26 Fla. L. Weekly Fed. D6aTop of Form
Insurance
— Underinsured motorist — Bad faith — Jurisdiction — Removal — Remand to
state court — Removal of insured’s state court lawsuit against the insurer for
underinsured motorist benefits after insured amended the complaint to add a
claim for statutory bad faith pursuant to Florida law was timely and proper
under 28 U.S.C. section 1446, which sets the time limits for removal, where
notice of removal was filed within 30 days of order authorizing addition of bad
faith cause of action — The amended bad faith complaint was an “initial
pleading” to which the one-year limitation of Section 1446(c) did not apply,
because statutory bad faith claim was removable as a separate and independent
action upon service of “initial pleading setting forth the claim for relief,”
regardless of whether it was asserted in a subsequent lawsuit or was simply
tacked-on to original UM case
— Underinsured motorist — Bad faith — Jurisdiction — Removal — Remand to
state court — Removal of insured’s state court lawsuit against the insurer for
underinsured motorist benefits after insured amended the complaint to add a
claim for statutory bad faith pursuant to Florida law was timely and proper
under 28 U.S.C. section 1446, which sets the time limits for removal, where
notice of removal was filed within 30 days of order authorizing addition of bad
faith cause of action — The amended bad faith complaint was an “initial
pleading” to which the one-year limitation of Section 1446(c) did not apply,
because statutory bad faith claim was removable as a separate and independent
action upon service of “initial pleading setting forth the claim for relief,”
regardless of whether it was asserted in a subsequent lawsuit or was simply
tacked-on to original UM case
TERRY ANN JOHNSON, Plaintiff, v. STATE FARM MUTUAL
AUTOMOBILE INSURANCE COMPANY, Defendant. U.S. District Court, Middle District
of Florida, Orlando Division. Case No. 6:15-cv-1942-Orl-31TBS. January 22,
2016. Gregory A. Presnell, Judge.
AUTOMOBILE INSURANCE COMPANY, Defendant. U.S. District Court, Middle District
of Florida, Orlando Division. Case No. 6:15-cv-1942-Orl-31TBS. January 22,
2016. Gregory A. Presnell, Judge.
ORDER
This matter is before the Court on Plaintiff’s Motion to
Remand (Doc. 13) and Defendant’s Response in Opposition (Doc. 16).
Remand (Doc. 13) and Defendant’s Response in Opposition (Doc. 16).
I. Background
On July 30, 2012, Plaintiff brought suit against Defendant,
Plaintiff’s insurer, for underinsured motorist (“UM”) benefits, with a policy
limit of $50,000. This litigation proceeded to trial on October 6, 2014 and a
jury returned a verdict in favor of Johnson in a total amount of $1,537,000.
Plaintiff then sought leave to amend her complaint to add a claim for statutory
bad faith pursuant to the provisions of Florida Statute 624.155. On October 12,
2015, the state court granted Plaintiff’s motion to amend and deemed the
Amended Complaint filed as of October 27, 2015. (Doc. 2).1 On November 17, 2015, Defendant filed
a Notice of Removal with this Court based on diversity jurisdiction. (Doc. 1).
Plaintiff’s insurer, for underinsured motorist (“UM”) benefits, with a policy
limit of $50,000. This litigation proceeded to trial on October 6, 2014 and a
jury returned a verdict in favor of Johnson in a total amount of $1,537,000.
Plaintiff then sought leave to amend her complaint to add a claim for statutory
bad faith pursuant to the provisions of Florida Statute 624.155. On October 12,
2015, the state court granted Plaintiff’s motion to amend and deemed the
Amended Complaint filed as of October 27, 2015. (Doc. 2).1 On November 17, 2015, Defendant filed
a Notice of Removal with this Court based on diversity jurisdiction. (Doc. 1).
