Lindfors v. State Farm Mutual Automobile Insurance Company

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
CORINNE LINDFORS,
Plaintiff,
v.
STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY,
Defendant.
Case No. 3:20-cv-00178-SLG
ORDER RE MOTION TO REMAND
Before the Court at Docket 11 is Plaintiff Corinne Lindfors’ Motion to
Remand. Defendant State Farm Mutual Automobile Insurance Co. responded in
opposition at Docket 15. Plaintiff replied at Docket 20. Oral argument was not
requested and was not necessary to the Court’s determination.
BACKGROUND
As alleged in the complaint, Plaintiff was covered by three automobile
insurance policies from Defendant.1 On January 15, 2019, Plaintiff was in a car
accident as a result of which she suffered bodily injury and received medical
treatment.2 Plaintiff filed uninsured motorist/underinsured motorist claims with
Defendant, who determined that Plaintiff’s total claim value for injuries and
1 Docket 1-1 at 2, ¶ 5 (Complaint).
2 Docket 1-1 at 4–5, ¶¶ 11–14.
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damages was $152,874.12 and offered Plaintiff a check for $77,874.12.3 On June
15, 2020, Plaintiff initiated an action against Defendant in the Superior Court for
the State of Alaska.4 Plaintiff states three causes of action against Defendant
including breach of contract, breach of fiduciary duty, and breach of the covenant
of good faith and fair dealing.5 She seeks “compensatory damages in an amount
exceeding the Court’s jurisdictional minimum of $100,000,” punitive damages,
consequential breach of contract damages, interest, attorneys’ fees and taxable
costs, as well as such further relief the Court deems just.6 On July 24, 2020,
Defendant removed the matter to this Court, invoking the Court’s jurisdiction under
28 U.S.C. § 1332(a).7 On August 24, 2020, Plaintiff filed the instant motion to
remand to state court.8
LEGAL STANDARD
“A defendant generally may remove an action filed in state court if a federal
district court would have had original jurisdiction over the action.”9 “The notice of
removal of a civil action or proceeding shall be filed within 30 days after the receipt
3 Docket 1-1 at 7, ¶ 20.
4 Docket 1-1; see Case No. 3AN-20-06589.
5 Docket 1-1 at 11–16 ¶¶ 29–61.
6 Docket 1-1 at 16–17.
7 Docket 1.
8 Docket 11.
9 Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 415 (9th Cir. 2018) (citing 28 U.S.C. §
1441(a)).
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by the defendant, through service or otherwise, of a copy of the initial pleading
setting forth the claim for relief upon which such action or proceeding is based.”10
DISCUSSION
Plaintiff moves to remand to state court alleging that (a) this Court lacks
subject matter jurisdiction, (b) Defendant has not established that the notice of
removal was timely, and (c) Plaintiff’s election to file suit in state court is binding
on Defendant under the terms of each of the insurance policies. The Court
addresses each basis for remand in turn.
A. Subject Matter Jurisdiction
Plaintiff contends that this Court lacks jurisdiction over the instant matter
because Defendant has not alleged that the amount in controversy exceeds
$75,000 as required for diversity jurisdiction.11 Specifically, Plaintiff notes that
Defendant has previously alleged that Plaintiff’s total claim value is $152,874.12
and has tendered a check of $77,874.12 to Plaintiff, leaving only $75,000 in
dispute.12 Plaintiff contends that Defendant’s “‘payment’ affirmative defense
‘offset’ claim” precludes it from establishing the amount in controversy necessary
for removal.13 She acknowledges that the complaint she filed in state court seeks
10 28 U.S.C. § 1446(b)(1).
