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Padilla v. American Modern Home Insurance Company

United States District Court, D. New Mexico

September 30, 2017


          Thomas A Biscup Zebrowski Law Shelby Township, Michigan and Geoffrey R. Romero Law Offices of Geoffrey R. Romero Albuquerque, New Mexico Attorneys for the Plaintiff.

          Meloney Cargil Perry Stacy Hemby Thompson Perry Law P.C. Dallas, Texas Attorneys for Defendant Government Employees Insurance Company.

          Megan Day Hill Civerolo, Gralow & Hill, P.A. Albuquerque, New Mexico Attorneys for Defendant American Modern Home Insurance Company.

          John A. Frase Resnick & Louis, PC Albuquerque, New Mexico Attorneys for Defendants Don Brown Insurance and Properties Inc. and Donald G. Brown.


         THIS MATTER comes before the Court on the Plaintiff's Motion for Remand, filed July 13, 2016 (Doc. 9)(“Motion”). The Court held a hearing on January 20, 2017. The primary issues are: (i) whether 28 U.S.C. § 1446 requires defendants to join in or consent to removal of an action within thirty days after they receive a copy of the initial pleading; and (ii) whether the Plaintiff Christopher Padilla fraudulently joined two of the Defendants in order to defeat federal diversity jurisdiction. The Court concludes that, while all defendants must join in or consent to removal, they need not do so within thirty days after they receive a copy of the initial pleading. The Court also concludes that the Plaintiff did not fraudulently join the non-diverse Defendants, so the Court will grant the Motion and remand the case.


         To provide context, the Court takes its recitation of the facts from Padilla's Complaint for Breach of Contract and Insurance Bad Faith, filed April, 26, 2016, in Padilla v. American Modern Home Ins. Co., D-202-CV-2016-02675 (Second Judicial District Court, County of Bernalillo, State of New Mexico), in file at July 10, 2016 (Dec. 1-1)(“Complaint”). The Court relies on this factual account for background purposes only, and it recognizes that the Complaint's factual account is largely Padilla's version of events. The Court also takes undisputed facts from the Notice of Removal, filed June 10, 2016 (Doc. 1)(“Notice of Removal”).

         Padilla is a resident of Bernalillo County, New Mexico. Complaint ¶ 2, at 2. Defendant American Modern Home Insurance Company (“American Home”) is incorporated in Ohio, and it has its principle place of business in Ohio. Notice of Removal, ¶ 8, at 2. Defendant Government Employees Insurance Company (“GEICO”) is incorporated in Maryland, and it has its principal place of business in Maryland. Notice of Removal, ¶ 11, at 2. Defendant Don Brown Insurance and Properties, Inc. (“Brown Insurance”) is a New Mexico corporation, and it has its principal place of business in Bernalillo County. Complaint ¶ 5, at 2. Defendant Donald G. Brown is a resident of Bernalillo County. See Complaint ¶ 6, at 2.

         Padilla owned a 1971 Chevrolet pickup truck that two distinct insurance policies covered. See Complaint ¶¶ 10-13, at 3. American Home issued Padilla a policy covering three collector vehicles, including the 1971 Chevrolet pickup truck. See Complaint ¶ 11, at 3. An insurance policy that GEICO sold to Padilla also covered Padilla's truck, and that policy included uninsured motorist (“UM”) coverage. Complaint ¶ 13, at 3. GEICO sold the policy to Padilla through Brown Insurance, which Brown operated and managed. See Complaint ¶ 14, at 3. GEICO and Brown Insurance told Padilla that his insurance policy's UM coverage would “protect[] him from damages sustained by an uninsured or underinsured motorist.” Complaint ¶ 15, at 3-4.

