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Breusch v. Progressive Preferred Insurance Co.

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

December 8, 2017

ERIC BREUSCH, Plaintiff,
v.
PROGRESSIVE PREFERRED INSURANCE COMPANY and NATHANIEL STRAUB, Defendants. NATHANIEL STRAUB, Plaintiff/Counter Defendant,
v.
PROGRESSIVE PREFERRED INSURANCE COMPANY, Defendants/Counterclaim Plaintiff,
v.
ERIC BREUSCH, Third Party Counterclaim Defendant.

          OPINION, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY, UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the pending motions to dismiss, to remand and alternatively to stay. For the reasons set forth below, the motion to remand is granted. The request to stay is granted, and the Motions to Dismiss are denied.

         Facts and Background

         This matter is composed of two consolidated cases. The cases involve litigation stemming from a personal injury suit brought in state court by Plaintiff against Defendant Straub. Prior to filing suit, Plaintiff sent a written demand to Defendant Progressive to settle his claim. Progressive did not settle the claim, and Plaintiff alleges it refused to pay the claim.

         On April 30, 2015, Plaintiff obtained a judgment against Straub in the amount of Two Million Six Thousand Seven Hundred and Eighty-Nine Dollars (2, 006, 789.00), plus interest at a rate of 5.25% per annum.

         After the judgment was entered, Straub and his wife filed bankruptcy and listed Plaintiff as a judgment creditor. On February 5, 2016, Straub, through the bankruptcy trustee made an assignment of certain of Straub's claims against Defendant Progressive to Plaintiff. The assignment authorizes Plaintiff to pursue suit against Defendant Progressive for the unsatisfied portion of the judgment entered against Straub.

         Plaintiff filed an equitable garnishment claim against Progressive and Straub in state court, pursuant to RSMo Section 379.200. This suit also includes claims of bad faith, and breach of fiduciary duty. Defendant Straub also filed an action against Progressive seeking a declaratory judgment ordering Progressive to produce the entire claims file of the claim filed by Breusch. Straub also sought attorneys' fees and punitive damages in his declaratory judgment action.

         Progressive removed both the garnishment suit and the declaratory judgment action to this Court. Progressive also filed a counterclaim for declaratory judgment against Straub and, through joinder, Breusch. The declaratory judgment action seeks a declaration from this Court that it acted lawfully, reasonably and consistently with the terms of the Insurance Policy it issued insuring Straub in the amount of $25, 000 limit for bodily injury, in its handling of the Breusch claim and lawsuit. It also seeks a declaration that it is not liable to Breusch or Straub for any damages claimed or contemplated in the Settlement Agreement, in the bankruptcy case or in any judgment entered in the underlying lawsuit in excess of the bodily injury limits of $25, 000. The parties moved to consolidate these suits, which the Court has granted.

         Straub moved to voluntarily dismiss his claim for the claim file on February 28, 2017. No objections were filed, and the Court granted the Motion on March 6, 2017.[1]

         Breusch and Straub have moved to dismiss the declaratory judgment suit. Upon review of the claims and the record, the Court concludes that the garnishment case was improperly removed and should be remanded. The declaratory judgment action should be stayed in deference to the garnishment claim that will be litigated in state court.

         Discussion

         Motion to Remand

         The Eighth Circuit has admonished district courts to “be attentive to a satisfaction of jurisdictional requirements in all cases.” Sanders v. Clem co Industries, 823 F.2d 214, 216 (8th Cir.1987). Because this action has been removed from state court to this Court, the party seeking to invoke diversity jurisdiction is the defendant. “Only state court actions that originally could have been filed in federal court may be removed to federal court by the defendant.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). The party invoking federal jurisdiction bears the burden of showing that all prerequisites to jurisdiction are satisfied. In re Business Men's Assur. Co. of America, 992 F.2d 181, 183 (8th Cir.1993). Any doubts about the propriety of removal are resolved in favor of state court jurisdiction and remand. Wilkinson v. Shackelford, 478 F.3d 957, 963 (8th Cir.2007). If the Court determines that it does not have jurisdiction over a removed action, it must remand the action to the state court where it originated. 28 U.S.C. § 1447(c).

         “In order for a federal court to have original diversity jurisdiction over an action, the action must be between ‘citizens of different states.'” American States Ins. Co., 2008 WL 163588, at *3; 28 U.S.C. § 1332(a). There must be complete diversity. Id. In cases involving multiple plaintiffs and/or multiple defendants, if ...


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