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Washington v. Allstate Insurance Co.

October 19, 2010

KIM WASHINGTON AND FRANK WASHINGTON, PLAINTIFFS,
v.
ALLSTATE INSURANCE COMPANY, AND DOES 1 THROUGH 50, INCLUSIVE DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

This action, originally filed in the Superior Court of California in and for the County of Sacramento, was removed by Defendant Allstate Insurance Company ("Defendant") to this Court on August 9, 2010. Plaintiffs Kim Washington and Frank Washington ("Plaintiffs") now move to remand the matter to state court pursuant to 28 U.S.C. § 1447(c) on grounds that Defendant's removal was untimely. For the reasons set forth below, Plaintiffs' Motion will be denied.

BACKGROUND*fn1

In June 2005, Kim Washington was injured in a motor vehicle accident. She brought an action against the third party driver, which was resolved by a policy limits settlement in the amount of $15,000. In early 2006, Plaintiffs initiated an underinsured motorist claim through Defendant, their own insurance provider. Between June 28, 2007, and March 20, 2009, Plaintiffs sent Defendant no fewer than five separate pieces of correspondence attempting to settle the claim in exchange for payment of the remaining $285,000 underinsured motorist limits. In a letter dated February 18, 2009, Plaintiffs' attorney stated that Ms. Washington likely incurred half a million dollars in lost wages and her medical bills would probably exceed $200,000. (Decl. of William C. Callaham in Supp. Of Pls.' Mot. for Remand, Ex 4.)

No settlement of Plaintiffs' underinsured motorist claim was ever achieved. The dispute was ultimately resolved by arbitration pursuant to California Insurance Code § 11580.2(f). On November 10, 2009 the arbitrator valued Plaintiffs' claim at $506,015. Defendant satisfied the award in full.

Plaintiffs subsequently filed the present action in state court alleging breach of contract and intentional infliction of emotional distress. Both causes of action are based on Defendant's alleged "bad faith" handling of Plaintiffs' underinsured motorist claim.

Defendant was served a copy of the Complaint on June 10, 2010. (Notice of Removal, Ex. A.)

Plaintiffs' Complaint does not plead a specific amount for damages. On July 21, 2010, Defendant served Plaintiffs with Requests for Statements of Damages pursuant to California Code of Civil Procedure § 425.11. (Decl. of Michelle Bradley in Opp'n to Pls.' Mot. for Remand, Ex A.) Defendant was served with Plaintiffs' response on August 4, 2010, which stated each plaintiff was seeking $500,000 for emotional distress and $1 million in punitive damages. (Decl. of Michelle Bradley in Opp'n to Pls.' Mot. for Remand, Ex B.) On August 9, 2010, Defendant removed the case to this Court.

STANDARD

A defendant may remove a civil action from state court to federal district court if the district court has original jurisdiction over the matter. 28 U.S.C. § 1441(a). A federal district court has original jurisdiction over civil actions where the amount in controversy exceeds $75,000 and there is complete diversity between the parties. 28 U.S.C. § 1332.

28 U.S.C. § 1446(b) provides two thirty-day periods for removing a case. First, a Defendant may file a notice of removal within thirty days after receipt of the initial pleading in a state action where the pleading sets forth a removable claim.

28 U.S.C. § 1446(b). Whether the pleading sets forth a removable claim is determined by the "four corners of the applicable pleadings."

Harris v. Bankers Life & Cas. Co., 425 F.3d 686, 694 (9th Cir. 2005). Second, where the grounds for removal are not evident in the initial pleading, the defendant may remove the case within thirty days of receiving "a copy of an amended pleading, motion, order or other paper from which removability may first be ascertained." Carvalho v. Equifax Info. Services, LLC, 2010 WL 3239477, *4 (9th Cir. Aug. 18, 2010) (internal quotations omitted) (quoting 28 U.S.C. ยง 1446(b)). A plaintiff ...


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