         In February, 2013, as part of the maintenance and repair process for a ruptured fuel line, Padilla parked his truck in his driveway “for safety reasons.” Complaint ¶ 17, at 4. Someone stole Padilla's truck on February 8, 2013. See Complaint ¶ 18, at 4. A few days later, Padilla's truck was found burning, and it was a total loss. See Complaint ¶ 19, at 4. The thief remains unidentified. See Complaint ¶ 19, at 4. Padilla filed an insurance claim with American Home. See Complaint ¶ 20, at 4. On February 12, 2013, American Home denied the claim, because a provision of Padilla's American Home policy restricts its coverage to damage that occurs while the vehicle is stored in a locked garage facility. See Complaint ¶ 21, at 4-5. That coverage restriction applies, however, only when a vehicle is not being used for “‘Occasional Pleasure Use, '” meaning “‘activities consistent with and related to participation in vehicle exhibitions, vehicle club activities, parades, leisure/pleasure drives, or maintenance.'” Complaint ¶ 22, at 5 (quoting Padilla's American Home policy).

         Padilla also filed a claim for UM coverage both with American Home and with GEICO, because, “once the [truck] was taken unlawfully, it was operated without permission by an unknown individual, and thus the driver was an uninsured motorist who caused damage to Mr. Padilla's property (i.e., the pickup).” Complaint ¶ 24, at 5-6. American Home denied Padilla's UM claim in February, 2014, and it asserted that Padilla had rejected UM coverage when purchasing his American Home policy. See Complaint ¶ 26, at 5. Padilla disputes that assertion and says that he “never signed a rejection of [UM] limits.” Complaint ¶ 27, at 6.

         GEICO also denied Padilla's UM claim, although it acknowledged that Padilla's policy contained UM coverage, because, under GEICO's understanding of New Mexico law, UM coverage does not apply to Padilla's loss. See Complaint ¶ 28, at 6-7. Padilla disagrees with GEICO's understanding of New Mexico law. See Complaint ¶ 34, at 7-8.


         On April 26, 2016, Padilla filed his Complaint in “[t]he Second Judicial District Court, County of Bernalillo, State of New Mexico.” Notice of Removal ¶ 2, at 1. On May 2, 2016, Padilla served notice on Brown Insurance and Brown. See Motion at 1-2. On May 11, 2016, both American Home and GEICO received service. See Motion at 2-3. On June 10, 2016, GEICO removed the case to federal court. See Notice of Removal at 8. The Notice of Removal alleges that Brown Insurance and Brown consented to removal. See Notice of Removal ¶ 35, at 6. On June 17, 2016, American Home filed a separate Notice of Consent to Removal, filed June 17, 2016 (Doc. 4)(“Notice of Consent to Removal”).

         1. The Notice of Removal.

         GEICO removed the case “on the basis of diversity jurisdiction.” Notice of Removal ¶ 36, at 7. According to GEICO, “diversity of citizenship is present in this matter as [Brown Insurance's and Brown's] citizenship does not defeat diversity, ” Notice of Removal ¶ 29, at 5, because Padilla “does not have a viable claim against” Brown Insurance or Brown, so they “are improperly joined, ” Notice of Removal ¶ 27, at 5. As justification for its claim that Padilla has no viable claim against Brown Insurance or Brown, GEICO asserts that Padilla “had no contact with [Brown Insurance or Brown] prior to the date of loss of February 8, 2013.” Notice of Removal ¶ 27, at 5.

         2. The Motion to Remand.

         On July 13, 2016, Padilla moved to remand the case to state court on two grounds. First, Padilla argued that the case should be remanded, because “GEICO's removal notice is procedurally defective.” Motion at 2. The Notice of Removal is procedurally defective, according to Padilla, because it does not allege that American Home consented to removal, and because American Home's subsequent Notice of Consent -- filed more than thirty days after American Home received a copy of the Complaint -- was untimely. See Notice of Removal at 7-8. Second, Padilla argued that the case should be remanded on jurisdictional grounds, because Brown Insurance and Brown were not fraudulently joined, so “complete diversity does not exist here.” Motion at 11. The joinder of Brown Insurance and Brown was not fraudulent, according to Padilla, because GEICO's assertion that Padilla “purchased the policy through the internet and had no contact with Donald G. Brown or Don Brown Insurance and Properties, Inc. prior to the February 8, 2013 date of loss, ” Notice of Removal ¶ 21, at 4, is factually incorrect, see Motion at 9-10. Padilla says that he obtained an insurance quote from GEICO's website, but he says that he later purchased the policy -- and paid his premium via credit card -- at Brown Insurance's office. See Motion at 10. Padilla swore to this version of events in an affidavit and attached it to his Motion, see Affidavit of Christopher R. Padilla ¶¶ 3-5, at 1-2 (dated July 12, 2016), filed July 13, 2016 (Doc. 9-1), and his Complaint accuses Brown Insurance and Brown of misrepresenting the policy that they sold to him in violation of the New Mexico Unfair Practices Act, N.M. Stat. Ann. § 57-12-2 (“UPA”), see Complaint ¶¶ 69, 75, at 21, 23 (“When Defendants . . . sold their policies to Mr. Padilla, they represented to and assured Mr. Padilla that he would be provided the coverages described herein . . . .”).

