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Jewett v. Scottsdale Insurance Co.

United States District Court, D. Oregon, Portland Division

July 16, 2018

SHARON M. JEWETT, in her capacity as trustee of Michael R. Jewett Revocable Living Trust; MICHAEL R. JEWETT, in his capacity as trustee of Michael R. Jewett Revocable Living Trust; MICHAEL R. JEWETT; and SHARON M. JEWETT, Plaintiffs,
v.
SCOTTSDALE INSURANCE COMPANY, and ALLIED INSURANCE COMPANY OF AMERICA, Defendants.

          FINDINGS AND RECOMMENDATIONS

          YOULEE YIM YOU, UNITED STATES MAGISTRATE JUDGE

         Plaintiffs originally filed this insurance coverage action in Multnomah County Circuit Court on April 16, 2018. ECF #1-1, at 2. On May 3, 2018, defendant Allied Insurance Company of America (“Allied”) filed a Notice of Removal with this court. ECF #1. Plaintiffs have now filed a Motion to Remand. ECF #9. Plaintiffs also seek an award of attorney fees. For the reasons discussed below, the motion to remand should be GRANTED, this case should be remanded to Multnomah County Circuit Court, and the court should award plaintiff reasonable attorney fees associated with litigating this motion.[1]

         FINDINGS

         I. Legal Standards

         “[A]ny 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 or the defendants, 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. § 1441. There is a strong presumption against removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).The removing party bears the burden of overcoming the presumption against a federal court's exercise of jurisdiction: “It is to be presumed that a cause lies outside [the federal court's] limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Corral v. Select Portfolio Servicing, Inc., 878 F.3d, 770, 773 (9th Cir. 2017) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). “This burden is particularly stringent for removing defendants because ‘[t]he removal statute is strictly construed, and any doubt about the right of removal requires resolution in favor of remand.'” Id. at 773-74 (quoting Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009)).

         Under 28 U.S.C. § 1446(b)(2)(A), “all defendants who have been properly joined and served must join in or consent to the removal of the action.” Thus, “[i]n a case involving multiple defendants, ‘[a]ll defendants must join in a removal petition.'” Proctor v. Vishay Intertechnology Inc., 584 F.3d 1208, 1224 (9th Cir. 2009) (quoting Hewitt v. City of Stanton, 798 F.2d 1230, 1232 (9th Cir. 1986)). However, the Ninth Circuit has held that a notice of removal filed by one defendant is effective on behalf of other defendants if it contains an averment of the other defendants' consent and is signed by an attorney of record. Id. at 1225.

         The removal statute provides that the “notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading.” 28 U.S.C. § 1446(b). Any defects in the removal notice, including lack of unanimity among defendants, must be cured within those 30 days, and the removing defendant has the burden of explaining the absence of any co-defendants in the notice of removal:

Section 1446 requires all proper defendants to join or consent to the removal notice. . . . Where fewer than all the defendants have joined in a removed action, the removing party has the burden under section 1446(a) to explain affirmatively the absence of any co-defendants in the notice for removal. . . . The defects in the removal notice were not cured within the thirty-day statutory period permitted for joinder. . . . Accordingly, because the removal notice was facially defective and the deficiencies uncured within the thirty-day statutory period, removal was improper.

Prize Frize, Inc. v. Matrix, 167 F.3d 1261, 1266 (9th Cir. 1999) (citations omitted), superseded by statute on other grounds as recognized in Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006).

         II. Background Facts

         On April 18, 2018, two days after this case was filed, both Allied and codefendant, Scottsdale Insurance Company (“Scottsdale”) were served through their registered agents. Archer Decl. ¶ 3, ECF #10; id., Ex. 2, ECF #10-2. Allied timely filed the Notice of Removal on May 3, 2018, but the notice did not include Scottsdale's consent and did not account for Scottsdale's position. ECF #1.

         Allied's counsel represents that he spoke with Scottsdale's counsel on April 24, 2018, and she confirmed Scottsdale did not object to removal. Thenell Decl. ¶ 3, ECF #14. Scottsdale subsequently “affirmed its consent” in email correspondence to Allied's counsel on May 14, 2018. Id. at ¶ 2. On May 30, 2018, 42 days after being served, Scottsdale filed a document with this court entitled “Consent to Removal, ” in which Scottsdale stated it “consents to co-defendant Allied Insurance Company of America's Notice of Removal.” ECF #8.

         III. Remand

         Plaintiffs contend that remand of this action is required because the Notice of Removal is facially defective. Defendants admit the Notice of Removal is defective, both because it did not include Scottsdale's consent and because it failed to account for Scottsdale's position. Response 3, ECF #13. However, defendants assert this was a “procedural error” that has since been corrected. ...


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