11 Docket 11 at 7.
12 Docket 11 at 7.
13 Docket 11 at 11–12.
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damages in excess of the Superior Court’s “jurisdictional minimum of $100,000,”
but contends that this allegation is not sufficient for Defendant to establish removal
jurisdiction.14 Plaintiff reasons that if this were true, “every superior court claim in
Alaska would automatically support federal court removal jurisdiction.”15 Plaintiff
cites to the Ninth Circuit’s opinion in Gaus v. Miles, Inc. as recognizing that where
“‘the amount in controversy is in doubt,’ there is a ‘sharp distinction between
original jurisdiction and removal jurisdiction’” and the defendant must support the
allegations of jurisdictional facts “by competent proof.”16
Defendant responds that it is well established that federal courts look to the
allegations of the complaint to determine whether the amount in controversy
exceeds $75,000.17 It cites to the Ninth Circuit’s decision in Guglielmino v. McKee
Foods Corporation as explaining that “when a complaint filed in state court alleges
on its face an amount in controversy sufficient to meet the federal jurisdictional
threshold, such requirement is presumptively satisfied unless it appears to a ‘legal
certainty’ that the plaintiff cannot actually recover that amount.”18 Defendant
emphasizes that, here, Plaintiff’s complaint specifically seeks “compensatory
damages in an amount exceeding the Court’s jurisdictional minimum of $100,000”
14 Docket 11 at 10.
15 Docket 11 at 10–11.
16 Docket 20 at 11 (quoting Gaus, 980 F.2d 564, 567 (9th Cir. 1992)).
17 Docket 15 at 4.
18 Docket 15 at 5–6 (quoting Guglielmino, 506 F.3d 696, 699 (9th Cir. 2007)).
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as well as consequential and punitive damages.19 Defendant also points to
Plaintiff’s settlement demand letter prior to suit as demonstrating the amount in
controversy exceeds $75,000.20 Defendant adds that it would only bear the burden
of establishing the amount in controversy if the complaint did not clearly allege an
amount in controversy, which is not the case here,21 and contends that courts “do
not look to whatever defenses a defendant may have to the claims at issue in
determining the amount in controversy.”22
Plaintiff replies that by attaching her settlement letter to its brief, Defendant
“necessarily ask[s] this Court to find that [Plaintiff’s] May 12, 2020 demand letter
‘reflects a reasonable estimate of the Plaintiff’s claims.’”23 Plaintiff requests that if
the Court denies her motion to remand, it include language that the “demand letter
reflects a reasonable estimate of Plaintiff’s claims, in satisfaction of State Farm’s
burden to prove” the amount in controversy requirement.24
Federal district courts have original jurisdiction over all civil actions where
(1) the matter in controversy exceeds the sum or value of $75,000 (exclusive of
19 Docket 15 at 6 (quoting Docket 1-1 at 16).
20 Docket 15 at 7, n.15 (citing Docket 16-3).
21 Docket 15 at 4–5.
22 Docket 15 at 7 (citing Scherer v. Equitable Life Assur. Soc’y of the United States, 347 F.3d
394, 397 (2d Cir. 2003)).
23 Docket 20 at 13 (emphasis in original) (quoting Carvalho v. Equifax Info. Services, LLC, 629
F.3d 876, 885 (9th Cir. 2010) and collecting additional cases)).
24 Docket 20 at 14.
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interest and costs), and (2) the matter is between citizens of different states.25 The
parties do not dispute that they are citizens of different states, and the Court finds
the diversity requirement is satisfied.26 Accordingly, the only jurisdictional issue is
whether the amount-in-controversy requirement is met.
The Ninth Circuit has “identified at least three different burdens of proof
which might be placed on a removing defendant under varying circumstances”
relating to the amount in controversy.27 Applicable here is “when a complaint filed
in state court alleges on its face an amount in controversy sufficient to meet the
federal jurisdictional threshold.”28 In such cases, the amount-in-controversy
“requirement is presumptively satisfied unless it appears to a ‘legal certainty’ that
the plaintiff cannot actually recover that amount.”29 On its face, Plaintiff’s state
25 28 U.S.C. § 1332(a).
26 Plaintiff alleges she is a resident of Alaska, Docket 1-1 at 1, and Defendant represents that it
is organized under the laws of Illinois, with its principal place of business in Illinois. Docket 1 at
2–3, ¶ 5.
