2021 WL 2688805

United States District Court, D. Vermont.
WAYNE P. GENNETTE, Plaintiff,
v.
ROBERT G. PEACOCK, Defendant.
Case No. 2:20-cv-00157
|
Filed 06/30/2021

OPINION AND ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT (Doc. 25)
Christina Reiss, District Judge United States District Court
*1 Plaintiff Wayne P. Gennette brings this suit against Defendant Robert G. Peacock, asserting that Defendant negligently rear-ended Plaintiff’s vehicle at a stop light, causing him serious injury. Plaintiff seeks compensatory and punitive damages.

On February 17, 2021, Defendant moved for partial summary judgment regarding Plaintiff’s claim for punitive damages. On March 2, 2021, Plaintiff opposed the motion and on March 8, 2021, Defendant replied, at which time the court took the pending motion under advisement.

Plaintiff is represented by Matthew D. Anderson, Esq. Defendant is represented by Kristin C. Wright, Esq., and Pietro J. Lynn, Esq.

I. The Undisputed Facts.
On December 28, 2017, Defendant was driving a milk tanker truck when he rear-ended the vehicle being driven by Plaintiff, causing an accident involving two other vehicles. The accident was investigated by a Shelburne Police officer, to whom Defendant reported that the sun was in his eyes and that this was the reason that he did not notice the stopped vehicles in front of him until it was too late to avoid the collision. The Shelburne Police officer did not issue any tickets as a result of his investigation.

Plaintiff alleges that Defendant lied to the police officer about whether the sun was in his eyes and that he has repeated this alleged lie on several occasions, including in his Answer to the Complaint, in response to Requests to Admit, in response to interrogatories, and during his deposition. Plaintiff asserts that Defendant lied to “protect his career” and that it was a “scientific impossibility” that Defendant was blinded by the sun because it was behind him at the time of the crash. (Doc. 29-1 at 1.) Plaintiff maintains that Defendant was in fact using his cell phone at the time of the crash and that “he is a recidivist cell phone user while driving his tractor trailer[.]” Id. at 3.

II. Conclusions of Law and Analysis.

A. Standard of Review.
Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A “material” fact is one that “ ‘might affect the outcome of the suit under the governing law[,]’ ” Rodriguez v. Vill. Green Realty, Inc., 788 F.3d 31, 39 (2d Cir. 2015) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)), while “[a] dispute of fact is ‘genuine’ if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ ” Id. at 39-40 (quoting Anderson, 477 U.S. at 248). On a motion for summary judgment, the court “constru[es] the evidence in the light most favorable to the nonmoving party and draw[s] all reasonable inferences in his favor.” McElwee v. Cty. of Orange, 700 F.3d 635, 640 (2d Cir. 2012).

The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying” the evidence “which it believes demonstrate[s] the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). When the moving party has carried its burden, its opponent must produce “sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Anderson, 477 U.S. at 249. “A non-moving party cannot avoid summary judgment simply by asserting a ‘metaphysical doubt as to the material facts.’ ” Woodman v. WWOR-TV, Inc., 411 F.3d 69, 75 (2d Cir. 2005) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)).

*2 In adjudicating a motion for summary judgment, the district court’s role “is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists.” Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010). “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.” Proctor v. LeClaire, 846 F.3d 597, 608 (2d Cir. 2017) (internal quotation marks omitted).

B. Whether Punitive Damages are Warranted.
Defendant claims that, even assuming arguendo that he lied about the sun being in his eyes and was in fact using his cell phone immediately prior to the crash, this is not the type of conduct that triggers punitive damages. “In Vermont, punitive damages are reserved for especially egregious conduct, and thus the party seeking them must overcome a very high standard of proof.” Beaudoin on Behalf of New England Expedition Ltd. P’ship II v. Feldman, 2018 VT 83, ¶ 18, 208 Vt. 169, 178, 196 A.3d 768, 776. “An award of punitive damages requires a showing of two essential elements – wrongful conduct that is outrageously reprehensible and malice, defined variously as bad motive, ill will, personal spite or hatred, reckless disregard, and the like.” Id. (internal quotation marks omitted). “[S]uch conduct need not only be wrongful, but truly reprehensible” and “the defendant must have acted with malice, [which requires] some showing of bad motive.” Fly Fish Vermont, Inc. v. Chapin Hill Estates, Inc., 2010 VT 33, ¶ 19, 187 Vt. 541, 549, 996 A.2d 1167, 1174.

