United States District Court, Eastern District of Pennsylvania
September 10, 2001
CONTINENTAL INSURANCE CO.
The opinion of the court was delivered by: Anita B. Brody, J.
MEMORANDUM AND ORDER
Before me is plaintiff's motion to remand this action to the Court of
Common Pleas of Philadelphia County. For the reasons stated below, I will
grant the motion.
Plaintiff Richard Meltzer is a resident of Pennsylvania. He was covered
under an automobile insurance policy issued by defendant Continental
Insurance Company. On or about February 28, 1997, Meltzer filed a claim
under the policy for injuries he allegedly sustained in connection with
the use of a motor vehicle on February 21, 1997. On February 14, 2001,
Meltzer filed a complaint in the Court of Common Pleas of Philadelphia
County. The complaint alleged that Continental refused to honor the
policy and failed to provide him with wage loss and medical benefits
payments arising out of this incident. It also alleged that Meltzer is an
individual "residing at 120 Drakes Drum Drive, Bryn Mawr, Pennsylvania."
(Cmplt. ¶ 1).
Continental received the Complaint on February 27, 2001 and timely
filed a Notice of Removal on March 29, 2001. See 28 U.S.C. § 1446(a).
In its Petition for Removal, Continental asserted that "there exists
diversity of citizenship between the parties," and that "[p]laintiff
seeks recovery under a contract of insurance which provides, on its
face, policy limits in excess of $75,000 for medical benefits and work
loss." (Notice of Removal ¶ 5). In alleging diversity, Continental
stated that "Plaintiff resides in Bryn Mawr, Pa." (Notice of Removal
¶ 1). Continental also averred that:
Defendant, Continental, is incorporated under the laws
of New Hampshire and has a principal place of business
in Chicago, Illinois.
(Notice of Removal ¶ 4) (emphasis added).
Following removal, Meltzer timely moved for a remand to the Court of
Common Pleas, Philadelphia County. In the Motion for Remand, Meltzer
claims that the Notice of Removal contains legally insufficient
allegations of diverse citizenship.
(Petition to Remand ¶ 7).
It is admitted that Defendant is incorporated under
the laws of New Hampshire and has its principal place
of business in Chicago, Illinois. Defendant denies
plaintiff's implication that it has a principal place
of business in more than one state.
(Response to Plaintiff's Motion to Remand ¶ 6) (emphasis added).
Continental attached several exhibits to its legal memorandum in support
of this response, but neither asked for permission to amend its Notice of
Removal, nor submitted any letters or supporting material regarding its
principal place of business.
A federal district court has "original jurisdiction of all civil
actions where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interests and costs, and is between citizens of
different States." 28 U.S.C. § 1332(a)(1). Where a corporation is one
of the parties to the civil action, it "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." Id. § 1332(c)(1) (emphasis
added). Under 28 U.S.C. § 1441(a), "any civil action brought in a
State court of which the district courts of the United States have
original jurisdiction, may be removed by the defendant or defendants, to
the district court of the United States for the district and division
embracing the place where such action is pending. . . ."
Continental's Notice of Removal stated that it was "incorporated under
the laws of New Hampshire and has a principal place of business in
Chicago, Illinois." Meltzer pointed out this flaw in Continental's
pleading in both his Petition to Remand and his Reply to Defendant's
Response to Petition to Remand. The extent of Continental's response was
its statement that "[i]t is admitted that Defendant is incorporated under
the laws of New Hampshire and has its principal place of business in
Chicago, Illinois. Defendant denies Plaintiff's implication that it has a
principal place of business in more than one state." (Response to
Plaintiff's Motion to Remand ¶ 6). In addition, both the Complaint
and the Notice of Removal contain allegations of Meltzer's residence, but
fail to explicitly mention his citizenship. Plaintiff and Defendant
disagree over the effect that these deviations from the statutory
language of 28 U.S.C. § 1332 have upon the disposition of this case.
In order to remove a case to federal court, a defendant must comply
with the statutory requirements of 28 U.S.C. § 1441 and 1446. First,
the district courts of the United States must have original
jurisdiction, which requires either a federal question or diversity of
citizenship of the parties. See 28 U.S.C. § 1331, 1332, 1441(a).
