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Hall v. Taylor

United States District Court, E.D. Kentucky, Central Division, Frankfort

January 6, 2017

JOSEPH DANIEL HALL & MAGO CONSTRUCTION COMPANY, LLC, Plaintiff,
v.
CHARLES S. TAYLOR, et al., Defendants. and KENTUCKY ASSOCIATES GENERAL CONTRACTOR'S SELF-INSURER'S FUND, Intervening Plaintiff,

          OPINION & ORDER

          GREGORY F.VAN TATENHOVE UNITED STATES DISTRICT JUDGE.

         28 U.S.C. § 1446(b)(3) explains what to do when a state court action that was not initially removable somehow becomes removable later on in the lawsuit. Specifically, the statute allows for an action to be removed within thirty days after the defendants to the suit receive “through service or otherwise, 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.”

         In this case, the parties challenge the meaning of the phrase “other paper.” Defendants obtained knowledge that all actual parties to the lawsuit were completely diverse through a post-complaint letter but believed that letter did not trigger § 1446(b)(3). Once a more official notice was filed in the record, they removed to this Court. Plaintiffs now contend the thirty-day deadline to remove the case runs from the date of the post-complaint letter, and they argue Defendants' notice of removal is untimely. For the reasons that follow, the Court finds in favor of Plaintiffs and GRANTS their motion to remand.

         I

         A

         This personal injury action was initially filed in Kentucky state court. Mr. Hall was operating an asphalt paving machine on the side of a highway in Anderson County when Defendant Charles Taylor, who was driving an interstate tractor-trailer, crashed into him. Hall and the owner of the asphalt paving machine, the Mago Construction Company, filed a lawsuit against Charles Taylor and Kirk Nationalease, the owner of the tractor-trailer. [R. 1-3.] The Plaintiffs later amended their complaint to include AK Industries, Inc., as a defendant. By information and belief, the tractor-trailer involved in the collision was owned by Kirk Nationalease but leased by AK Industries. [R. 1-4.]

         Turns out, there are two AK Industries, Inc. One has an office in Lexington, Kentucky, and the other is an unrelated Indiana corporation. [Compare Id. with R. 1-5; see also R. 1-1.] Plaintiffs meant to sue only the Indiana AK Industries, but both corporations were accidently served with the complaint.[1] [See R. 1-1.] The Indiana AK Industries obtained the same counsel as Defendant Charles Taylor and, along with Mr. Taylor, filed an answer to the complaint. [R. 1-10.] But before anyone could get in touch with the Kentucky AK Industries to explain the mistake, the Kentucky corporation also filed an answer. [R. 1-11; see also R. 1-1 at 3.]

         Subsequently, Plaintiffs' counsel sought to clarify the matter by reaching out to the two AK Industries' attorneys. In a letter dated July 28, 2016, attorney Michelle Buckley Sparks informed the Kentucky AK Industries lawyer Jeffrey A. Taylor that his corporation was served in error. [See R. 1-1 at 3-4.] The letter indicated Plaintiffs' counsel had spoken with the Indiana AK Industries lawyer Jillian House and that Ms. House agreed there was no need for Jeffrey Taylor or the Kentucky AK Industries to participate in the lawsuit. [Id. at 3.] A copy of the letter was also sent to Ms. House. [Id. at 4.] Nothing was filed in the Anderson Circuit Court record explaining the mishap at that time. However, going forward, the Indiana AK Industries participated in discovery, but the Kentucky AK Industries did not.[2] [Id. at 1.]

         On October 11, 2016, Plaintiffs' counsel filed a notice of clarification, formally explaining the AK Industries mix-up but noting the Indiana corporation had answered the complaint, propounded discovery, and responded to discovery requests as it should. [R. 1-1 at 1.] The July 28 letter to Jeffrey Taylor was filed along with the notice. [Id. at 3-4.] Ten days later, Defendants removed the case to federal court on the basis of diversity jurisdiction. [R. 1.]

         The question before the Court is in great part one of timing. Defendants maintain the case could not be removed until the notice of clarification was filed in the record, because complete diversity of parties could not be established without that “official filing.” [R. 13 at 3.] But Plaintiffs insist the July 28 letter, which all parties received, was sufficient to prove complete diversity. Plaintiffs' theory renders the notice of removal untimely and requires remand.

         B

         In general, a defendant may remove a civil action brought in state court to federal court only if the action is one over which the federal court could have exercised original jurisdiction. See 28 U.S.C. §§ 1441, 1446. This Court has original diversity jurisdiction over all civil actions in which “the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and the dispute is between” parties who are “citizens of different states.” See 28 U.S.C. § 1332(a)(1).

         In order for diversity jurisdiction to attach, “all parties on one side of the litigation [must be] of a different citizenship from all parties to the other side of the litigation.” Coyne v. Amer. Tobacco Co., 183 F.3d 488, 492 (6th Cir. 1999) (quoting SHR Ltd. Partnership v. Braun, 888 F.2d 455, 456 (6th Cir. 1989)). When removal is based on diversity of the parties, the removing defendant has the burden to prove the diversity requirements are satisfied by a preponderance of the evidence. Everett v. Verizon Wireless, Inc., 460 F.3d 818, 829 (6th Cir. 2006). If a case is not removable based on its initial pleadings but later becomes removable, 28 U.S.C. § 1446(b)(3) requires the notice of removal to be filed within thirty days after the defendant receives “through service or otherwise, a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one ...


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