Litigation conduct, even if egregious, does not give rise to punitive damages in the absence of a malicious prosecution claim. See Pease v. Windsor Dev. Rev. Bd., 2011 VT 103, ¶ 28, 190 Vt. 639, 645, 35 A.3d 1019, 1027 (holding that the doctrine of litigation immunity “protects parties, witnesses, lawyers, and judges as participants in the judicial process from liability for acts and conduct related to a proceeding”) (internal quotation marks and citation omitted).

Under Vermont law, the trial court must decide in the first instance whether punitive damages are warranted and can do so as a matter of law. See Folio v. Florindo, 2009 VT 11, ¶ 44, 185 Vt. 390, 411, 970 A.3d 1230, 1245 (observing that “[w]e require a showing that defendants acted with actual malice before we allow the issue of punitive damages to go to a jury”).

Plaintiff contends that in light of Defendant’s history of cell phone use while driving and Defendant’s alleged lying for the purpose of protecting his career, “a reasonable jury could possibly conclude” that Defendant’s conduct “evince[s] constructive malice toward [Plaintiff] justifying punitive damages.” (Doc. 29 at 1.) “To demonstrate the malice necessary to establish liability for punitive damages, one must show ‘conduct manifesting personal ill will or carried out under circumstances evidencing insult or oppression, or even by conduct showing a reckless or wanton disregard of one’s rights.’ ” DeYoung v. Ruggiero, 2009 VT 9, ¶ 24, 185 Vt. 267, 278, 971 A.2d 627, 635 (quoting Brueckner v. Norwich Univ., 730 A.2d 1086, 1095 (Vt. 1999)).

Although use of a cell phone while driving may be considered both unlawful and reckless, “a threshold of reckless disregard – without more – would be so flexible that it can become virtually unlimited in its application.” Fly Fish Vermont, Inc., 2010 VT 33, ¶ 21, 187 Vt. at 550-51, 996 A. 2d at 1174 (internal quotation marks and citation omitted); see also Brueckner, 730 A.2d at 1097 (Vt. 1999) (holding that “[t]o sanction punitive damages solely upon the basis of conduct characterized as heedless disregard of the consequences would be to allow virtually limitless imposition of punitive damages”) (internal quotation marks, citation, and footnote omitted). There is no evidence that Plaintiff and Defendant had a relationship prior to the collision or evidence that Defendant’s alleged conduct was directed at Plaintiff personally. At best, Plaintiff has proffered evidence that Defendant’s alleged conduct was irresponsible and posed a risk of danger to the general public at large, rather than to Plaintiff personally.

*3 “[I]n addition to a showing of illegal, wrongful, or reckless conduct, there must be some evidence of bad motive on the defendant’s part to establish malice and support an award of punitive damages.” DeYoung, 2009 VT 9, ¶ 24, 185 Vt. at 278, 971 A.2d at 635; see also Beaudoin, 2018 VT 83, ¶ 18, 208 Vt. at 178, 196 A.3d at 776 (holding that “malice must be proven by some showing of bad motive”) (internal quotation marks, alteration, and citation omitted). In this case, even if Defendant was using a cell phone at the time of the accident and repeatedly lied about whether the sun was in his eyes, this conduct, although by no means commendable, is not the kind of “deliberate and outrageous conduct[,]” DeYoung, 2009 VT 9, ¶ 27, 185 Vt. at 279, 971 A.2d at 636, with “the character of outrage frequently associated with crime[,]” sufficient to warrant an award of punitive damages. Folio, 2009 VT 11, ¶ 44, 185 Vt. at 411, 970 A.2d at 1245 (internal quotation marks and citation omitted).

