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Plunkett v. Illinois Farmers Insurance Co.

United States District Court, S.D. Indiana, Terre Haute Division

June 15, 2018



          Doris L. Pryor United States Magistrate Judge

         This matter comes before the Court on Plaintiff's Motion to Remand (Dkt. 6). The motion was referred to the undersigned for ruling. For the reasons set forth below, Plaintiff's Motion to Remand (Dkt. 6) is DENIED.

         I. Background

         On April 9, 2013, Plaintiff was struck by a vehicle while she was walking across the intersection of Grant Avenue and Indiana State Roads 32 and 47 in Crawfordsville, Indiana. She suffered severe physical injuries. Plaintiff then brought suit against Nancy J. Williamson, the driver of the vehicle that struck her, and claimed damages in excess of $100, 000. Plaintiff ultimately settled her claim against Ms. Williamson for $74, 120.43. After settling her claim against the driver, Plaintiff sought to recover from her own insurance company, Illinois Farmers Insurance Company (Defendant), pursuant to the under insured provision of her insurance policy, which she alleges provided under-insured coverage up to $100, 000. Defendant refused to pay any amount on the grounds that there was no coverage.

         Thereafter, Plaintiff brought this declaratory action in Indiana state court to recover the difference between the policy limit and the settlement amount. On February 1, 2018, the Defendant removed the action to federal court on the grounds of diversity jurisdiction (Dkt. 1). On February 26, 2018, the Plaintiff filed this Motion to Remand arguing that the Court lacks subject matter jurisdiction and thus should be remanded to state court.

         II. Discussion

         The federal removal statue permits a defendant to remove a civil action from state court when a district court has original jurisdiction over the action. Micrometl Corp. v. Tranzact Techs., Inc., 656 F.3d 467, 470 (7th Cir. 2011); see also, 18 U.S.C. § 1441(a). A federal court has original jurisdiction for all civil cases where the action is between citizens of different states and “the amount in controversy is greater than $75, 000, exclusive of interest and costs.” Micrometl Corp., 656 F.3d at 470; see also 28 U.S.C. § 1332(a). The party invoking federal jurisdiction has the burden of establishing that at the time it filed its notice of removal both diversity of citizenship and the amount in controversy requirements were met. Schimmer v. Jaguar Cars, Inc., 384 F.3d 402, 404 (7th Cir. 2004); Tylka v. Gerber Products, 211 F.3d 445, 448 (7th Cir. 2000).

         Absent diversity jurisdiction, this Court lacks subject matter jurisdiction and must remand this case to state court. See Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006); Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006). Because this is a jurisdictional question, the Court has “an independent obligation to determine whether it has the authority to resolve this dispute.” Webb v. Fin. Regulatory Auth, Inc., 889 F.3d 853, 856 (7th Cir. 2018).

         Here, the Plaintiff argues that the Court lacks jurisdiction over this matter because the parties are not diverse and the amount in controversy is not greater than $75, 000.

         The Seventh Circuit has directed courts to “interpret the removal statue narrowly and presume that the plaintiff may choose his or her forum. Any doubt regarding jurisdiction should be resolved in favor of [remand].” Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993). If it appears “at any time before final judgment that the district court lacks subject-matter jurisdiction, ” the case must be remanded to state court. 28 U.S.C. § 1447(c); Townsquare Media, Inc. v. Brill, 652 F.3d 767, 768 (7th Cir. 2011).

         1. Citizenship of the Parties

         In order for jurisdiction to be founded on diversity of citizenship, there must be complete diversity-no plaintiff can be a citizen of the same state as any defendant. 28 U.S.C. § 1332 (a). The parties agree that the Plaintiff is a citizen of Indiana, but they disagree about the citizenship of the Defendant. Relying on provisions of 28 U.S.C. §§ 1332 and 1441, the Plaintiff argues that this is a “direct action” against Illinois Farmers Insurance Company who is allegedly standing in the shoes of the insured tortfeasor-Nancy J. Williamson-who was a citizen of Indiana, thus defeating diversity.

         Pursuant to 28 U.S.C. § 1332, a corporation is deemed “to be of a citizen of every State . . . by which it has incorporated and of the State . . . where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). The statute contains the following exception:

[I]n any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of every state . . . which the insured is a citizen; every State . . . by which the insurer has been ...

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