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Marshall v. Safeco Insurance Company of Illinois

United States District Court, D. Montana

November 6, 2018

MARCIA MARSHALL, Plaintiff,
v.
SAFECO INSURANCE COMPANY OF ILLINOIS, and MID-CENTURY INSURANCE COMPANY, Defendants.

          FINDINGS AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          TIMOTHY J. CAVAN, UNITED STATES MAGISTRATE JUDGE

         Plaintiff initially filed this action in the Montana Sixth Judicial District Court, Park County, Montana, alleging a class action against Defendants Safeco Insurance Company and Mid-Century Insurance Company. (Doc. 7.) Plaintiff claimed the Defendants unlawfully reduced the payment of damages to Plaintiff, and all those similarly situated, under Montana's collateral source statutes. Id. The initial complaint was never served.

         Plaintiff later filed her First Amended Complaint (“FAC”) on November 2, 2016, and served the Defendants. (Docs. 8; 6-1 at 1.) The FAC omitted the class claims asserted in the initial complaint. (Doc. 8.).

         Plaintiff subsequently filed a motion to amend the FAC on April 27, 2018 to again include class allegations. (Doc. 6-1 at 298.) Safeco was served with Plaintiff's motion on April 30, 2018 and immediately filed a notice of removal, seeking to invoke federal jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332, 1453. (Doc. 1.)

         Presently before the Court is Plaintiff's Motion to Remand. (Doc. 25.) Safeco has filed an opposition, and Plaintiff has replied. (Docs. 31, 32.) The motion is fully briefed and ripe for the Court's review.

         The Court finds this matter is suitable for determination. Having considered the parties' submissions, IT IS HEREBY RECOMMENDED that Plaintiff's Motion to Remand be GRANTED.

         I. BACKGROUND

         Plaintiff originally filed her complaint as a putative class action against Defendants in Montana state court on November 25, 2013. (Doc. 7.) The action concerns an insurance dispute from the settlement of Plaintiff's personal injury claim arising from an automobile accident. Id. Specifically, Plaintiff challenged the Defendants' reduction of personal injury settlements based on offsets for payments made by health insurers under Montana's collateral source reduction statutes. Id.

         Plaintiff never served the complaint on Defendants. Instead, she filed her FAC almost three years later on November 2, 2016. (Doc. 8.) The FAC differs from the initial complaint, in relevant part, by omitting all class action allegations. Id. Defendants were served with the FAC, and thereafter moved to dismiss the case. The state court granted their motion, and Plaintiff appealed to the Montana Supreme Court. (Doc. 13.) The Montana Supreme Court reversed and remanded the case back to the state district court on March 13, 2018. See Marshall v. Safeco Ins. Co. & Mid-Century Ins. Co., 413 P.3d 828 (Mont. 2018).

         On March 29, 2018, Plaintiff notified Defendants of her intent to amend the FAC to include class claims. (Docs. 31 at 4; 31-5 at 2.) Plaintiff emailed a copy of her motion to amend and the proposed second amended complaint to Defendants on April 3, 2018. Id. Plaintiff filed her motion to amend and supporting brief on April 27, 2018, and attached a copy of the proposed second amended complaint. (Doc. 6-1 at 298.) Safeco was served with Plaintiff's motion on April 30, 2018, and removed the case to this Court that same day. (Doc. 1.) At the time of Safeco's removal, the state court had not acted on the motion to amend.

         After removal, Defendants moved for an extension of time to respond to Plaintiff's motion to amend her complaint. (Doc. 3.) This Court noted that, pursuant to District of Montana Local Rule 3.3(a), Plaintiff's motion to amend and any other motion pending before the state court were automatically terminated upon removal from state court. (Doc. 18.) This Court explained that Plaintiff would be required to refile her motion in this Court. Id. Plaintiff did not refile the motion. Instead, Plaintiff filed the pending motion to remand. (Doc. 25.)

         In support of her motion to remand, Plaintiff contends Safeco's removal was premature. (Doc. 26 at 5.) Plaintiff argues this Court does not have jurisdiction because Safeco removed the case based on a proposed amended complaint. Id. at 7. Plaintiff cites several district court decisions within the Ninth Circuit to support her assertion that a proposed amended complaint does not provide a sufficient basis for federal court jurisdiction. Id. Plaintiff contends the state court must grant the motion to amend before the case is ripe for removal. Id. at 8.

         Plaintiff argues that, since the state court had not acted on the motion to amend, Safeco's removal was based on the FAC. Id. Plaintiff asserts the FAC does not give this Court subject matter jurisdiction because it does not contain class action allegations, a claim for punitive damages, or allege an amount in controversy greater than $75, 000. Id. at 5-6.

         In response, Safeco argues its removal was timely. (Doc. 31 at 5.) Safeco points to conflicting law within the Ninth Circuit concerning whether a proposed amended complaint triggers removal. Id. Because those cases have applied other trigger dates for removal based on the parties' informal ...


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