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Pinkham v. State Farm Mutual Automobile Insurance Co.

United States District Court, W.D. Washington, Tacoma

May 31, 2018

JOSEPH PINKHAM, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

          ORDER ON PLAINTIFF'S MOTION TO REMAND TO STATE COURT

          ROBERT J. BRYAN United States District Judge

         THIS MATTER comes before the Court on Plaintiff's Motion to Remand to State Court. Dkt. 8. The Court has considered the motion, Defendant's Response (Dkt. 9), Plaintiff's Reply (Dkt. 11), and the remainder of the file herein.

         Plaintiff seeks remand of this case, which was removed on diversity jurisdiction grounds. Plaintiff argues that Defendant has failed to meet procedural requirements for timeliness of removal and that the amount in controversy threshold has not been met. Dkt. 8 at 1. The parties do not dispute diversity of citizenship. Plaintiff also seeks an award of cost and fees. Id.

         A. Timeliness.

         Plaintiff filed the case in Thurston County Superior Court on February 20, 2018. A date stamp of March 9, 2018, 2pm on the Complaint details the timeframe of “ACCEPTED SOP” by the Washington Insurance Commissioner. Dkt. 1 at 9. The Notice of Service of Process, a document generated by Corporation Service Company (CSC), Defendant's service of process agent, affirms the March 9, 2018 date of “original” service of process on the Commissioner. Dkt. 10 at 7. The Notice of Service of Process also notes an additional date, March 19, 2018, as the “Date Served on CSC, ” when CSC received service “via certified mail” on Defendant's behalf. Id. at 1, ¶2; Id. at 7. “20 days” is noted as the “Answer or Appearance Date” on the Notice of Service of Process. Defendant removed the case to federal court on April 18, 2018. Dkt. 1 at 3.

         Defendant is an insurance agency incorporated under the laws of the State of Texas, with its principal place of business in Illinois. Dkt. 1 at 3.

         28 U.S.C. § 1446 governs the procedure for the removal of civil actions. By statute, a “notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b)(1).

         The parties agree that the case was removed on April 18, 2018, but they disagree as to whether the 30 day clock should run from service of process on the Commissioner, on March 9, 2018, or on CSC, on March 19, 2018. If service of process runs from the former, removal was untimely.

         Resolving this issue turns on the sufficiency of the service of process. “The sufficiency of service of process prior to removal is strictly a state law issue.” Lee v. City of Beaumont, 12 F.3d 933, 937 (9th Cir. 1993), overruled on other grounds by Cal. Dep't of Water Resources v. Powerex Corp., 533 F.3d 1087 (9th Cir. 2008). Under Washington law:

Each authorized foreign or alien insurer must appoint the commissioner as its attorney to receive service of, and upon whom must be served, all legal process issued against it in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes service upon the insurer. Service of legal process against the insurer can be had only by service upon the commissioner, except actions upon contractor bonds pursuant to RCW 18.27.040, where service may be upon the department of labor and industries.

RCW 48.050.200(1) (emphasis added).

         Applying Washington law, Defendant is undisputedly a foreign insurer, so RCW 48.050.200(1) applies. By statute, service of process “must” be on the Commissioner, which in this case, was on March 9, 2018. The 30 day clock ran from March 9, 2018 and thus elapsed prior to removal on April 18, 2018.

         Perhaps anticipating this result, Defendant points to the general “receipt” language in § 1446(b)(1) (“30 days after the receipt by the defendant, by service or otherwise”), arguing that Defendant “received” service of process on March 19, 2018 via certified mail. Dkt. 9 at 3, 4, citing to Dkt. 10 at 7. This argument ignores recent on-point Washington precedent, which controls. The Washington State Supreme Court answered, in the affirmative, the following certified question:

Do RCW 4.28.080(7)(a), RCW 48.02.200, and RCW 48.05.200 establish service through the Washington State Insurance Commissioner as a uniform and exclusive means of service for authorized ...

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