United States District Court, W.D. Texas, Austin Division
HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION OF THE UNITED STATES
HIGHTOWER UNITED STATES MAGISTRATE JUDGE
this Court are Defendant Allstate Fire & Casualty
Insurance Company's Motion to Dismiss, filed on May 29,
2019 (Dkt. No. 2); Plaintiff's Motion to Remand, filed on
June 7, 2019 (Dkt. No. 5); and the parties' related response
and reply briefs. The District Court referred the above
motions and related filings to the undersigned Magistrate
Judge for Report and Recommendation pursuant to 28 U.S.C.
§ 636(b)(1), Federal Rule of Civil Procedure 72, and
Rule 1 of Appendix C of the Local Rules of the United States
District Court for the Western District of Texas
Jessica Arnold (“Plaintiff”) brings this lawsuit
based on a claim for underinsured motorist benefits
(“UIM benefits”) under her insurance policy
contract (the “Policy”) with Allstate Fire &
Casualty Insurance Company (“Allstate”).
Plaintiff alleges that she was injured in an October 2017
automobile accident and that the accident was caused by the
negligence of underinsured driver Amy Elizabeth Szemkus
originally filed this lawsuit in state court on January 22,
2019, asserting negligence claims against Defendant Szemkus
only. Dkt. No. 1-5. On April 22, 2019, Plaintiff amended her
Original Petition to include claims against Allstate. Dkt.
No. 1-3. See Arnold v. Allstate, C-1-CV-19-000665
(County Court at Law No. 2, Travis County, Tex. April 22,
First Amended Petition alleges that Allstate refuses to pay
UIM benefits it is obligated to pay under the Policy. Dkt.
No. 1-3. Plaintiff further alleges that on December 6, 2017,
she notified Allstate of the automobile accident and basis of
her claim for UIM benefits, but Allstate failed to timely
acknowledge and commence an investigation of Plaintiff's
claim and failed to attempt in good faith to settle,
compelling her to initiate litigation. Id. Plaintiff
asserts claims against Allstate for breach of contract and
violations of the Texas Insurance Code, including the Prompt
Payment of Claims Act and the Unfair Claim Settlement Act.
Id. Plaintiff's First Amended Petition seeks
monetary relief. Id.
17, 2019, Plaintiff consented to Defendant Szemkus'
voluntary dismissal from the state court action, based on an
agreement between the parties. Dkt. No. 1-7. On May 29, 2019,
Allstate removed this lawsuit to federal court on the basis
of diversity jurisdiction under 28 U.S.C. § 1332 and
immediately moved for dismissal of Plaintiff's claims
under Fed.R.Civ.P. 12(b)(6). Dkt. Nos. 1 and 2. Plaintiff
opposes Allstate's Motion to Dismiss and argues that the
case was improperly removed. Dkt. No. 6.
7, 2019, Plaintiff filed a Motion to Remand, contending that
there is a lack of diversity between the parties. Dkt. No. 5.
On June 18, 2019, Plaintiff filed “Plaintiff's
Original Complaint Filed Subject to, and Subsequent to,
Plaintiff's Motion to Remand” (“Second
Amended Pleading”), in which Plaintiff restates her
previous claims against Allstate and adds a cause of action
seeking a declaratory judgment to establish the amount of
benefits she is owed under her insurance policy. Dkt. No. 7.
Court addresses the Motion to Remand and Motion to Dismiss in
Motion to Remand
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. There are two principal
bases on which a district court may exercise removal
jurisdiction: the existence of a federal question and
complete diversity of citizenship between the parties. 28
U.S.C. §§ 1331 and 1332. Here, Allstate alleges
only diversity of citizenship as the basis of the Court's
jurisdiction. A federal court may exercise diversity
jurisdiction after removal only if three requirements are
met: (1) the parties are of completely diverse citizenship;
(2) none of the properly joined defendants is a citizen of
the state in which the case is brought; and (3) the case
involves an amount in controversy of more than $75, 000.
See 28 U.S.C. §§ 1332(a), 1441(b)(2);
Flagg v. Stryker Corp., 819 F.3d 132, 136 (5th Cir.
2016). If a party is improperly joined, a court may disregard
the party's citizenship for purposes of determining
subject matter jurisdiction. Smallwood v. Ill. Cent. R.R.
Co., 385 F.3d 568, 572-73 (5th Cir. 2004) (en banc).
motion to remand, “[t]he removing party bears the
burden of showing that federal jurisdiction exists and that
removal was proper.” Manguno v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
“Any ambiguities are construed against removal because
the removal statute should be strictly construed in favor of
remand.” Id. The federal removal statute
provides that even where a case was not initially removable,
“a notice of removal may be filed within 30 days after
receipt by the defendant, through service or otherwise, of a
copy of an amended pleading, motion, order or other paper
from which it may first be ascertained that the case is one
which is or has become removable.” 28 U.S.C.
§ 1446(b)(3) (emphasis added); see also Weems v.
Louis Dreyfus Corp., 380 F.2d 545, 547-48 (5th Cir.
1967). To ...