         Additionally, Padilla “requests an award of attorneys' fees and costs incurred in responding to the Notice of Removal and obtaining a remand to State court, pursuant to 28 U.S.C. § 1447(c).” Motion at 11. Such an award is justified, Padilla contends, because “GEICO lacked an objectively reasonable basis for seeking removal.” Motion at 11.

         3. The Responses.

         In response to the Motion, GEICO argues that the Notice of Removal is not procedurally defective, because American Home's Notice of Consent to Removal should be considered timely even though it was filed more than thirty days after American Home received a copy of the Complaint, because, “as it had not made an appearance or answered, American [Home] could not file its own joinder or consent prior to the 30-day deadline.” Defendant Government Employees Insurance Company's Response in Opposition to Plaintiff's Motion to Remand at 6, filed July 27, 2016 (Doc. 15)(“GEICO Response”). According to GEICO, “[a]pplication of the 30-day requirement as asserted by Plaintiff would work an injustice to any defendant that seeks to remove a multi-party lawsuit which is properly removable due to diversity jurisdiction.” GEICO Response at 6. GEICO also asserts that remand is inappropriate, even if American Home's consent was not timely, because GEICO contends that its failure to obtain American Home's timely consent to removal is a de minimis procedural defect that can be cured by amending the Notice of Removal. See GEICO Response at 6-7.

         GEICO says that Padilla fraudulently joined Brown Insurance and Brown, because its “records demonstrate that on November 10, 2012, Plaintiff purchased his policy online and finalized the purchase via a telephone call to a GEICO representative located in Dallas, Texas.” GEICO Response at 2-3. GEICO acknowledges that the “Plaintiff has provided an affidavit purporting to establish that he purchased the policy at the Don Brown Insurance office, ” but GEICO maintains that “there are no records which support his contention.” GEICO Response at 2-3. GEICO supports those factual claims by attaching to the GEICO Response an employee affidavit and a copy of its policy log records. See Affidavit of Ruben Garay ¶¶ 1-9, at 1-3 (dated June 10, 2016), filed July 27, 2016 (Doc. 15-1); Policy Log Records at 1-13, filed July 27, 2016 (Doc. 15-1).

         In addition to contesting Padilla's version of events, GEICO indicates that the “Plaintiff's Complaint asserts no causes of action against the Brown Defendants, ” and it contends that, “[w]hen no cause of action is alleged against a non-diverse defendant, fraudulent joinder is established.” GEICO Response at 9-10.

         American Home also filed a response to the Motion. See Defendants' Response to Plaintiff's Motion to Remand, filed August 2, 2016 (Doc. 16)(“American Home Response”). American Home argues that removal was proper even though the Notice of Removal did not allege that American Home consented to removal, because “the removal statute, 28 U.S.C. § 1446, only speaks generally to the manner of removal” without detailed requirements regarding “how the other defendants should ‘join in or consent to the removal.'” American Home Response at 3 (quoting 28 U.S.C. 1446(b)(2)(B)). American Home also observes that the United States Court of Appeals for the Tenth Circuit “has not stated what is necessary to satisfy the requirement that all defendants” join in or consent to removal. American Home Response at 3. Given that neither Congress nor the Tenth Circuit has established strict or specific requirements, American Modern “submits that filing a notice of removal can be effective even without concurrently filed statements of individual consent from each defendant. To hold otherwise would . . . create procedural hurdles that Congress did not intend and that provide pitfalls for all but the most experienced federal court litigants.” American Home Response at 3. In the alternative, American Home urges that, “if this Court should find that the Notice of Removal is defective, GEICO should be allowed to file an Amended Notice of Removal, signed by all defense counsel to cure any deficiency.” American Home Response at 4. American Home also reiterates GEICO's argument that Brown Insurance and Brown were fraudulently joined, because the “Plaintiff's Complaint does not assert a claim against” Brown Insurance or Brown “under any theory.” American Home Response at 8.