27 Guglielmino, 506 F.3d at 699.
28 Id.
29 Id. at 699. In St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288–290 (1938),
the Supreme Court described the test as follows:
The rule governing dismissal for want of jurisdiction in cases brought in the federal
court is that, unless the law gives a different rule, the sum claimed by the plaintiff
controls if the claim is apparently made in good faith. It must appear to a legal
certainty that the claim is really for less than the jurisdictional amount to justify
dismissal. The inability of plaintiff to recover an amount adequate to give the court
jurisdiction does not show his bad faith or oust the jurisdiction. Nor does the fact
that the complaint discloses the existence of a valid defense to the claim. But if,
from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff
cannot recover the amount claimed, or if, from the proofs, the court is satisfied to
a like certainty that the plaintiff never was entitled to recover that amount, and that
his claim was therefore colorable for the purpose of conferring jurisdiction, the suit
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court complaint alleges over $100,000 in compensatory damages. Accordingly,
the amount in controversy requirement is presumptively satisfied absent a ‘legal
certainty’ that Plaintiff cannot recover that amount. Neither party has alleged that
it is a legal certainty that Plaintiff cannot recover more than $75,000 should she
prevail, nor does the Court find such certainty exists.30
Because the amount-in-controversy and diversity requirements of 28 U.S.C.
§ 1332 are both satisfied, the Court has subject matter jurisdiction over this matter.
B. Timeliness
Plaintiff contends that Defendant has not met its burden of establishing
timely removal.31 Plaintiff contends that although Defendant’s notice of removal
represents that service of the summons was accomplished through the Alaska
Division of Insurance “on or about June 30, 2020,” Defendant’s counsel was aware
of the lawsuit on the date it was filed, June 15, 2020, and thus its July 24, 2020
Notice of Removal is untimely.32 Plaintiff adds that pursuant to Alaska Statute
21.09.190, “[p]rocess served upon the director [of insurance] and the copy
forwarded . . . constitutes service upon the insurer,”33 and that she served the
will be dismissed.
30 The Court did not rely on Plaintiff’s settlement demand letter in evaluating jurisdiction, and
therefore will not address Plaintiff’s arguments about the implications of the demand letter.
31 Docket 11 at 13.
32 Docket 11 at 13 (quoting Docket 1 at 2). Plaintiff adds that the Notice of Removal was not
filed until July 24, 2020, even though it was signed on July 22, 2020. Docket 11 at 13–14.
33 Docket 11 at 14 (quoting AS 21.09.190(b)).
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Director of Insurance via certified mail on June 16, 2020.34 Finally, Plaintiff cites
the Ninth Circuit’s opinion in Anderson v. State Farm Mutual Automobile Insurance
Company for its holding that “actual receipt” of the initial pleading “started the
removal clock,” maintaining that Defendant’s actual receipt of the complaint before
June 30, 2020 should be investigated.35
Defendant responds that it was served through the Alaska Division of
Insurance on June 30, 2020, and received the complaint on July 6, 2020, and thus,
its July 24, 2020 notice of removal was timely.36 Defendant cites to the Supreme
Court’s opinion in Murphy Brothers v. Michetti Pipe Stringing as holding that the
period for removal does not begin running until a party is summoned and receives
a copy of the complaint simultaneous with or after service of the summons.37
In her reply, Plaintiff contends that there is “a genuine issue of material fact
as to whether State Farm had actual receipt of [the] initial pleading on or after June
15, 2020.”38 Plaintiff maintains that the affidavit filed with the opposition does not
address whether the insurer had earlier notice through counsel.39
34 Docket 11 at 14.
35 Docket 11 at 15 (quoting Anderson, 917 F.3d 1126 (9th Cir. 2019)).
36 Docket 15 at 2–3. Defendant adds that it never received a courtesy copy of the complaint
from Plaintiff’s counsel. Docket 15 at 3 (citing Docket 19).
