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Spaulding v. Honeywell Aerospace

United States District Court, D. Arizona

November 23, 2016

NIKKI M. SPAULDING, a married woman, Plaintiff,
HONEYWELL AEROSPACE, et al., Defendants.


          H. Russel Holland United States District Judge

         Motion to Remand

         Plaintiff moves to remand this case.[1] This motion is opposed.[2] Oral argument was not requested and is not deemed necessary.


         Plaintiff Nikki M. Spaulding was an employee of defendant Honeywell Aerospace, a division of Honeywell International, and a participant in a short-term disability plan (STD Plan) sponsored by Honeywell. The STD Plan is a payroll practice exempt from ERISA. The STD Plan was administered by defendant Life Insurance Company of North America (LINA). The STD Plan provides that the plan administrator is the Vice President of Human Resources for Compensation and Benefits.

         Plaintiff applied for STD benefits on May 20, 2015.[3] LINA denied her claim for STD benefits on July 16, 2015 on the grounds that she did not meet the STD Plan's definition of disability.[4] Plaintiff appealed that denial and on August 24, 2015, LINA upheld its benefits decision.[5]

         On May 10, 2016, plaintiff commenced this action in state court. Plaintiff's complaint names Honeywell Aerospace, LINA, and Steve Kelly as defendants. Plaintiff alleges that Kelly was the plan administrator of the STD Plan.[6] Plaintiff asserts five claims in her complaint: 1) unpaid wages pursuant to A.R.S. § 23-355, 2) tortious interference with contract, 3) breach of the implied covenant of good faith and fair dealing, 4) intentional infliction of emotional distress, and 5) unpaid wages pursuant to Delaware law.

         After plaintiff served and filed her complaint in state court, the parties engaged in a series of emails regarding Kelly's status as a party.[7] Plaintiff ultimately agreed to dismiss Kelly because he was not the plan administrator but the parties could not agree on whether plaintiff had a valid claim against the actual plan administrator given that the STD Plan is not an ERISA plan.[8]

         But before plaintiff could dismiss Kelly, defendants removed this action from state court on the basis of diversity jurisdiction. Although Kelly was alleged to be a resident of Arizona in plaintiff's complaint, [9] defendants asserted in their notice of removal that Kelly was fraudulently joined.

         Plaintiff now moves to remand this matter to state court.[10]


         “A defendant generally may remove any action filed in state court if a federal district court would have had original jurisdiction.” Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 2016 WL 6122776, at *3 (9th Cir. 2016). The court has original jurisdiction of cases “where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between ... citizens of different States[.]” 28 U.S.C. § 1332(a)(1). There is a strong presumption against removal, [11] Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992), and “removal statutes should be construed narrowly in favor of remand to protect the jurisdiction of state courts.” Harris v. Bankers Life and Cas. Co., 425 F.3d 689, 698 (9th Cir. 2005).

         Plaintiff argues that removal was improper because the amount in controversy does not exceed $75, 000. In the Ninth Circuit, the amount in controversy is defined “as the ‘amount at stake in the underlying litigation[.]'” Gonzales, 2016 WL 6122776, at *3 (quoting Theis Research, Inc. v. Brown & Bain, 400 F.3d 659, 662 (9th Cir. 2005)). “This amount includes, inter alia, damages (compensatory, punitive, or otherwise) and ... attorney's fees awarded under fee shifting statutes.” Id. “Where it is not facially evident from the complaint that more than $75, 000 is in controversy, the removing party must prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional threshold.” Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). The removing party meets its burden by “establishing that it is ‘more likely than not' that the amount in controversy exceeds $75, 000.” Del Real v. Healthsouth Corp., 171 F.Supp.2d 1041, 1043 (D. Ariz. 2001) (quoting Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)). But, “[w]here doubt regarding the right to removal exists, a case should be remanded to state court.” Matheson, 319 F.3d at 1090.

         “[T]he court considers ‘the amount in controversy at the time of removal.'” Patel v. Nike Retail Services, Inc., 58 F.Supp.3d 1032, 1043 (N.D. Cal. 2014) (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). “The general rule is that the amount in controversy represents ‘an estimate of the total amount in dispute, not a prospective assessment of defendant's liability.'” Kuxhausen v. BMW Financial Services NA LLC, 707 F.3d 1136, 1140 n.2 (9th Cir. 2013) (quoting Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010)). The court generally ÔÇťassume[s] that ...

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