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Dorothy B. Weber and Robert P. Weber, H/W v. Nationwide Mutual Insurance Company

June 12, 2012

DOROTHY B. WEBER AND ROBERT P. WEBER, H/W PLAINTIFFS,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Buckwalter, S. J.

MEMORANDUM

Currently pending before the Court is the Emergency Motion for Remand to State Court of Plaintiffs Dorothy B. Weber and Robert P. Weber (collectively referred to hereinafter as "Defendants" or "the Webers.") For the following reasons, the Motion is granted.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The Webers are a married couple residing in Kennett Square, Pennsylvania. On October 30, 2007, Dorothy was struck by a motor vehicle operated by a third party, Richard Wade. (Pls.' Emergency Mot. Remand ("ER Mot. Rem.") ¶ 2.) As a result of the collision, Dorothy sustained serious physical and mental injuries, prompting the Webers to file suit against Wade and his corporation, Wade & Company, LLC. (Id. ¶¶ 2, 3.) In February of 2012, Wade apparently offered to settle the dispute by agreeing to binding high/low arbitration. (Id. ¶ 4.) The limit on Wade's insurance policy was $300,000. (Id. ¶ 6.)

The Webers hold an uninsured/underinsured motorist insurance policy ("UIM") issued by Defendant Nationwide Mutual Insurance Company ("Nationwide" or "Defendant"). Upon receiving notification of the aforementioned settlement,*fn1 the Webers were required to transmit the offer to Nationwide under Pennsylvania law.*fn2 (Id. ¶ 5.) After receiving notification of the settlement, Nationwide was thereafter required to either: (1) approve it and accept a credit up to the limit of Wade's policy for future actions brought by Plaintiffs for UIM benefits; or (2) tender the full value of Wade's policy limit and pursue its subrogation rights.*fn3 (Id.) According to the Webers, Nationwide has declined to exercise either option. (Id. ¶ 6.) Defendant, on the other hand, avers that it received no notice or documentation of a proposed settlement with Wade, and therefore was not required to take any action. (Def.'s Resp. ¶ 6.)

On April 25, 2012, the Webers filed a declaratory action in the Pennsylvania Court of Common Pleas, requesting the court to determine whether the arbitration agreement constituted a "settlement" under Pennsylvania law. (ER Mot. Rem. ¶ 7.) Specifically, the Webers requested the Court of Common Pleas to compel Nationwide to: "either (a) approve [the] binding high/low arbitration . . . ; or (b) exercise its subrogation rights; or in the alternative, DECLARE that by declining to either approve or subrogate, Nationwide has waived its right to subrogate in this case, resulting in automatic approval." (Def.'s Notice of Removal, Ex. A, Action for Declaratory Judgment ("PA Decl. Act.") ¶ 18.)

Nationwide removed the matter to federal court on May 16, 2012. (ER Mot. Rem. ¶ 8.) Plaintiffs filed the instant Emergency Motion for Remand to State Court on May 22, 2012.*fn4

Defendant filed its Response on May 30, 2012. This matter is now ripe for judicial consideration.

II. STANDARD OF REVIEW

It is well-recognized that a party may remove to federal court a civil action originally filed in state court if the federal court would have had original jurisdiction to hear the matter in the first instance. See The Bachman Co. v. MacDonald, 173 F. Supp. 2d 318, 322 (E.D. Pa. 2001) (internal citations omitted). Once the case has been removed, "'the federal court may remand if there has been a procedural defect in removal.'" Id. (citing Kimmel v. DeGasperi, No. Civ.A.00-143, 2000 WL 420639, at *1 (E.D. Pa. Apr. 7, 2000)). Remand is mandatory if the federal court finds that it lacks subject matter jurisdiction over the suit. The Bachman, 173 F. Supp. 2d at 322 (citing 28 U.S.C. § 1447(c)). Moreover, the removing party bears the burden of proving the existence of subject matter jurisdiction. Id.

III. DISCUSSION

In the instant action, Nationwide removed this case to federal court pursuant to the diversity jurisdiction statute, 28 U.S.C. § 1332. Section 1332 governs diversity actions in federal court, and provides as follows: "district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different States[.]" 28 U.S.C. § 1332(a)(1). Thus, in order for a case solely involving state law claims to be heard in federal court on account of diversity jurisdiction, two elements must be satisfied: (1) there must be complete diversity of citizenship among the parties; and (2) the disputed amount must be greater than $75,000.

Here, the Webers aver that this Court lacks subject matter jurisdiction over this suit because the amount in controversy is less than $75,000, and this action should therefore be remanded back to the Court of Common Pleas.*fn5 Specifically, Plaintiffs allege that the basis of their state declaratory action does not compel Nationwide to pay more than $75,000, but rather requests the Court to compel Nationwide to decide whether or not it will approve the high/low arbitration amount or alternatively decide to exercise its subrogation rights. (ER Mot. Rem. ¶ 18.) In essence, Plaintiffs request that the Court determine the rights and responsibilities of the parties here-not allocate damages. In the event that this Court does find that the amount in controversy exceeds $75,000, the Webers assert that it should nonetheless decline to entertain suit because the exercise of diversity jurisdiction in federal court is discretionary. (Id. ¶ 20.) In response, Defendant avers that the amount in controversy element is met because, in declaratory ...


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