Second, the defendant must file a notice of removal with the district
court, containing "a short and plain statement of the grounds for
removal," as well as "a copy of all process, pleadings, and orders served
upon such defendant or defendants in such action." Id. § 1446(a).
Following the direction of the Supreme Court in Shamrock Oil & Gas Corp.
v. Sheets, 313 U.S. 100, 108-09 (1941), the Third Circuit has mandated a
policy of "strict construction of the removal statutes." Westmoreland
Hospital Ass'n v. Blue Cross of Western Pennsylvania, 605 F.2d 119, 123
In this case, defendant's notice of removal pled "a" principal place of
business, instead of "its" principal place of business. See
28 U.S.C. § 1332. Continental dismisses the deviation as a
"difference without distinction," contending that
it should not affect
the validity of removal. The Third Circuit addressed the sufficiency of
this specific defective allegation in Hunt v. Acromed, 961 F.2d 1079 (3d
Cir. 1992). The Third Circuit instructed that the replacement of "its"
with "a" renders the notice of removal "technically defective." Hunt, 961
F.2d at 1080, 1082 n. 7. The Third Circuit later revisited this same
defective allegation and reiterated that replacing "its" with "a" fails
to "properly plead diversity jurisdiction." J&R Ice Cream Corp. v.
California Smoothie Licensing Corp., 31 F.3d 1259, 1265 n. 3 (3d Cir.
1994). Therefore, under established Third Circuit law, the Notice of
Removal was legally deficient.
Meltzer also claims that the pleading of his residence in both the
Complaint and the Notice of Removal is insufficient to meet the diversity
requirement of 28 U.S.C. § 1332. The Supreme Court has held that
where federal jurisdiction depends upon diversity of citizenship, "the
whole record . . . may be looked to, for the purpose of curing a
defective averment of citizenship . . . and if the requisite citizenship
is anywhere expressly averred in the record, or facts are therein stated
which, in legal intendment, constitute such allegation, that is
sufficient." Sun Printing & Publishing Ass'n v. Edwards, 194 U.S. 377,
382 (1904) (citing Horne v. George H. Hammond Co., 155 U.S. 393 (1894)).
However, the Third Circuit has held that "a naked averment that one is a
`domiciliary' or a `resident' of a state is insufficient. The statute
requires that the averment be that one is a `citizen' of a state."
Tanzymore v. Bethlehem Steel Corp., 457 F.2d 1320, 1324 n. 5 (3d Cir.
1972); see also Kerstetter v. Ohio Cas. Ins. Co., 496 F. Supp. 1305, 1307
(E.D.Pa. 1980) ("for the purpose of establishing diversity, residence is
not synonymous with citizenship").
In this case, the Complaint and the Notice of Removal referred only to
Meltzer's residency. There are no express statements of Meltzer's
citizenship in the record, although there are several statements
concerning his address. (See Memorandum in Support of Response to
Plaintiff's Motion to Remand, Exhibits B-E). However, these statements
are mere recitals of Meltzer's address and do not constitute a sufficient
allegation of citizenship.
While the original Notice of Removal contained flawed jurisdictional
allegations, an immediate remand to state court might have been avoided.
Continental had various options once plaintiff pointed out the flaws in
the Notice. For example, Continental might have cured the defects by
filing an amended Notice of Removal. See Hunt, 961 F.2d at 1080.
However, Continental failed to request an amendment and therefore missed
an opportunity to argue that such an amendment should be permitted.
Continental might also have filed supporting material with the court
indicating that its principal place of business was in Chicago at the
time the complaint was filed. See J&R Ice Cream Corp., 31 F.3d at 1265
n. 3. Continental did not avail itself of this option either.*fn1
In light of the applicable Third Circuit authority, the Notice of
Removal fails to properly plead diversity jurisdiction. Continental was
informed of the defects in its Notice of Removal and had several
opportunities to cure it. As it failed to take advantage of these
Continental has waived its right to have this case heard in
Therefore, plaintiff's Motion to Remand (Docket Entry No. 3) is
GRANTED and this case is remanded to the Court of Common Pleas of
Philadelphia County. Jurisdiction is relinquished.