Opinion
Case No. 19-CV-0788 (PJS/LIB)
04-09-2019
Melissa Amandalee MAYO and Dana Mayo, Plaintiffs, v. Christina Marie KNUTSON; Neil Owen Knutson; and Government Employees Insurance Company, Defendants.
Matthew James Barber, Peter W Riley, Schwebel, Goetz & Sieben, Minneapolis, MN, for Plaintiffs. John R. Crawford, Lauren Elizabeth Nuffort, Michelle Kristine Kuhl, Lommen Abdo, P.A., Minneapolis, MN, for Defendants.
Matthew James Barber, Peter W Riley, Schwebel, Goetz & Sieben, Minneapolis, MN, for Plaintiffs.
John R. Crawford, Lauren Elizabeth Nuffort, Michelle Kristine Kuhl, Lommen Abdo, P.A., Minneapolis, MN, for Defendants.
ORDER
Patrick J. Schiltz, United States District Judge
This case arises out of a July 2018 motor-vehicle accident involving plaintiff Melissa Mayo and defendant Christina Knutson. The Mayos commenced this lawsuit in state court asserting two claims: (1) a claim of negligence against Knutson and her father, the alleged owner of the car that Knutson was driving; and (2) a claim seeking a declaration of insurance coverage against defendant Government Employees Insurance Company ("GEICO"), which issued an automobile-insurance policy to Knutson's mother.
GEICO removed this case on the basis of diversity jurisdiction. GEICO does not allege that there exists complete diversity of citizenship. Instead, GEICO argues that the Court should realign the Knutson defendants with the Mayo plaintiffs because their interests are not adverse. Skeptical of this argument, the Court ordered GEICO to show cause why this case should not be remanded for lack of subject-matter jurisdiction.
Having reviewed GEICO's response, the Court remains unconvinced that realignment is appropriate in this case. As the Court previously explained, the Mayos' and the Knutsons' interests are obviously adverse with respect to the Mayos' negligence claim. If the Knutsons prevail on that claim, there will be no need for a coverage determination against GEICO. And even if the Knutsons are found liable, they have an interest in minimizing the damages so as to avoid personal exposure. Clearly, then, there is "an actual and substantial controversy" between the Knutsons and the Mayos that precludes realignment. Universal Underwriters Ins. Co. v. Wagner , 367 F.2d 866, 871 (8th Cir. 1966).
As the Court previously noted, the Mayos' demand letter, which GEICO submitted in support of its notice of removal, asserts that "the damages in this matter unquestionably far exceed the available insurance coverage including the coverage for Progressive on the vehicle [Christina Knutson] was operating." Nuffort Decl. Ex. A.
GEICO argues that the Knutsons should be realigned as plaintiffs because Minnesota law does not permit an injured party to proceed directly against a liability insurer. But GEICO's argument goes to the merits of the Mayos' claim, and the Court cannot reach the merits of any claim without jurisdiction. GEICO also argues that it would be more efficient to keep this case in federal court because the Mayos and the Knutsons are likely to enter into a Miller-Shugart agreement under which their interests will be aligned. The short answer to this contention is that removal jurisdiction depends on the state of facts at the time of removal. See Schubert v. Auto Owners Ins. Co. , 649 F.3d 817, 822 (8th Cir. 2011) ("It is axiomatic the court's jurisdiction is measured either at the time the action is commenced or, more pertinent to this case, at the time of removal."); see also Universal Underwriters Ins. Co. , 367 F.2d at 871 ("The question of realignment, involving jurisdiction, must be tested at the time of filing of the complaint."). The Court therefore remands this case under 28 U.S.C. § 1447(c) for lack of subject-matter jurisdiction.
See Miller v. Shugart , 316 N.W.2d 729 (Minn. 1982).
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ORDER
Based on the foregoing, and on all of the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT this matter is REMANDED to the Minnesota District Court, Fourth Judicial District.