Opinion
CIVIL ACTION NO. 2:08cv826-WHA (WO).
December 22, 2008
MEMORANDUM OPINION AND ORDER
I. FACTS AND PROCEDURAL HISTORY
This cause is before the court on a Motion to Remand, filed by the Plaintiff George Tompkins on November 7, 2008.
The Plaintiff originally filed a Complaint in this case in the Circuit Court of Montgomery County, Alabama. The Plaintiff brings claims arising out of a commercial truck/automobile accident. Complete diversity of citizenship exists between the Plaintiff and Defendants Craft and Powell Transportation Company. Defendant Alfa Mutual Insurance Company is a citizen of Alabama.
The case was removed on the basis of diversity jurisdiction. The Defendants contend that because Alfa Mutual Insurance Company ("Alfa") has been sued only its capacity as Tompkins' uninsured/underinsured motorist carrier, its citizenship ought to be disregarded for purposes of removal on the basis of diversity jurisdiction.
For reasons to be discussed, the Motion to Remand is due to be DENIED.
II. MOTION TO REMAND STANDARD
Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (1994); Wymbs v. Rep. State Exe. Comm., 719 F.2d 1072, 1076 (11th Cir. 1983), cert. denied, 465 U.S. 1103 (1984). As such, federal courts only have the power to hear cases that they have been authorized to hear by the Constitution or the Congress of the United States. See Kokkonen, 511 U.S. at 377. Because federal court jurisdiction is limited, the Eleventh Circuit favors remand of removed cases where federal jurisdiction is not absolutely clear. See Burns, 31 F.3d at 1095.
III. DISCUSSION
A federal district court may exercise subject matter jurisdiction over a civil action in which only state law claims are alleged if the civil action arises under the federal court's diversity jurisdiction. See 28 U.S.C. § 1332(a)(1). The diversity statute confers jurisdiction on the federal courts in civil actions "between citizens of different states," in which the jurisdictional amount is met. Id. There is no question that the jurisdictional amount is sought in this case. The only issue is whether complete diversity of the parties existed at the time of removal.
The Defendants contend, citing Broyles v. Bayless, 878 F.2d 1400, 1402 (11th Cir. 1989); Toole v. Chupp, 456 F. Supp. 2d 1218 (M.D. Ala. 2006) (Thompson, J.); and Oliver v. Rodriquez, No. 2:08cv81, 2008 WL 928328 (M.D. Ala. April 4, 2008) (Albritton, J.), that Alfa is a nominal party in this case, so that its citizenship should be disregarded for purposes of analyzing diversity jurisdiction.
In Broyles, the court identified three exceptions to the general rule that an insurance company is not a real party in interest; namely where the insurance company (1) has become subrogated to the rights of the insured, (2) is defending against a direct action against it, and (3) has assumed primary control of the litigation. Id. at 1404. It is the third of these exceptions which was at issue in Broyles, and is relevant here. Id.; see also Toole v. Chupp, 456 F. Supp. 2d 1218, 1221 (M.D. Ala. 2006). In analyzing the third exception, the Broyles court concluded that although the insurance company which was sued in its capacity as an underinsured motorist carrier participated in the trial of the case, it "took a back seat to defendant's counsel throughout the liability proceedings." 878 F.2d at 1405. Therefore, none of the exceptions, including the third, to the general rule that insurance companies are not a real party in interest applied, and the citizenship of the underinsured carrier was to be disregarded. Id.
Tompkins points out that in the Toole and Oliver cases relied on by the Defendants, the uninsured/underinsured motorist carriers opted out completely, and agreed to be bound by the judgment of liability and damages, whereas in this case, Alfa only conditionally opted out, reserved the right to opt back into the case, and did not agree to be bound by a settlement. Tompkins states that if the Defendants' insurer has a punitive damage exclusion, then coverage for Tompkins' wantonness claim against the Defendants will fall to Alfa. Tompkins states that because Alfa can opt back into the litigation to defend the wantonness claim, Alfa ought not be treated as a nominal party to the litigation.
While Alfa's conditional opt-out makes this case somewhat different from Toole and Oliver, the conditional opt-out does not remove this case from the holding in Broyles, because at least at this point, Alfa has done even less to participate in the case than did the insurer in Broyles, which was held to be a nominal party. Based on the state of the case at the time of removal, therefore, it appears to the court that Alfa is a nominal party whose citizenship does not destroy diversity jurisdiction.
IV. CONCLUSION
For the reasons discussed, the court concludes that the citizenship of the only non-diverse Defendant, Alfa, ought to be disregarded. Accordingly, this court has diversity subject matter jurisdiction and the Motion to Remand is due to be and is hereby ORDERED DENIED.
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CIVIL APPEALS JURISDICTION CHECKLIST
1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1 365 1 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 486 U.S. 196 201 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. 890 F.2d 371 376 Gillespie v. United States Steel Corp. 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing : Rinaldo v. Corbett 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal : See also 3pro se 4. Effect of a notice of appeal : 4
Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , , 368 (11th Ci r. 1 983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , , (11th Cir. 1984). A judg ment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. , , , , , (1988); , , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , , 69S.Ct. 1221, 1225-26, (1949); , , (11th Cir. 1989); , , , , , (1964). Rev.:4/04 The timely filing of a notice of appeal is mandatory and jurisdictional. , , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).