Opinion
No. 3:03-CV-00940-P
August 14, 2003
ORDER
Now before the Court is Plaintiff's Motion to Remand and for Costs, filed May 23, 2003. After a thorough review of the pleadings, the evidence, the briefing, and the applicable law, the Court GRANTS Plaintiff's motion.
Defendants' Opposition to Plaintiff's Motion to Remand and for Costs was filed June 13, 2003.
BACKGROUND
Plaintiff sued Defendants State Farm Lloyds ("State Farm") and Matt Kirkpatrick ("Kirkpatrick"), a claims adjuster for State Farm, in the E-101st District Court of Dallas County, Texas, on August 23, 2002. Plaintiff alleged that plumbing leaks caused foundation damage to her home. Her insurer, State Farm, refused to pay her claim. Plaintiff's suit asserted causes of action based on breach of contract, violations of the Texas Insurance Code Articles 21.21 and 21.55, violations of the Texas Deceptive Trade Practices Act ("DTPA"), and breach of the duty of good faith and fair dealing. State Farm removed the case on grounds of diversity, contending that Defendant Kirkpatrick, a Texas citizen, was fraudulently joined. Plaintiff now moves to remand due to the purported untimeliness of the removal and the absence of complete diversity.
DISCUSSION
Timeliness of Defendant's Removal
Plaintiff first argues that Defendant removed this case more than thirty days after she gave at deposition the answers on which Defendant bases its Notice of Removal. Under 28 U.S.C. § 1446(b), a defendant may remove a case to federal court after receiving 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." But the defendant must file its Notice of Removal within thirty days of receiving a paper indicating that the case is or has become removable. Id. This thirty-day deadline for filing a notice of removal begins to run when it first becomes "unequivocally clear and certain" that the case is removable. Bosky v. Krogaer Tex., LP, 288 F.3d 208, 211 (5th Cir. 2002). Notice of removal may also be based on answers given in deposition, and the thirty-day period for filing a notice of removal begins when the defendant receives a copy of the deposition transcript. S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 494 (5th Cir. 1996); Delaney v. Viking Freight, Inc., 41 F. Supp.2d 672 (E.D. Tex. 1999) (noting that a defendant's receipt of a certified copy of deposition transcript would begin the accrual of the thirty day deadline). Plaintiff swore to and signed her oral deposition on April 17, 2003, and Defendant State Farm filed its notice of removal on May 6, 2003. Plaintiff does not argue that Defendant State Farm received a certified transcript of the deposition more than thirty days prior to filing its notice of removal. The Motion to Remand cannot be granted due to an untimely removal.
Fraudulent Joinder
Plaintiff moves to remand the case on grounds that State Farm's basis for removal — fraudulent joinder of Kirkpatrick — is without merit. A party removing a state case to federal court bears the burden of showing that the federal court has jurisdiction to hear the case. Jernigan v. Ashland Oil, Inc. 989 F.2d 812, 815 (5th Cir. 1993). A defendant who removes on the basis of fraudulent joinder must prove the alleged fraud by clear and convincing evidence. Dodson v. Spillada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1991). The removing party must show that state law would not impose liability on the party whose joinder is in question. Travis v. Irby, 326 F.3d 644, 648 (5th Cir. 2003). Courts examining fraudulent joinder issues evaluate the plaintiff's factual allegations in the light most favorable to the plaintiff and resolve all contested issues of substantive fact as well as any uncertainties as to the current state of controlling substantive law in favor of the plaintiff. Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 259 (5th Cir. 1995). The court's examination should focus not on whether the plaintiff will or is likely to prevail on the merits of the claim, but rather on whether there exists any reasonable possibility that the plaintiff might do so. Burden v. General Dynamics Corp., 60 F.3d 213, 215 (5th Cir. 1995).
In the case at hand, the Court must determine whether there is "arguably a reasonable basis for predicting that state law might impose liability" on the nondiverse party, Plaintiff's insurance claim adjuster. Travis, 326 F.3d at 648. Numerous courts have held that violations of article 21.21 of the Texas Insurance Code are actionable against individual adjusters and have found that plaintiffs can maintain causes of action against such nondiverse defendants.
See, e.g., Liberty Mutual Insurance Company v. Garrison Contractors, Inc., 966 S.W.2d 482 (Tex. 1998); Vargas v State Farm Lloyds, 216 F. Supp.2d 643, 648 n. 3 (S.D. Tex. 2002); see also PL's Mot. Ex. D (setting forth remand orders in twenty-five State Farm lawsuits).
