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Wilson v. Travelers Ins. Co.

United States District Court, E.D. Pennsylvania

March 30, 2015

ANNE WILSON, Plaintiff,
v.
TRAVELERS INSURANCE COMPANY, Defendant.

MEMORANDUM OPINION

Edward G. Smith, J.

For subject-matter jurisdiction based upon the diversity of citizenship between the parties to exist, the amount in controversy must exceed $75, 000. In this case, a state trial court imposed sanctions (in the nature of attorney’s fees and costs) against the now-deceased plaintiff and her attorney after the defendant insurance company claimed that they engaged in improper conduct while attempting to have judgment entered on a workers’ compensation award in the plaintiff’s favor. The insurance company had the state trial court enter judgment on the sanctions award, which was well less than $75, 000. While the insurance company was engaged in discovery to aid in executing on the judgment, the plaintiff’s attorney, proceeding pro se, removed the matter to this court on the basis of diversity jurisdiction.

The insurance company now moves to have the court remand this matter to the trial court because, inter alia, the court lacks subject-matter jurisdiction insofar as the amount in controversy does not exceed $75, 000. The plaintiff’s attorney has sought discovery to determine if the amount in controversy exceeds $75, 000, and the insurance company has moved for a protective order if the court is inclined to allow limited discovery on this issue. Unfortunately for the plaintiff’s attorney, the record in this case is clear that the amount in controversy does not exceed $75, 000 and his arguments that the amount could exceed $75, 000 are patently frivolous. Therefore, as the removing party, he has not satisfied his burden to demonstrate that removal was proper. As such, the court will deny the attorney’s request for jurisdictional discovery and remand this case to the Court of Common Pleas. In addition, because the plaintiff’s attorney had no objectively reasonable basis for removing the case from state court in the first place, the court will permit the insurance company to submit documentation to recover its actual expenses, including any attorney’s fees, incurred because of the attorney’s wrongful removal.

I. APPLICABLE RECORD AND RELEVANT PROCEDURAL HISTORY[1]

A. Proceedings Prior to Removal to Federal Court This matter comes before the court after a lengthy and contentious history that started with the filing of a workers’ compensation claim in 1983. See Wilson v. Travelers Ins. Co., No. 893 C.D. 2007, 2008 WL 9406439, at *1 (Pa. Cmwlth. July 8, 2008) (“ Wilson I ”). More specifically, the action commenced when James Wilson (“Mr. Wilson”), the now-deceased husband of the now-deceased plaintiff, Anne Wilson (the “plaintiff” or “Mrs. Wilson”), filed a petition under Pennsylvania’s Workers’ Compensation Act, 77 P.S. §§ 1-1041.4, 2501-2708, claiming that an occupational disease caused him to become totally disabled. Id. After Mr. Wilson died in 1990, the plaintiff filed a fatal claim petition alleging that he died from an occupational disease. Id. at *2. After approximately 15 years of litigating the fatal claim petition, Workers’ Compensation Judge Susan Kelley (“WCJ Kelley”) granted the petition and entered a fatal claim award in favor of the plaintiff on May 16, 2006. Id. at *2-4. The award totaled approximately $517, 958.41. See Wilson v. Travelers Ins. Co., No. 659 C.D. 2008, 2010 WL 9519213, at *1 (Pa. Cmwlth. Jan. 29, 2010) (“ Wilson II ”). The Workers’ Compensation Appeal Board (the “Board”) affirmed WCJ Kelley’s decision and, in May 2007, the plaintiff and Mr. Wilson’s employer, Allied Signal, Inc. (“Allied”), filed petitions for review of the Board’s decision with the Commonwealth Court of Pennsylvania. Id. at *1.

