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Richey v. Auto-Owners Insurance Co.

United States District Court, M.D. Alabama, Northern Division

June 7, 2019

SHARON PAIGE RICHEY, et al., Plaintiffs,



         On March 27, 2019, Defendant Auto-Owners Insurance Co. (“Auto-Owners”) removed this action from the Circuit Court of Montgomery County, Alabama. Doc. 2. On May 1, 2019, the parties consented to the full jurisdiction of a United States Magistrate Judge. Docs. 12 & 13. Now pending before the court is Plaintiffs' Motion to Remand. Doc. 1. After careful consideration of the parties' filings and the relevant law, and for the reasons stated below, the court concludes that the Motion to Remand (Doc. 1) is due to be DENIED.


         The facts are as alleged in the complaint. Plaintiffs Sharon Richey and Tommy Richey (“the Richeys”) and their minor children are residents of Alabama. Doc. 2-1. The Richeys' adult child, Plaintiff Devin Brian Frazier, also is a resident of Alabama. Doc. 2-1. In early January 2017, the Richeys purchased an insurance policy for their home on 2nd Street in Montgomery, Alabama. Doc. 2-8. On January 26, 2017, their home and personal property were destroyed by fire. Doc. 2-1. The Montgomery Fire Department determined that the fire was accidental and caused by smoking materials placed in a garbage can. Doc. 2-1. Suspicious of this explanation, Reneeka Hawkins, an investigator working for Auto-Owners, decided to look into the fire and contacted the Montgomery Fire Department for assistance. Doc. 2-1. Hawkins and Kenneth R. Peoples of the Montgomery Fire Department ultimately determined that the Richeys should be prosecuted for insurance fraud. Doc. 2-1. On or about April 28, 2017, the Montgomery Police Department arrested Sharon Richey and Tommy Richey on a charge of first-degree insurance fraud. Doc. 2-1. The warrants for their arrest were primarily supported by a sworn statement prepared by Peoples. Doc. 2-1. Sharon and Tommy Richey were then indicted by a Montgomery County Grand Jury in July 2017. Doc. 2-1. In April 2018, the criminal case against the Richeys was dismissed. Doc. 2-1.

         To date, Auto-Owners has refused to pay the insurance coverage claim. Doc. 2-1. Plaintiffs assert that Sharon and Tommy Richey were wrongfully prosecuted and arrested at a relative's home in front of their children. Doc. 2-1. Plaintiffs filed this action in the Circuit Court of Montgomery County, asserting a bad faith refusal to pay/breach of insurance contract claim, and a malicious prosecution/false imprisonment claim. Doc. 2-1. Plaintiffs sued Auto-Owners and Peoples. Doc. 2-1. Peoples, an Alabama citizen, was dismissed from the case on February 26, 2019. Doc. 2-7. Auto-Owners removed the action to this court 29 days after Peoples' dismissal. Doc. 2.


         Removal is appropriate “in two types of cases: (1) those removable on the basis of an initial pleading; and (2) those that later become removable on the basis of a copy of an amended pleading, motion, order or other paper.” Williams v. Wal-Mart Stores, Inc., 534 F.Supp.2d 1239, 1243 (M.D. Ala. 2008) (citing 28 U.S.C. § 1446(b)). Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Thus, the courts “have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Arbaugh v. Y & H Corp., 126 S.Ct. 1235, 1244 (2006). And because removal implicates federalism concerns, the court must construe the removal statutes narrowly and resolve all doubts in favor of remand. See, e.g., Scimone v. Carnival Corp., 720 F.3d 876, 882 (11th Cir. 2013). “It is in everyone's best interest, both the litigants' and the courts,' to verify that diversity jurisdiction exists before proceeding with the case.” Purchasing Power, LLC v. Bluestem Brands, Inc., 851 F.3d 1218, 1220 (11th Cir. 2017). Diversity jurisdiction exists where the amount in controversy exceeds $75, 000 and the action is between citizens of different states. 28 U.S.C. § 1332. “A party removing a case to federal court based on diversity of citizenship bears the burden of establishing the citizenship of the parties.” Rolling Greens MHP, L.P. v. Comcast SCH Holding L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004).


         Plaintiffs argue that removal to federal court is improper because (1) removal is untimely, (2) complete diversity of citizenship does not exist, and (3) the amount in controversy does not exceed $75, 000. These arguments are unavailing.

         A. Timeliness

         Without citation to any law, Plaintiffs assert that removal is untimely and unripe because depositions have not occurred. Doc. 1 at 2. A defendant must remove within 30 days of receiving a document that provides the basis for removal. Lowery v. Ala. Power Co., 483 F.3d 1184, 1213 (11th Cir. 2007). In such a removal, “a case becomes removable when three conditions are present: there must be (1) an amended pleading, motion, order or other paper, which (2) the defendant must have received from the . . . court . . . and from which (3) the defendant can first ascertain that federal jurisdiction exists.” Williams, 534 F.Supp.2d at 1244 (citing 28 U.S.C. § 1446(b)) (internal quotation marks omitted). “The 30-day removal clock ‘starts ticking' once all three conditions are present.” Pitts v. Ram Partners, L.L.C., 2018 WL 5786219, at *3 (M.D. Ala. Nov. 5, 2018) (quoting Allen v. Thomas, 2011 WL 197964, at *3 (M.D. Ala. 2011)).

         Here, all three conditions are present. When the state court dismissed Peoples, an Alabama citizen, from the action, Auto-Owners received an order from the court from which it could first ascertain that federal jurisdiction existed. Peoples, the only non-diverse party, was dismissed from the lawsuit on February 26, 2019. Doc. 2-7 at 5 & 7. With this order, diversity of the parties was established, and the 30-day removal clock began ticking. On March 27, 2019-29 days later-Auto-Owners removed this action to federal court. Doc. 2. Because Auto-Owners removed the case within 30 days after first learning that federal jurisdiction existed, the removal is timely.

         B. Citizenship

         Plaintiffs contend that diversity jurisdiction does not exist because Auto-Owners is a citizen of Alabama. Doc. 1 at 3. Federal diversity jurisdiction requires that no plaintiff be a citizen of the same state as any defendant. Travaglio v. Am. Exp. Co., 735 F.3d 1266, 1268 (11th Cir. 2013). Additionally, in a case based on diversity jurisdiction, a party is not permitted to remove a civil action to federal court if that party is a citizen of the state in which the action is brought. 28 U.S.C. ยง 1441(b)(2). In other words, ...

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