         Brown Insurance and Brown also filed a pro forma response to the Motion in which they incorporate by reference “all arguments and authorities” in the GEICO Response and in the American Home Response. Defendant Don Brown Insurance and Properties, Inc., and Don Brown's First Joinder in Defendants American Home Insurance Company and Government Employees Insurance Company's Responses to Plaintiff's Motion to Remand, filed August 12, 2016 (Doc. 19).

         4. The Reply.

         On August 22, 2016, Padilla filed a reply brief. See Brief in Support of Plaintiff's Motion to Remand, filed August 22, 2016 (Doc. 24)(“Reply”). Padilla asserts that the 2011 amendments to 28 U.S.C. 1446 “codif[y] the unanimity rule and set forth strict timing requirements.” Reply at 2. Padilla characterizes GEICO's argument -- that American Home did not need to consent to removal within thirty days of receiving the Complaint -- as an attempt to rewrite the statute, because “[t]he plain language of the statute does not say only those joined and served defendants who have answered or appeared must consent.” Reply at 2. Padilla also argues that American Home could have consented to removal “prior to the statutory deadline, ” even though “it had not answered or appeared in state court, ” because “Congress did not include such prerequisite language and the strict construction of the Congressional language is required.” Reply at 2.

         Padilla also argues that treating the Notice of Removal's failure to allege that American Home consented to removal as a curable procedural defect “requires ignoring the statutory requirements and is improper.” Reply at 5-6. Padilla notes that the “Defendants rely heavily on pre-amendment caselaw” when arguing that the defect in GEICO's Notice of Removal is curable, but “[t]he problem for Defendants is that indeed Congress has amended the statute to include requirements that must be met strictly.” Reply at 5.

         In addition to arguing that the Notice of Removal is procedurally defective, Padilla attacks the evidence attached to the GEICO Response purporting to establish that Padilla fraudulently joined Brown Insurance and Brown. See Reply at 5-6. Padilla characterizes the Garay Aff. as “a conclusory statement” that “provides nothing to explain the basis for his assertions, provides no detail, etc.” Reply at 6. As to GEICO's Policy Log Records that “purport[] to show a phone call to GEICO in Dallas, ” Padilla says that “the documentation does not show who allegedly placed the call. It is certainly a reasonable inference that the Brown defendants placed the call with Mr. Padilla right there in the agency's office.” Reply at 6.

         5. The Hearing.

         The Court held a hearing on the Motion on January 20, 2017. See Draft Transcript of Motion Hearing held on January 20, 2017 (“Tr.”).[1] At the beginning of the hearing, the Court indicated that it was troubled by attempts to “get around the requirement that [all Defendants] got to consent within 30 days, ” because the text of the removal statute “is fairly plain.” Tr. at 3:4-7 (Court). The Court also indicated that it was inclined to grant the Motion for lack of subject-matter jurisdiction, because “there is enough evidence here that the Court shouldn't be deciding or assuming that Mr. Padilla didn't go to Brown and the Brown Agency to order the insurance policy.” Tr. at 4:3-22 (Court).

         Padilla then argued that the removal statute “allows for removal or joinder in removal after the 30-day period” only “if there are later served defendants.” Tr. 5:19-22 (Romero). Padilla emphasized that American Home did not consent to GEICO's Notice of Removal before the time to do so had lapsed. See Tr. at 10:3-12 (Romero, Court). Padilla also said that Brown Insurance and Brown signaled that they wished to litigate in state court instead of in federal court by timely filing their amended answer in state court rather than in federal court. See Tr. at 10:13-17 (Romero). Padilla later conceded, however, that “[w]e are not arguing that the Brown defendants did not timely consent . . . . We believe that they did advise GEICO of their consent.” Tr. 10:21-24 (Romero).

