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Pinnacle Rock Financial Services, LLC v. Allstate Insurance Co.

United States District Court, E.D. Missouri, Eastern Division

October 5, 2017

PINNACLE ROCK FINANCIAL SERVICES, LLC, Plaintiff,
v.
ALLSTATE INSURANCE CO., Defendant.

          MEMORANDUM AND ORDER

          STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on plaintiff Pinnacle Rock Financial Services, LLC's (“Pinnacle”) motion to remand (#10) and defendant Allstate Insurance Co.'s (“Allstate”) motion to dismiss (#11). The motions are fully briefed. Because Allstate's removal was untimely, Pinnacle's motion to remand will be granted.

         I. Background

         Allstate underwrites and sells insurance policies. It sells some of its policies through exclusive agents. To become an exclusive agent, a person must start a new agency or buy an existing one. This is a dispute about the sale of one of Allstate's agencies (“Target Agency”).

         Pinnacle originally filed this action in state court on June 13, 2017. The next day, Pinnacle served Allstate through the Director of the Missouri Department of Insurance (“Director”). As a foreign insurance company, Allstate was required to “execute an irrevocable power of attorney, ” “appointing and authorizing the [Director] to acknowledge or receive service of all lawful process” before it could issue policies in Missouri. RSMo. § 375.906.1. The same day, Pinnacle emailed an Allstate lawyer a copy of the file-stamped petition and mistakenly told the Allstate lawyer that Pinnacle would “hold service.” On June 15, 2017, Pinnacle corrected itself and told the Allstate lawyer that Pinnacle had already served the Director. The Director mailed the summons and petition to Allstate's designated Missouri agent, which received the service on June 19, 2017.

         On June 28, 2017, Allstate requested a copy of “Exhibit 1”-a list of the Target Agency's accounts-which Pinnacle referred to many times in the petition but inadvertently failed to attach. Pinnacle sent Allstate Exhibit 1 the same day. On July 18, 2017-thirty-four days after the Director was served, and twenty-nine days after Allstate's designated Missouri agent received service-Allstate removed the action to this Court based on diversity jurisdiction. Pinnacle moved to remand, arguing that removal was untimely.

         II. Legal Standard

         “Any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . to the district court of the United States.” 28 U.S.C. § 1441(a). The notice of removal must be filed “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” Id. § 1446(b). The thirty-day window is triggered when the defendant is officially served, and state law determines when a defendant is properly served. Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 351 (1999).

         Missouri law requires all foreign insurance companies to first appoint the Director as their irrevocable power of attorney before they can issue policies in Missouri. Specifically, the statute provides:

1. No insurance company or association not incorporated or organized under the laws of this state shall directly or indirectly issue policies, take risks, or transact business in this state, until it shall have first executed an irrevocable power of attorney in writing, appointing and authorizing the director of the department of insurance, financial institutions and professional registration of this state to acknowledge or receive service of all lawful process, for and on behalf of the company, in any action against the company, instituted in any court of this state, or in any court of the United States in this state, and consenting that service upon the director shall be deemed personal service upon the company.
2. Service of process shall be made by delivery of a copy of the petition and summons to the director of the department of insurance, financial institutions and professional registration, the deputy director of the department of insurance, financial institutions and professional registration, or the chief clerk of the department of insurance, financial institutions and professional registration at the office of the director of the department of insurance, financial institutions and professional registration at Jefferson City, Missouri, and service as aforesaid shall be valid and binding in all actions brought by residents of this state upon any policy issued or matured, or upon any liability accrued in this state, or on any policy issued in any other state in which the resident is named as beneficiary, and in all actions brought by nonresidents of this state upon any policy issued in this state in which the nonresident is named beneficiary or which has been assigned to the nonresident, and in all actions brought by nonresidents of this state on a cause of action, other than an action on a policy of insurance, which arises out of business transacted, acts done, or contracts made in this state.

RSMo. §§ 375.906.1-375.906.2 (emphases added).

         III. Discussion

         Allstate claims its removal was timely based on three arguments. First, it argues that § 375.906 does not apply in this case. Second, it argues that the thirty-day removal window was triggered when its designated Missouri agent received service, not when Pinnacle served the Director. Third, it argues that it was not properly served until ...


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