Duran v. Doe

1

ANTHONY DURAN, Plaintiff, v. JOHN DOE, Defendant.

Civil Action No. 1:23-CV-2624-TWT

United States District Court, N.D. Georgia, Atlanta Division

November 2, 2023

OPINION AND ORDER

THOMAS W. THRASH, JR.,UNITED STATES DISTRICT JUDGE.

This is an insurance settlement dispute. It is before the Court on the Plaintiff Anthony Duran's Motion for Sanctions [Doc 3] and Motion to Dismiss Movant Allstate Casualty Insurance Company's Counterclaim [Doc. 4], as well as the Movant Allstate's Motion for Default Judgment [Doc. 9] and Motion to Strike the Plaintiff's Answer [Doc. 15]. For the reasons set forth below, the Plaintiff Anthony Duran's Motion for Sanctions [Doc. 3] and the Movant Allstate's Motion for Default Judgment [Doc. 9] are DENIED. The Plaintiff's Motion to Dismiss Movant Allstate Casualty Insurance Company's Counterclaim [Doc. 4] is GRANTED. Allstate's Motion to Strike the Plaintiff's Answer [Doc. 15] is DENIED as moot.

I. Background

This action originated in Fulton County State Court. The Plaintiff Anthony Duran filed his Complaint against John Doe, alleging that he was involved in a car accident in September 2022 in Fulton County where the other driver fled the scene and was never identified. (Notice of Removal, Ex. A (“Complaint”) ¶¶ 2-3). The Complaint noted that Allstate was the Plaintiff's uninsured motorist carrier and asserted claims for negligence against John Doe and for uninsured motorist coverage against Allstate. (Compl. ¶¶ 3, 5-13). Allstate removed this action to federal court on June 12, 2023 and filed an Answer on June 20, 2023. The Answer included a counterclaim alleging that the parties had reached a settlement agreement for Allstate to pay out the entirety of the $100,000.00 uninsured motorist policy limits under the Plaintiff's policy, but that the Plaintiff's counsel had refused to provide a W-9 to allow Allstate to issue the payment. (Answer at 7-10). The Plaintiff filed a Motion for Sanctions on July 12, 2023, asserting that Allstate had improperly removed the action to this Court and seeking remand and attorney's fees. [Doc. 3]. On July 25, 2023, the Plaintiff moved to dismiss Allstate's counterclaim. [Doc. 4]. On August 7, 2023, Allstate moved for default judgment as to the Plaintiff, arguing that the Plaintiff had failed to answer the counterclaim and his Motion to Dismiss was not timely filed. [Doc. 9]. The Plaintiff filed an Answer to the counterclaim on September 18, 2023, and Allstate moved to strike the Plaintiff's Answer as untimely on October 10, 2023. [Doc. 15]. The Court will address each pending Motion in turn.

II. Discussion

A. Motion for Sanctions

In an action that has been removed to federal court, a district court must remand the case to state court if it lacks subject matter jurisdiction. See 28 U.S.C. § 1447(c). The determination of the court's subject matter jurisdiction is, and must be, the first inquiry in the removal context. See Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999). 28 U.S.C. § 1332(a) provides one jurisdictional hook in removal cases: even absent a federal question, diversity jurisdiction can be invoked on removal if there is complete diversity among the parties and the amount in controversy is more than $75,000. The Court is required to ignore fictitious defendants in conducting the diversity jurisdiction analysis in removal cases. 28 U.S.C. § 1441(b)(1).

The defendant bears the burden of proving that it is entitled to have the case heard in federal court. Fowler v. Safeco Ins. Co. of Am., 915 F.2d 616, 617 (11th Cir. 1990). The burden on the removing party is a “heavy one.” Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997) (quoting B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. Unit A 1981)). In keeping with their limited authority, federal courts “strictly construe the right to remove and apply a general presumption against the exercise of federal jurisdiction, such that all uncertainties as to removal jurisdiction are to be resolved in favor of remand.” Scimone v. Carnival Corp., 720 F.3d 876, 882 (11th Cir. 2013) (brackets omitted).

