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Target Corp. v. Frederick Mutual Insurance Co.

United States District Court, E.D. Pennsylvania

March 19, 2018

TARGET CORPORATION, Plaintiff,
v.
FREDERICK MUTUAL INSURANCE COMPANY, et al., Defendants.

          MEMORANDUM OPINION

          Rufe, J.

         Plaintiff Target Corporation initiated this civil action against Frederick Mutual Insurance Company and five other defendants[1] in the Court of Common Pleas for Bucks County, Pennsylvania. Acting alone, Frederick Mutual removed the action to this Court. Target now moves to remand, arguing that removal was defective because: (1) Frederick Mutual failed to obtain consent of the other defendants prior to removal, and (2) the other defendants are citizens of Pennsylvania. For reasons set forth below, the Court will grant the motion to remand.

         I. Background

         On November 21, 2017, Target sued, seeking to enforce its right to defense and indemnification for liability in an underlying action, filed by Ross Smith and his wife after he slipped and fell on ice in a Target parking lot in Bucks County.[2]

         At the time of the accident, Brickman Facility Solutions, LLC (“BFS”) was under contract with Target to provide snow and ice management services.[3] Pursuant to the terms of their contract, BFS agreed to maintain liability insurance naming Target as an additional insured, and agreed to defend and indemnify Target against third-party claims for injury. BFS was insured by Ace American Insurance Company at the time of Mr. Smith's fall.[4]

         BFS in turn subcontracted snow and ice removal to Groundtec, Inc.[5] According to Target, in the subcontract, Groundtec agreed to name both BFS and Target as additional insureds in its liability insurance policy and agreed to defend and indemnify Target against third-party claims for injury. At the time of Mr. Smith's accident, Groundtec was insured under a general liability policy issued by Frederick Mutual.[6]

         Target seeks a declaration under the Pennsylvania Declaratory Judgments Act of Frederick Mutual's duty to defend and indemnify Target as an additional insured under its liability policy. Target also seeks a declaration that Groundtec and BFS have a duty to defend and indemnify Target under indemnification provisions in the snow and ice removal contracts. In addition to seeking declaratory relief, Target alleges that Groundtec and BFS breached its contractual duties to defend and indemnify Target. Target also raises breach of contract and insurance bad faith claims against Frederick Mutual.[7]

         Target alleges Frederick Mutual initially agreed to defend it in the Smiths' underlying action.[8] However, on September 22, 2017, Frederick Mutual disclaimed its defense of Target and initiated a declaratory judgment action in the Court of Common Pleas for Philadelphia County.[9] On October 31, 2017, Frederick Mutual filed a similar declaratory judgment action before this Court, and discontinued in state court.[10]

         II. Legal Standard

         28 U.S.C. § 1441(a) allows a defendant to remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.”[11] The defendant seeking removal must file a notice of removal with the district court within 30 days of the plaintiff's service of the complaint.[12] “When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.”[13] Furthermore, when removal is based solely upon diversity jurisdiction, the action “may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.”[14]

         “The defendants bear the burden of establishing removal jurisdiction and compliance with all pertinent procedural requirements.”[15] “Because federal courts are courts of limited jurisdiction, the federal removal statutes are to be strictly construed.”[16] “[A]ll doubts should be resolved in favor of remand.”[17]

         Once a defendant has removed an action, 28 U.S.C. § 1447 authorizes a plaintiff to seek a remand to state court. “A district court can remand a case for lack of subject matter jurisdiction or for a defect in the removal procedure.”[18] A motion to remand based on a procedural defect in the notice of removal must be made within 30 days of the filing of the notice of removal.[19] A motion for remand premised on lack of subject matter jurisdiction can be made at any time before final judgment.[20]

         III. Analysis

         Target first moves to remand because Frederick Mutual failed to obtain consent of the other defendants prior to filing its notice of removal. As previously noted, “[w]hen a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.”[21] Each defendant must sign the notice of removal, file its own, or file a written joinder in the original.[22] In this case, Frederick Mutual acted alone in filing the notice of removal on December 11, 2017. However, by December 8, 2017, Target had served all defendants with the complaint. Despite being served, none of the five other defendants signed the notice of removal, filed its own, ...


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