Cases

Russell v. Home State County Mutual

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United States District Court,

E.D. Louisiana.

Katherine RUSSELL

HOME STATE COUNTY MUTUAL INSURANCE COMPANY, et al

Nov. 10, 2003.

ORDER & REASONS

FALLON, J.

Before the Court is the Plaintiff’s motion to remand. For the following reasons, the motion to remand is DENIED.

I. FACTUAL AND PROCEDURAL BACKGROUND

This case arises from an auto accident that occurred on August 22, 2001 when Defendant Stephen Dell allegedly backed into Plaintiff Katherine Russell’s vehicle. According to the plaintiff, Dell was in the course and scope of his employment with Longmile Trucking Company at the time of the accident. Plaintiff filed suit in Civil District Court for the Parish of Orleans, naming as defendants Stephen Dell, Longmile Trucking Company (“Longmile”), Home State County Mutual Insurance Company (“Home State”), insurer of Longmile, and Government Employees Insurance Company (“GEICO”), plaintiff’s uninsured motorist carrier. Plaintiff sought damages for mental pain and suffering, medical expenses, and physical pain and suffering. In accordance with Louisiana law, plaintiff did not allege a specific dollar amount of damages in her state court petition. La.Code Civ. Proc. art. 893 (West 2003).

Defendant Home State first removed the case to this Court on November 21, 2002. In its Notice of Removal, Home State indicated that, under 28 U.S.C. § 1446(b), it received “other paper” that revealed the matter in controversy met the amount required to establish federal diversity jurisdiction. 28 U.S.C. § 1332(a). Counsel for the defendant sent a letter to the plaintiff’s attorney on November 7, 2002, wherein he attached a stipulation stating that the plaintiff’s damages did not exceed $75,000. The letter indicated that he would remove the case to federal court if he did not receive the signed stipulation by November 12, 2002. Plaintiff’s counsel did not sign or return the stipulation. Accordingly, defendant argued that plaintiff’s failure to return the stipulation qualified as “other paper” such that removal was proper.

Plaintiff filed a timely motion to remand arguing that the “other paper” exception did not apply. This Court agreed with plaintiff and granted the motion to remand, finding that plaintiff’s failure to return the stipulation provided by defendant did not constitute a “voluntary act” necessary to convert the letter from defense counsel into “other paper” under the statute. Russell v. Home State County Mut. Ins. Co., 244 F.Supp.2d 669, 671-72 (E.D.La.2003) (citing Addo v. Globe Life & Accident Ins. Co., 230 F.3d 759, 762 (5th Cir.2000) and S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 494 (5th Cir.1996)).

On July 2, 2003, Defendant Home State removed the action to this Court a second time. In its Notice of Removal, Home State asserts that “new information has surfaced which now indicates that the matter in controversy exceeds $75,000.00, exclusive of interest and costs, such that this action has now become removable.” (Record Doc. No. 1). Specifically, this new information consists of a settlement demand from plaintiff dated June 4, 2003 requesting $150,000 to settle all claims. According to Home State, this new information qualifies as “other paper” under 28 U.S.C. 1446(b), and its removal is timely because it was filed within thirty (30) days from the receipt of this “other paper.”

Plaintiff again filed a motion to remand claiming that the removal is defective on several counts. Namely, plaintiff argues that: 1) the settlement demand is not tantamount to the value of the case; 2) defendant’s Notice of Removal was not timely; and, 3) defendant did not have the consent of all other defendants to remove the action to this Court. Thus, the issues before the Court are whether the plaintiff’s settlement demand is sufficient to establish jurisdictional amount and whether defendants’ notice of removal was filed timely. For reasons set forth below, plaintiff’s motion for remand is DENIED.

