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The Goldenberg Family Trust C/O Elizabeth Goldenberg v. Travelers Commercial Insurance Company


August 18, 2011


The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER GRANTING MOTION TO REMAND [Motion filed on June 27, 2011]

Presently before the court is Plaintiff Goldenberg Family Trust C/O Elizabeth Goldenberg's Motion to Remand Action Under 28 U.S.C. § 1447. Travelers Commercial Insurance Company("Defendant") opposes the motion. Having read the parties' pleadings and considered the arguments therein, the court GRANTS Plaintiff's Motion to Remand and REMANDS Plaintiff's Complaint.

In April 2011, Plaintiff brought suit in Los Angeles Superior Court, alleging breach of contract and breach of the implied covenant of good faith and fair dealing in violation of California law. (Dkt. No. 1.) On May 18, 2011, Defendants removed Plaintiff's complaint to this court, alleging diversity jurisdiction. (Id.) On June 27, 2011, Plaintiff filed the present Motion to Remand. (Dkt. No. 7.)

A defendant may remove a case from state court to federal court if the case could have originally been filed in federal court. 28 U.S.C. § 1441(a); see also Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th Cir. 1977). The removal statute is strictly construed against removal jurisdiction, and federal jurisdiction must be rejected if any doubt exists as to the propriety of removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Title 28 U.S.C. § 1447(c) gives a federal court authority to remand a case to state court for lack of subject matter jurisdiction.

As the removing party, Defendant bears the burden of proving federal jurisdiction. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996); see also Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). Courts resolve doubts as to removability in favor of remand. Gaus, 980 F.2d at 566.

Here, Defendant opposes removal because, according to Defendant, the parties are diverse. Federal subject matter based on diversity jurisdiction exists only where "the matter in controversy exceeds the sum or value of $75,000 exclusive of interest and costs" and the dispute is between "citizens of different States." 28 U.S.C. § 1332(a). The parties dispute whether Defendant is a citizen of California, and so not diverse, or a citizen, as Defendant suggests, of Connecticut.

The federal diversity jurisdiction statute provides that "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. § 1332(c)(1) (emphasis added). The Supreme Court has recently affirmed that "principal place of business" refers to "the place where the corporation's high level officers direct, control, and coordinate the corporation's activities," which is often called the corporation's "nerve center." Hertz Corp. v. Friend, 130 S. Ct. 1181, 1185-86 (2010).

In the present matter, Plaintiff argues that Defendant's "nerve center" is Sacramento, California. (Pl.'s Motion 6:11-28.) Defendant, however, contends that Hartford, Connecticut is the corporation's "nerve center." (Def.'s Opp'n 5:5-18.) Defendant has offered a declaration in support of its position, which states that Defendant is incorporated in the State of Connecticut, its books and records are in Connecticut, four of the six members of the Board of Directors are located in Hartford, meetings of the Board of Directors are sometimes in Hartford, and various senior officers are located in Hartford. (Id.; Skjerven Decl 2-3.) While these facts might lend support a finding that Defendant's nerve center is in Connecticut, they do not, without more, establish that Connecticut is where Defendant directs, controls, and coordinates the corporation's activities.

Because there is a dispute, and because Plaintiff has offered evidence that California also serves as a center of the company's control and coordination of insurance claims, the court is obligated to resolve all ambiguity in favor of remand.

For the foregoing reasons, the court GRANTS Plaintiff's Motion to Remand.



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