II. Standards
28 U.S.C. § 1446 provides that a defendant may only remove
within thirty days of receiving the initial pleading setting forth the claim
for relief upon which such action is based. In a case not originally removable,
a defendant may remove within thirty days of receiving “an amended pleading,
motion, order or other paper from which it may first be ascertained that the
case is one which . . . has become removable.” 28 U.S.C. § 1446(b)(3). However,
a case removed based on diversity jurisdiction that was not initially removable
may not be removed more than one year after the commencement of the action,
unless the district court finds that the plaintiff has acted in bad faith in
order to prevent a defendant from removing the action. Id. § 1446(c)(1).
within thirty days of receiving the initial pleading setting forth the claim
for relief upon which such action is based. In a case not originally removable,
a defendant may remove within thirty days of receiving “an amended pleading,
motion, order or other paper from which it may first be ascertained that the
case is one which . . . has become removable.” 28 U.S.C. § 1446(b)(3). However,
a case removed based on diversity jurisdiction that was not initially removable
may not be removed more than one year after the commencement of the action,
unless the district court finds that the plaintiff has acted in bad faith in
order to prevent a defendant from removing the action. Id. § 1446(c)(1).
Removal statutes are strictly construed and any doubts or
ambiguities must be resolved in favor of remand. See Whitt v. Sherman Int’l
Corp., 147 F.3d 1325, 1329 (11th Cir. 1998). The removing party bears the
burden of demonstrating that removal was proper. Id.
ambiguities must be resolved in favor of remand. See Whitt v. Sherman Int’l
Corp., 147 F.3d 1325, 1329 (11th Cir. 1998). The removing party bears the
burden of demonstrating that removal was proper. Id.
III. Analysis
It is undisputed that this case meets the requirements of
diversity jurisdiction under 28 U.S.C. § 1332. Plaintiff is a citizen of
Florida, Defendant is a resident of Illinois and the amount in controversy
exceeds $75,000. Thus, the only question is whether Defendant’s removal was timely
under § 1446. Plaintiff alleges that the removal was untimely because the
original complaint for UM benefits was removable and State Farm failed to
remove the case within thirty days of being served with that complaint.
Alternatively, Plaintiff argues that even if the original complaint was not
removable, State Farm’s removal violates the one year limitation of §
1446(c)(1). State Farm contends that the bad faith claim was, in effect, a new
“action” that could be separately removed under § 1446(b)(1) within thirty days
of its filing. State Farm also argues that Plaintiff’s joining of her bad faith
claim to her action for UM coverage after waiting until the 1 year limitation
expired falls within the §1446(c)(1)’s “bad faith” exception to the one year repose
period.
diversity jurisdiction under 28 U.S.C. § 1332. Plaintiff is a citizen of
Florida, Defendant is a resident of Illinois and the amount in controversy
exceeds $75,000. Thus, the only question is whether Defendant’s removal was timely
under § 1446. Plaintiff alleges that the removal was untimely because the
original complaint for UM benefits was removable and State Farm failed to
remove the case within thirty days of being served with that complaint.
Alternatively, Plaintiff argues that even if the original complaint was not
removable, State Farm’s removal violates the one year limitation of §
1446(c)(1). State Farm contends that the bad faith claim was, in effect, a new
“action” that could be separately removed under § 1446(b)(1) within thirty days
of its filing. State Farm also argues that Plaintiff’s joining of her bad faith
claim to her action for UM coverage after waiting until the 1 year limitation
expired falls within the §1446(c)(1)’s “bad faith” exception to the one year repose
period.
Florida procedural practice regarding insurance bad faith
litigation has resulted in a distinct split among federal district courts.
Under Florida state law, a statutory bad faith claim is “grounded upon the
legal duty to act in good faith, and is thus separate and independent of the
claim arising from the contractual obligation to perform.” Dadeland Depot,
Inc. v. St. Paul Fire and Marine Ins. Co., 945 So. 2d 1216, 1235 (Fla.
2006) [31 Fla. L. Weekly S882a] (quoting Blanchard v. State Farm Mut. Auto
Ins. Co., 575 So. 2d 1289, 1291 (Fla. 1991). “[A]n uninsured’s underlying
first-party action for insurance benefits against the insurer necessarily must
be resolved favorably to the insured before the cause of action for bad faith
in settlement negotiations can accrue” Blanchard, 575 So. 2d at 1291.
Although these claims should not, therefore, exist in the same case, “Florida
courts, in practice, routinely allow for the filing of such premature claims .
