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Cody Hattox v. State Farm Mutual Automobile

January 25, 2013


The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge


Presently before the Court is Plaintiff Cody Hattox's ("Plaintiff") motion to remand. (Doc. No. 7.) On September 10, 2012, Plaintiff filed a complaint against Defendants State Farm Automobile Insurance Company ("State Farm"), Corrine Steinman ("Steinman"), and Suzanne Jones ("Jones") (collectively, "Defendants") in San Diego Superior Court. (Doc. No. 1.) The complaint alleged eleven state law causes of action, including two causes of action for intentional and negligent infliction of emotional distress. State Farm removed the action to federal court on October 24, 2012, asserting diversity jurisdiction pursuant 28 U.S.C. §§ 1332 and 1441(a) and (b). In accordance with Civil Local Rule 7.1.d.1, the Court found the motion suitable for determination on the papers and vacated the hearing set for January 24, 2013. For the reasons set below, the Court GRANTS Plaintiff's motion to remand, DENIES Plaintiff's motion for fees and costs and remands the action to San Diego Superior Court.


Relevant Factual Allegations

From about January 1, 2009 to May 31, 2012, Plaintiff was employed by Defendant State Farm. (Doc. No. 1, Compl. ¶ 14.) During this time, Plaintiff served as the office manager at the State Farm office located at 5375 Kearny Villa Road, Suite 102, San Diego, California 92123 (the "Office"). (Id.) Up until July 2011, Plaintiff reported directly to Defendant Steinman, an agent at the State Farm Office.

. at ¶ 16.) Around March or April of 2011, however, Steinman informed Plaintiff of her intent to accept a position at another State Farm office. (Id.) As a result, Plaintiff would no longer report directly to Steinman, and instead was directed to report to Defendant Jones, an Agency Field Executive. (Id. at ¶ 17.) Concurrent with the change in supervisory personnel, Jones presented Plaintiff with a Staff Assistance Agreement (the "Agreement"). (Id. at ¶ 16.) Pursuant to the Agreement, Plaintiff would be State Farm's employee from July 1, 2011 through June 30, 2012, and would receive medical benefits from State Farm during that time period. (Id.) The Agreement also stated that Plaintiff would provide "staff assistance following the death or retirement of a State Farm agent," which Plaintiff understood was a reference to Defendant Steinman. (Id.)

Plaintiff performed under the Agreement without incident until early October 2011, at which time Plaintiff informed Jones that she was pregnant. (Id. at ¶ 19.) Thereafter, Plaintiff alleges that Jones became hostile and threatened to terminate the Agreement, even though termination of the Agreement would leave Plaintiff without medical care during the remainder of her pregnancy. (Id.) Plaintiff also alleges that Jones contacted Mr. Hattox's office, Plaintiff's husband, to see if his office could cover Plaintiff's medical benefits. (Id. at ¶ 21.) Thereafter, Plaintiff contacted Debbie Taylor ("Taylor"), the Senior Occupational Health Nurse for State Farm to inquire about taking leave under the Family Medical Leave Act ("FMLA"). (Id. at ¶ 22.) Taylor informed Plaintiff that State Farm only considers time as a State Farm employee, and not as an employee of an agent when computing eligibility for FMLA. (Id.) As a result, Plaintiff's request for FMLA leave was denied. (Id.)

Plaintiff subsequently became concerned that State Farm would not honor the terms of the Agreement, and informed Jones that she was looking for other employment opportunities within State Farm. (Id. at ¶ 23.) In response, Jones informed Plaintiff that this was "okay," but that Plaintiff would probably not get hired because of how far along Plaintiff was in her pregnancy. (Id.) After Plaintiff spoke with Jones she applied for various openings at State Farm, but was not offered any of the positions despite being qualified. (Id.) Thereafter, Jones stop communicating with Plaintiff. (Id.)

Plaintiff continued working at State Farm until April 12, 2012, the day before she delivered her baby. (Id. at ¶ 24.) Thereafter, Jones sent Plaintiff a letter demanding Plaintiff's resignation. (Id.) Plaintiff refused to resign, at which time Plaintiff became aware that State Farm had placed Plaintiff on pregnancy disability leave. (Id. at ¶ 25.) While Plaintiff was out on leave, Plaintiff received notice from human resources that she had resigned, notice from human resources that she was terminated, and bills from State Farm for medical insurance premiums that Jones had ceased paying as of May 2012. (Id. at ¶ 25.) Plaintiff was eventually terminated on June 22, 2012, effective May 31, 2012, for "End of Contract." (Id. at ¶ 26.)

Plaintiff filed a complaint in San Diego Superior Court against all Defendants on September 10, 2012. The complaint includes eleven state law causes of action: 1) pregnancy discrimination; 2) sex discrimination; 3) failure to accommodate disability; 5) failure to engage in the interactive process; 6) failure to prevent discrimination; 7) violation of the California Family Rights Act "CFRA"); 8) retaliation for the exercise of rights pursuant to CFRA; 9) wrongful termination in violation of public policy; 10) intentional infliction of emotional distress; and 11) negligent infliction of emotional distress. The first nine causes of action are alleged solely against State Farm and Steinman, and the tenth and eleventh causes of action are alleged against all Defendants.

State Farm removed the action to this Court on October 24, 2012, alleging complete diversity pursuant to 28 U.S.C. § 1332.*fn1 (Doc. No. 1.) Specifically, State Farm alleged that the amount in controversy exceeds $75,000.00, and that Defendants Steinman and Jones were fraudulently joined as sham defendants for the sole purpose of destroying complete diversity. (Id. at pp. 5, 6.) Thus, State Farm argues that because State Farm is an Illinois corporation, with its principal place of business in Illinois, the Court has subject matter jurisdiction to adjudicate the claim. Plaintiff filed the instant motion to remand on November 19, 2012. (Doc. No. 7.)


The right to remove a case to federal court is entirely a creature of statute. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). The removal statute, 28 U.S.C. § 1441, allows defendants to remove an action when a case originally filed in state court presents a federal question, or is between citizens of different states and involves an amount in controversy that exceeds $75,000. See 28 U.S.C. §§ 1441(a), (b);28 U.S.C. §§ 1331, 1332(a). Only state court actions that could originally have been filed in federal court can be removed. 28 U.S.C. § 1441(a). See also Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987); Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988).

"[J]urisdiction founded on [diversity] requires that parties be in complete diversity and the amount in controversy exceed $75,000." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003); see 28 U.S.C. § 1332(a)(1). Complete diversity requires that the plaintiff's citizenship is diverse from that of each named defendant. 28 U.S.C. §§ 1332(a)(1), 1332(c)(1); Caterpillar, 519 U.S. at 68 n. 3. Whether or not complete diversity is present is determined at the time of removal. See Am. Dental Indus., Inc. v. EAX Worldwide, Inc., 228 F. Supp. 2d 1155, 1157 (D. Or. 2002); In re Haw. Fed. ...

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