Despite the pending petitions for review, on May 16, 2007, the plaintiff filed two documents in the Court of Common Pleas of Philadelphia County: (1) a praecipe to enter judgment on the fatal claim award in the amount of $517, 958.41, including penalties, interest, and attorney’s fees, against Travelers Insurance Company (“Travelers”), and Allied, and (2) a praecipe for a writ of execution in the amount of $517, 958.41, along with $26, 140.16 in interest and $1, 634.45 in costs.[2] Travelers filed a motion to open/strike the judgment on May 24, 2007. In June 2007, the plaintiff apparently also filed a praecipe for writ of execution in Montgomery County. See Wilson I at *9. The Honorable Gary Di Vito of the Court of Common Pleas of Philadelphia County entered an order granting the motion to open/strike the judgment and striking the judgment from the record on July 12, 2007.[3] On July 20, 2007, the plaintiff filed an emergency motion for reconsideration of the order striking the judgment, which Judge Di Vito granted on August 7, 2007.[4]

Travelers filed a petition for a special injunction on August 14, 2007. In the petition, Travelers alleged that although it appealed from the Board’s decision, it had hand-delivered a check in the amount of $545, 733.02 (the total set forth in the writ of execution) to the plaintiff on July 2, 2007, and the plaintiff and her attorney, Robert J. Murphy (“Murphy”), had endorsed the hand-delivered check on July 20, 2007. Despite having endorsed the check, Travelers averred that the plaintiff refused to mark the outstanding judgments as satisfied and sought to continue collecting upon the judgments because she asserted that Travelers and Allied owed her and Murphy additional counsel fees and costs. Travelers also alleged that it issued additional checks to the plaintiff, but Murphy asserted he did not receive the checks and was not present at his office when Travelers attempted to hand-deliver the checks to him. Travelers explained that it had attempted to amicably resolve the case with the plaintiff (and Murphy), but the plaintiff continually refused to mark the judgment satisfied and threatened to file the judgment in counties throughout the Commonwealth. As such, Travelers sought a court order requiring the plaintiff to mark the judgment as satisfied and prohibiting the plaintiff from entering the judgment in any county, including reentering it in Philadelphia County.

Judge Di Vito entered an order granting the petition for a special injunction on September 12, 2007. In the order, Judge Di Vito (1) prohibited the plaintiff from entering the judgment in any county in the Commonwealth of Pennsylvania and reentering the judgment in Philadelphia County; (2) ordered that the plaintiff had ten days to mark the judgment satisfied; and (3) provided that the special injunction would continue in effect until further order of court. The plaintiff filed an appeal from Judge Di Vito’s September 12, 2007 order with the Superior Court on September 19, 2007.[5]

While the appeal from the September 12, 2007 order was pending with the Commonwealth Court, Travelers filed a motion for sanctions on October 18, 2007.[6] Judge Di Vito denied the motion on November 26, 2007, because he determined that under Rule 1701(a) of the Pennsylvania Rules of Appellate Procedure the court lacked jurisdiction over the motion due to the pending appeal. Judge Di Vito entered another order on January 2, 2008, in which he granted Travelers’ motion for sanctions and required the plaintiff and Murphy to pay Travelers’ costs and attorney’s fees associated with preparing and prosecuting the petition for special injunction and motion for sanctions. Judge Di Vito also required Travelers to present a bill of costs justifying the sought-after fees and costs. The plaintiff filed an appeal from Judge Di Vito’s order on January 10, 2008.[7]

Regarding the cross-appeals from the Board’s decision, the plaintiff’s appeal from the order granting the motion to strike the judgment, and the plaintiff’s appeal from the order granting the special injunction, the Commonwealth Court resolved these appeals on July 8, 2008. See Wilson I . In the Commonwealth Court’s decision, the court (1) reversed the part of the Board’s decision in which the Board denied attorney’s fees to the plaintiff with respect to the claim petition, (2) affirmed the Board’s decision in all other respects, (3) affirmed the order granting the special injunction, and (4) denied as moot the appeal from the order striking the judgment.[8] See Wilson I at *5-10. The parties filed motions for reargument, which the Commonwealth Court denied on August 29, 2008.[9] The plaintiff filed a petition for allowance of appeal with the Supreme Court of Pennsylvania on September 29, 2008, which the Court denied on May 6, 2009.[10]

Travelers filed an emergency petition for a special injunction on August 10, 2009. On September 24, 2009, Judge Di Vito granted the petition and stayed all workers’ compensation proceedings until the workers’ compensation judgment was “deemed satisfied.”[11] Judge Di Vito also ordered that his order would become effective upon Travelers presenting a bond in the amount of $1, 000, and the injunction would remain in effect until further order of court. Id.

