Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

SPIELMAN v. STANDARD INS. CO.

July 1, 1996

LYNN E. SPIELMAN, Plaintiff,
v.
STANDARD INSURANCE COMPANY, et al., Defendants.



The opinion of the court was delivered by: ORRICK

 In this insurance action, plaintiff Lynn Spielman ("Spielman") sued defendant Standard Insurance Company ("Standard") in state court to recover benefits under a disability insurance policy. Standard removed the action to federal court, pursuant to 28 U.S.C. 1446(b), based on diversity jurisdiction. Spielman now moves to remand to state court on the grounds that Standard's removal was untimely. For the reasons hereinafter set forth, Spielman's motion is denied.

 I.

 The following statement of facts is taken from the complaint. Spielman obtained disability insurance through her employer. Standard issued the policy. Spielman later sustained injuries during the course of her employment and sought compensation under the terms of the policy. Standard denied coverage. Spielman sued Standard for breach of contract, breach of the covenant of good faith and fair dealing, negligent and intentional misrepresentation, intentional infliction of emotional distress, and fraudulent concealment of a cause of action. Spielman filed the action in the Superior Court for the City and County of San Francisco.

 Spielman sent a copy of the lawsuit by certified mail to Standard on February 13, 1996. A letter accompanying the complaint specified that the communication was not intended as "formal service" upon Standard, as no summons was enclosed. The complaint arrived at the post office on Saturday, February 17, 1996. A messenger employed by an external courier service acknowledged receipt of the letter and delivered the letter to Standard's closed offices. The courier's actions conformed with the usual practice for weekend mail.

 Due to the President's Day holiday, Standard's offices remained closed the following Monday. A mail clerk at Standard processed the complaint on Wednesday, February 21, 1995, by entering the appropriate information in the company's certified mail log and forwarding the letter to the office of Ron Timpe, President of Standard. The complaint was received that day by Robert Maver, Vice President of Standard, on behalf of Timpe.

 On March 22, 1996, Standard removed the case to the United States District Court for the Northern District of California. Spielman now moves to remand to state court, alleging that Standard's removal was untimely because the thirty-day removal period should commence on the date of receipt by the out-of-house courier (resulting in a passage of thirty-four days). Standard contends that the period should run from the date of Maver's receipt, and that removal occurred in a timely manner.

 II.

 Section 1446(b) of Title 28 of the United States Code provides: "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). There is a split of authority regarding when the removal period begins to run. Cases following the approach of Love v. State Farm Mutual Automobile Insurance Co., 542 F. Supp. 65, 68 (N.D. Ga. 1982), have held that only formal service of process triggers the running of the thirty-day period. Cases following the approach of Tyler v. Prudential Insurance Co., 524 F. Supp. 1211, 1214 (W.D. Pa. 1981), however, have held that the period runs from the defendant's actual receipt of the complaint, even if the receipt does not occur through formal service of process.

 Standard correctly states that certain decisions from the district courts within the Ninth Circuit indicate an acceptance of the Love reasoning. See, e.g., Student A. v. Metcho, 710 F. Supp. 267, 268 (N.D. Cal. 1989) (citing Thomason v. Republic Ins. Co., 630 F. Supp. 331 (E.D. Cal. 1986), for the proposition that service is required for the period to run); Bennett v. Allstate Ins. Co., 753 F. Supp. 299, 304 (N.D. Cal. 1990). More recent decisions, however, indicate the growing acceptance of the Tyler court's reasoning. See, e.g., Silverwood Estates Dev. Ltd. Partnership v. Adcock, 793 F. Supp. 226, 228 (N.D. Ca. 1991); Lofstrom v. Dennis, 829 F. Supp. 1194, 1198 (N.D. Cal. 1993). Although the Ninth Circuit has yet to consider the issue, other circuits have found the receipt rule of Tyler and its progeny more persuasive. See, e.g., Tech Hills II Assocs. v. Phoenix Home Life Mutual Ins. Co., 5 F.3d 963, 968 (6th Cir. 1993), Roe v. O'Donohue, 38 F.3d 298, 304 (7th Cir. 1994).

 Courts adopting the receipt rule have relied on four basic premises in support of their position. Lofstrom, 829 F. Supp. at 1197. First, the plain language of the statute clearly indicates that formal service of process is not necessary. Id. Second, the legislative history of § 1446(b) supports this interpretation, as shown through the addition of the language, "through service or otherwise." Id. Third, Congress intended to create a uniform federal standard for removal. Id. Finally, in Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 85 L. Ed. 1214, 61 S. Ct. 868 (1941), the Supreme Court held that removal statutes should be strictly construed. Id. This Court finds the argument favoring the plain language of the statute most compelling. By acknowledging informal notification, such as "courtesy copies" of complaints, this interpretation focuses on actual notice to the defendant. Furthermore, acknowledgment of informal notice supports the function of the removal deadline to "expedite the identification of the proper tribunal." Roe, 38 F.3d at 302. Finally, adoption of the receipt rule clearly encourages uniformity by preventing the technicalities of state service laws from controlling the timing of federal removal.

 Similarly, the Seventh Circuit has held that "the 30 days commences when the defendant, or its authorized agent, comes into possession of a copy of the complaint whether or not the delivery complies with the requirements of 'service.'" Roe, 38 F.3d at 304 (emphasis added) (citation omitted). In Roe, a deputy sheriff personally served the complaint upon the corporate defendant's receptionist. Id. at 300. The complaint was forwarded to another employee three days later. Id. The defendant's removal fell within the thirty-day period if measured from receipt by the second employee, but failed to meet the deadline if measured from receipt by the receptionist. Id. The court found that the service upon the receptionist triggered the removal period and that the removal was untimely. Id. at 304. The Ninth Circuit followed similar reasoning in Pochiro v. Prudential Insurance Co., 827 F.2d 1246, 1248 (9th Cir. 1987) (indicating that an attorney who represented the defendant in a related action was not necessarily authorized to accept service in a subsequently-filed suit).

 Here, Standard correctly argues that the acceptance of the certified letter by an external courier fails to constitute "receipt" as required by § 1446(b). Unlike the receptionist in Roe, the courier had no authorization to receive service of process. Common sense similarly demands that a party should not be considered on notice ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.