Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-00667/USCOURTS-casd-3_19-cv-00667-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441in Removal- Insurance Contract

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19-CV-667-CAB-BGS

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

BORIS GROYSMAN and SUSANNA 

GROYSMAN,

Plaintiffs,

v.

LIBERTY INSURANCE 

CORPORATION et al.,

Defendants.

Case No.: 19-CV-667-CAB-BGS

ORDER GRANTING MOTION TO 

REMAND AND AWARDING 

ATTORNEYS’ FEES

[Doc. No. 5]

This matter is before the Court on Plaintiff’s motion to remand. The motion has 

been fully briefed, and the Court deems it suitable for submission without oral argument. 

For the following reasons, the motion is granted and this case is remanded to San Diego 

County Superior Court.

I. Timeliness of the Notice of Removal

On March 19, 2018, Plaintiff filed this insurance coverage lawsuit in San Diego 

County Superior Court, alleging that Defendants breached Plaintiffs’ condominium 

insurance policy by failing to pay policy benefits for flooding and mold in Plaintiffs’ 

condominium unit. More than a year later, on April 10, 2019, Defendant Liberty Insurance 

Corporation removed the lawsuit to this Court. The notice of removal contends that there 

is subject matter jurisdiction based on diversity pursuant to 28 U.S.C. § 1332, and that the 

removal is timely under 28 U.S.C. § 1446(b)(3), which provides:

Except as provided in subsection (c), if the case stated by the initial pleading 

is not removable, a notice of removal may be filed within 30 days after receipt 

by the defendant, through service or otherwise, of a copy of an amended 

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pleading, motion, order or other paper from which it may first be ascertained 

that the case is one which is or has become removable.

28 U.S.C. § 1446(b)(3). 

Plaintiffs now move to remand on the grounds that removal was untimely based on 

subsection (c) of section 1446, which provides:

Requirements; removal based on diversity of citizenship.--(1) A case may 

not be removed under subsection (b)(3) on the basis of jurisdiction conferred 

by section 1332 more than 1 year after commencement of the action, unless 

the district court finds that the plaintiff has acted in bad faith in order to 

prevent a defendant from removing the action.

28 U.S.C. § 1446(c). In its opposition, Defendant argues that the complaint was removable 

when it was initially filed, and that therefore, under Ritchey v. Upjohn Drug Company, 139 

F.3d 1313 (9th Cir. 1998), the one year deadline under subsection (c)(1) does not apply. 

Ritchey, however, “stands for the proposition that 28 U.S.C. § 1446(c)(1)’s one-year 

deadline applies to cases that become removable; where Defendant removes the case 

pursuant to 28 U.S.C. § 1446(b)(3).” Danzig v. The End Records, Inc., No. 

218CV05936ODWJCX, 2018 WL 4859261, at *2 (C.D. Cal. Oct. 4, 2018). In the notice 

of removal, Defendant stated that it was removing the case pursuant to subsection (b)(3), 

contending that the case became removable upon receipt of a settlement demand from 

Plaintiff on March 11, 2019. Thus, based on the notice of removal, and pursuant to Ritchey, 

subsection (c)(1)’s one year deadline applies.

Now, however, in a misguided attempt to avoid the one year deadline of subsection 

(c)(1), Defendant takes the position that the case did not “become removable” on March 

11, 2019; it was removable at inception. Yet, “because initially removable cases can only 

rely on (b)(1)’s initial thirty-day window[

1

], [Defendant’s] attempt to use (b)(3)’s thirty-

 

1 Section 1446(b)(1) requires a notice of removal to “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 

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day window while also arguing that this case was initially removable is fundamentally 

flawed.” Markham v. Home Depot USA, Inc., No. CV 13-8431-GHK JCGX, 2014 WL 

117102, at *3 (C.D. Cal. Jan. 10, 2014). “If the Complaint in this case was removable from 

inception, as Defendant[] argue[s] it was, the analysis stops with subsection (b)(1), and 

Defendant[] ha[s] no recourse to subsection (b)(3), obviating Plaintiffs need to invoke 

subsection (c)(1). On the other hand, if the Complaint was not removable from inception 

but only became removable after amendment, subsection (b)(3) applies, but so does 

subsection (c)(1), which bars removal in this case in the absence of bad faith.” WMCV 

Phase, LLC v. Tufenkian Carpets Las Vegas, LLC, 2012 WL 5198478, at *3 (D.Nev. 

Oct.18, 2012). Defendant “cannot have it both ways.” Markham, 2014 WL 117102, at *3.

Ultimately, Defendant’s removal is untimely under either subsection (b)(1) or 

subsection (b)(3). Defendant was served with the state court summons and complaint on 

March 30, 2018. [Doc. No. 1 at ¶ 3.] Thus, because Defendant’s notice of removal was 

filed well beyond thirty days after the complaint was served, the removal is untimely 

pursuant to subsection (b)(1). 