II. LEGAL STANDARDS FOR REMOVAL

Federal courts are courts of limited jurisdiction. Chadwick v. Shell Oil Co., 828 F.Supp. 26, 27 (E.D.La.,1993). Absent another basis for federal jurisdiction, a case may be removed to federal court when the amount in controversy exceeds $75,000, and the parties are citizens of different states. 28 U.S.C. § 1332(a). It is well established that the jurisdiction of a federal court sitting in diversity is determined at the time the complaint is filed. Saunders v. Rider, 805 F.Supp. 17, 18 (E.D.La.1992). When, as in this case, the plaintiff has not pleaded with certainty a request for monetary damages, as is permissible in Louisiana (La.Code Civ. Proc. art. 893), federal jurisdiction is determined at the time of removal. Id. The removing party bears the burden of proving to a legal certainty that the plaintiff’s claim satisfies the requisite jurisdictional amount. Id. Without more compelling evidence, the defendant’s “mere assertions” as to the value of a plaintiff’s claim cannot meet the legal certainty standard. Id. at 19. Evidence of the jurisdictional amount must be clear and convincing. Id. at 18.

As a general proposition, removal is timely when filed within thirty (30) days of defendant’s receipt of the initial pleading. 28 U.S.C. § 1446(b). However, when the case as stated in the initial pleading is not removable, the defendant may file a notice of removal within thirty (30) days after the defendant’s receipt “of a copy of an amended pleading, motion, order or other paper from which it may be first asserted that the case is one which is or may become removable.” Id. (emphasis added). The removing party bears the burden of showing that federal jurisdiction exists. Saunders, 805 F.Supp. at 18.

III. ANALYSIS

Plaintiff argues that the demand letter offering to settle the case for $150,000.00 should not be construed as “other paper” under 28 U.S.C. § 1446(b) because the demand was “mere posturing” and does not reflect the honest value of the case. However, the Fifth Circuit has held that a demand letter from the plaintiff qualifies as other paper. Addo v. Globe Life and Accident Insurance Co., 230 F.3d 759 (5th Cir.2000). In Addo, the plaintiff served a post-complaint demand letter on the defendant offering to settle the suit for an amount in excess of $75,000. Id . at 760. An issue of first impression before the court, the Fifth Circuit held that a post-complaint letter concerning settlement terms which is not plainly a sham may qualify as other paper within the meaning of 28 U.S.C. § 1446(b). Id. at 762. The Addo court based its decision on the fact that the demand letter resulted from a voluntary act of the plaintiff and gave the defendant notice of changed circumstances supporting federal jurisdiction. Id.

The question before this Court, then, is whether or not plaintiff’s settlement demand is plainly a “sham.” The Court finds that plaintiff’s settlement demand is not plainly a sham and qualifies as other paper sufficient to establish jurisdictional amount under 28 U.S.C. § 1446(b). In a letter to opposing counsel dated, June 4, 2003, plaintiff offered to settle the case for $150,000.00. (Mem. in Opp. Ex. A). Plaintiff later states in a letter dated August 6, 2003, that he would prefer to litigate the case in state court where he has “gotten as much as $175,000.00” for injuries similar to the ones alleged in the instant matter. (Mem. in Opp. Ex. D). These letters indicate that plaintiff was not merely posturing, but was relaying an accurate reflection of what he believes the case to be worth. Indeed, at least one Louisiana court has awarded amounts in excess of the federal jurisdictional amount for similar injuries. Rollings v. Winn-Dixie of La., Inc., 439 So.2d 1132, 1336, n. 1 (La.App. 4th Cir.1983) (awarding nearly $175,000 for an unoperated disc).

Furthermore, plaintiff in this case should have had a heightened awareness of the defendants’ intention to remove to federal court should new information emerge establishing jurisdictional amount. Defendant removed this case once before on November 21, 2002. At that time, this Court found that the defendant could not bear its burden of proving that removal was proper. At this time, however, plaintiff provided defendant with sufficient information and removal is proper.

In the alternative, plaintiff argues that removal was untimely because the thirty (30) day time limit began to run when the plaintiff sent a medical report to the defendants on March 21, 2003. Plaintiff argues, then, that the medical report constitutes “other paper,” not the settlement demand. However, when the complaint does not clearly reveal on its face the amount in controversy, “the information supporting removal in a copy of an amended pleading, motion, order or other paper must be ‘unequivocally clear and certain’ to start the time limit running for a notice of removal under the second paragraph of section 1446(b).” Bosky v. Kroger Texas, LP, 288 F.3d 208, 210 (5th Cir.2002) (citing Chapman v. Powermatic Inc., 969 F.2d 160, 163 (5th Cir.1992).

