In Rhone
v. Cenlar Agency, Inc., 2014 U.S. Dist. LEXIS 38251 (N.D. Ala. Mar. 24,
2014), on November 26, 2012, in the Circuit Court of Tuscaloosa County,
Alabama, Rhone sued Cenlar, asserting a single cause of action, namely,
conversion of insurance proceeds, and seeking damages well below $75,000. Cenlar filed a motion for summary judgment
which, after a hearing, was denied on June 4, 2013. On June 5, 2013, at Cenlar’s request, Rhone
e-mailed Cenlar a copy of a proposed Second Amended Complaint which included
new claims of unjust enrichment, wrongful foreclosure and estoppels and
requested punitive and mental anguish damages; Rhone asked Cenlar if it would
oppose the amended complaint. On June
14, 2013, Rhone e-mailed a settlement demand, in excess of $75,000, which was
based on the proposed amended complaint.
After Cenlar indicated that it would oppose the proposed amendment, on
June 27, 2013, Rhone filed a Motion for Leave to file a Second Amended
Complaint. On July 11, 2013, Cenlar
withdrew its opposition and, on July 12, 2013, the trial court granted Rhone’s
Motion to Amend. On July 23, 2013,
Cenlar filed a notice of removal.
Rhone
unsuccessfully contended that the removal was untimely. Rhone suggested that the 30-day window to
timely remove began to run on June 5th, the e-mailing of a copy of
the proposed amendment, or on June 14th, the e-mailing of the
settlement demand. District Judge
Blackburn found that the time could only start running when the state court
granted the Motion to Amend because only then was there the unambiguous
establishment of federal jurisdiction.
Rhone
also unsuccessfully contended that Cenlar had waived its right to remove. This contention was predicated on Cenlar’s
activities in the state court prior to the granting of the Motion to Amend. There was no “clear and unequivocal” waiver
of the right to remove if that right was not available to Cenlar. Until the granting of the Motion to Amend,
the single-count conversion lawsuit was not properly removable. After the granting of the Motion to Amend,
Cenlar engaged in no activities in state court which would constitute a waiver
of its right to remove a matter which recently became removable.
In
Broadway v. State Farm Mut. Auto. Ins.
Co., 2014 U.S. Dist. LEXIS 35665 (M.D. Ala. Mar. 19, 2014), Broadway was
injured in a traffic accident caused by Channell. Channell had only $25,000 in liability
coverage. Under his State Farm policy,
Broadway had $25,000 in UIM coverage.
With State Farm’s express permission, Broadway settled with Channell and
his liability insurer and received $25,000.
State Farm waived its subrogation rights as to Channell in regard to
Broadway’s claim for UIM benefits with State Farm. Yet, State Farm refused to pay more than
$5,000 in UIM benefits.
In
the Circuit Court of Montgomery County, Alabama, Broadway sued State Farm and
Anderson, the agent who sold Broadway the subject State Farm policy. Against State Farm alone, Broadway asserted
claims of breach-of-contract and bad faith.
Against State Farm and Anderson, Broadway asserted a fraud-based
claim. The opinion addressed both
Broadway’s motion to remand and State Farm’s motion to dismiss.
In
the notice of removal, State Farm asserted that Anderson had been fraudulently
joined because Broadway had no viable claim against Anderson. District Judge Fuller concluded that Alabama
procedural law, and not federal procedural law, in particular, the Twombly/Iqbal, would apply in
determining whether an Alabama state court would possibly recognize Broadway’s
fraud claim under Alabama’s rule that a failure to state a claim is appropriate
only when it appears beyond doubt that the plaintiff can prove no set of facts
in support of the claim that would entitle the plaintiff to relief. Broadway’s fraud claim was predicated on
State Farm’s “Good Neighbor” advertising slogan and Broadway’s allegation that
he relied on this slogan in deciding to purchase the policy. District Judge Fuller found that “an
advertising slogan such as this is patently insufficient to state a cause of
action for fraud in Alabama” because the slogan is mere opinion or puffery, and
not a statement of fact.
State
Farm’s Rule 12(b)(1)-based motion to dismiss was denied. State Farm unsuccessfully contended that
there was no subject matter jurisdiction because Broadway’s claims of breach of
contract and bad faith were not ripe because there was a dispute as to the
amount of UIM benefits to which Broadway was entitled. District Judge Fuller found that Broadway had
alleged sufficient facts to overcome a facial attack to subject matter
jurisdiction. Broadway alleged both that
State Farm refused to pay him any more than $5,000 and that he was entitled to
the full $25,000 in available UIM coverage and that State Farm had no basis for
not paying him the full $25,000.
District Judge Fuller distinguished scenarios in which the UIM carrier
had yet to make any decision because he had requested additional information,
such a medical records, and the insured had not provided the requested
information. In those scenarios, the
insured’s claims were not ripe. While
there was a “dispute” between Broadway and State Farm as to what amount of UIM
benefits were actually due, this dispute was ripe for judicial resolution given
that State Farm was not waiting for additional information but had made a
rather “definitive” decision that it was obligated to pay only $5,000 in UIM
benefits.