The Vermont Supreme Court’s decision in Bolsta v. Johnson is instructive. There, the court upheld a trial court’s denial of punitive damages against a defendant who caused an accident while driving under the influence. Although the defendant had two prior DUI convictions and four convictions for driving with a suspended license, the court held that “this case do[es] not constitute the kind of malicious, intentional acts that punitive damages are designed to address.” Bolsta v. Johnson, 2004 VT 19, ¶ 9, 176 Vt. 602, 604, 848 A.2d 306, 309 (internal quotation marks omitted).

As in Bolsta, Defendant’s alleged actions do not satisfy the “very high standard of proof” required for punitive damages. Beaudoin, 2018 VT 83, ¶ 18, 208 Vt. at 178, 196 A.3d at 776; cf. Shahi v. Madden, 2008 VT 25, ¶ 26, 183 Vt. 320, 949 A.2d 1022 (holding punitive damages not excessive where “defendant waged a campaign of terror against plaintiffs motivated in part by sectarian and racial bias”); Pion v. Bean, 2003 VT 79, ¶ 42, 176 Vt. 1, 833 A.2d 1248 (noting “overwhelming” evidence of actual malice to justify punitive award for deliberate destruction of property, removal of property marker pins, and calculated trespass – all coincident to serial verbal harassment). Construing the undisputed facts in the light most favorable to Plaintiff, Plaintiff has not established that Defendant maliciously engaged in wrongful conduct that is outrageously reprehensible sufficient to render punitive damages an issue for the finder of fact.

CONCLUSION
For the foregoing reasons, Defendant’s motion for partial summary judgment regarding Plaintiff’s claim for punitive damages (Doc. 25) is GRANTED.

SO ORDERED.

Dated at Burlington, in the District of Vermont, this 30th day of June, 2021.

All Citations
Slip Copy, 2021 WL 2688805

2021 WL 2682729

United States District Court, D. New Mexico.
Power of Grace Trucking, LLC, Plaintiff,
v.
WEATHERBY-EISENRICH, INC., Hudson Insurance Company, Hudson Specialty Insurance Company, Maria Estela Lara, Miguel H. Lara, and Stephanie Coronado, Defendants.
Case No. 2:21-cv-00356-KWR-GJF
|
Filed 06/30/2021
Attorneys and Law Firms
Dick A Blenden, Blenden Law Firm, P.A., Carlsbad, NM, for Plaintiff.
Bradley Ryan Fellman, Pro Hac Vice, Gordon & Rees LLP, Dallas, TX, Lillian Alves, Gordon & Rees, LLP, Denver, CO, for Defendant Weatherby-Eisenrich, Inc.
Gena LoPresto Sluga, Christian Dichter & Sluga, PC, Phoenix, AZ, for Defendants Hudson Insurance Company, Hudson Specialty Insurance Company.
Max Houston Proctor, Max Houston Proctor Attorney at Law, Hobbs, NM, Rickey J Brantley, BrantleyPelley, PLLC, Fort Worth, TX, for Defendants Maria Estela Lara Miguel H. Lara.
Michael Alfred, Hallett & Perrin, P.C., Dallas, TX, for Defendant Stephanie Coronado.

MEMORANDUM OPINION AND ORDER
KEA W. RIGGS, UNITED STATES DISTRICT JUDGE
*1 THIS MATTER comes before the Court upon Plaintiff Power of Grace Trucking, LLC’s Motion to Remand to State Court (Doc. 10), Defendants Maria Estela Lara’s and Miguel H. Lara’s Motion to Remand to State Court (Doc. 11), Plaintiff’s motion to supplement (Doc. 13), and Defendant Weatherby-Eisenrich, Inc’s motion for leave to file surreply (Doc. 22). Having reviewed the parties’ briefs and applicable law, the Court finds that the motions to remand are well-taken and GRANTED, Plaintiff’s Motion to Supplement is GRANTED, and Defendant Weatherby-Eisenrich’s motion for leave to file surreply is GRANTED. This case is remanded back to the Fifth Judicial District Court, Lea County, State of New Mexico.

BACKGROUND
This case involves an insurance coverage dispute. Plaintiff Power of Grace Trucking was sued for wrongful death in the Western District of Texas. Defendant Weatherby is a Texas-based insurance broker. Plaintiff hired Weatherby to help it purchase insurance related to its trucking business. Weatherby procured a $1 million primary policy and $5 million excess/umbrella policy, issued by Defendant Hudson.

