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Beasley v. Progressive Northwestern Insurance Co.

United States District Court, D. Kansas

February 12, 2015

QUINCEY METANYA BEASLEY, Plaintiff,
v.
PROGRESSIVE NORTHWESTERN INSURANCE COMPANY, CCS, LLC, a/k/a CCS COMMERCIAL, LLC, and ALONDRA MENDOZA GUTIERREZ, Defendants.

MEMORANDUM AND ORDER

JULIE A. ROBINSON, District Judge.

This matter was removed from Wyandotte County, Kansas District Court on October 23, 2014. Before the Court is Plaintiff's Motion to Remand (Doc. 18), in which she argues that Defendants failed to comply with the removal procedures by each consenting to removal, and that Defendant Alondra Mendoza Gutierrez's citizenship destroys this Court's subject matter jurisdiction. In connection with this motion, the Court also considers Plaintiff's Motions to Stay Deadlines (Doc. 20, 21) on the Defendants' pending motions to dismiss, as well as Plaintiff's Motion for Attorney Fees and Costs Pursuant to 28 U.S.C. § 1447(c) (Doc. 22). The motions are fully briefed and the Court is prepared to rule. As described more fully below, the motion to remand is denied, therefore Plaintiff's request for attorney fees and costs is moot. Plaintiff shall respond to the motions to dismiss within twenty-one days of this Order.

I. Background

Plaintiff Quincey Beasley filed her state court Petition on September 29, 2014, seeking declaratory relief that she is not liable for a car accident that occurred on March 3, 2014, and a separate claim for damages, civil penalties, and attorneys' fees associated with deceptive acts and practices under the Kansas Consumer Protection Act ("KCPA").[1]

The following facts are alleged in the Petition or Notice of Removal and assumed to be true for purposes of deciding this motion. On March 3, 2014, an uninsured motorist operating Plaintiff's vehicle collided with a vehicle owned and operated by Defendant Gutierrez, causing property damage to Gutierrez's vehicle. Because Plaintiff could not provide proof of financial responsibility, the Director of Vehicles suspended her driving privileges and vehicle registration on July 8, 2014. Plaintiff later purchased liability insurance for her vehicle and paid a reinstatement fee, but in order to have her driving privileges reinstated, she also must produce either (1) an agreement with the other party to pay for personal property damages; (2) a release of liability; or (3) a judgment of non-liability from the district court located in the district where the accident occurred.

Defendant Progressive Northwestern Insurance Company ("Progressive") insured Gutierrez's vehicle and has asserted a subrogation claim against Plaintiff in the amount of $4554.40, the amount it has paid to Gutierrez. Progressive retained CCS, LLC a/k/a CCS Commercial, LLC ("CCS") to collect on the subrogation claim. Plaintiff cannot afford to pay this claim to Progressive, and has been unable to obtain reinstatement of her driving privileges as a result. On August 8, 2014, in exchange for a release of liability, Defendants demanded that Plaintiff sign a promissory note for the full amount it paid on the claim, plus Progressive's attorney fees and costs. But Plaintiff would not sign the note, claiming that it contained false statements that she had been found liable or assumed liability for the March 3 accident.

Plaintiff alleges that Defendants wrongfully and recklessly pursued a subrogation claim against her and misrepresented to her that she must admit liability in order to obtain a release.

Plaintiff served all three Defendants with a copy of summons and the Petition on October 1, 2014. Defendant Progressive filed its Notice of Removal on October 23, 2014. Progressive states in the Notice of Removal that its counsel also represents Defendant Gutierrez, who consents to removal. It further states that "CCS was served" on October 1, 2014 and has consented to removal. Progressive is a citizen of Ohio, and CCS is a citizen of Massachusetts. The Notice of Removal alleges that although Defendant Gutierrez is a citizen of Kansas, she was fraudulently joined in this matter to defeat diversity jurisdiction. Progressive alleges that the insurer is the real party in interest because it has fully satisfied the claim of its insured.

On November 3, 2014, Defendant Gutierrez filed a Motion to Dismiss, seeking dismissal because she is not the real party in interest given the subrogation agreement. Progressive and CCS each filed a motion to dismiss Count 2 of the Petition, arguing that the KCPA claim must be dismissed because the facts do not involve a "consumer transaction" under the statute. The next day, Plaintiff filed the instant Motion to Remand. In her motion she argues for remand on two grounds: (1) lack of removal jurisdiction because the parties are not completely diverse under 28 U.S.C. § 1446 and 1332; and (2) the removal procedure was defective because neither Gutierrez nor CCS filed a timely written consent to removal. Plaintiff also sought to stay the response deadlines to the motions to dismiss pending a ruling on her motion to remand. On November 19, 2014, Defendant CCS filed a Notice of Consent and Joinder of Removal, in which it explicitly consented in writing to removal.[2]

II. Discussion

Federal courts are required to remand a case to state court "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction."[3] To avoid remand, a defendant must show that the action satisfies the requirements for federal jurisdiction.[4] Because federal courts "are courts of limited jurisdiction, there is a presumption against federal jurisdiction."[5] Therefore, courts must resolve doubtful cases in favor of remand.[6] Defendants bear the burden of proving facts sufficient to establish jurisdiction.[7]

Remand is generally improper if the defendant properly removed a case to federal court that the plaintiff could have originally filed in federal court.[8] Federal courts are courts of limited jurisdiction, and as such they must have a statutory or constitutional basis to exercise jurisdiction over any controversy.[9] Under 28 U.S.C. § 1332(a), federal district courts have original jurisdiction of civil actions where complete diversity of citizenship and an amount in excess of $75, 000 (exclusive of interest and costs) in controversy exists. Removal jurisdiction over diversity cases is more limited than jurisdiction over diversity cases originally brought in federal court because removal based on diversity is available only if none of the defendants is a citizen of the state in which the action is brought.[10]

"The courts must rigorously enforce Congress' intent to restrict federal jurisdiction in controversies between citizens of different states."[11] The presumption is thus against removal jurisdiction, [12] and courts must refrain from exercising jurisdiction in all cases where such jurisdiction does not affirmatively appear on the record.[13] Statutes conferring both diversity and removal jurisdiction are to be strictly construed, and "[d]oubtful cases must be resolved in favor of remand."[14]

In addition to a lack of subject matter jurisdiction, defects in the removal procedure are grounds for remand if the motion is filed within thirty days after removal.[15] This type of defect is procedural and not jurisdictional.[16] In a case such as this one that is removed solely under § 1441(a), the statute requires "all defendants who have been properly joined and served" to "join in or consent to the removal of the action."[17] The failure of all defendants to join in the removal petition, often referred to as the unanimity requirement, is one type of procedural defect that could justify remand.[18] An exception to the unanimity rule exists for nominal, unknown, unserved, or fraudulently joined defendants.[19] The Tenth Circuit has not yet ruled on the form of consent required by a non-removing defendant in removal cases. Other circuit courts are split on whether the consent requirement may be met by representations from counsel for the removing defendant that all co-defendants consent.[20] ...


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