United States District Court, W.D. Kentucky, Louisville Division
For Linda Graves, Plaintiff: Michael D. Grabhorn, LEAD ATTORNEY, Grabhorn Law Office, PLLC, Louisville, KY.
For Standard Insurance Company, Defendant: Angela Logan Edwards, LEAD ATTORNEY, Dinsmore & Shohl LLP - Louisville, Louisville, KY; Jacqueline J. Herring, Warren S. von Schleicher, LEAD ATTORNEY, Smith von Schleicher & Associates, Chicago, IL.
MEMORANDUM OPINION AND ORDER
John G. Heyburn II, Senior United States District Judge.
Linda Graves and Standard Insurance Company disagree over whether this case should be in federal court, mostly because they disagree over when Standard had sufficient information to require removal under 28 U.S.C. § 1446. Graves, a Kentuckian, filed Kentucky state law claims against Standard--a corporation incorporated in Oregon with its principal place of business in Portland, Oregon--in Jefferson Circuit Court. The case proceeded for several months before Standard removed to this Court on diversity jurisdiction. Standard argues that earlier removal was not required
because it was not yet clear that the necessary jurisdictional amount was met. Graves argues that Standard waited too long to remove and therefore seeks remand to state court.
For the reasons that follow, the Court concludes that Standard did not have sufficient information that would require removal within thirty (30) days of the initial complaint.
The facts are straightforward. Linda Graves had a long term disability insurance policy with Standard. While covered under the policy, she became disabled and entitled to monthly benefits. A former school bus driver, the 51 year-old Graves' disability was due to neck pain, back pain, and cervical fusion surgery. At first, Standard approved her claim and paid her disability insurance benefits for the next twenty-four months. After this twenty-four month period, the definition of " disability" in her policy became more stringent, and Standard refused to continue paying her monthly disability income, believing she did not qualify as " disabled" under the more rigid standard.
Four months later, Graves sued for her missing disability benefits, which at that point were worth less than $6,800. She sought damages for (1) breach of contract; (2) breach of the duty of good faith and fair dealing; (3) statutory bad faith; (4) violation of Kentucky's consumer protection act; and (5) unjust enrichment. She also sought punitive damages. Initially, Standard did not remove her complaint to federal court. Thinking that her case was worth less than $6,800--the amount of benefits payments she alleged Standard owed her--Standard believed the case was not removable because it fell short of the federal jurisdictional minimum.
Instead, the two parties litigated at length in state court. Motions were filed and briefed; discovery proceeded. After over five months of litigation--and after Graves responded to an interrogatory saying she valued her claim at $883,000 or more--Standard removed to federal court. Graves opposes removal and desires remand to state court. Not only does she assert that Standard's removal was untimely, she also argues that Standard has forfeited its right to remove and has failed to show by a preponderance of the evidence that the required jurisdictional minimum is met in this case.
" When considering a motion to remand, the Court must examine whether the case was properly removed to federal court." Shawver v. Bradford Square Nursing, LLC, No. 3:09-02-DCR, 2009 WL 971463, at *1 (E.D. Ky. Apr. 9, 2009) (citing Coyne ex rel. Ohio v. Am. Tobacco Co., 183 F.3d 488, 492 (6th Cir. 1999)). Where removal is based on diversity jurisdiction--as here--the amount in controversy must exceed $75,000. 28 U.S.C. § 1332 (2012). The removing party must file within thirty days of receiving the initial complaint, unless it is unclear that the claims are worth $75,000. Then, defendants may remove within thirty days of receiving " an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b)(3) (2012). Discovery responses are considered " other paper" under the relevant statute. 28 U.S.C. § 1446(c)(3)(A). The party seeking removal carries ...