Court Opinion

ID: 3028482
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:40:44.152814+00
Date Added: 2024-06-11T15:03:52.487002
License: Public Domain

United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 01-1939
                                  ___________

Clara M. Brown,                      *
                                     *
              Appellant,             *
                                     *
      v.                             * Appeal from the United States
                                     * District Court for the
Tokio Marine and Fire Insurance      * Western District of Missouri.
Co., Ltd.; Toyota Motor Sales        *
U.S.A., Inc.,                        *
                                     *
              Appellees.             *
                                ___________

                            Submitted: November 15, 2001

                                 Filed: March 25, 2002
                                  ___________

Before BOWMAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and
      NANGLE,1 District Judge.
                               ___________

BOWMAN, Circuit Judge.

     In September 1994, Clara Brown was involved in an automobile accident with
an underinsured motorist while on her way to a computer class required by her
employer, Toyota Motor Sales. At the time of the accident, Brown was driving a car

      1
       The Honorable John F. Nangle, United States District Judge for the Eastern
District of Missouri, sitting by designation.
leased to her by Toyota. Toyota obtained insurance for the leased car through Tokio
Marine and Fire Insurance Co. Brown sued Tokio in Missouri state court, seeking
underinsured motorist benefits under Toyota's policy with Tokio to "partially satisfy
a default judgment she obtained . . . against the other driver involved in the accident."
Appellee's Br. at 16. Although diversity jurisdiction existed between Tokio and
Brown at the time Brown filed her complaint, see 28 U.S.C. § 1332 (1994 & Supp.
IV 1998), Tokio attempted but failed to properly remove the case to federal court.
Ninth months later Brown added Toyota as a defendant, bringing a breach of contract
claim against Toyota for failure to maintain the underinsured motorist coverage that
Brown argues her lease agreement with Toyota requires. Toyota, also a diverse party,
removed the case to the District Court2 with Tokio's consent. The District Court then
granted summary judgment in favor of Tokio and Toyota, concluding that the
provisions of Tokio's insurance policy and Toyota's lease agreement with Brown
excluded the coverage she was seeking. Brown appeals and we affirm.

        We must in the first instance ascertain whether this case is properly heard in
federal court. Brown argues that this Court and the District Court are without subject
matter jurisdiction because her case was removed from state court more than one year
after its commencement, in violation of the one-year limitation period set out in the
removal statute, 28 U.S.C. § 1446(b) (1994). The District Court addressed this
argument and concluded that the one-year limitation period does not apply to cases
such as Brown's suit that were removable to federal court when originally filed.

      2
       The Honorable Howard F. Sachs, United States District Judge for the Western
District of Missouri.

                                          -2-
      Brown's argument on this point raises an issue as yet undecided by this Circuit,
as we have not construed the scope of the one-year limitations period in § 1446(b).3
The text of the statute provides:

             The notice of removal of a civil action or proceeding shall be filed
      within thirty 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 thirty
      days after the service of summons upon the 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.

             If the case stated by the initial pleading is not removable, a notice
      of removal may be filed within thirty days after receipt by the defendant,
      through service or otherwise, of a copy of an amended pleading, motion,
      order or other paper from which it may first be ascertained that the case
      is one which is or has become removable, except that a case may not be
      removed on the basis of jurisdiction conferred by section 1332 of this
      title more than 1 year after commencement of the action.

28 U.S.C. § 1446(b). Thus, the real question in this case is whether the last clause of
the second paragraph of § 1446(b) modifies only the second paragraph, or applies
more broadly to both paragraphs of the provision.

      3
        Our review of the case law discovered only one other case in this Circuit that
has referred to the scope of the one-year limitations period of § 1446(b). To the
extent that Brown construes our discussion in footnote four of In re Burns & Wilcox,
Ltd., 54 F.3d 475, 476 (8th Cir. 1995), to support her argument, we conclude that it
does not govern our decision for two reasons. First, the footnote is dicta and not
controlling here. Second, the cause of action at issue in that case was not initially
removable to federal court when filed; the case only became removable once non-
diverse plaintiffs had been dismissed.

                                          -3-
       Three other circuits have addressed this question, and all three are in agreement
with the position taken by the District Court and by Tokio and Toyota that rules of
usage and statutory construction lead inevitably to the conclusion that the one-year
limitation period modifies only the second paragraph of § 1446(b), and therefore only
applies to cases that were not removable to federal court when originally filed. We
are persuaded by the reasoning of those cases and we hold that construction to be the
proper interpretation of the statute. See Johnson v. Heublein Inc., 227 F.3d 236, 241
(5th Cir. 2000); Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534 (6th
Cir. 1999), cert. denied, 528 U.S. 1076 (2000); N.Y. Life Ins. Co. v. Deshotel, 142
F.3d 873, 886 (5th Cir. 1998); Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1316-17
(9th Cir.), cert. denied, 525 U.S. 963 (1998).4

      Having determined that the one-year limitations period does not apply to
Brown's case because complete diversity existed between Brown and Tokio when
Brown filed her original complaint in state court in May 1998, it remains to inquire
whether Toyota complied with the provisions of the first paragraph of § 1446(b).
Brown moved to add Toyota as a defendant in March 1999, but Toyota was not
served with the amended complaint until September 1999. Toyota filed a notice of
removal within thirty days of the September service, a fact that Brown does not
contest.

       The law is settled in this Circuit that the thirty-day period to file a notice of
removal runs from the time that a defendant is served with the complaint, even when
the defendant is a later-served defendant and does not receive service until the time
limit during which the first-served defendant could have removed the case has
expired. See Marano Enters. v. Z-Teca Rests., L.P., 254 F.3d 753, 756-57 (8th Cir.

      4
       Although we recognize that numerous district courts, cited by Brown, agree
with the reading of the statute that she urges, we conclude that the construction
adopted by the Fifth, Sixth, and Ninth Circuits represents the better-reasoned
interpretation of the statute's language.

                                          -4-
2001). Toyota did not receive service of process until September 1999, and thus its
subsequent notice of removal, filed within thirty days (and with Tokio's consent), was
timely. We conclude that federal removal jurisdiction of Brown's claims is proper.

      Turning to the merits of Brown's appeal, Brown argues that she is entitled to
underinsured motorist coverage under the policy issued by Tokio, and that her lease
agreement with Toyota required Toyota to obtain underinsured motorist coverage for
the accident. She argues that the District Court improperly granted summary
judgment because the court misinterpreted the insurance policy's coverage provisions
and the lease agreement with Toyota. Brown urges this Court to reverse the District
Court and to grant summary judgment in her favor.

       Under Missouri law, interpretation of the language in an insurance policy or
a lease is a question of law, which we review de novo. See St. Paul Fire & Marine
Ins. Co. v. Mo. United Sch. Ins. Council, 98 F.3d 343, 345 (8th Cir. 1996). After
carefully reviewing the submissions of the parties and the applicable law, we
conclude that summary judgment was properly granted in favor of Tokio and Toyota.
We affirm based on the well-reasoned opinion of the District Court. See 8th Cir. R.
47B.

      A true copy.

             Attest:

                CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                         -5-