In this case, the medical report supplied by plaintiff is essentially a narrative of plaintiff’s physical complaints and recent treatment. (Mtn. to Rem. Ex.II). It contains an invoice amounting to $630.00 and concludes with the doctor commenting that he needs more information to make a prognosis and recommendations for further treatment. The report, then, neither clearly nor certainly establishes jurisdictional amount. Thus, the clock did not begin running until defendant received the demand letter. Accordingly, removal was timely.

Lastly, plaintiff claims that the removal is defective because it lacks the consent of all the defendants. However, it is well settled that the consent of all defendants is not necessary when the non-consenting defendants have not been properly served. Miranti v.. Lee, 3 F.3d 925, 928 (5th Cir.1993); Jones v. Houston Indep. School Dist., 979 F.2d 1004, 1007 (5th Cir.1992). As the other defendants named in the case have not been served, their consent is not required for removal.

IV. CONCLUSION

For the foregoing reasons, Plaintiff’s motion to remand is DENIED.

Campbell V. Shura

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United States Court of Appeals, Fifth Circuit.

Marilyn CAMPBELL; Shelton Campbell, Plaintiffs–Appellants,

William R SHURA; et al, Defendants,

FIKES TRUCK LINE INC; Lancer Insurance Co, Defendants–Appellees.

Nov. 5, 2003.

Summary Calendar

PER CURIAM. [FN*]

Plaintiffs-Appellants Marilyn and Shelton Campbell appeal the district court’s grant of summary judgment to Defendants-Appellees Fikes Truck Line, Inc. and Lancer Insurance Company. For the following reasons, we AFFIRM.

I. FACTUAL AND PROCEDURAL BACKGROUND

The facts underlying this appeal are generally uncontested. On December 8, 2001, Levi Campbell, Jr. died after a collision in Louisiana with a 1993 Freightliner tractor trailer driven by William Shura. The parties agree that on the date of the accident Shura was an employee of Parks Transportation, a commercial motor-carrier operator. Ray Owens, who owned the Freightliner, had leased the truck to Parks Transportation on June 20, 2001. Thus, Campbell’s survivors brought a wrongful death action against Shura, Parks, and Park’s insurance carrier, XYZ Insurer, in Louisiana state court.

Plaintiffs later amended their complaint to include Fikes Truck Line, Inc. and its liability insurer, Lancer Insurance Co., as additional defendants. Fikes had leased the 1993 Freightliner from Owens on May 21, 2001. More than three months before the accident, on August 28, 2001, Fikes terminated the lease and asked Owens to remove Fikes’s placards and decals from the Freightliner and to return Owens’s copy of the cancelled lease agreement. Owens complied with these instructions. Thereafter, Fikes no longer operated the Freightliner and the tractor trailer was not listed on the insurance policy it renewed with Lancer on October 1, 2001. Nevertheless, a certificate of insurance that Fikes was required to file with the Texas Department of Transportation continued to include the 1993 Freightliner as a covered vehicle. Fikes claims that it failed to update this certificate due to an oversight. This certificate of insurance constitutes the only connection that either party has alleged between the Freightliner and either Fikes or Lancer on the date of the accident.

On March 28, 2002, defendants Fikes and Lancer removed the case to the United States District Court for the Western District of Louisiana on the basis of diversity jurisdiction. They subsequently moved for summary judgment, claiming that they could not be found legally liable for the Freightliner or for Shura’s conduct on the date of the accident. [FN1] On March 25, 2003, the district court granted summary judgment and dismissed the plaintiffs’ claims against Fikes and Lancer after finding that: (1) Shura was employed by Parks Transportation, not Fikes, on the date of the accident and (2) under Louisiana law, the certificate of insurance Fikes filed with the Texas Department of Transportation was incapable of creating insurance coverage that was not part of an actual insurance policy. Plaintiffs timely appealed.

