Bullock v. Almon

MARY BULLOCK PLAINTIFF v. JANICE ALMON AND SHELTER MUTUAL INSURANCE CO. DEFENDANTS

Civil Action No. 4:21-CV-57-JHM

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

August 5, 2021

MEMORANDUM OPINION AND ORDER

Joseph H. McKinley Jr., United States District Court Senior Judge

This matter is before the Court on Mary Bullock's Motion to Remand and for Attorney's Fees. [DN 7]. Fully briefed this matter is ripe for decision. For the following reasons Bullock's Motion to Remand is GRANTED and Motion for Attorney's Fees is DENIED.

I. Background

On February 7, 2017, Mary Bullock and Janice Almon were involved in a motor vehicle collision in Hopkins County, Kentucky. [DN 14-1 at 2]. Chris Bullock (as parent and next friend of Mary Bullock) sued Almon and Safeco Insurance Company of Illinois in Hopkins Circuit Court. [Id. at 1]. Bullock alleged that Almon was negligent under common law and K.R.S §§ 189.290(1), 189.390(2), K.R.S. § 446.070. [Id. at 3]. Bullock also alleged that she was entitled to underinsured motorist benefits that Safeco provided to Chris Bullock. [Id.]. On May 30, 2019, a jury found that Almon “failed to operate her vehicle with ordinary care for the safety of other persons and vehicles using the highway, and that such failure was a substantial factor in causing the collision with Mary Bullock's automobile.” [DN 14-5 at 2]. The jury also found that Bullock “operat[ed] her vehicle with ordinary care for the safety of other persons and vehicles using the highway, and that [her actions were not] a substantial factor in causing the collision with Janice Almon's automobile.” [Id. at 3]. The Hopkins Circuit Court entered a judgment on July 18, 2019 ordering Almon to pay $81, 539.80 to Bullock. [Id. at 4]. When Almon appealed the judgment [DN 14-3], it was affirmed on July 17, 2020 [DN 1-2 at 2, DN 14 at 2]. Then, on December 8, 2020, the Hopkins Circuit Court “entered an order allowing for the recovery of Plaintiff's costs in the amount of $3, 640.99, post-judgment interest accrued in the amount of $7, 038.08, and declaring that the total judgment amount of $92, 318 (as of that date) shall bear six percent (6%) interest, compounded annually, until paid.” [DN 1-2 at 3]. Almon did not appeal the December 8, 2020 order. [Id.].

At the time of the collision, Almon had an insurance policy with Shelter. [Id.]. The policy allegedly covers Almon “in the amount of $50, 000 per person, $100, 000 per accident.” [Id. at 3]. Bullock filed this suit against Almon and Shelter on April 9, 2021 in the Hopkins Circuit Court. [Id. at 1]. She has alleged six counts: (1) Enforcement of the July 18, 2019 Judgment and December 8, 2020 Order Against Janice Almon and Violation of Kentucky Uniform Voidable Transactions Act, (2) Enforcement of the July 18, 2019 and December 8, 2020 Order Against Shelter, (3) Statutory Bad Faith Against Shelter for Violations of the Kentucky Unfair Claims Settlement Practices Act, (4) Common Law Bad Faith Against Shelter, (5) Violation of K.R.S. § 304.12-235 Against Shelter, and (6) Punitive Damages Against Shelter. [Id. at 4-9].

Bullock says that the day before Shelter removed this case to federal court, it “tendered a check to plaintiff in the amount of $52, 452.70 toward the indebtedness of itself and its insured.” [DN 7 at 4]. On May 26, 2021, Shelter removed the case to this Court under diversity jurisdiction. [DN 1]. Shelter claims that diversity of citizenship exists between it and Bullock, and that the amount in controversy exceeds $75, 000. [Id. at 3-4]. And although Almon is a Kentucky citizen, Shelter argues that Almon's citizenship does not destroy diversity jurisdiction because Bullock fraudulently joined her. [Id. at 4]. Bullock has now moved to remand the case to Hopkins Circuit Court and seeks attorney's fees. [DN 7]. She argues that the case should be remanded because the removal is untimely, the notice of removal is defective, and Almon is not a fraudulently joined party. [DN 7 at 15-17, 5-8, 8-14].