37 Docket 15 at 2–3 (citing Murphy Bros., 526 U.S. 344 (1999).
38 Docket 20 at 16.
39 Docket 20 at 17.
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As required by statute, the “notice of removal of a civil action or proceeding
shall be filed within 30 days after the receipt by the defendant, through service or
otherwise, of a copy of the initial pleading setting forth the claim for relief upon
which such action or proceeding is based.”40 The Supreme Court interpreted this
provision of the removal statute in Murphy Brothers v. Michetti Pipe Stringing,
holding that a “defendant’s time to remove is triggered by simultaneous service of
the summons and complaint, or receipt of the complaint, ‘through service or
otherwise,’ after and apart from service of the summons, but not by mere receipt
of the complaint unattended by any formal service.”41 Thus, the clock does not
begin to run on the notice of removal until the defendant has received both the
summons—as “one becomes a party officially, and is required to take action in that
capacity, only upon service of a summons”—and the complaint, so as to know
what the suit is about.42
In the instant case, Plaintiff served process on the Director of the Alaska
Division of Insurance as prescribed by Alaska law, which requires any insurer
operating in the state to appoint the Director to receive service on its behalf.43 The
Director of Insurance is then required to forward the summons and complaint to
40 28 U.S.C. § 1446(b)(1).
41 526 U.S. 344, 347–48 (1999) (emphasis added).
42 Id. at 350, 352.
43 See AS 21.09.180 and AS 21.09.190.
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the insurer by certified mail.44 This scenario—where a plaintiff serves a statutorily
designated agent—was not covered in Murphy Brothers, which “addressed what
must be received, not who must receive it.”45 However, in Anderson v. State Farm
Mutual Automobile Insurance Company, the Ninth Circuit addressed the latter
question, ultimately holding that the “thirty-day removal clock under 28 U.S.C. §
1446(b)(1) does not begin upon service on and receipt by a statutorily designated
agent” but only when the defendant “actually received the [Plaintiff’s] complaint.”46
With this framework in mind, the Court turns to the facts here. Defendant
has provided a certificate of service prepared by the Division of Insurance
indicating that the Director of Insurance was served with the summons and
complaint on June 30, 2020, and subsequently forwarded the documents to
Defendant by certified mail.47 Counsel’s affidavit states that Defendant “actually
received a copy of the summons and complaint on July 6, 2020.”48 The Court
concludes that under Murphy Brothers and Anderson, the 30-day removal clock
began on July 6, 2020, when Defendant actually received the summons and
complaint.
44 AS 21.09.190.
45 Anderson, 917 F.3d at 1130 (emphases in original).
46 Id.
47 Docket 16-1 at 2.
48 Docket 19-1 at 2, ¶ 3.
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Plaintiff posits that Defendant’s counsel “knew as early as June 15, 2020 of
State Farm being sued.”49 But even assuming State Farm did earlier procure a
copy of the complaint, the 30-day time frame in the removal statute does not begin
to run until a defendant has a copy of the complaint and the summons. Plaintiff
does not allege, and the record does not indicate, that Defendant was served with
a summons prior to service by the Director of the Division of Insurance.
Because Defendant filed the Notice of Removal within 30 days of July 6,
2020, the notice was timely.
C. The terms of the insurance policy
Plaintiff contends that under Alaska law, insurance policy terms are “read to
achieve the insured’s ‘reasonable expectations,’”50 and that her insurance policies
provide that Plaintiff can choose whether to proceed in state or federal court.51 The
relevant policy language states that “the insured shall . . . file a lawsuit, in a state
or federal court that has jurisdiction, against” State Farm.52 Plaintiff contends that
an insured could reasonably expect the policy’s language to mean that she would
have her choice of forum53 and not expect to be subjected to the additional time
49 Docket 11 at 13.
50 Docket 11 at 16 (quoting State Farm Mut. Auto. Ins. Co. v. Dowdy, 192 P.3d 994, 998 (Alaska
2008)).
