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Hiser v. Seay

United States District Court, W.D. Kentucky, Paducah Division

December 5, 2014

CLINT HISER, et al., Plaintiffs,
LAKIN H. SEAY, et al., Defendants.


THOMAS B. RUSSELL, Senior District Judge.

This matter is before the Court upon two motions. First, Plaintiffs Clint Hiser and Karen Hiser have filed a Motion to Remand. (Docket No. 13). Defendants Volkswagen De Mexico, S.A. de C.V., and Volkswagen Group of America, Inc. ("VW Defendants") have responded, Docket No. 15, and Plaintiffs have replied, Docket No. 16. Additionally, VW Defendants filed a Motion for Leave to File Sur-Reply to Plaintiffs' Motion to Remand. (Docket No. 19). Plaintiffs have responded, Docket No. 20, and the time for VW Defendants to reply has passed. These matters are now fully briefed and ripe for adjudication. VW Defendant's Request to File a Sur-Reply, (Docket No. 19), is GRANTED, and the Court has considered VW Defendant's arguments in their attached Sur-Reply, (Docket No. 19-1). For the following reasons, Plaintiffs' Motion to Remand is DENIED.


This litigation arises from an accident that occurred on December 21, 2011, in which Plaintiff Shelby Hiser sustained serious injuries and was paralyzed. Plaintiffs filed suit in the Union County Circuit Court on December 19, 2012 against the VW Defendants, as well as against Lakin Seay, Delores Seay, and the Kentucky Farm Bureau Mutual Insurance Company ("KFB"). The VW Defendants are not citizens or residents of Kentucky, but the Seays and the KFB are citizens or residents of Kentucky. The parties agree that the amount in controversy exceeds $75, 000.

On January 18, 2013, the Seays's insurer offered to pay its policy limits of $50, 000 in full settlement of claims against the Seays. Docket No. 15-2. On January 23, 2013, the Plaintiffs' counsel sent a letter to KFB's counsel, stating that the Seays were offering to settle with their policy limits and asking KFB to pay its underinsured motorist policy limits of $100, 000. Id. Plaintiffs invoked Coots v. Allstate, 853 S.W.2d 895 (Ky. 1993), which establishes a procedure where an underinsured motorist carrier (here, KFB) can elect to tender its policy limits upon notification that the plaintiff has settled with the underinsured tortfeasor (here, the Seays). Docket No. 15. On January 28, 2013, KFB's counsel responded that his client was prepared to tender its policy limits as long as certain conditions were met. Id.

Because the Plaintiff was a minor, Plaintiffs sought approval of the settlement from the Henderson District Court on April 18, 2013; the settlement was approved, but a dispute later arose because the Plaintiffs had not actually accepted the Seays' settlement offer yet, a necessary precursor step under the Coots framework. Id. The Crittenden Circuit Court denied the Plaintiffs' Motion to Enforce Settlement Agreement on July 11, 2013, because the agreement with KFB was predicated on the Plaintiffs' need to first settle with the Seays. Id. After this however, both the Seays and KFB remained willing to pay their policy limits. VW Defendants attach the affidavit of David T. Schaefer, an attorney who alleges that at a settlement conference on March 21, 2014, Plaintiffs' counsel stated that he would not accept the policy limits from the Seays yet because it would allow the VW Defendants to remove the case to federal court. Docket No. 15-5. Schaefer alleges that counsel also noted that because the VW Defendants were served several months after the case was filed, he thought that the statutory one-year deadline had not yet expired. Id.

On August 6, 2014, counsel for the VW Defendants received emails which stated that Plaintiffs had accepted the policy limits and were settling with the Seays and KFB. Docket No. 15-6. On August 26, 2014, the VW Defendants filed their Notice of Removal. Plaintiffs now move to remand the action to the Crittenden County Circuit Court under 28 U.S.C. s. 1446(c) and on the grounds that more than one year passed between the commencement of the action and the Notice of Removal.


Removal is proper in "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). An action "may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." Id. Under 28 U.S.C. § 1446, when a case not originally removable to federal court becomes removable, "a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of 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). 28 U.S.C. s. 1446(c)(1) bars removal of a case to federal court more than 1 year after the commencement of an action, unless the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action.

Following the filing of a notice of removal, a plaintiff may move to remand the case "on the basis of any defect other than lack of subject matter jurisdiction" within thirty days. 28 U.S.C. § 1447(c). Finally, "[t]he removal petition is to be strictly construed, with all doubts resolved against removal." Her Majesty the Queen in Right of Province of Ontario v. Detroit, 874 F.2d 332, 339 (6th Cir. 1989) (citations omitted).


1) VW Defendants' properly removed this case to federal court under 28 U.S.C. § 1446.

a. VW Defendants' removal was timely under 28 U.S.C. § 1446(b)(3).

Plaintiffs first argue that VW Defendants' removal was not proper because on August 26, 2014, when the Defendants filed their Notice of Removal, the Seays and the KFB had not been yet dismissed from the case. Docket No. 13. The Plaintiffs argue that the state court lost diversity when the Notice was filed, and that the Seays and the KFB are still Defendants in this action, destroying diversity jurisdiction.[1] Docket No. 13. In response, Defendants state that they received notice through e-mail on August 6, 2014 that the Plaintiffs agreed to settle with the Seays and the KFB. Docket No. 15. Defendants attach those e-mails. Docket No. 15-6. Defendants argue that ...

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