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O'Bresley v. Farm Bureau Property & Casualty Insurance Company

United States District Court, D. Arizona

November 20, 2018

Stephen O'Bresley, et al., Plaintiffs,
v.
Farm Bureau Property & Casualty Insurance Company, et al., Defendants.

          ORDER

          Douglas L. Rayes United States District Judge

         Plaintiffs Stephen and Carol O'Bresley initiated this action by filing a complaint in Maricopa County Superior Court on June 25, 2018. (Doc. 1-3 at 2.) Defendant Farm Bureau Property & Casualty Insurance Company subsequently removed the action to federal court, asserting subject matter jurisdiction under 28 U.S.C. § 1332. (Doc. 1.) Before the Court is Plaintiffs' motion to remand (Doc. 14), which is fully briefed (Docs. 15, 18).[1] For the reasons stated below, the motion is granted.[2]

         I. Background

         Plaintiffs are the insureds under a homeowners' insurance policy issued by Defendant. (Doc. 1-3 at 2-3.) Plaintiffs allege that their home suffered fire- and smoke- related damage in June 2017. (Id. at 4.) They contend that the smoke damage and related losses are covered under the homeowners' insurance policy, but that Defendant unreasonably handled their claim. (Id.) Plaintiffs assert claims against Defendant for breach of contract and breach of the covenant of good faith and fair dealing. (Id. at 8-9.) They also seek to compel an appraisal. (Id. at 9-10.) The amount in controversy is not apparent from the face of the complaint, but Plaintiffs seek general and special damages, including compensatory damages, damages for funds still owing under the homeowners' insurance policy, damages for mental and emotional distress, punitive damages, as well as attorneys' fees and costs. (Id. at 11.)

         Along with the complaint, Plaintiffs filed a Certificate Regarding Compulsory Arbitration (Doc. 1-4) and an Offer of Judgment letter (Doc. 1-7). The Certificate Regarding Compulsory Arbitration certified that Plaintiffs' claims are not subject to compulsory arbitration under Arizona law because the amount in controversy exceeds $50, 000. (Doc. 1-4.) The Offer of Judgment requested $74, 000 “inclusive of all damages, all taxable court costs, all interest, and all attorneys' fees.” (Doc. 1-7 at 2-3.)

         Plaintiffs served the summons, complaint, Certificate Regarding Compulsory Arbitration, and Offer of Judgment letter via service on Defendant's designated statutory agent, the Arizona Department of Insurance (“ADOI”), on July 10, 2018. (Doc. 14 at 2.) On July 13, 2018, Defendant received the documents. (Doc. 1 at 2.) On August 10, 2018, Defendant removed the matter to this Court. (Doc. 1.)

         II. Legal Standard

         Any civil action brought in state court over which the federal district courts have original jurisdiction may be removed by the defendants to the federal district court for the district where the action is pending. 28 U.S.C. § 1441(a). A notice of removal must “be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading . . . .” 28 U.S.C. § 1446(b). Although the statutory time limit for removal petitions is procedural, not jurisdictional, the time limit nonetheless is mandatory and a timely objection to a late notice of removal will defeat removal. See Smith v. Mylan Inc., 761 F.3d 1042, 1045 (9th Cir. 2014).

         When removal is based on diversity jurisdiction, complete diversity among parties must exist and the matter in controversy must exceed $75, 000. 28 U.S.C. § 1332(a). If the complaint does not demand a specific dollar amount, the defendant “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). Doing so requires more than “conclusory allegations, ” Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997); a removing defendant must offer evidence that it is “more likely than not” that the amount in controversy exceeds $75, 000, Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). A case will be remanded “if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

         III. Discussion

         It is undisputed that Plaintiffs are citizens of Arizona and Defendant is an Iowa corporation with its principal place of business in West Des Moines, Iowa. (Doc. 1 at 3.) Plaintiffs argue, however, that Defendant untimely noticed its removal and, alternatively, that the amount in controversy does not exceed $75, 000. (Doc. 14.)

         A. Timeliness of Removal

         Pursuant to A.R.S. § 20-221(B), Plaintiffs were required to serve Defendant through the ADOI. The parties dispute whether the 30-day clock for removal began to run when Plaintiffs served process on the ADOI, or when the ADOI forwarded the pleadings to Defendant three days later. (Doc. 14 at 3; Doc. 15 at 2.)

         Under § 1446(b), the 30-day removal period begins to run “after the receipt by the defendant . . . of a copy of the initial pleading.” 28 U.S.C. § 1446(b). In enacting this provision, Congress intended to safeguard defendants from not having “access to the complaint before commencement of the removal period.” See Befort v. Farm Bureau Prop. & Cas. Ins. Co., No. CV-18-02564-PHX-RM, 2018 WL 5792339, at *2 (D. Ariz. Nov. 5, 2018) (quoting Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 351-52 (1999)). Consistent with this purpose and with other district court decisions within the Ninth Circuit, the Court concludes that the removal period begins to run from the date a defendant actually receives the complaint, not merely from the ...


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