51 Docket 11 at 17.
52 Docket 11-1 at 18.
53 Docket 11 at 18.
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and expense associated with removal to federal court.54 Plaintiff reasons that
Defendant could have written the policies to preserve its right to litigate in federal
court, but instead opted for language that allows the insured to file suit in a venue
of her choice.55 Plaintiff maintains that the phrase “in a state or federal court that
has jurisdiction” must be given meaning since language requiring a plaintiff to file
a lawsuit would have sufficed if the language was only intended to dictate the type
of resolution available.56 She adds that Defendant could have initiated its own
lawsuit for declaratory judgment in federal court to resolve the parties’ dispute
about coverage but did not do so.57
Defendant responds that interpretation of a forum selection clause is a
procedural issue governed by federal law in diversity cases.58 It contends that
district courts in the Ninth Circuit and elsewhere have rejected arguments like
Plaintiff’s that similar or identical insurance policy provisions foreclose removal
from state court.59 Among others, Defendant cites to the district court’s decision
in Craker v. State Farm Mutual Automobile Insurance Company, which held that
54 Docket 11 at 18; Docket 20 at 2.
55 Docket 11 at 17.
56 Docket 20 at 5.
57 Docket 11 at 19 (citing McDonnell v. State Farm Mut. Auto. Ins. Co., 299 P.3d 715, 728
(Alaska 2013)).
58 Docket 15 at 8 (citing Manetti-Farrow v. Gucci America, Inc., 858 F.2d 509 (9th Cir. 1988)) .
59 Docket 15 at 9–12 (collecting cases).
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language identical to that in dispute here “govern[s] the type of dispute resolution
available . . . rather than the location thereof” and that the “concern of the clause
is not with where a lawsuit must be filed, but with the fact that a lawsuit must be
filed.”60 The district court concluded that the language “could not reasonably be
interpreted to waive State Farm’s right to remove” an action and that nothing in the
policy suggested that State Farm submitted to the jurisdiction of any court or
forfeited its right to object to jurisdiction in a selected forum.61
Plaintiff replies that Defendant’s position is internally inconsistent because
Defendant insists that federal law governs interpretation of forum selection clauses
but then cites case law concluding that the language is not a forum selection clause
at all.62 Plaintiff contends that the better approach is to apply the “reasonable
expectations” framework used by the Alaska Supreme Court.63 Plaintiff adds that
the cases cited by Defendant from district courts in Pennsylvania are not
persuasive, because Pennsylvania law accords narrower protections to insureds
than does Alaska law.64
The disputed language of Section 1(b) of the parties’ policies provides that
in the event of a disagreement about compensatory damages, “the insured shall .
60 Case No. 11-0225, 2011 WL 1671643, at *3 (W.D. Pa. May 3, 2011) (emphases in original).
61 Id.
62 Docket 20 at 6–7.
63 Docket 20 at 7.
64 Docket 20 at 7–8.
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. . file a lawsuit, in a state or federal court that has jurisdiction.”65 The Court does
not interpret this language as a forum selection clause and agrees with those
district courts that have concluded that the clause “indicates that a lawsuit must be
filed, as opposed to arbitration or mediation, but does not designate the specific
court where it must be filed.”66 Based on the policies’ language, Plaintiff could not
reasonably have expected that the policies precluded Defendant from removing
the case, as there is no commitment by Defendant to submit to the insured’s
selected court’s jurisdiction.
Because Defendant has not waived its right to removal, and because
Defendant’s Notice of Removal was otherwise proper, the Court will deny Plaintiff’s
motion to remand.
CONCLUSION
In light of the foregoing, IT IS ORDERED that Plaintiff’s Motion to Remand
at Docket 11 is DENIED.
DATED this 20th day of October, 2020 at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE
65 Docket 11-1 at 18.
66 See, e.g., Malpass v. State Farm. Auto. Ins. Co., Case No. 2:17-cv-00279-SAB, 2017 WL
4881596, at *2 (E.D. Wash. Oct. 30, 2017).
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