Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-01697/USCOURTS-azd-2_06-cv-01697-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 12:635 Breach of Insurance Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

The Power P.E.O. of Florida, Inc., a

Florida Corporation; The Power P.E.O. of

Florida I, Inc., a Florida Corporation,

Plaintiffs, 

vs.

SUNZ Insurance Company, A Florida

Domiciled Stock Property and Casualty

Insurance Company; ABC Companies 1-

20, 

Defendants. 

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No. CV 06-1697-PHX-JAT

ORDER

Pending before the Court is Defendant's Motion to Dismiss or Transfer (Doc. # 6).

For the reasons set forth below, the Court declines to rule on the pending motion and

remands this action to Maricopa County Superior Court for the State of Arizona for lack of

subject matter jurisdiction.

Plaintiffs, The Power P.E.O. of Florida, Inc., and The Power P.E.O. of Florida I, Inc.,

filed this action on May 14, 2006, in Maricopa County Superior Court alleging breach of

contract and bad faith claims against SUNZ Insurance Company ("Defendant"). On July 3,

2006, Defendant removed this action, contending that this Court has original jurisdiction

based on diversity of citizenship under 28 U.S.C. § 1332. In the Notice of Removal,

Defendant represented that it is a Florida corporation with its principal place of business in

Florida. Defendant also represented that Plaintiffs are Florida corporations with their

Case 2:06-cv-01697-JAT Document 21 Filed 11/27/06 Page 1 of 3
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In fact, in their Response to Motion to Dismiss or Transfer (Doc. # 13), Plaintiffs cite

with approval Defendant's Notice of Removal when stating "[a]lthough Plaintiffs are Florida

corporations, as is [Defendant], because Plaintiffs' principal place of business is Scottsdale,

Arizona, [Defendant] recognizes that Plaintiffs are, under 28 U.S.C. § 1332(c), treated as

citizens of Arizona and this 'action is between citizens of different states.'"

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principal places of business in Arizona. Plaintiffs do not dispute Defendant's

representations.1

 

Federal district courts have a duty to determine the existence of subject matter

jurisdiction over removed actions sua sponte. United Investors Life Ins. Co. v. Waddell &

Reed Inc., 360 F.3d 960, 966-67 (9th Cir. 2004). The court's duty to determine whether it

has subject matter jurisdiction exists even if the parties fail to raise the issue. Id. Lack of

federal jurisdiction cannot be waived or be overcome by agreement of the parties. Id.

The Defendant's Notice of Removal states that this Court has jurisdiction over this

action pursuant to 28 U.S.C. § 1332. Federal jurisdiction over a civil action pursuant to 28

U.S.C. § 1332 exists only when there is complete diversity between the plaintiffs and the

defendants and the amount-in-controversy requirement has been met. Owen Equip. and

Recreation Co. v. Kroger, 437 U.S. 365, 373 (1978); Inecon Agricorporation v. Tribal

Farms, 656 F.2d 498 (9th Cir. 1981). In order to achieve “complete diversity,” no party

plaintiff may be a citizen of the same state as any of the defendants. Owen Equipment, 437

U.S. at 373; Inecon Agricorporation, 656 F.2d at 498. The jurisdictional amount-incontroversy requirement for civil actions is $75,000.00. 28 U.S.C. § 1332(a).

Under 28 U.S.C. § 1332(c)(1), "a corporation shall be deemed to be a citizen of any

State by which it has been incorporated and of the State where it has its principal place of

business." Under this provision, Defendant is a citizen of Florida and Plaintiffs are citizens

of Florida and Arizona for purposes of diversity jurisdiction. Accordingly, diversity

jurisdiction does not exist because Plaintiffs are citizens of the same state, i.e., Florida, as

Defendant. See Sty-Lite Co. v. Eminent Sportswear Inc., 115 F.Supp.2d 394, 398 (S.D.N.Y.

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2000) (stating "if either the corporation's place of incorporation or principal place of business

destroys diversity, then the courts will not have diversity jurisdiction").

Remand of removed matters for lack of subject matter jurisdiction is controlled by 28

U.S.C. § 1447. Pursuant to the statute, if a district court determines at any time before final

judgment that it is without subject matter jurisdiction it “shall” remand the action to the state

court. 28 U.S.C. § 1447(c); Bruns v. Nat’l Credit Union Admin., 122 F.3d 1251, 1257 (9th

Cir. 1997). Because complete diversity of citizenship is not present, this Court lacks subject

matter jurisdiction and must remand this action to the state court. 

Accordingly, 

IT IS ORDERED remanding this action to the Maricopa County Superior Court for

the State of Arizona;

IT IS FURTHER ORDERED denying for lack of subject matter jurisdiction

Defendant's Motion to Dismiss or Transfer (Doc. # 6);

IT IS FURTHER ORDERED vacating oral argument on Defendant's Motion to

Dismiss or Transfer, set for December 4, 2006, at 11:00 a.m. 

DATED this 27th day of November, 2006.

 

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