. . either [ ] pled along with the underlying insurance claim and allowed to
stand subject to stay or abatement, or allowed as an amendment to the original
complaint, months or years later. Ludwig v. Liberty Mut. Fire Ins. Co.,
No. 2:13-cv-212-Ftm-99SPC, 2013 WL 2406320, at *4 (M.D. Fla. June 3, 2013).
litigation has resulted in a distinct split among federal district courts.
Under Florida state law, a statutory bad faith claim is “grounded upon the
legal duty to act in good faith, and is thus separate and independent of the
claim arising from the contractual obligation to perform.” Dadeland Depot,
Inc. v. St. Paul Fire and Marine Ins. Co., 945 So. 2d 1216, 1235 (Fla.
2006) [31 Fla. L. Weekly S882a] (quoting Blanchard v. State Farm Mut. Auto
Ins. Co., 575 So. 2d 1289, 1291 (Fla. 1991). “[A]n uninsured’s underlying
first-party action for insurance benefits against the insurer necessarily must
be resolved favorably to the insured before the cause of action for bad faith
in settlement negotiations can accrue” Blanchard, 575 So. 2d at 1291.
Although these claims should not, therefore, exist in the same case, “Florida
courts, in practice, routinely allow for the filing of such premature claims .
. . either [ ] pled along with the underlying insurance claim and allowed to
stand subject to stay or abatement, or allowed as an amendment to the original
complaint, months or years later. Ludwig v. Liberty Mut. Fire Ins. Co.,
No. 2:13-cv-212-Ftm-99SPC, 2013 WL 2406320, at *4 (M.D. Fla. June 3, 2013).
This practice conflicts with the procedural limitations of
the removal statute, creating a conflict among federal district courts. Several
judges in this district recognize the undisputable fact that the bad faith
claim is a separate and distinct cause of action that does not even arise until
the underlying UM case has concluded, and therefore constitutes a new “civil
action” that resets the removal clock. Batchelor v. Geico Cas. Co., No.
6:11-cv-1071-Orl-31GJK, Doc. No. 21 (M.D. Fla. Aug. 15, 2011); Love v.
Property & Casualty Co. of Hartford, No. 8:10-cv-649-T27EAJ, 2010 WL
2836172 (M.D. Fla. July 16, 2010); Moss v. Geico Indem. Co., No.
5:10-cv-104-Oc-10GRJ, Doc. 14 (M.D. Fla. May 24, 2010), adopted by Doc.
22 (M.D Fla. June 24, 2010); Lahey v. State Farm Mut. Auto Ins. Co., No
8:06-cv-1949-T-27TBM, 2007 WL 2029334 (M.D. Fla. July 11, 2007). Other judges
have concluded that the action is “commenced” when the initial complaint is
filed because amending the complaint to add such a claim does not start the action
anew, and consequently, the 1 year limitation can work to preclude the
Defendant from removing that which does not come into existence until after the
1 year expires. Barroso v. Allstate Prop. & Cas. Ins. Co., 958 F.
Supp. 2d 1344, 1346-47 (M.D. Fla. 2013); Darragh v. Nationwide Mut. Fire
Ins. Co., Case No. 6:14-cv-00104-JA-KRS (M.D. Fla. 2014).
the removal statute, creating a conflict among federal district courts. Several
judges in this district recognize the undisputable fact that the bad faith
claim is a separate and distinct cause of action that does not even arise until
the underlying UM case has concluded, and therefore constitutes a new “civil
action” that resets the removal clock. Batchelor v. Geico Cas. Co., No.
6:11-cv-1071-Orl-31GJK, Doc. No. 21 (M.D. Fla. Aug. 15, 2011); Love v.
Property & Casualty Co. of Hartford, No. 8:10-cv-649-T27EAJ, 2010 WL
2836172 (M.D. Fla. July 16, 2010); Moss v. Geico Indem. Co., No.
5:10-cv-104-Oc-10GRJ, Doc. 14 (M.D. Fla. May 24, 2010), adopted by Doc.
