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Estes v. Maxim Healthcare Services, Inc.

United States District Court, D. New Mexico

March 8, 2019

LINDA ESTES, Plaintiff,



         THIS MATTER is before the Court on Plaintiff's Motion to Remand, [Doc. 6], Plaintiff's Motion for Leave to File Amended Complaint for Damages, [Doc. 8], and Defendant Maxim's Motion for Leave to Amend its Answer and Defenses to Plaintiff's Complaint, [Doc. 31]. Having reviewed the motion to remand and brief in support, the Defendants' response, the Plaintiff's reply, and all the relevant legal authorities, the Court concludes that Plaintiff's Motion to Remand should be granted because Defendants failed to remove the case in a timely manner. The case will be remanded to state court, and the other motions will remain pending.


         On March 29, 2017, Plaintiff Linda Estes, a New Mexico citizen, filed a lawsuit in state court against Defendant Maxim Healthcare Services, a Maryland citizen, and Defendant Jeremy Solano, a New Mexico citizen, alleging five counts: (1) violations of the New Mexico Human Rights Act (“NMHRA”); (2) breach of implied contract; (3) assault and battery; (4) negligence; and (5) punitive damages. [Doc. 1-1 at 4 of 10]. The complaint states, inter alia, “Plaintiff has suffered damages including, but not limited to emotional distress and lost wages.” [Doc. 1-1 at 6 of 10]. It also asserts a claim for punitive damages. [Doc. 1-1 at 8 of 10].

         Almost one year later, on March 20, 2018, Defendants deposed the Plaintiff. [Doc. 1 at 3]. Then on March 28, 2018, nearly a year after Plaintiff initially filed suit in state court, Defendants filed their Notice of Removal. Id. Defendants contend that the case had just become removable because at the Plaintiff's deposition they discovered for the first time that the amount in controversy exceeded $75, 000. Defendants further argue that Plaintiff fraudulently joined Defendant Solano to defeat this Court's diversity jurisdiction. Id. at 3.

         In her Motion to Remand, Plaintiff asserts that Defendants were in possession of information regarding the amount in controversy well before her deposition and therefore they did not remove the case in a timely manner. Plaintiff also argues that this Court does not have diversity jurisdiction because Defendant Solano was properly joined to this lawsuit. Plaintiff also filed a Motion for Leave to Amend seeking to add a claim against Defendant Solano. Finally, Defendant Maxim seeks to amend its answer to include a defense alleging that Plaintiff did not follow the statutory requirements under the NMHRA.


         Federal courts are courts of limited jurisdiction, and there is a presumption against removal jurisdiction, which the defendant seeking removal must overcome. See Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982); see also Martin v. Franklin Capital Corp., 251 F.3d 1283, 1290 (10th Cir. 2001). Removal statutes are to be strictly construed, and all doubts are to be resolved against removal. Fajen, 683 F.2d at 333.

         Defendants removed this case to federal court based on diversity jurisdiction. To invoke diversity jurisdiction, “a party must show that complete diversity of citizenship exists between the adverse parties and that the amount in controversy exceeds $75, 000.” Dutcher v. Matheson, 733 F.3d 980, 987 (10th Cir. 2013). “The burden of establishing subject-matter jurisdiction is on the party asserting jurisdiction.” Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002) (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). When a case has been removed, “the defendant is required to prove jurisdictional facts by a ‘preponderance of the evidence' such that the amount in controversy may exceed $75, 000.” McPhail v. Deere & Co., 529 F.3d 947, 953 (10th Cir. 2008) (citation and internal quotation marks omitted). Nevertheless, “the removing defendant, as proponent of federal jurisdiction, must establish what the plaintiff stands to recover.” Id. at 954 (citation omitted).

         A matter may be remanded back to state court if the federal court lacks subject matter jurisdiction (such as diversity jurisdiction). 28 U.S.C. § 1447(c). “[T]here are two types of improperly removed cases: those in which the federal court has no subject matter jurisdiction and those with defects in the removal procedure itself.” Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072, 1076 (10th Cir. 1999) (citation omitted). A defendant must remove a case within thirty (30) days “after receipt by the defendant [. . .] 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) (emphasis added).

         “[T]he key to determining the date from which the clock begins to run is when the defendant is able to intelligently ascertain removability.” Akin v. Ashland Chem. Co., 156 F.3d 1030, 1036 (10th Cir. 1998) (citation and internal quotation marks omitted). The Tenth Circuit does not “impose a duty to investigate and determine removability where the initial pleading indicates that the right to remove may exist.” Id. (citation and internal quotation marks omitted). The Tenth Circuit “requires clear and unequivocal notice from the pleading itself, or a subsequent ‘other paper' such as an answer to interrogatory.” Id. (quotation marks in original). Furthermore, a statement of damages need not be explicit; rather, a defendant may rely on an estimate of the potential damages from the allegations in the complaint. For example, a Defendant may remove a case based on a reading of the face of the complaint even though the complaint did not specify the numerical value of the damage claim. McPhail v. Deere & Co., 529 F.3d 947, 955-56 (10th Cir. 2008) (citing Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th Cir.1999)).

         In any event, a case may not be removed based on diversity jurisdiction “more than 1 year after commencement of the action, unless the district court finds the plaintiff has acted in bad faith in order to prevent a defendant from removing the action.” Id. § 1446(c)(1). “The failure to comply with these express statutory requirements for removal can fairly be said to render the removal ‘defective' and justify a remand.” Huffman, 194 F.3d at 1077 (citation and internal quotation marks omitted).


         The first issue this Court must resolve is whether Defendants filed their notice of removal in a timely manner under 28 U.S.C. § 1446. Plaintiff filed the Complaint in state court on March 29, 2017, Defendants took the Plaintiff's deposition on March 20, 2018, and Defendants removed on March 28, 2018. Thus, the Defendants did remove the case just under one year from commencement of the action in accordance with Section 1446(c)(1). Less clear is whether the Defendants removed the case within 30 days of their receipt of “an amended pleading, motion, order, or other paper” from which it was first ascertainable that the case was removable. 18 U.S.C. § 1446(b)(3). Here, that question centers upon the question of when Defendants were in possession of information from the pleadings and discovery that would enable them to intelligently ascertain that the jurisdictional amount of $75, 000 was satisfied. The Tenth Circuit has held that one may ascertain the amount in controversy through “contentions, interrogatories or admissions in state court; by calculation from the complaint's allegations[;] by reference to the plaintiff's informal estimates or settlement demands[;] ...

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