         The Court then asked GEICO for its perspective on the procedural issue, specifically how GEICO could justify ignoring the statute's plain language about the consent deadline. See Tr. at 14:11-14 (Court). GEICO referred the Court to its earlier decision in Thompson v. Intel Corporation, 2012 WL 3860748 (August 27, 2012)(Browning, J.), in which the Court addressed the most recent amendment to the removal statute's legislative history. See Tr. at 14:17-15:14 (Perry). Quoting from the House Report that the Court cites in a footnote in Thompson v. Intel Corporation, GEICO said that the 2011 amendment adds a new paragraph that “clarifies the rule of timeliness and provides for equal treatment of all defendants and their ability to obtain Federal jurisdiction over the case against them without undermining the Federal interest in ensuring that defendants act with reasonable promptness in invoking Federal jurisdiction.” Tr. at 16:1-8 (Perry)(quoting H.R. Rep. No. 112-10 (2011)). GEICO argued that is vital to keep such legislative intent in mind, because § 1446's text “doesn't say [all defendants] must join in . . . thirty days.” Tr. at 16:11-13 (Perry). Instead, GEICO said that the statute indicates that, “[i]f defendants are served at different times, and a later served defendant files a notice of removal, any earlier served defendant may consent to the removal, even though the earliest served defendant did not purposely initiate or consent to removal.” Tr. at 16:22-17:2 (Perry). Conspicuous by its absence, GEICO asserted, is any indication of a thirty-day window for consent. See Tr. at 17:3-4 (Perry). According to GEICO, the combination of text and legislative history indicates that defendants need only act with “reasonable promptness” when seeking to remove to federal court. Tr. at 17:4-7 (Perry). GEICO said that the one-business-day turnaround time from when it filed the Notice for Removal and American Home consented qualifies as reasonable promptness and, therefore, conformed to Congress' intent. See Tr. at 17:8-19:25 (Perry, Court).

         American Home then offered its perspective on the procedural issue. See Tr. at 24:1-3 (Court, Hill). American Home insisted that it tried, unsuccessfully, to discover the identity of GEICO's counsel before GEICO filed the Notice of Removal. See Tr. at 25:3-20 (Hill). American Home maintained that, once the Notice of Removal's filing made GEICO's counsel's identity clear, it immediately filed its Notice of Consent to Removal. See Tr. at 25:20-22 (Hill). American Home protested, therefore, that it would be unfair and unjust to strictly apply a thirty-day deadline. See Tr. at 25:23-26:2 (Hill).

         The Court then asked American Home how, in its opinion, the deadline rule should read. See Tr. at 26:3-4 (Court). American Home suggested that the rule should be read to require defendants to consent to a notice of removal within a reasonable time after they have identified all other defendants' counsel. See Tr. at 26:5-10 (Hill). The Court pushed back, noting that Congress had not written the rule that way. See Tr. at 26:12-13 (Court). American Home speculated that Congress did not write the rule in that way because Congress did not take into account: (i) the difficulties inherent in coordinating among many defendants -- especially when one or more of those defendants is a corporation from outside the state; and (ii) New Mexico's idiosyncratic process of routing service on insurance companies through the Superintendent of Insurance. See Tr. at 26:14-21 (Hill).

         Padilla then returned to the podium and conceded that he had not previously familiarized himself with the legislative history that GEICO introduced, but he cautioned that the Court is one of “very limited jurisdiction” that must strictly construe the removal rules. Tr. at 27:11-16 (Romero). Padilla then suggested that GEICO hoisted itself on its own petard by arguing that equal treatment ought to be a consideration in this case. See Tr. at 27:19-28:7 (Romero)(referencing Tr. at 20:6-14 (Perry)). According to Padilla, equal treatment to all defendant corporations demands that the consent deadline be strictly enforced; otherwise, the voice of those defendants who do not wish to consent to removal have their voices muted. See Tr. at 27:19-28:7 (Romero). Resisting any implication that the deadline could be relaxed, Padilla urged the Court to strictly apply the thirty-day window that he found in subsection (C). See Tr. at 28:8-29:15 (Romero, Court).

