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Gardner v. Foremost Insurance Company Grand Rapids

United States District Court, D. Kansas

May 25, 2017

LISA GARDNER, Judgment Creditor, and CHERYLE HARDY, Judgment Debtor,
v.
FOREMOST INSURANCE COMPANY GRAND RAPIDS, MICHIGAN, Garnishee.

          MEMORANDUM AND ORDER

          Daniel D. Crabtree, United States District Judge

         This matter comes before the court on Judgment Creditor Lisa Gardner's Motion to Remand (Doc. 7) and Motion for Default Judgment (Doc. 4). After considering the parties' arguments, the court denies Ms. Gardner's Motion to Remand and the Motion for Default Judgment. The court denies Foremost's Motion for Leave to File Surreply (Doc. 3) as moot.

         I. Factual and Procedural Background

         The following facts come from Ms. Gardner's Reply to Answer of Garnishee, which she filed in in the District Court of Lyon County, Kansas on October 26, 2016 (Doc. 1-1 at 34-47), and the parties' briefs.

         This lawsuit arises from injuries Ms. Gardner suffered from Ms. Hardy's dog. Ms. Gardner sued Ms. Hardy for her injures in the District Court of Lyon County, Kansas, and on December 7, 2015, the court entered a final judgment against Ms. Hardy for $899, 293.70. On August 29, 2016, Ms. Gardner filed her Request for Garnishment. Foremost was served with the garnishment action on September 16, 2016.

         Ms. Gardner filed a Motion for Default Judgment on October 25, 2016, alleging that Foremost failed to Answer the Garnishment Action within the time allowed under Kan. Stat. Ann. § 40-218. In her Motion for Default Judgment, Ms. Gardner concedes that Foremost had filed its Answer with the court on October 21, 2016, but she contends this was improper, and Foremost should have sent its Answer to her and her attorney. In its Answer, Foremost denies that it possessed any property, funds, credits or other indebtedness belonging to Ms. Gardner. Ms. Gardner filed a Reply to Foremost's Answer on October 26, 2016, in state court. Foremost filed a Notice of Removal on November 16, 2016, and removed the case to our court. Ms. Gardner now asks the court to remand the case to the state court because Foremost failed to file a timely Notice of Removal.

         II. Legal Standard

         “Federal courts are courts of limited jurisdiction; they must have a statutory basis for their jurisdiction.” Dutcher v. Matheson, 733 F.3d 980, 984 (10th Cir. 2013) (quoting Rural Water Dist. No. 2 v. City of Glenpool, 698 F.3d 1270, 1274 (10th Cir. 2012)). Under 28 U.S.C. § 1441, a defendant may remove to federal court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441.

         The federal removal statutes require a defendant to remove an action “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)(1). But, “if the case stated by the initial pleading is not removable, ” the defendant must remove the action to federal court “within 30 days after receipt . . . of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.” 28 U.S.C. § 1446(b)(3).

         The Tenth Circuit has explained that “[t]he failure to comply with these express statutory requirements for removal can fairly be said to render the removal ‘defective' and justify a remand.” Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072, 1077 (10th Cir. 1999) (quoting Snapper, Inc. v. Redan, 171 F.3d 1249, 1253 (11th Cir. 1999)); see also Farm City Ins. Co. v. Johnson, 190 F.Supp.2d 1232, 1236 (D. Kan. 2002) (explaining that “the 30-day time requirement for removal is mandatory” but “not jurisdictional”); Wichita Fed. Savings & Loan Assoc. v. Black, No. 89-1089-K, 1989 WL 60141, at *1 (D. Kan. May 10, 1989) (“The time limitations established by § 1446(b) are mandatory and must be strictly applied.”)

         III. Analysis

         The court first determines whether this case is properly in federal court. In its Notice of Removal, Foremost alleges diversity jurisdiction exists under 28 U.S.C. §1332(a). Although Ms. Gardner and Ms. Hardy are Kansas citizens, Foremost contends that the court should align their interests on the same side of the caption for purposes of the diversity analysis. This is correct. See Smotherman v. Caswell, 755 F.Supp. 346, 348 (D. Kan. 1990) (“In garnishment actions, where a garnishee has denied liability to the judgment debtor, the judgment creditor's and judgment debtor's interests are aligned on the same side for purposes of determining diversity of citizenship.” (citation omitted)). So, the court views Ms. Gardner and Ms. Hardy both as plaintiffs. Foremost is incorporated under the laws of Michigan and has its principal place of business in Michigan. Doc. 1 at 3. Foremost thus is a Michigan citizen for diversity purposes. 28 U.S.C. § 1332(c)(1). Because Foremost is not a citizen of Kansas for diversity jurisdiction purposes, and the amount placed in controversy by the garnishment claim places more than $75, 000 at issue, diversity jurisdiction exists.

         Ms. Gardner does not dispute that diversity jurisdiction exists. Instead, she contests the timeliness of Foremost's removal under 28 U.S.C. § 1446(b). Section 1446 of Title 28 of the United States Code requires a party to remove an action to federal court within 30 days “after the receipt by the defendant . . . of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based” if the case is removable when it is filed. 28 U.S.C. § 1446(b)(1). If a case is not initially removable, but later becomes removable, § 1446(b)(3) governs the procedure. It provides: “if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant . . . a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.” 28 U.S.C. § 1446(b)(3).

         For § 1446(b)(1) purposes, Ms. Gardner contends that Foremost “received . . . a copy of the initial pleading” when it received the Order of Garnishment on September 16, 2016, and that the 30-day clock began to run on that date. But Foremost contends the 30-day clock did not begin to run until October 25 and 26, 2016, when Ms. Gardner filed her Motion for Default Judgment and Reply. See Doc. 14 at ...


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