In December 2019, Luis Lara was traveling in Texas when he was struck by Plaintiff Power of Grace’s tractor trailer. Luis Lara died. Marie Estela Lara and Miguel Lara (the “Lara Defendants”) sued Plaintiff Power of Grace Trucking in the Western District of Texas.

This declaratory action was filed in the Fifth Judicial District, Lea County, State of New Mexico, on January 22, 2021. Plaintiff seeks a declaration that Weatherby and Hudson are liable for $5,000,000 under the umbrella policy.

Defendant Weatherby removed this case on April 19, 2021. Both Plaintiff and the Lara Defendants filed motions to remand this case to state court on May 6, 2021.

LEGAL STANDARDS
Generally, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). A notice of removal must be filed within thirty days after receipt by the defendant of a copy of a pleading or other paper from which it may first be ascertained that the case is one which is removable. 28 U.S.C. § 1446(b). “When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.” 28 U.S.C. § 1446(b)(2)(A).

“The failure of one defendant to join in [or consent to] the notice renders the removal notice procedurally defective, which requires that the district court remand the case.” Brady v. Lovelace Health Plan, 504 F.Supp.2d 1170, 1172–73 (D.N.M.2007) (quoting Cornwall v. Robinson, 654 F.2d 685, 686 (10th Cir. 1981)). This rule is commonly known as the “unanimity rule.” See Brady, 504 F.Supp at 1173.

Federal courts are courts of limited jurisdiction; thus, there is a presumption against removal jurisdiction, which the defendant seeking removal must overcome. See Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995). “It is well-established that statutes conferring jurisdiction upon the federal courts, and particularly removal statutes, are to be narrowly construed in light of our constitutional role as limited tribunals.” Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1095 (10th Cir. 2005) (quoting Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–09 (1941); United States ex rel. King v. Hillcrest Health Ctr., 264 F.3d 1271, 1280 (10th Cir. 2001)). “All doubts are to be resolved against removal.” Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982). “The burden of establishing subject-matter jurisdiction is on the party asserting jurisdiction.” Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002).

DISCUSSION
*2 Plaintiff and the Lara Defendants seek to remand this case back to the Fifth Judicial District Court, Lea County, State of New Mexico because Defendants did not unanimously consent to removal pursuant to 28 U.S.C. § 1446(b)(2)(A).1 The Court agrees. Because the Lara Defendants did not give consent to removal pursuant to 28 U.S.C. § 1446(b)(2)(A), the Court will remand this case pursuant to 28 U.S.C. § 1447(c) to the Fifth Judicial District Court, Lea County, State of New Mexico.

Section 1446(b)(2)(A) requires that “all defendants who have been properly joined and served must join in or consent to the removal of the action.” This rule is commonly known as the “unanimity rule.” See Brady, 504 F.Supp.2d at 1173, cited in Zambrano v. New Mexico Corr. Dep’t, 256 F. Supp. 3d 1179, 1181 (D.N.M. 2017). The “lack of unanimity is a procedural defect clearly established by statute as precluding removal.” Harvey v. UTE Indian Tribe of the Uintah & Ouray Rsrv., 797 F.3d 800, 805 (10th Cir. 2015). The Tenth Circuit has held 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’shp, 194 F.3d 1072, 1077 (10th Cir.1999) (quotation omitted).

It is undisputed that the Lara Defendants did not consent to removal and have instead moved to remand this case back to state court. Therefore, it appears there is a lack of unanimity warranting remand for a procedural defect pursuant to § 1447(c).

Defendant Weatherby does not argue that the Lara Defendants were not properly served. Rather, Weatherby appears to argue that the Lara Defendants were not properly joined because they are nominal parties, and therefore need not consent to the removal of this action. The Court disagrees and concludes that Weatherby has not shown that the Lara Defendants are nominal parties or improperly joined in this action.