         Addressing American Home's arguments, Padilla attacked the contention that American Home had been unable to identify GEICO's counsel before GEICO filed the Notice of Removal. See Tr. at 29:16-30:10 (Romero). According to Padilla, the New Mexico bar is small, and court dockets readily reveal dozens of cases against GEICO that the same even smaller collection of attorneys handled. See Tr. at 29:21-30:3 (Romero). Padilla asserted that it would not be very difficult to focus on, identify, and communicate with the counsel handling this specific case for GEICO. See Tr. at 30:2-10 (Romero). Prompted by the Court to say how it would write the consent deadline rule, Padilla extemporized that “a defendant can consent or remove within thirty days of, I'm adding actually to the language, Your Honor, but that's the way I'm reading the rule or thinking of the rule. If they're within their right to remove within their thirty days, they can remove.” Tr. at 32:22-33:2 (Romero). Enumerating some of the benefits that he saw to reading the rule this way, Padilla maintained that it: (i) prevents defendants who do not want to be removed from being removed; (ii) prevents state courts from losing jurisdiction incorrectly; and (iii) removes the lexical ambiguity that inheres to GEICO's preferred language of “within a reasonable time.” Tr. at 33:10-19 (Romero).

         The Court then turned its attention to the fraudulent joinder issue, and it asked Padilla what Brown Insurance and Brown did wrong that would permit naming them as Defendants in this case. See Tr. at 33:23-24 (Court). Padilla indicated that he believed Brown Insurance and Brown breached their contract with him, because Brown allegedly promised to obtain full UM coverage for Padilla and failed to do what he said he would do. See Tr. at 35:2-36:7 (Romero, Court). The Court noted -- and Padilla conceded -- that Padilla had received some UM coverage, even if it was not full coverage. See Tr. at 36:8-12 (Court, Romero). Padilla insisted, however, that he had wanted full coverage and not partial coverage. See Tr. at 36:16-37:1 (Romero, Court).

         GEICO then took its turn at the podium to respond regarding the fraudulent joinder issue. See Tr. at 44:2-6 (Perry, Court). GEICO stated that Padilla pleads no viable claim against Brown Insurance and Brown. See Tr. at 44:7-9 (Perry). GEICO asserted that a breach-of-contract claim cannot apply to Brown Insurance or to Brown, because: (i) GEICO denied Padilla's insurance claim; (ii) Brown Insurance and Brown are not GEICO; and (iii) the breach-of-contract claim has to be brought against the company that sold the policy. See Tr. at 44:19-45:8 (Perry). The Court challenged GEICO on this position, observing that Padilla could have a viable claim against Brown Insurance and Brown for breach of contract if Padilla “walked in, for example, and said [that he] wanted to buy insurance, ” and if Brown responded “you got it, we got it for you, ” but then Brown Insurance and Brown never bought a single policy. Tr. at 45:9-17 (Court). Furthermore, the Court highlighted that Brown Insurance and Brown receive a commission for providing customers with the GEICO policies that they purchase through him. See Tr. at 46:24-47:7 (Court, Perry). GEICO posited that the commission is immaterial, because a straight breach-of-contract claim requires that a contract exist between the parties, and Brown Insurance and Brown never entered into a contract with Padilla. See Tr. at 47:8-48:5 (Perry, Romero, Court).

         Padilla chimed that his first claim in fact includes a breach-of-contract claim against Brown Insurance and Brown, based on Padilla's contract with them to procure the coverage with GEICO. See Tr. at 48:15-24 (Romero). GEICO scoffed at the idea that “there is a mysterious third contract that we've never seen, because it's not in writing, ” suggesting that -- at worst --there might be a negligent misrepresentation claim or an agency claim to be had in the case of an oral contract, but that breach of contract requires an agreement in writing. Tr. at 48:25-50:6 (Perry, Court). The Court, not fully convinced, asked analogically whether breach of contract exists if someone walks into a store and buys a piece of wood but the owner does not give him or her the wood. See Tr. at 50:7-11 (Court). GEICO suggested that the analogy was imperfect, on the grounds that Brown and Brown were only agents who sold GEICO's contract, i.e., that Brown and Brown did not have their own policy to sell. See Tr. at 50:12-51:5 (Perry).

