Opinion
Cause No. IP01-0291-C-T/G
April 12, 2001
Mark C. Ladendorf, Law Firm of Mark C Ladendorf Indianapolis, IN.
John W. Hammel, Yarling Robinson Indianapolis, IN.
This cause is presently before the court on the Plaintiff's Motion To Remand To State Court and Defendant Allstate Insurance Company's Objection To And Motion To Strike Plaintiff's Motion For Leave To File Second Amended Complaint For Damages And To Add Party Defendants.
Defendants Allstate and Smith and Allstate CNA Staff Counsel filed on March 30, 2001, separate motions seeking judgment on the pleadings, but these motions are not yet fully briefed so the court does not address them at this time.
Background
On February 5, 2001, Plaintiff Sharon K. Hammond filed her Complaint against Defendant Allstate Insurance Company ("Allstate") in Indiana state court. She alleges that Allstate negligently handled her claim and in bad faith negotiated her claim. Ms. Hammond is a citizen of the State of Indiana. Allstate is a corporation organized under the laws of the State of Illinois with its principal place of business in Illinois. The Complaint was amended on February 13, 2001, to attach a copy of the Allstate Policy at issue in this action. On March 2, 2001, Allstate filed Defendant's Notice Of Removal removing the action to this court on the basis of diversity jurisdiction.Subsequently, on March 8, 2001, Ms. Hammond filed a Motion For Leave To File Second Amended Complaint For Damages To Add Party Defendants in which she sought to add as Defendants Allstate CNA Staff Counsel and Robert J. Smith, counsel for Allstate CNA Staff Counsel. Her motion was granted by court order entered March 9, 2001. On that same date the Second Amended Complaint For Damages ("Second Amended Complaint") was filed. The Second Amended Complaint alleges that Allstate
CNA Staff Counsel has its practice and principle place of business in the State of Indiana and that Mr. Smith is licensed to practice law and engages in the practice of law solely on behalf of the Defendants in the State of Indiana.
On March 12, 2001, Allstate filed an objection to and motion to strike the Second Amended Complaint. Defendants have filed answers to the Second Amended Complaint. Ms. Hammond has filed a response to the objection and motion.
On March 14, 2001, Ms. Hammond filed a Motion To Remand To State Court. Allstate opposes the motion.
Motion To Remand
Plaintiff Sharon Hammond moves to remand this action to state court, contending that the court lacks subject matter jurisdiction because there is a lack of complete diversity.
Ms. Hammond filed this action in state court and Defendant Allstate timely removed to this court based on diversity jurisdiction. Allstate argues that the motion to remand should be denied because the addition of Defendants Robert J. Smith as counsel of Allstate and CNA Staff Counsel is an improper and fraudulent joinder.
The motion to remand should be denied, not necessarily because joinder of Defendants Smith and Allstate CNA Staff Counsel is improper or fraudulent but because the question of whether subject matter jurisdiction exists to justify removal is determined "by looking at the complaint as it existed at the time the petition for removal was filed." Gossmeyer v. McDonald, 128 F.3d 481, 487 (7th Cir. 1997) (emphasis in Gossmeyer) (citation omitted); cf. Cook v. Winfrey, 141 F.3d 322, 326 (7th Cir. 1998) ("It is well settled that subject matter jurisdiction is to be determined as of the time when jurisdiction is invoked"). If an action is properly removed from state court to federal court, "an amendment of the complaint rendering it outside the federal court's jurisdiction does not defeat the original removal." Id. at 487-88 (citing Wellness Community Nat'l v. Wellness House, 70 F.3d 46, 50 (7th Cir. 1995) (stating that "after a defendant removes a case from state to federal court, a plaintiff cannot defeat the federal court's jurisdiction by amending to claim an amount less than the required amount in controversy"); Hammond v. Terminal R.R. Ass'n, 848 F.2d 95, 97 (7th Cir. 1988), cert. denied, 489 U.S. 1032 (finding that if the complaint states a claim that is removable, "removal is not defeated by the fact that, after the case is removed, the plaintiff files a new complaint, deleting the federal claim or stating a claim that is not removable")). The only parties relevant to determining whether complete diversity exists are Ms. Hammond and Allstate who are of diverse citizenship.
It is unnecessary for the court to reach this issue in order to resolve the motion for remand.
Therefore, the post-removal addition of Defendants Allstate CNA Staff Counsel and Mr. Smith does not defeat the court's diversity jurisdiction. The motion to remand should be denied.
Objection and Motion to Strike
With its objection to and motion to strike, which the court treats as an objection to and motion to strike the Second Amended Complaint, Allstate argues that Ms. Hammond has added Defendants who cannot be held liable to her on a bad faith claim. Ms. Hammond has not directly responded to the objection and motion to strike. Instead, she argues that the case should be remanded for lack of diversity jurisdiction, which as discussed above, is erroneous. She requests, in the alternative, that the court allow her fifteen days to file a memorandum in response to the objection and motion. The time for filing a response has passed. See S.D. Ind. L.R. 7.1(a).
It is noted, however, that Defendants Smith and Allstate CNA Staff Counsel have moved for judgment on the pleadings. The basis for the motion is that they cannot be held liable on Ms. Hammond's bad faith claim. Their brief cites the same cases and advances the same arguments made in Allstate's objection and motion to strike. The time for filing an answer brief to that motion has not yet passed, and the court presumes that Ms. Hammond will respond to the motion. Therefore, the court believes that the best course is to defer resolution of the issues raised in the objection and motion to strike until the motion for judgment on the pleadings is fully briefed. In this way, the court will have the benefit of Ms. Hammond's response to the arguments raised by Defendants Smith and Allstate CNA Staff Counsel.
Conclusion
For the foregoing reasons, the court DENIES Ms. Hammond's Motion To Remand To State Court and DEFERS ruling on Defendant Allstate's Objection To And Motion To Strike Plaintiff's Motion For Leave To File Second Amended Complaint For Damages And To Add Party Defendants until such time as Defendants' Smiths' And Allstate CNA Staff Counsel's Motion For Judgment On The Pleadings is fully briefed.
ALL OF WHICH IS ORDERED.