The plaintiff appealed from Judge Di Vito’s September 24, 2009 order to the Superior Court on October 28, 2009. Travelers posted the $1, 000 bond on November 16, 2009. The plaintiff then filed another notice of appeal to the Superior Court on December 10, 2009.[12]

On January 29, 2010, the Commonwealth Court filed an unpublished memorandum opinion resolving the plaintiff’s appeal from the January 2, 2008 order imposing sanctions. See Wilson II . In this decision, the court concluded that although Judge Di Vito had jurisdiction to enter the order, he did not enter any “specific findings of fact regarding the obdurate, dilatory or vexatious nature of [the plaintiff’s] conduct” to support the sanctions award.[13] Wilson II at *3-4. Therefore, the court “reluctantly” vacated the order and remanded the issue regarding the award of attorney’s fees “so that [the trial court] may set out the statutory basis for its award of attorney’s fees and make findings of fact necessary to support such an award.”[14] Id. at *4.

On October 25, 2010, the plaintiff filed a praecipe to have the prothonotary mark the judgment as satisfied “in accordance with the court’s order dated September 12, 2007 and docketed September 12, 2007, incorporated herein, granting preliminary injunction.”[15] On November 23, 2010, the plaintiff then filed yet another appeal from the judgment purportedly entered on October 25, 2010, to the Superior Court.[16]

Travelers filed another motion for sanctions and a supporting memorandum of law on March 11, 2011. In response to the motion, the plaintiff filed a document titled, “Plaintiff/Claimant, Anne Wilson’s, and her Counsel’s Objections, Motion to Strike, Dismiss or Deny, Answer, Brief and Exhibits to Defendants’ Purported Motion for Sanctions Filed in Violation of Federal and Pennsylvania Constitutions, and the Mandatory Provisions Under Pa. R.C.P. 1023.1-1023.4 and Applicable Law and Decisions” and a supporting memorandum of law on March 31, 2011. On April 13, 2011, Travelers filed a reply brief in support of the motion for sanctions.

The plaintiff filed an “Emergency Motion for Sanctions Pursuant to PA. R.C.P.

4003.1(a)(b)(c), 4003.4, 4003.5, 4007.1(d)(1)(e), 4009.1, 4009.11, 4011, 4016, 4019 and Applicable Law” on August 18, 2011. The plaintiff and Murphy then filed a document on August 25, 2011, titled:

Emergency Motion to Vacate and/or Nullify the Proceedings and Orders Including Defendants’ Motion for Sanctions Seeking Costs as Counsel Fees and Grant New Proceedings and/or Sanctions Including Resulting from the Tribunal’s and Defendants’ Admitted and Repeated Violations of the Code of Judicial Conduct and Rules of Professional Conduct Involving Improprieties and/or Appearance of Impropriety in the Captioned Proceedings Pursuant to Plaintiff’s Fundamental Constitutional and Legal Rights to Due Process, Equal Protection, Adequate Remedy, Administration of Right and Justice Without Sale, Denial or Delay, and a Fair and Impartial Decision Based on a Fair, Complete, Accurate and Impartial Record by a Competent Tribunal Having Jurisdiction to Decide the Issues under the United States Constitution 14th Amendment and Pennsylvania Constitution Art. I Sec. 1 and 11, Art. V Sec. 1, 5, 9, 10, and 17 and Applicable Law.

On August 30, 2011, the Honorable Paul Panepinto entered rules to show cause as to why the court should not grant the two motions and scheduled the rule returnable date for September 7, 2011.

Travelers filed an answer to the plaintiff’s emergency motion for sanctions on September 1, 2011, and filed a response to the motion to vacate or nullify proceedings on September 6, 2011. It appears that Judge Panepinto held a motions hearing on September 7, 2011.[17] After the hearing, the plaintiff filed another brief in opposition to Travelers’ motion for sanctions on September 9, 2011, which apparently compelled Travelers to file a surreply on September 14, 2011.

The plaintiff filed a supplemental motion and brief in support of her various motions on September 16, 2011. The plaintiff then filed a motion to have Judge Panepinto recuse himself from hearing the case on September 19, 2011. Travelers filed a response to the supplemental motion on September 30, 2011. The plaintiff filed a reply brief on October 7, 2011.