         The Court then offered Brown Insurance and Brown an opportunity to speak to the merits question, asking them to focus why they believe that Padilla does not have a viable claim against them. See Tr. at 53:13 (Court). The Court expressed qualms about concluding that Brown Insurance and Brown could not have breached a contract with Padilla under any circumstances, as GEICO suggested. See Tr. at 53:16-19 (Court). After all, the Court surmised, insurance brokers could “really do[] bad things to consumers if there isn't some law out there that says, when people walk in and [the brokers] don't purchase what they say they purchased, ” that the broker is liable for breach of contract. Tr. at 53:19-24 (Court). Brown Insurance and Brown explained that it did not believe that insurance brokers in general are immune from breach-of-contract suits, but they believed that Padilla does not prove a viable breach-of-contract claim against them in this particular instance. See Tr. at 53:25-54:3 (Frase). According to Brown Insurance and Brown, there was no consideration exchanged between Padilla, and Brown Insurance or Brown; they stated that even an insurance broker commission, if any, would arise out of the contractual relationship that GEICO has with Brown and Brown Insurance. See Tr. at 54:3-15 (Frase). Burrowing more deeply into this point, the Court suggested that it does not seem to matter from whence the broker commission comes insofar as the commission arises from Brown Insurance and Brown selling Padilla an insurance contract. See Tr. at 54:16-24 (Court). Brown Insurance and Brown indicated that they disputed that they even sold the GEICO policy to Padilla. See Tr. 55:13-19 (Frase).

         The Court asked Brown Insurance and Brown whether Brown would even be able to state under oath that Brown Insurance and Brown had not sold the insurance policy to Padilla. See Tr. at 55:20-24 (Court). Brown Insurance and Brown responded that it is likely that Brown will never be able to make such a statement under oath, because he (i) retired before the case was filed; (ii) gave away all his records; and (iii) has no direct interactions with Padilla. See Tr. at 55:25-56:4 (Frase). Brown Insurance and Brown acknowledged that, as a result, it was staking its defense primarily on GEICO's documentation. See Tr. at 56:5-9 (Frase, Court). Brown Insurance and Brown then conceded that they believe GEICO's and Padilla's conflicting accounts of how Padilla purchased the GEICO policy could be reconcilable, at least for the purposes of the Motion.[2] See Tr. at 56:10-13 (Court, Frase).

         Padilla then took advantage of his opportunity to reply to further address his breach-of-contract claim against Brown Insurance and Brown. See Tr. at 56:18-23 (Court, Romero). Padilla asserted that there are “lots of different claims related to failing to procure coverage, ” including breach of contract. Tr. at 57:4-18 (Romero, Court). Padilla contended that Brown Insurance and Brown failed to obtain the unlimited UM coverage that Padilla requested, and that New Mexico requires under the Mandatory Financial Responsibility Act, N.M. Stat. Ann. §§ 66-5-201 to -239. See Tr. at 57:25-58:9 (Romero).


         “Subject-matter jurisdiction under 28 U.S.C. § 1332(a)(1) requires: (i) complete diversity among the parties; and (ii) that ‘the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs.'” Thompson v. Intel Corp., 2012 U.S. Dist. LEXIS 126311, at *12 (D.N.M. 2012)(Browning, J.)(citing 28 U.S.C. § 1332(a)). As the Court has previously explained, “[t]he Supreme Court of the United States has described this statutory diversity requirement as ‘complete diversity, ' and it is present only when no party on one side of a dispute shares citizenship with any party on the other side of a dispute.” McEntire v. Kmart Corp., 2010 U.S. Dist. LEXIS 13373, at *3 (D.N.M. 2010)(Browning, J.)(citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267-68 (1806), overruled in part by Louisville & N. R. Co. v. Mottley, 211 U.S. 149 (1908); McPhail v. Deere & Co., 529 F.3d 947, 951 (10th Cir. 2008)). The amount-in-controversy requirement is an “estimate of the amount that will be put at issue in the course of the litigation.” Valdez v. Metro. Prop. & Cas. Ins. Co., 867 F.Supp.2d 1143, 1163 (D.N.M. 2012)(Browning, J.)(citing McPhail v. Deere & Co., 529 F.3d at 956). The Court will discuss the two requirements in turn.

