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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

Walter Goldsmith,

Plaintiff,

v. Case No. 08-14817

Allstate Insurance Company, Honorable Sean F. Cox

Defendant.

_____________________________/

OPINION & ORDER

GRANTING PLAINTIFF’S MOTION TO REMAND

This action for first party no-fault benefits arising out of a motor vehicle accident was

removed to this Court on November 17, 2008. The matter is currently before the Court on

Plaintiff’s Motion to Remand. The parties have briefed the issues and the Court heard oral

argument on April 15, 2009. The Court shall GRANT the Motion to Remand for two reasons. 

First, this Court does not have subject matter jurisdiction over this action because the threshold

amount in controversy was not met at the time of removal. Second, this Court is persuaded by

the reasoning and analysis in Warren v. State Farm Mutual Automobile Ins. Co., 2007 WL

1267579 (E.D. Mich. 2007), and concludes that the Notice of Removal in this action was not

“timely filed” under 28 U.S.C. § 1446(b).

BACKGROUND

On or about April 4, 1993, while Plaintiff Walter Goldsmith (“Plaintiff”) was insured by

Defendant Allstate Insurance Company (“Defendant”), he incurred injuries in an automobile

accident (“the Accident”).

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At case evaluation, Plaintiff sought an award of $135,444.80 for his past no-fault

benefits. (Ex. B to Pl.’s Reply Br.).

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On or about August 11, 2005, Plaintiff filed suit against Defendant in Wayne County

Circuit Court, asserting a first party claim for personal injury protection benefits arising out the

Accident. Plaintiff’s complaint alleged the following two counts: “Breach of Contract” (Count I)

and “Declaratory Relief” (Count II). That case, Case No. 05-524048, was assigned to the

Honorable Wendy Baxter. The case proceeded before Judge Baxter for more than two years and

proceeded through case evaluation1

 and all other pretrial proceedings. Defendant did not attempt

to remove the action to this Court at any point during the case. A jury trial commenced on or

about January 7, 2008. Shortly after selection of the jury, the parties agreed to settle all “NoFault claims through January 7, 2008, resulting from the subject April 4, 1993 motor vehicle

accident.” (See Settlement and Release, attached as Ex. C to Pl.’s Resp. Br., at 1)(emphasis

added). 

After January 7, 2008, Plaintiff continued to submit on-going no-fault claims to

Defendant for unpaid medical bills, attendant care and mileage that was incurred after January 7,

2008. (Ex. D to Pl.’s Resp. Br.). Plaintiff states that Defendant has failed to pay for the majority

of these submitted no-fault claims.

As a result, on or about August 5, 2008, Plaintiff filed a second action against Defendant

in Wayne County Circuit Court. The case was again was assigned to Judge Baxter. Like the

complaint in the first action, Plaintiff’s complaint asserts a first party claim for personal injury

protection benefits arising out of the Accident and asserts two counts: “Breach of Contract”

(Count I) and “Declaratory Relief” (Count II). In this action, Plaintiff seeks no-fault benefits for

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his expenses incurred after January 7, 2008. Plaintiff’s complaint requests damages “in excess

of Twenty-Five Thousand ($25,000) Dollars.”

Defendant removed the action to this Court on November 17, 2008, asserting that this

Court has diversity jurisdiction over this action. It asserts that Plaintiff is a citizen of Michigan

and that it is a Illinois corporation and does not have its principal place of business in Michigan. 

The Notice of Removal notes that Plaintiff’s complaint only alleges the jurisdictional amount of

$25,000 in damages, but asserts that this matter involves more than $75,000. (Notice of

Removal at ¶¶ 7-8).

On November 25, 2008, Plaintiff filed the instant Motion to Remand to Wayne County

Circuit Court. 

ANALYSIS

I. This Court Lacks Subject Matter Jurisdiction Over This Action Because The Amount-InControversy Requirement Was Not Met At The Time Of Removal.

“[F]ederal courts have an independent obligation to investigate and police the boundaries

of their own jurisdiction.” Douglas v. E.F. Baldwin & Assocs., Inc., 150 F.3d 604, 607 (6th Cir.

1998). Thus, while Plaintiff’s Motion to Remand did not expressly raise the issue of whether

Defendant has established diversity jurisdiction, this Court has a “duty to consider [its] subject

matter jurisdiction in regard to every case and may raise the issue sua sponte.” Answers in

Genesis of Kentucky, Inc. v. Creation Ministries Intern., __ F.3d __ (6th Cir. 2009).

Under 28 U.S.C. §1332(a), the two requirements for diversity jurisdiction are: 1) that the

matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and

2) that complete diversity of citizenship exists between the disputing parties. While diversity of

citizenship appears to be satisfied here, the amount in controversy is not.

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A defendant wishing to remove a case bears the burden of satisfying the amount-incontroversy requirement. Gafford v. Gen. Elec. Co., 997 F.2d 150, 155 (6th Cir. 1993). “In

gauging the amount in controversy, courts view the claims from the vantage point of the time of

removal.” Everett v. Verizon Wireless, 460 F.3d 818, 822 (6th Cir. 2006) (emphasis added).

Here, Defendant removed this action on November 17, 2008. Prior to that time, the

parties had settled all claims through January 7, 2008, and, therefore, the only damages Plaintiff

claims in this action are for those expenses incurred after January 7, 2008. Thus, at the time of

removal on November 17, 2008, the amount in controversy consists of the expenses Plaintiff

incurred between January 7, 2008, and November 17, 2008.

In asserting that the amount in controversy is met in this action, Defendant notes that as

of the time of removal, “no-fault benefits of $159,000 had already been paid to Plaintiff.” 