On October 13, 2011, Judge Panepinto entered orders (1) denying the plaintiff’s motion to vacate or nullify all proceedings, (2) denying the plaintiff’s motion to recuse, (3) denying the plaintiff’s emergency motion for sanctions, and (4) granting Travelers’ motion for a protective order precluding the plaintiff from seeking certain depositions. Judge Panepinto also entered an order granting Travelers’ motion for sanctions and ordered that the plaintiff and Murphy “are required to pay [Travelers] all costs and attorneys’ fees associated with the preparation and prosecution of the Petition for Special Injunction pursuant to Defendant’s Bill of costs to be submitted to this Court for approval within ten (10) days of the date of this order.” In the same order, Judge Panepinto required the plaintiff and Murphy to pay Travelers “all costs and attorneys[’] fees associated with the preparation and prosecution of the instant Motion for Sanctions upon presentation of Defendants’ Bill of Costs to be submitted to this Court for approval within ten (10) days of the date of this order.”[18]

Travelers filed a bill of costs on October 26, 2011. The bill of costs indicates that Travelers incurred attorney’s fees and costs in the amount of $55, 600.41.

The plaintiff and Murphy filed an appeal from the aforementioned order (and other “interlocutory orders”) with the Superior Court on October 27, 2011.[19] On November 16, 2011, the plaintiff and Murphy filed exceptions, objections, and a motion to strike the bill of costs. It appears that the plaintiff unfortunately passed away on January 5, 2012.[20]

Travelers filed a motion to strike the plaintiff’s and Murphy’s exceptions and objections to the bill of costs on January 27, 2012. The plaintiff filed an answer to the motion to strike on February 15, 2012. Travelers filed a reply in support of the motion to strike on February 21, 2012, and the plaintiff filed a surreply brief on March 5, 2012. On March 8, 2012, the Honorable Leon W. Tucker entered an order dismissing (1) the plaintiff’s and Murphy’s objections, exceptions, and motion to strike bill of costs, and (2) Travelers’ motion to strike the plaintiff’s objections, exceptions, and motion to strike bill of costs. Predictably, the plaintiff and Murphy appealed from this order on March 27, 2012.[21]

On March 28, 2012, the Commonwealth Court quashed the plaintiff’s and Murphy’s appeal from Judge Panepinto’s October 13, 2011 orders because they were not final orders.[22]The plaintiff and Murphy filed a motion for reconsideration/reargument, which the Commonwealth Court denied on April 24, 2012. The plaintiff and Murphy then filed a petition for review with the Supreme Court of Pennsylvania on May 24, 2012, which the Court treated as a petition for allowance of appeal and then denied the petition on August 30, 2012.

The plaintiff and Murphy filed another set of exceptions to the bill of costs on September 18, 2012. Travelers filed a motion to strike the exceptions on September 20, 2012. The plaintiff and Murphy filed an answer and objections to the motion to strike on October 11, 2012. Judge Tucker denied Travelers’ motion to strike the exceptions to the bill of costs on November 7, 2012.

On February 14, 2013, Travelers filed a praecipe to enter judgment against Murphy on Judge Panepinto’s October 13, 2011 order.[23] The plaintiff and Murphy filed an appeal from the praecipe to enter judgment to the Superior Court on March 7, 2013.[24]

Travelers filed a praecipe for a writ of execution on the judgment on March 27, 2013.[25]On April 3, 2013, the prothonotary entered a “corrective entry” so that the “judgment is now entered against plaintiff’s counsel Robert J. Murphy Esq.”[26]

The plaintiff and Murphy filed an emergency motion for special relief seeking to vacate and strike the judgment and the writ of execution on April 9, 2013. On April 25, 2013, the Honorable Ellen Ceisler entered an order denying this emergency motion.[27]

On April 25, 2013, the plaintiff and Murphy also filed appeals from the prothonotary’s corrective entry on April 3, 2013, and from the other corrective entry entered on April 25, 2013.[28] The plaintiff and Murphy also filed an emergency motion and application on May 14, 2013, in which they sought to have the court (1) strike, vacate, stay, enjoin, or supersede the execution proceedings, or (2) issue a supersedeas and stay of execution proceedings. On that same date, they filed a motion for reconsideration of the court’s April 25, 2013 order denying the emergency motion. Judge Ceisler denied the emergency motion ...


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