United States District Court, W.D. Texas, Austin Division
CARLOS RIOJAS and CYNTHIA RIOJAS, a/k/a CYNTHIA COLLAZO, Plaintiffs,
NATIONWIDE GENERAL INSURANCE COMPANY; DHI MORTGAGE CO., LTD.; DHI MORTGAGE CO., GP; LEZAM & ASSOCIATES, LLC; and BRITTANY PRESENT; Defendants.
PITMAN, UNITED STATES DISTRICT JUDGE.
the Court is Plaintiffs Carlos and Cynthia Riojas's (the
“Riojases”) Motion to Remand, (Dkt. 5), along
with a response filed by Defendant Nationwide General
Insurance Company (“Nationwide”) (Dkt. 7).
Nationwide's response also asks the Court to dismiss the
claims against Defendants DHI Mortgage Co., Ltd.; DHI
Mortgage Co., GP (together, “DHI”); Lezam &
Associates, LLC (“Lezam”); and Brittany Present
(“Present”) (altogether, including Nationwide,
“Defendants”). (Id. at 8-9). After
considering the parties' arguments, the record, and the
relevant law, the Court finds that the motion should be
Riojases filed this action against Defendants in the 98th
Judicial District Court in Travis County, Texas, on August
22, 2018. (Orig. Pet., Dkt. 1-1, at 5). In the process of
selling the Riojases a home loan in 2015, DHI (through its
employee, Present), allegedly told the Riojases that DHI
would secure homeowners' insurance for their home.
(Id. at 7). Present then asked Lezam to obtain an
insurance policy, and Lezam found one from Nationwide.
(Id.). All of the defendants allegedly represented
to the Riojases that the policy provided “full”
coverage for their home, including water damage.
pipe burst in the Riojases' upstairs bathroom in October
2017, they reported the damage to Nationwide, which
represented that the loss would be covered, told them to
check into a hotel, and hired a remodeling company to repair
to damage. (Id. at 7-8). After remodeling work had
begun, Nationwide allegedly told the Riojases that the loss
would not be covered. (Id. at 8). The Riojases then
filed this action, asserting claims for breach of contract,
breach of the duty of good faith and fair dealing, fraud, the
Texas Insurance Code, the Texas Deceptive Trade Practices
Act, negligent misrepresentation, and negligent procurement.
(Id. at 9-12).
December 28, 2018, Nationwide removed this action to this
Court. (Dkt. 1). The Riojases, Texas residents, are diverse
from Nationwide, an Ohio resident. (Id. at 3). They
are not diverse from DHI, Lezam, and Present, all of whom are
also Texas residents. (Id.). But Nationwide says
that all of the in-state defendants are improperly joined,
both because the limitations period on the Riojases'
claim expired before they filed suit, (id. at 6-7),
and because insurers and their agents have no duty “to
explain policy terms, ” (id. at 5). The
Riojases now move to remand on the sole basis that
Nationwide's removal was untimely. (Dkt. 5).
defendant may remove any civil action from state court to a
district court of the United States that has original
jurisdiction. 28 U.S.C. § 1441(a). District courts have
original jurisdiction over all civil actions that are between
citizens of different states and involve an amount in
controversy in excess of $75, 000, exclusive of interest and
costs. 28 U.S.C. § 1332(a). Diversity jurisdiction
“requires complete diversity-if any plaintiff is a
citizen of the same State as any defendant, then diversity
jurisdiction does not exist.” Flagg v. Stryker
Corp., 819 F.3d 132, 136 (5th Cir. 2016).
“the improper joinder doctrine constitutes a narrow
exception to the rule of complete diversity.”
Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d
242, 249 (5th Cir. 2011). To establish improper joinder, the
removing party has the burden to demonstrate either:
“(1) actual fraud in the pleading of jurisdictional
facts, or (2) inability of the plaintiff to establish a cause
of action against the non-diverse party in state
court.” Smallwood v. Ill. Cent. R.R. Co., 385
F.3d 568, 573 (5th Cir. 2004). Only the doctrine's second
prong is before the Court here. (Not. Removal, Dkt. 1, at
the second prong of the improper joinder doctrine, a
defendant must establish “that there is no possibility
of recovery by the plaintiff against an in-state defendant,
” which stated differently means “that there is
no reasonable basis for the district court to predict that
the plaintiff might be able to recover against an in-state
defendant.” Smallwood, 385 F.3d at 573. A
court evaluates the reasonable basis of recovery under state
law by “conduct[ing] a Rule 12(b)(6)-type
analysis” or “pierc[ing] the pleadings and
conduct[ing] a summary inquiry.” Id.; see
also Int'l Energy Ventures Mgmt., L.L.C. v. United Energy
Grp., Ltd., 818 F.3d 193, 207 (5th Cir. 2016) (stating
that a court may use either analysis, but it must use one and
only one). A Rule12(b)(6)-type analysis is appropriate here.
conducting a 12(b)(6)-type analysis, federal pleading
standards apply. Int'l Energy Ventures, 818 F.3d
at 207. Accordingly, a plaintiff must plead “enough
facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). The party seeking removal “bears the
burden of establishing that federal jurisdiction exists and
that removal was proper.” Manguno v. Prudential
Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.
2002). The removal statute must “be strictly construed,
and any doubt about the propriety of removal must be resolved
in favor of remand.” Gasch v. Hartford Accident
& Indem. Co., 491 F.3d 278, 281-82 (5th Cir.
notice of removal must be filed within 30 days after the
defendant is formally served with a copy of the initial
pleading setting forth the plaintiff's claim for relief.
28 U.S.C. § 1446(b)(1); Bd. of Regents of Univ. of
Tex. Sys. v. Nippon Tel. & Tel. Corp., 478 F.3d 274,
278 (5th Cir. 2007). However, if the case stated by the
initial pleading is not removable, a notice of removal may be
filed within 30 days after the defendant receives any paper
from which “it may first be ascertained that the case
is one which is or has become removable.” 8 U.S.C.
§ 1446(b)(3). Unless the plaintiff waives this time
limit or it should not apply for an equitable reason,
“a defendant who does not timely assert the right to
remove loses that right.” Brown v. Demco,
Inc., 792 F.2d 478, 481 (5th Cir. 1986).
Riojases believe that Nationwide waived its right to remove
because it waited more than 30 days from being served with
the original petition to do so. (Mot. Remand, Dkt. 5, at
3-4). Nationwide responds that the case was not removable
when the action was first filed because the limitations
defense had not been pleaded by every in-state defendant