The phrase “nominal party” is not in section 1446(b)(2)(A). Rather, that statute requires consent from defendants who are “properly joined.” The parties do not cite to Tenth Circuit law on the meaning of “nominal party” in the context of this statutory language. It is clear that the Lara Defendants are not nominal parties because they are interested parties under the Declaratory Judgment Act, 28 U.S.C. § 2201, and parties otherwise seek relief against them.

When this case was filed in New Mexico state court, the Lara Defendants were properly joined under New Mexico law. “When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding.” N.M.S.A 1978 § 44–6–12. “This means that any person or entity with an existing or potential interest in the outcome of the action must be named; failure to do so deprives the court of subject matter jurisdiction.” Gallegos v. Nevada Gen. Ins. Co., 2011-NMCA-004, ¶ 9, 149 N.M. 364, 366, 248 P.3d 912, 914 (citation and internal quotation marks omitted). This includes tort claimants whose interests would necessarily be affected by a judgment in a declaratory action. Id.

Here, this action seeks to determine whether Defendants Weatherby and Hudson must indemnify Power of Grace Trucking in the wrongful death suit brought by the Lara Defendants. The Lara Defendants’ ability to recover in the underlying tort action may depend on the outcome of this declaratory judgment action.

*3 Defendant argues that Gallegos is irrelevant because it is based on New Mexico rather than Federal law. In diversity cases, the Court applies state substantive law and federal procedural law. The Court agrees that the federal law applies to matters in this case occurring post-removal. Fed. R. Civ. P. 81(c). However, Weatherby has not cited to any federal law indicating that tort claimants may not participate in a declaratory judgment action involving a tortfeasor’s insurer. Rather, “[t]he United States Supreme Court has held that an injured party cannot avoid being made a party to an insurer’s declaratory action against the insured for non-coverage.” Gallegos v. Nevada Gen. Ins. Co., 2011-NMCA-004, ¶ 14, 149 N.M. 364, 367, 248 P.3d 912, 915, citing Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 274, 61 S.Ct. 510, 85 L.Ed. 826 (1941). Gallegos cited to federal decisions in noting that most courts have found that injured parties are “proper participants in declaratory actions brought by insurers to deny coverage.” Id. The Court often sees tort claimants participate in a declaratory judgment action against a tortfeasor’s insurance company while the underlying tort action is pending.

Moreover, Defendant Hudson Insurance Company filed cross-claims against the Lara Defendants. Doc. 9. Hudson seeks a declaratory judgment against the Lara Defendants that it has no duty to indemnify its insureds in the wrongful death suit brought by the Lara Defendants. Although the cross-claims were filed after this case was removed, the cross-claims provide further evidence that the Lara Defendants were never considered “nominal” to this action but are interested parties under the federal declaratory judgment action.

The Court concludes that Defendant Weatherby has not carried its burden of showing that the Lara Defendants are nominal parties and not properly joined to this action. The Court has significant doubts as to whether the removal procedure under § 1446(b)(2)(A) was properly effectuated in this case. See Fajen, 683 F.2d at 333 (“Removal statutes are to be strictly construed, and all doubts are to be resolved against removal.”). Because there is a lack of unanimous consent pursuant to 28 U.S.C. § 1446(b)(2)(A), the Court will remand this case for a procedural defect pursuant to 28 U.S.C. § 1447(c) to the Fifth Judicial District Court, Lea County, State of New Mexico.

IT IS THEREFORE ORDERED that the motions to remand (Docs. 10, 11) are hereby GRANTED for the reasons described in this Memorandum Opinion and Order;

IT IS FURTHER ORDERED that Defendant Weatherby-Eisenrich’s motion for leave to file sur-reply (Doc. 22) is GRANTED. The Court considered the surreply attached to the motion;

IT IS FURTHER ORDERED that Plaintiff’s motion to supplement (Doc. 13) is GRANTED.

IT IS FINALLY ORDERED that this action is REMANDED to the Fifth Judicial District Court, Lea County, State of New Mexico. The Clerk of Court is hereby directed to take the necessary actions to remand the case.

IT IS SO ORDERED.

All Citations
Slip Copy, 2021 WL 2682729

Footnotes

1
Plaintiff also argues that this case should be remanded because it was untimely removed. The Court need not reach that ground because the case is remanded on other grounds.