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Hawkinson v. State Farm Mutual Automobile Insurance Co.

United States District Court, M.D. Florida, Jacksonville Division

July 23, 2018



         The issue of whether an insurance bad faith claim, joined by amendment to the underlying coverage action, may be removed more than a year after the original action began has divided my colleagues, and the Eleventh Circuit has not weighed in. I must now take a side. The case is before the Court on Plaintiff Jennifer Ann Hawkinson's Motion to Remand (Doc. 6), to which Defendant State Farm Mutual Automobile Insurance Company filed a response (Doc. 7).[1]

         I. BACKGROUND [2]

         On April 24, 2012, nineteen year old Hawkinson was a passenger in a car when it was hit by Brian Peters, an uninsured motorist driving under the influence. (Doc. 2 ¶¶ 5-6). As a result of the accident, Hawkinson suffered severe and permanent injuries. (Id. ¶ 8).

         Hawkinson claimed coverage under two State Farm automobile insurance policies: her own policy provided for $25, 000 of uninsured motorist coverage benefits, and her parents' policy provided stackable uninsured motorist coverage limits of $250, 000 per person and $500, 000 per accident.[3](Doc. 6 at 2). After State Farm denied her claim for uninsured motorist coverage under her parents' policy, on November 19, 2013, Hawkinson filed a two count Complaint against Peters, a Florida citizen, and State Farm in the Fourth Judicial Circuit Court, in and for Duval County, Florida, alleging negligence against Peters (Count I) and an uninsured motorist coverage claim under her parents' policy against State Farm (Count II). On December 11, 2013, she served a Civil Remedy Notice, which notified State Farm that by denying her claim, it was not acting fairly and honestly toward its insured. (Doc. 6-1). Once State Farm failed to cure the notice in the sixty-day window, the prerequisite for Hawkinson's bad faith claim was established. (Doc. 6 at 3).

         Following a bench trial on February 4, 2016, the state court found Hawkinson was an insured under her parents' policy. (Doc. 6-2). Further, on April 22, 2016, the court granted Hawkinson's amended motion for leave to file an amended complaint, which included a claim for punitive damages against Peters and a claim of bad faith against State Farm under Florida Statute § 624.155.[4] The AC was filed in state court on April 25, 2016.[5] (Doc. 2). State Farm unsuccessfully moved to dismiss the bad faith claim, which was abated pursuant to a court order dated August 8, 2016. (Doc. 6-4).

         On November 3, 2016, Hawkinson and State Farm signed a Stipulation for Entry of Final Judgment and Temporary Stay of Execution, granting Hawkinson compensatory damages, final judgment on her uninsured motorist claim against State Farm, and attorneys' fees and costs. (Doc. 6-5). The court entered Final Judgment on Hawkinson's uninsured motorist claim (Count II) November 18, 2016, thus resolving all matters related to Count II. (Doc. 6-6). State Farm appealed the Final Judgment to the First District Court of Appeal, and on March 8, 2018, that court affirmed coverage, granted Hawkinson attorneys' fees, and remanded that issue for resolution regarding the amount.[6](Doc. 6-7). Hawkinson filed a motion to lift abatement of the bad faith claim in state court on March 9, 2018.[7] (Doc. 7-2 at 2). On April 5, 2018, State Farm removed the bad faith claim (Count III), invoking this Court's diversity jurisdiction under 28 U.S.C. § 1332. (Doc. 1).

         Hawkinson filed a motion to remand on April 30, 2018, arguing that removal is untimely, State Farm waived any right to remove, and piecemeal removal is impermissible. (Doc. 6). State Farm opposes the motion (Doc. 7), which is ripe for review.

         II. LAW

         Removal is governed by 28 U.S.C. § 1441, which provides that “[e]xcept as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction may be removed by the defendant . . . to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. at § 1441(a). As federal district courts are courts of limited jurisdiction, see Morrison v. Allstate Indem. Co., 228 F.3d 1255, 1260-61 (11th Cir. 2000), a party seeking to invoke federal jurisdiction must demonstrate that the underlying claim is based upon either diversity jurisdiction, see 28 U.S.C. § 1332, or the existence of a federal question, see 28 U.S.C. § 1331.

         Under the removal statute, the notice of removal must be filed “within 30 days after the receipt by the defendant . . . of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based . . . .” 28 U.S.C. § 1446(b)(1). However, “if the case stated by the initial pleading is not removable, ” then a notice of removal may be filed within thirty days of the defendant's receipt “of 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.” Id. § 1446(b)(3). Where this latter method of removal is employed in a diversity case, the case may not be removed “more than 1 year after commencement of the action, ” unless the plaintiff acted in bad faith to prevent removal. Id. § 1446(c)(1).

         A plaintiff may seek remand of a removed action based on two grounds: “(1) lack of subject matter jurisdiction; or (2) procedural defect in the removal of the case.” Russell Corp. v. Am. Home Assur. Co., 264 F.3d 1040, 1043-44 (11th Cir. 2001); see 28 U.S.C. § 1447(c). Due to “significant federalism concerns arising in the context of federal removal jurisdiction, ” removal requirements and limitations are “strictly interpreted and enforced.” Russell, 264 F.3d at 1049. “[A]mbiguities are generally construed against removal, ” and “uncertainties are resolved in favor of remand.” Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (noting that the “[d]efendant's right to remove and [the] plaintiff's right to choose his forum are not on equal footing”).

         III. ANALYSIS

         Hawkinson argues that the action giving rise to the bad faith claim was initially filed in state court on November 19, 2013; State Farm was served on November 27, 2013. (Doc. 6 at 8). As a result, she contends that State Farm had until November 27, 2014-one year after the commencement of the case-to file its notice of removal.[8]

         State Farm contends that the “separate and independent action for statutory bad faith” commenced on the date it accrued (March 8, 2018), when the judgment in the underlying uninsured motorist action became final (Doc. 1; Doc. 7 at 13), as opposed to the date the original complaint (November 19, 2013) or AC alleging the bad faith claim (April 25, 2016) was filed. Using March 8, 2018 as the operative date ...

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