UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Andy Mulholland,

Plaintiff

v. Civil No. 08-cv-254-SM

Opinion No. 2008 DNH 176

Irene Morin and State Farm Mutual

Automobile Insurance Company,

Defendants

O R D E R

This case arises out of an automobile accident involving the

plaintiff, Andy Mulholland, and one of the defendants, Irene

Morin. According to plaintiff, he sustained personal injuries

when the car he was driving was struck in the rear by a car

operated by Morin. 

In May of 2008, plaintiff filed a Writ of Summons in

Strafford County (New Hampshire) Superior Court, in which he

advanced two claims. In count one, plaintiff alleged that he

suffered personal injuries as a result of Morin’s negligent

operation of an automobile. In count two, he alleged that

Morin’s insurer, State Farm, acted in bad faith and failed to

honor its obligation to fully and fairly compensate him for the

losses he sustained as a result of the negligence of its insured. 

Although he has yet to secure a judgment against Morin, plaintiff

claims her insurer (State Farm) acted in bad faith by refusing to

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settle his claim against Morin and/or by making an unreasonably

low settlement offer. 

Pending before the court is plaintiff’s motion to remand

this action to the state superior court. For the reasons

discussed below, that motion is granted. 

Discussion

State Farm is incorporated under the laws of, and has a

principal place of business in, Illinois. But, both plaintiff

and defendant Morin are citizens of New Hampshire. Accordingly,

there is not complete diversity of citizenship among the parties. 

Nevertheless, State Farm removed the action, invoking this

court’s diversity jurisdiction. See 28 U.S.C. § 1332. See also

28 U.S.C. §§ 1441, 1446. 

When removal is challenged, the removing party bears the

burden of demonstrating that the asserted basis for removal

satisfies the statutory requirements. Sirois v. Business

Express, 906 F. Supp. 722, 725 (D.N.H. 1995). And, it is well

established that “removal statutes are strictly construed”

against removal. Danca v. Private Health Care Sys., 185 F.3d 1,

4 (1st Cir. 1999) (citing Shamrock Oil & Gas Corp. v. Sheets, 313

U.S. 100, 108-09 (1941)). 

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Despite the lack of complete diversity among the parties,

State Farm asserts that it properly removed this proceeding

because, if the court were to sever plaintiff’s claims against it

from plaintiff’s claims against its insured, there would be

complete diversity in the severed case against State Farm. In

other words, State Farm explains its removal of this proceeding

as, in essence, involving two steps. First, State Farm says it

was improperly joined in plaintiff’s state court suit against its

insured, Morin. See generally Fed. R. Civ. P. 20(a)(2). 

Accordingly, it asks this court to sever plaintiff’s claims

against it from those he asserts against Morin. Then, says State

Farm, once plaintiff’s claims against it are asserted in a

separate proceeding, there will be complete diversity and removal

will be proper (and, presumably, plaintiff’s claim against Morin

would be remanded to state court). The court disagrees. 

The preferred means by which to resolve the issues raised by

State Farm is for it to present a motion to sever to the state

court. Because the claims plaintiff advances against both State

Farm and its insured (Morin) arise under state law, the state

court is in the best position to determine whether plaintiff has

properly joined those claims in a single action. If the state

court concludes that State Farm is entitled to severance, State

Farm could then decide whether to remove the action to this court

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(provided, of course, it complies with the law governing

removal). See generally 28 U.S.C. § 1446(b). 

Parenthetically, the court notes that the cases cited by

State Farm in support of its assertion that severance is

appropriate are plainly distinguishable from the case at hand. 

Among other things, those cases involved suits by a plaintiff

against his or her own insurance carrier, seeking either

uninsured motorist coverage or damages for breach of the

insurer’s fiduciary duty to its insured - that is, the plaintiff. 

See Pena v. McArthur, 889 F. Supp. 403 (E.D. Cal. 1994) (suit

against uninsured negligent driver and plaintiff’s own insurance

carrier for uninsured motorist coverage); Beaulieu v. Concord

Group Ins. Co., 208 F.R.D. 478 (D.N.H. 2002) (same); Gruening v.

Sucic, 89 F.R.D. 573 (E.D. Pa. 1981) (suit against negligent

driver and company that insured both plaintiff and defendant). 

Here, State Farm does not provide insurance coverage to

plaintiff, and his claim against State Farm does not arise out of

any contractual relationship between them. 

Conclusion

The parties to this action are not diverse. Accordingly,

the court lacks subject matter jurisdiction under 28 U.S.C.

§ 1332 and defendant State Farm improperly removed this

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proceeding from state court. Plaintiff’s motion to remand

(document no. 5) is, therefore, granted. The case is hereby

remanded to the Strafford County Superior Court. 

SO ORDERED.

____________________________

Steven J. McAuliffe

Chief Judge

September 26, 2008

cc: Brian T. Stern, Esq.

Linda E. Fraas, Esq.

Dennis T. Ducharme, Esq.

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