(Def.’s Br. at 8). The amount that Defendant may have paid Plaintiff in connection with a

settlement that occurred prior to removal is irrelevant for purposes of establishing subject matter

jurisdiction. The only inquiry is whether, as of the time of removal, the amount in controversy

exceeds $75,000.

In his response to Defendant’s Motion to Remand, Plaintiff states that it “currently seeks

less than $50,000.00 in overdue no-fault benefits that have been incurred since the settlement. 

The Plaintiff’s treating physician has prescribed six (6) hours per day of attendant care which the

Plaintiff has submitted in monthly billings to the Defendant insurer. The claimed damages

currently are less than $50,000.” (Pl.’s Reply Br. at 2-3).

In order to provide Defendant notice of this issue and an opportunity to respond, this

Court issued a Show Cause Order prior to the hearing, requiring Defendant to show cause, at the

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scheduled hearing, why this case should not be dismissed for lack of subject matter jurisdiction

because the amount in controversy is not met. (Docket Entry No. 10). 

In response to that order, Defendant filed a written response. (Docket Entry No. 11). In

that response, and at oral argument, Defense Counsel asserted that the threshold amount of

$75,000 is met when the following damage items are considered: 1) attendant care; 2) medical

expenses; 3) guardianship fees; and 4) attorney fees. Defendant acknowledged in its written

response that the amount of attendant care and medical expenses claimed to date total $54,172. 

(Id. at 6). Defense Counsel acknowledged at the hearing that Defendant has no information as to

the amount of any guardianship expenses that are claimed. Finally, Defendant presented no

evidence to as to the amount of any attorney fees that have been incurred by Plaintiff. Moreover,

at the hearing, Plaintiff’s Counsel indicated that Plaintiff had incurred less than $1,000.00 in

attorney fees in this action at the time of removal.

Accordingly, the Court concludes that Defendant has not met its burden of establishing

that the amount-in-controversy requirement was satisfied at the time of removal and this Court

therefore lacks subject matter jurisdiction over this action.

II. In Addition, The Court Concludes That Defendant’s Notice Of Removal Was Untimely

Under 28 U.S.C. § 1446(b).

Pursuant to 28 U.S.C. § 1446, a notice of removal in a civil action “shall be filed within

thirty days after the receipt by the defendant, though 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) (emphasis added).

Plaintiff states that “[f]ederal courts decisions interpreting § 1446 have reflected a

pragmatic approach to the thirty day limit for removal which does not favor removal under

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circumstances where the new action commenced is simply a continuation of the original action.” 

(Pl.’s Br. at 6). Plaintiff relies on Korzinski v. Jackson, 326 F.Supp.2d 704 (E.D. N.C. 2004) and

a recent decision from this Court, Warren v. State Farm Mut. Auto. Insur. Co., 2007 WL

1267579 (E.D. Mich. 2007), in requesting that the Court remand the matter because the removal

is untimely under § 1446(b).

Warren involved a situation very similar to the case at bar. The plaintiff filed suit in state

court, asserting a first party claim for no-fault benefits. The defendant did not remove the case

and the case ultimately settled, thereby resolving benefits through a given date. A second action

was later filed in state court, seeking benefits for the period after the settlement. The defendant

then sought to remove the second action to federal court. The plaintiff filed a motion to remand,

asserting that the removal was untimely under § 1446(b). The district court agreed, granted the

motion, and remanded the action to the state court. In doing so, the court stated:

This case does appear to be a continuation of an established lawsuit because both

cases involve the exact same parties, same medical provider and same type of

bills (although for a different time frame) that are once again being denied by

Defendant State Farm . . . Defendant knew the Plaintiff, the issues the court and

the judge involved in the May 12-July 12, 2004, period when it elected to remain

in the Michigan state court. No substantial policies involving notice, opportunity,

fairness or federalism warrant providing Defendant a second election regarding a

federal forum.

Principles of efficiency would support returning this case to the state

forum of its origin. This case has a long history in Washtenaw County Circuit

Court before Judge Shelton. The prior action progressed for 13 1⁄2 months on the

same provider and services, and was 2 months from trial before it was settled. 

The present lawsuit is seeking further benefit installments for the same benefits

and the same medical expenses that were being incurred in the law lawsuit . . . 

Warren, supra, at *5-6. The court further stated:

As stated in Korzinski, Federal court decisions regarding § 1446 reflect a

pragmatic approach to the thirty day limit for removal. Utilizing such an

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approach to analyze the facts in this case, does not favor removal because the

“new action” appears to be no more than a formality and a continuation, in all

other respects, of the original action. For the benefit of judicial economy and to

reduce the potential for “judge shopping,” it is appropriate for this matter to be

maintained in state court before the same judge who is fully familiar with the

facts and parties in this case.

Because Defendant never objected to jurisdiction in state court and never

sought removal from May 12 to July 12, 2004, Defendant’s current attempt to

remove this matter pursuant to § 1446 is untimely.

Id.

This Court is persuaded by the reasoning and analysis in Warren v. State Farm Mutual

Automobile Ins. Co., 2007 WL 1267579 (E.D. Mich. 2007), and concludes that the Notice of

Removal in this case was not timely filed under 28 U.S.C. § 1446(b).

CONCLUSION & ORDER

For the reasons above, IT IS ORDERED that Plaintiff’s Motion to Remand is

GRANTED and this action is hereby REMANDED to Wayne County Circuit Court.

IT IS SO ORDERED.

s/Sean F. Cox 

Sean F. Cox

United States District Judge

Dated: April 21, 2009

I hereby certify that a copy of the foregoing document was served upon counsel of record on

April 21, 2009, by electronic and/or ordinary mail.

s/Jennifer Hernandez 

Case Manager

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