (2) abnormal bad faith, and
(3) bad faith. (Id.).
two hours before EHD filed its case in state court,
Cincinnati Insurance Company filed a case against EHD, styled
as Cincinnati Insurance Co. v. EHD Technologies, LLC
(hereinafter Cincinnati Insurance case). That case was filed
on June 6, 2018 at 11:16 am, also in the Circuit Court of
Jefferson County, Alabama. (Doc. 5 at 1). Cincinnati
Insurance alleged that EHD had not paid its premiums on three
insurance policies: EPP 013 70 32, the policy involved here,
and two unrelated workers compensation policies.
(Id. at 1-2). Cincinnati Insurance's causes of
action included (1) open account, (2) breach of contract, and
(3) account stated. (Doc. 5 at Exhibit 1).
argues that the filing of the second case in state court-two
hours before EHD filed this suit-demonstrated Cincinnati
Indemnity's intent to litigate the EHD case in state
Standard of Review
party seeking removal must present facts establishing its
right to remove and has the burden of proving that federal
jurisdiction exists by a preponderance of the evidence.
See Friedman v. N.Y. Life Ins., 410 F.3d 1350, 1353
(11th Cir. 2005). When the party seeking removal fails to
present such facts to satisfy its burden, the case must be
remanded. Williams v. Best Buy Co., 269 F.3d 1316,
1321 (11th Cir. 2001). Generally, a defendant may remove a
case filed in state court if the action could have originally
been filed in federal court. See 28 U.S.C. §
1441(a) (2012). A federal district court has jurisdiction
over civil cases where the amount in controversy exceeds $75,
000 and complete diversity between the parties exists.
See 28 U.S.C. § 1332.
does not contest that Cincinnati Indemnity properly alleged
diversity of citizenship jurisdiction. Instead, EHD relies on
the legal principle that a defendant may waive its right to
remove if it has litigated on the merits in the state court
proceeding. See Yusefzadeh v. Nelson, Mullins, Riley
& Scarborough, LLP, 365 F.3d 1244, 1246 (11th Cir.
intent to waive the right to remove must be “clear and
unequivocal.” Franklin v. City of Homewood,
No. 07-TMP-006-S, 2007 WL 1804411, at *5 (N.D. Ala. June 21,
2007). The court determines whether the defendant has
litigated on the merits on a case-by-case basis. See
Yusefzadeh, 365 F.3d at 1246 (citing Hill v. State
Farm Mutual Automobile Ins., 72 F.Supp.2d 1353, 1354
(M.D. Fla. 1999)). Courts consider two factors: “1)
whether the actions taken by the Defendants in the state
court were for the purpose of preserving the status quo, or
did they manifest an intent to litigate on the merits in
state court and 2) whether the removal can be characterized
as an appeal from an adverse judgment of the state
court.” Fain v. Biltmore Securities, Inc., 166
F.R.D. 39, 40-41 (M.D. Ala. 1996); see Franklin,
2007 WL 1804411, at *5. “[S]ubstantial offensive or
defensive action in the state court action indicating a
willingness to litigate” will waive the defendant's
right to remove unless “the defendant's
participation in the state court has not been substantial or
was dictated by the rules of that court.”
Yusefzadeh, 365 F.3d at 1246 (quoting Charles A.
Wright, et al., 14b Federal Practice & Procedure §
contends that Cincinnati Insurance, by filing a case
involving a particular insurance policy two hours
prior to EHD filing a case involving that same
policy against Cincinnati Indemnity, manifested Cincinnati
Indemnity's intent to litigate the second-filed case in
state court. In their motions and responses, the parties
debate whether Cincinnati Indemnity was “preserving the
status quo” or “manifest[ing] an intent to
litigate on the merits in state court.” Fain,
166 F.R.D. at 40-41. But the factors outlined in
Fain are unhelpful in this case.
Cincinnati Insurance case neither preserves the status quo
nor manifests an intent to litigate in state court its
obligation to indemnify EHD under the insurance policy-the
subject of this case. The Cincinnati Insurance case is an
entirely different case filed by a different (although
related) entity raising different causes of action regarding
different transactions. That one policy at issue overlaps
with the EHD case does not mean that these cases overlap on
the merits. To the extent that EHD believes a party can see
into the future and intend to litigate all claims not yet
filed regardless of relatedness, this court disagrees.
argues that the two cases will result in duplicative
discovery because “[c]laims brought in one lawsuit may
be defenses in the other lawsuit.” (Doc. 5). In its
answer to Cincinnati Insurance's complaint for failure to
pay premiums, EHD's answer included a list of affirmative
defenses, including “breach of contract.” (Doc. 5
at Exhibit 4). While this pleading may include the
nonpayment of EHD's insurance claim from the EHD case,
EHD has not asserted that specifically. If the cases were so
related, EHD would be required to file the breach of contract
claim as a compulsory counterclaim in the Cincinnati
Insurance case in state court. See Ala. R. Civ. P.
13(a) (“A pleading shall state as a counterclaim any
claim which at the time of serving the pleading the pleader
has against any opposing party, if it arises out ...