II. Standard of Review

Removal from state to federal court is proper for “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). Shelter removed this action under 28 U.S.C. § 1441, claiming that this Court has diversity jurisdiction over the action under 28 U.S.C. § 1332. Diversity jurisdiction gives “[t]he district courts . . . original jurisdiction [over] all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different states.” 28 U.S.C. § 1332(a), (a)(1).

III. Discussion

A. Motion to Remand

1. Was the notice of removal timely filed?

Bullock argues that Shelter's removal was not timely because “more than 30 days elapsed from the time Shelter was served with the summons and complaint . . . .” [DN 7 at 15]. 28 U.S.C. § 1446(b)(1) describes the requirements for a defendant to file a notice of removal:

The 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, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

In explaining 28 U.S.C. § 1446(b), the Supreme Court in Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999) held that “a named defendant's time to remove is triggered by simultaneous service of the summons and complaint, or receipt of the complaint, ‘through service or otherwise,' after and apart from service of the summons, but not by mere receipt of the complaint unattended by any formal service.”

When determining “the validity of service in state court prior to the defendant's removal, ” Kentucky law applies. Ashford v. Bollman Hat Co., 10-192-JBC, 2011 WL 127153 (E.D. Ky. Jan. 14, 2011). And under Murphy Brothers, “the thirty day removal period is triggered by the completion of formal process under Kentucky law and the actual receipt of the complaint by Defendant [Shelter].” Whelan v. Dollar Gen. Corp., No. 3:11-cv-495-CRS, 2012 WL 1947179, at *3 (W.D. Ky. May 30, 2012).

Because Shelter is an out-of-state defendant, it was served via Kentucky's long-arm statute under K.R.S. § 454.210(3), which provides:

(b) The clerk of the court in which the action is brought shall issue a summons against the defendant named in the complaint. The clerk shall execute the summons either by:

1. Sending by certified mail two (2) true copies to the Secretary of State and shall also mail with the summons two (2) attested copies of plaintiff's complaint; or

2. Transmitting an electronically attested copy of the complaint and summons to the Secretary of State via the Kentucky Court of Justice electronic filing system.

(c) The Secretary of State shall, within seven (7) days of receipt thereof in his office, mail a copy of the summons and complaint to the defendant at the address given in the complaint. The letter shall be posted by certified mail, return receipt requested, and shall bear the return address of the Secretary of State. The clerk shall make the usual return to the court, and in addition the Secretary of State shall make a return to the court showing that the acts contemplated by this statute have been performed, and shall attach to his return the registry receipt, if any. Summons shall be deemed to be served on the return of the Secretary of State and the action shall proceed as provided in the Rules of Civil Procedure.

K.R.S. § 454.210(3) (emphasis added). The Secretary of State mailed a copy of the summons and complaint on April 20, 2021. [DN 14-8]. Then, on April 26, 2021, the Secretary of State made its statutorily required return to the court showing that the acts contemplated by the statute had been performed. [Id.]. “[U]nder Kentucky law, it is clear that the return from the Secretary of State, and not the actual receipt by the defendant, is what establishes formal service and jurisdiction.” Whelan, 2012 WL 1947179, at *3; Travelers Prop. Cas. Co. of Am. v. Rapid Power, No. 5:12-cv-00038-R, 2012 WL 1252574, at *2 (W.D. Ky. Apr. 13, 2012) (“Under the long-arm statute, a party is not deemed served until the Secretary of State files a return of service.”). Thus, formal service of process upon Shelter was completed under Kentucky law on April 26, 2021.

Bullock argues that because Shelter received both the summons and complaint on April 23, 2021, its removal on May 26, 2021 was untimely. [DN 7 at 15]. In its notice of removal, Shelter claims that it was served with the complaint “[o]n or about April 23, 2021 . . . via the Kentucky long-arm statute.” [DN 1 at ¶ 2]. The key here is that Shelter was not formally served on April 23, 2021 as required under Murphy. See Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347 (1999)(“We read Congress' provisions for removal in light of a bedrock principle: An individual or entity named as a defendant is not obliged to engage in litigation unless notified of the action, and brought under a court's authority, by formal process.”).

Bullock attempts to support her argument by claiming that Courtney Southers v. Appalachian Reg'l Healthcare Inc., No. 7:20-CR-126, 2021 WL 1250315 (E.D. Ky. Apr. 5, 2021) offers a different reading of Murphy than the courts in the Western District of Kentucky. [DN 7 at 16]. In Southers, the defendant, a Kentucky citizen, removed the case to federal court and had been formally served the complaint and summons via certified mail...