State Farm does not argue that Plaintiff has not adequately plead a cause of action against Kirkpatrick; instead, it argues that Plaintiff lacks any evidence to support her claims. Def. Mot. at 16. While the Fifth Circuit has `"cautioned the district courts against prettying a case to determine removal jurisdiction,' a federal court may consider `summary judgment-type evidence such as affidavits and deposition testimony' when reviewing a fraudulent joinder claim." Griggs v. State Farm Lloyds, 181 F.3d 694 (5th Cir. 1999) (quoting Cavallini, 44 F.3d at 263). Defendants contend that the summary judgment-type evidence, specifically Plaintiff's sworn deposition testimony, demonstrates that her claim is groundless, affording her no possibility of recovering in state court. Def. Mot. at 12.
Plaintiff, in her original petition, alleged that Kirkpatrick violated article 21.21 by disregarding pertinent evidence favoring Plaintiff, failing to completely and thoroughly investigate her claim, misrepresenting pertinent facts such as the independence and objectivity of the engineer, and misrepresenting policy terms and provisions regarding coverage. PL's Pet. at 3, 4, 5, 6, 7, 8. These factual allegations, if proven, could reasonably support a finding that Kirkpatrick violated article 21.21. In her deposition, Plaintiff testified that Kirkpatrick was dishonest with her, represented to her facts that she believes were untrue, failed to review her claim in an unbiased manner, and sent a biased engineer to her home. Pl.'s Mot. Ex. E. In light of Plaintiff's allegations and deposition testimony, and resolving all contested issues of fact in favor of the Plaintiff, the Court cannot conclude that there is no reasonable possibility that Plaintiff can recover against Kirkpatrick in state court. Defendants have not proven fraudulent joinder by clear and convincing evidence; Kirkpatrick remains a nondiverse defendant in this case; the Court therefore lacks jurisdiction over the dispute. The Motion to Remand is GRANTED.
State Farm points to Plaintiff's statement at deposition that, at the instruction of her attorney, she is suing Kirkpatrick in part due to legal reasons. Def.'s Mot. at 2, 17. State Farm insinuates that this motivation, by itself, makes the joinder fraudulent. Plaintiff's motivation for joining Kirkpatrick is of no import to the determination at hand, so long as she has an arguably reasonable possibility of prevailing against him. While Plaintiff may have legal motivations for joining Kirkpatrick, she has set forth factual allegations and given competent testimony that make recovery possible. Joining Kirkpatrick may be a ploy to avoid federal court, but, in the case at hand, it is a legitimate and successful ploy.
Motion for Costs
Pursuant to 28 U.S.C. § 1447(c), "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." The decision to award such payment is left to the discretion of the court. See Avitts v. Amoco Prod. Co., 111 F.3d 30, 32 (5th Cir. 1997). In considering whether to award costs and fees, a court must "consider objectively the merits of the defendant's case [for removal] at the time of the removal." Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 292 (5th Cir. 2000). Fees should be awarded if the removing defendant lacked "objectively reasonable grounds to believe the removal was legally proper." Id. at 293.
Plaintiff notes that Defendant State Farm removed this case despite the numerous cases involving similar allegations against State Farm and its adjusters wherein removal has been found improper. Pl.'s Mot. at 13. Plaintiff further contends that such removal and subsequent remand is unnecessarily "burdensome, dilatory, harassing, and vexatious," and requests and award of $750.00 for attorney fees. Id. Considering Plaintiff's numerous factual allegations supporting her claims in both her petition and deposition and the repeated admonitions of numerous Texas federal courts in similar cases, State Farm could not have had an objectively reasonable basis for believing that Plaintiff fraudulently joined Defendant Kirkpatrick. If the removal was based solely on Plaintiff's admission that she had legal reasons for joining Kirkpatrick, the removal was frivolous. Plaintiff's Motion for Costs is GRANTED. State Farm does not contest the reasonableness of the fee requested. State Farm shall pay Plaintiff $750.00 to cover attorneys' fees.
CONCLUSION
Plaintiff's Motion to Remand and for Costs is GRANTED. The case is remanded to the E-101st District Court of Dallas County, Texas.
It is so ordered.