Georgia's uninsured motorist statute requires a Plaintiff involved in an accident with an uninsured motorist to initiate a suit for the uninsured motorist benefits of an insurance policy against a John Doe defendant, while also serving a copy of the complaint in the action on the insurance carrier. O.C.G.A. § 33-7-11(d). The insurance company then has the right “to file pleadings and take other action allowable by law in the name of ‘John Doe' or itself.” Id. The Georgia Court of Appeals has noted that answering in its own name results in the insurance company taking on the status of a “named party defendant” to the action. See Maxwell v. State Farm Mut. Auto. Ins. Co., 196 Ga.App. 545, 546 (11th Cir. 1990). “With that status comes the right to contest the liability, . . . [and] with the right to defend there must come the attendant risk of defeat, which would result in a judgment against the insurance carrier in favor of the insured for the amount the insured would be legally entitled to recover from the tortfeasor.” Id. The sole purpose for requiring the Plaintiff to sue John Doe is to keep the possibility of any insurance coverage a secret from the jury. See State Farm Mut. Auto. Ins. Co. v. Brown, 114 Ga.App. 650, 654-655 (1966). To that end, a recent case from this Court construed the insurance carrier's status in these actions to be that of an “unnamed defendant.” See Goolsby v. Farmers Ins., 2021 WL 2661547, at *3 (N.D.Ga. June 29, 2021).

In his Motion for Sanctions, the Plaintiff essentially argues that Allstate improperly removed this action to federal court both because Allstate is not a true defendant to this action and because under Georgia law, the John Doe defendant is regarded as a citizen of either the county where the accident occurred or the county of the Plaintiff's residence, and therefore the parties are not diverse. (Pl.'s Mot. for Sanctions, at 1-4). He also argues that he is entitled to attorney's fees and costs associated with the removal because Allstate lacked an objectively reasonable basis to remove this action to federal court. (Id. at 5-7). In response, Allstate argues that it was considered a defendant to the action under Georgia law and, because it is diverse from the Plaintiff, the removal was proper. (Allstate's Resp. in Opp. to Mot. for Sanctions, at 3-6).

The Court can easily dispense with one of the Plaintiff's arguments: the residency of the John Doe defendant is irrelevant to the removal inquiry. 28 U.S.C. § 1441(b)(1) (“In determining whether a civil action is removable on the basis of the jurisdiction under [28 U.S.C. §] 1332(a) . . . the citizenship of defendants sued under fictitious names shall be disregarded.”). The second argument-that Allstate is not a defendant to this action-is not as clear-cut, but the Court finds that Allstate was (and is) a defendant to this action. First, the Plaintiff listed Allstate as a defendant on the state court civil cover sheet, and referenced Allstate as a defendant in the Complaint, even though O.C.G.A. § 33-7-11(d) instructs plaintiffs not to name the insurance carrier as a defendant. [Doc. 1-1 at 2-3]. Allstate chose to answer in its own name, which it has a right to do. (Answer at 1); O.C.G.A. § 33-7-11(d). Doing so allowed Allstate to assume the status of a defendant to this action regardless of whether the Plaintiff actually named it as one, and to essentially step into the shoes of the John Doe defendant. See Maxwell, 196 Ga.App. at 546. Therefore, Allstate could properly remove this action to federal court as a defendant. See Goolsby, 2021 WL 2661547, at *1-3 (finding insurance defendant should continue as an unnamed defendant and noting that it had standing to remove the action).

The Plaintiff has made no argument that the requirements of diversity jurisdiction are not met with Allstate as a defendant, but the burden is on the defendant to demonstrate that removal was proper whenever remand is requested. Fowler, 915 F.2d at 617. Allstate has done so here. Allstate is incorporated in Illinois, with its principal place of business there as well. (Notice of Removal at 3). The Plaintiff is a citizen of Georgia. (Id. at 2). The Plaintiff is seeking the entirety of his $100,000.00 uninsured motorist policy limits from Allstate, satisfying the amount in controversy requirement. 28 U.S.C. § 1332(a), (c). Accordingly, the Court has diversity jurisdiction over this matter, Allstate properly removed this action, and the Plaintiff's Motion for Sanctions [Doc. 3] should be denied.

B. Motion for Default Judgment

“When a defendant has failed to plead or defend, a district court may enter judgment by default.” Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1244 (11th Cir. 2015) (citing Fed.R.Civ.P. 55(b)(2)). Where a plaintiff's claims are not for a sum certain or a sum that can be made certain by computation, the party must apply to the Court for a default judgment once the Clerk has first entered default. Fed.R.Civ.P. 55(a), (b). Entry of default judgment is at the discretion of the district court. Surtain, 789 F.3d at 1244; In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003). Because there is a strong policy in this circuit of determining cases on their merits, default judgments are viewed with disfavor. Surtain, 789 F.3d at 1244-45; In re Worldwide Web Sys., Inc., 328 F.3d at 1295.

Allstate argues that default judgment is warranted because the Plaintiff's Motion to Dismiss was not timely filed under Fed.R.Civ.P. 12. (Allstate's Mot. for Def. J., at 1-4). In response, the Plaintiff argues only that he overlooked the counterclaim in Allstate's answer and, once learning of it, he...