II. STANDARD OF REVIEW

This court reviews a grant of summary judgment de novo, applying the same standards as the district court. Daniels v. City of Arlington, 246 F.3d 500, 502 (5th Cir.2001). Summary judgment should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). “The moving party is ‘entitled to a judgment as a matter of law’ [when] the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citations omitted).

III. DISCUSSION

On appeal, the plaintiffs do not challenge the district court’s conclusion that Shura was driving the Freightliner in the course and scope of his employment with Parks, and not as an employee of Fikes, on the day of the accident. Instead, they argue that it is possible to find Fikes and Lancer legally liable for the accident because, by listing the Freightliner on a certificate of insurance with the Texas Department of Transportation, Fikes and Lancer held themselves out to the public as liability insurers of the Freightliner. Further, the plaintiffs contend that Fikes’s cancellation of the lease may have ended the relationship between Fikes and Owens, yet it could not obviate Fikes’s liability over the tractor trailer under the certificate. Defendants, on the other hand, argue that they are entitled to judgment as a matter of law because there is no valid legal basis for holding them liable for Freightliner accident. They claim that Louisiana law decisively demonstrates that filing a certificate of insurance with a public agency does not create legal liability over a vehicle.

Plaintiffs’ argument–that the certificate of insurance filed on Fikes behalf with the Texas Department of Transportation creates liability over the Freightliner–lacks merit. Both the district court and the parties have assumed that Louisiana’s substantive law of insurance policy interpretation control this issue. Consequently, we may apply Louisiana law to the facts of this case without engaging in a complicated choice of law analysis. See Clemtex, Inc. V. Southeastern Fid. Ins. Co., 807 F.2d 1271, 1274 (5th Cir.1987).

Louisiana law provides that the Texas certificate of insurance may not “amplif [y], extend[ ], or modify[ ]” the terms of Fikes’s insurance policy with Lancer because the certificate does not qualify as a “rider, endorsement, or application attached to or made a part of the policy.” La.Rev.Stat. Ann. 22:654 (West 1995); see Citgo Petroleum Corp. v. Yeargin, Inc., 95-1574, p. 13 (La.App. 3 Cir. 2/19/97); 690 So.2d 154, 164; cf. Ferguson v. Plummer’s Towing & Recovery Inc., 98-2894, p. 6 (La.App. 1 Cir. 2/18/00); 753 So.2d 398, 401 (holding that a certificate of insurance is prima facie evidence of the genuineness of the facts stated therein if the certificate was issued between the parties to a legal action but that a third party may not rely on the certificate to “change the coverage provided” by an insurance policy). Defendants proffered uncontroverted evidence that the actual, written insurance policy between Fikes and Lancer, which was in effect on the date of the accident, by its terms did not cover the tractor trailer that collided with Levi Campbell. Therefore, under Louisiana law, the certificate of insurance did not make either Fikes or Lancer liable for the Freightliner on the date in question.

Moreover, even though the parties have not raised the issue, we note that a publicly filed certificate of insurance is not the equivalent of an insurance policy under Texas law. See R.R. Comm’n of Tex. v. W.A. Querner Co., 310 S.W.2d 670, 673 (Tex.Civ.App.-Austin 1958, no writ) (“The distinction between having or not having insurance and filing evidence of such insurance with the [state agency] is obvious. Nor is such distinction technical or trivial. It is one of substance. It is the existence of the insurance which protects the public, not filing it with the [state agency].”). Therefore, under either Texas or Louisiana law, the certificate of insurance does not provide a basis for holding Fikes and Lancer liable for the Freightliner accident. Cf. Graham v. Malone Freight Lines, Inc., 314 F.3d 7, 14 (1st Cir.1999) (rejecting the argument that a carrier could be held liable for a tractor trailer’s accident simply because the carrier “did in fact have a certificate of insurance on file with the Illinois Commerce Commission”).

IV. CONCLUSION

Accordingly, we AFFIRM the district court’s grant of summary judgment in favor of Fikes and Lancer.

FN* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

FN1. In the meantime, the district court dismissed the claims against Parks Transportation and XYZ Insurance for failure to prosecute and entered a default judgment against Shura.