Even assuming that, contrary to Defendant’s admission in its opposition, the 

complaint was not removable when it was originally filed, the case became removable 

months before the notice of removal was filed, and not on March 11, 2019. The complaint 

seeks compensatory damages, punitive damages, and attorneys’ fees. [Doc. No. 1-1 at 7.] 

In interrogatory responses from Plaintiffs dated August 30, 2018, that Defendant attached 

to its opposition brief, Plaintiffs stated that the amount of property damage in question 

“will be an amount no less than $50,000,” and stated that Plaintiffs seek other damages 

including electricity, food, and legal fees since March 2017. [Doc. No. 8-1 at 24-25.] In 

its reply, Plaintiff identifies other discovery responses making clear that the matter in 

controversy exceeds the jurisdictional threshold. Based on this information, even if it was 

 

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.” 

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not removable from inception, the lawsuit became removable no later than thirty days after 

Defendant received these responses. Accordingly, removal was not timely because it did 

not occur within the thirty day window provided by section 1446(b)(3).

Finally, even assuming that the case did not become removable until Defendant 

received Plaintiff’s settlement demand on March 11, 2019, as Defendant contends in the 

notice of removal, the removal is untimely under section 1446(c)(1) unless Plaintiffs acted 

in bad faith to prevent Defendant from removing the action. There is no support for bad 

faith in the record. To the contrary, as reflected in the discovery responses Defendant 

contends support its argument of bad faith, Defendant was on notice, no later than August 

30, 2018, that Plaintiffs sought damages of not less than $50,000 for damage to their 

condominium, plus additional damages for food, electricity, attorneys’ fees since March 

2017, and punitive damages. Such responses do not reflect a bad faith effort to conceal the 

amount in controversy and prevent removal. Rather, Plaintiffs provided Defendant 

sufficient information to ascertain that the matter in controversy exceeds $75,000, entitling 

Defendant to remove the case to federal court based on diversity jurisdiction. Accordingly, 

Defendant has not demonstrated that Plaintiffs acted in bad faith, meaning Defendant’s 

removal was also untimely under section 1446(c)(1).

II. Attorney’s Fees

Plaintiff asks for $1,500 in attorneys’ fees pursuant to 28 U.S.C. 1447(c), which 

states that “[a]n order remanding the case may require payment of just costs and any actual 

expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). 

“Absent unusual circumstances, a court may award costs and attorney’s fees under § 

1447(c) only where the removing party lacked an objectively reasonable basis for seeking 

removal. Removal is not objectively unreasonable solely because the removing party’s 

arguments lack merit, or else attorney’s fees would always be awarded whenever remand 

is granted.” Grancare, LLC v. Thrower by & through Mills, 889 F.3d 543, 552 (9th Cir. 

2018) (internal citations and quotation marks omitted). “The appropriate test for awarding 

fees under § 1447(c) should recognize the desire to deter removals sought for the purpose 

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of prolonging litigation and imposing costs on the opposing party, while not undermining 

Congress’ basic decision to afford defendants a right to remove as a general matter, when 

the statutory criteria are satisfied.” Martin v. Franklin Capital Corp., 546 U.S. 132, 140 

(2005). 

Here, Defendant had no objectively reasonable basis to believe that its removal of 

this case would be timely. As discussed above, Richey, on which Defendant relies, actually 

supports remand here, and a little research would have revealed to Defendant the 

fundamental flaw in its reliance on that case. Indeed, as another court recently stated with 

respect to a defendant’s similarly misplaced reliance on Ritchey, Defendant may have

“found the correct case, but failed to read it.” Danzig v. The End Records, Inc., No. 

218CV05936ODWJCX, 2018 WL 4859261, at *2 (C.D. Cal. Oct. 4, 2018). Moreover, 

even if Defendant’s fundamentally flawed interpretation of Richey was correct, its removal 

was still objectively unreasonable because it was not filed within either of the thirty day 

windows in section 1446(b). Ultimately, Defendant’s arguments for the timeliness of its 

removal lack any support in the law or facts, and even a cursory review of the applicable 

statutes and caselaw would have revealed as much to Defendant. Accordingly, because it 

was objectively unreasonable for Defendant to believe that its removal was timely, Plaintiff 

is entitled to its fees for the instant motion to remand.

III. Disposition 

Defendant’s notice of removal was untimely under 28 U.S.C. 1446(b) and (c), and 

its arguments to the contrary are objectively unreasonable. Accordingly, Plaintiff’s motion 

to remand is GRANTED, and this case is REMANDED to San Diego County Superior 

Court. It is further ORDERED that Defendant pay Plaintiffs attorneys’ fees of $1,500 

incurred as a result of the objectively unreasonable removal.

Dated: May 15, 2019

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