United States District Court, C.D. California
PRESENT THE HONORABLE DAVID O. CARTER, JUDGE
CIVIL MINUTES - GENERAL
(IN CHAMBERS): ORDER GRANTING PLAINTIFFS' MOTION TO
the Court is William Parish (“Parrish”), Spring
Creek Research, LLC (“SCR”), and Passport 420,
LLC (“Passport” and collectively,
“Plaintiffs”) Motion to Remand
(“Motion”) (Dkt. 22). The Court finds this matter
appropriate for resolution without oral argument.
See Fed. R. Civ. P. 78; L.R. 7-15. Having reviewed
the moving papers and considered the parties' arguments,
the Court GRANTS Plaintiffs' Motion.
Court adopts the facts as set out in Plaintiffs'
Complaint (“Compl.”) (Dkt. 1-1). This is an
action regarding losses resulting from the government seizure
of an aircraft owned and operated by the Plaintiffs. Compl.
¶ 1. In June 2016, Parrish contemplated the joint
purchase of an aircraft with his attorney Defendant Michael
Avenatti (“Avenatti”). Id. ¶ 15. In
July 2016, Parrish and Avenatti formed Passport and entered
into an agreement to purchase an aircraft. Id.
¶ 16. At the time Passport was formed, Avenatti was the
formal “manager” of the LLC. Id. ¶
18. However, by the Summer of 2018, Parrish assumed the role
of manager. Id.
Starr Indemnity & Liability Company (“Starr”)
sold an insurance policy (the “policy”) to
Plaintiff Passport. Id. ¶ 19. Passport is the
“named insured” on the policy. However, the
policy further defines as an insured “any director,
officer, partner, employee or stockholder of the
Named Insured while that person is acting
within their official capacity as such.” Declaration of
Robert W. Clark (“Clark Decl.”) (Dkt. 26-3), Exh.
2 at 37. Thus, Parrish and Plaintiff SCR argue they are
insureds under the policy. Compl. ¶ 20.
April 10, 2019, the federal government seized the aircraft at
issue in this case. Id. ¶ 21. Subsequently,
Plaintiffs submitted a claim to Starr. However, Starr has not
provided coverage to date. Id. ¶ 22. Instead,
Starr “asserts that coverage may be limited by the
conduct of Mr. Avenatti in connection to the pending criminal
charges against him in the Central District of
California.” Id. Plaintiffs bring claims for
Breach of Contract against Starr, Breach of the Covenant of
Good Faith and Fair Dealing against Starr, and Declaratory
Relief against Starr, Avenatti, and Avenatti and Associates
(collectively, “Defendants”). Id.
September 11, 2019, Defendant Starr removed the case to this
Court based on diversity jurisdiction. See Not. of
Removal. On October 11, 2019, Plaintiff filed the instant
Motion. On November 4, 2019, Defendant Starr opposed
(“Opp'n”) (Dkt. 26) and on November 27, 2019,
Plaintiff replied (“Reply”) (Dkt. 31).
federal court may order remand for lack of subject matter
jurisdiction or any defect in the removal procedure. 28
U.S.C. § 1447(c). A federal court has diversity
jurisdiction if: (1) the controversy is between
“citizens of different States, ” and (2) the
amount in controversy exceeds the sum or value of $75, 000.
28 U.S.C. § 1332(a). Diversity jurisdiction requires
complete diversity, meaning that no plaintiff can be from the
same state as a defendant. Abrego Abrego v. The Dow Chem.
Co., 443 F.3d 676, 679 (9th Cir. 2006). Thus, a case
ordinarily cannot be removed to the federal court if a
plaintiff and a defendant are citizens of the same state.
See 28 U.S.C. § 1332(a).
this Court “must align for jurisdictional purposes
those parties whose interests coincide respecting the
‘primary matter in dispute, '” and
“will ignore the citizenship of ‘nominal or
formal parties who have no interest in the
action.'” Prudential Real Estate Affiliates,
Inc. v. PPR Realty, Inc., 204 F.3d 867, 873 (9th Cir.
2000). Overall, “[i]f the interests of a party named as
a defendant coincide with those of the plaintiff in relation
to the purpose of the lawsuit, the named defendant must be
realigned as a plaintiff for jurisdictional purposes.”
Dolch v. United Cal. Bank, 702 F.2d 178, 181 (9th
Cir. 1983). The “general presumption” is that the
inclusion of a defendant residing in the same state as the
plaintiff is not for the sole purpose of defeating diversity
jurisdiction. Hamilton Materials, Inc. v. Dow Chem.
Corp., 494 F.3d 1203, 1206 (9th Cir. 2007).