22 (M.D Fla. June 24, 2010); Lahey v. State Farm Mut. Auto Ins. Co., No
8:06-cv-1949-T-27TBM, 2007 WL 2029334 (M.D. Fla. July 11, 2007). Other judges
have concluded that the action is “commenced” when the initial complaint is
filed because amending the complaint to add such a claim does not start the action
anew, and consequently, the 1 year limitation can work to preclude the
Defendant from removing that which does not come into existence until after the
1 year expires. Barroso v. Allstate Prop. & Cas. Ins. Co., 958 F.
Supp. 2d 1344, 1346-47 (M.D. Fla. 2013); Darragh v. Nationwide Mut. Fire
Ins. Co., Case No. 6:14-cv-00104-JA-KRS (M.D. Fla. 2014).
A Florida statutory bad faith claim is a separate and
independent action regardless of whether it is asserted in a subsequent lawsuit
or is simply tacked-on to the original UM case. Thus, this Court continues to
agree with the Lahey line of cases holding that the amended bad faith
complaint is an “initial pleading” to which the 1 year limitation of 1446(c)
does not apply.
independent action regardless of whether it is asserted in a subsequent lawsuit
or is simply tacked-on to the original UM case. Thus, this Court continues to
agree with the Lahey line of cases holding that the amended bad faith
complaint is an “initial pleading” to which the 1 year limitation of 1446(c)
does not apply.
There is no dispute that State Farm filed its Notice of
Removal within 30 days of the order authorizing Johnson to add the bad faith
cause of action. See Lahey, 2007 WL 2029334, at *2 (removal period
begins when state court authorizes filing of amended complaint containing bad
faith claim). And since the bad faith claim is removable as a separate cause of
action upon service of “the initial pleading setting forth the claim for
relief,” the one year limitation contained in § 1446(c)(1) is not implicated.2 State Farm’s removal was therefore
timely and proper. It is:
Removal within 30 days of the order authorizing Johnson to add the bad faith
cause of action. See Lahey, 2007 WL 2029334, at *2 (removal period
begins when state court authorizes filing of amended complaint containing bad
faith claim). And since the bad faith claim is removable as a separate cause of
action upon service of “the initial pleading setting forth the claim for
relief,” the one year limitation contained in § 1446(c)(1) is not implicated.2 State Farm’s removal was therefore
timely and proper. It is:
ORDERED that Plaintiff’s Motion to Remand (Doc. 13) is
DENIED.
DENIED.
__________________
1In its Order, the state court judge
stayed entry of final judgment on the UM claim, pending the litigation of the
remaining claims set forth in the Amended Complaint. (Doc. 1-1). As support for
this procedure, the Court cited Geico General Ins. Co. v. Paton, 150 So.
3d 804 (4th DCA 2014) [39 Fla. L. Weekly D1988a]. That case, however, does not
support this procedural contrivance. Rather, the Geico Court simply held
that the damages determined in the UM case were binding on the Defendant in the
subsequent bad faith trial.
stayed entry of final judgment on the UM claim, pending the litigation of the
remaining claims set forth in the Amended Complaint. (Doc. 1-1). As support for
this procedure, the Court cited Geico General Ins. Co. v. Paton, 150 So.
3d 804 (4th DCA 2014) [39 Fla. L. Weekly D1988a]. That case, however, does not
support this procedural contrivance. Rather, the Geico Court simply held
that the damages determined in the UM case were binding on the Defendant in the
subsequent bad faith trial.
2The Court is mindful of J. Antoon’s
opinion in Curran v. State Farm Mut. Auto Ins. Co., No.
6:09-cv-463-Orl-28DAB, 2009 WL 2003157 (M.D. Fla. July 2, 2009), remanding a
case as premature because the final judgment had not been entered and the state
court had abated the bad faith action. While this may be a valid defense to the
viability of Plaintiff’s claim, it does not undermine the Court’s exercise of
subject matter jurisdiction.
opinion in Curran v. State Farm Mut. Auto Ins. Co., No.
6:09-cv-463-Orl-28DAB, 2009 WL 2003157 (M.D. Fla. July 2, 2009), remanding a
case as premature because the final judgment had not been entered and the state
court had abated the bad faith action. While this may be a valid defense to the
viability of Plaintiff’s claim, it does not undermine the Court’s exercise of
subject matter jurisdiction.
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