         1. Diversity of Citizenship.

         For diversity jurisdiction purposes, a person's domicile determines citizenship. See Crowley v. Glaze, 710 F.2d 676, 678 (10th Cir. 1983). “A person's domicile is defined as the place in which the party has a residence in fact and an intent to remain indefinitely, as of the time of the filing of the lawsuit.” McEntire v. Kmart Corp., 2010 U.S. Dist. LEXIS 13373, at *3 (citing Crowley v. Glaze, 710 F.2d at 678). See Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426, 428 (1991)(“We have consistently held that if jurisdiction exists at the time an action is commenced, such jurisdiction may not be divested by subsequent events.”). If neither a person's residence nor the location where the person has an intent to remain can be established, the person's domicile is that of his or her parents at the time of the person's birth. See Gates v. Comm'r of Internal Revenue, 199 F.2d 291, 294 (10th Cir. 1952)(“[T]he law assigns to every child at its birth a domicile of origin. The domicile of origin which the law attributes to an individual is the domicile of his parents. It continues until another domicile is lawfully acquired.”). Additionally, “while residence and citizenship are not the same, a person's place of residence is prima facie evidence of his or her citizenship.” McEntire v. Kmart Corp., 2010 U.S. Dist. LEXIS 13373, at *3 (citing State Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514, 520 (10th Cir. 1994)). A corporation, on the other hand, is “‘deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.'” Gadlin v. Sybron Int'l Corp., 222 F.3d 797, 799 (10th Cir. 2000)(quoting 28 U.S.C. § 1332(c)(1)); Thompson v. Intel Corp., 2012 WL 3860748, at *12 (D.N.M. 2012)(Browning, J.).

         2. Amount in Controversy.

         The statutory amount-in-controversy requirement, which presently stands at $75, 000.00, must be satisfied as between a single plaintiff and a single defendant for a federal district court to have original jurisdiction over the dispute; “a plaintiff cannot aggregate independent claims against multiple defendants to satisfy the amount-in-controversy requirement, ” nor can multiple plaintiffs aggregate their claims against a single defendant to exceed the threshold. Martinez v. Martinez, 2010 U.S. Dist. LEXIS 38109, at *18 (D.N.M. 2010)(Browning, J.). If multiple defendants are jointly liable, or jointly and severally liable, on some of the claims, however, the amounts of those claims may be aggregated to satisfy the amount-in-controversy requirement as to all defendants jointly liable for the claims. See Alberty v. W. Sur. Co., 249 F.2d 537, 538 (10th Cir. 1957); Martinez v. Martinez, 2010 U.S. Dist. LEXIS 38109, at *18. Similarly, multiple plaintiffs may aggregate the amounts of their claims against a single defendant if the claims are not “separate and distinct.” Martin v. Franklin Capital Corp., 251 F.3d 1284, 1292 (10th Cir. 2001)(Seymour, C.J.), abrogated on other grounds by Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547 (2014). Multiple claims by the same plaintiff against the same defendant may be aggregated, even if the claims are entirely unrelated. See 14AA Charles A. Wright, Arthur R. Miller, Edward H. Cooper, Vikram D. Amar, Richard D. Freer, Helen Hershkoff, Joan E. Steinman, & Catherine T. Struve, Federal Practice and Procedure, Jurisdiction ยง 3704, at 566-95 (4th ed. 2011). While the rules on aggregation sound complicated, they are not in practice: if a single plaintiff -- regardless whether he or she is the only plaintiff who will share in the recovery -- can recover over $75, 000.00 from a single defendant --regardless whether ...

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