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Shiel v. Pacific Specialty Insurance Co.

United States District Court, W.D. Oklahoma

February 12, 2018

JIMMY SHIEL and MARCY SHIEL, Plaintiffs,
v.
PACIFIC SPECIALTY INSURANCE COMPANY, Defendant.

          ORDER

          TIMOTHY D. DEGIUSTI UNITED STATES DISTRICT JUDGE.

         Before this Court is Plaintiffs' Motion to Remand [Doc. No. 9]. Defendant has filed its Response [Doc. No. 16]. The matter is fully briefed and at issue.

         BACKGROUND

         Plaintiffs filed their Petition in the District Court of Logan County, Oklahoma, on September 1, 2017. Plaintiffs alleged claims for breach of contract and bad faith. Defendant is a foreign insurer. Plaintiffs served the summons and petition on the Oklahoma Insurance Commissioner on September 15, 2017 pursuant to Okla. Stat. tit .36, § 621(B). Defendant filed its Notice of Removal on October 17, 2017. Plaintiff alleges the Notice of Removal was untimely as it was not filed within thirty days of service on the Oklahoma Insurance Commissioner. Plaintiffs do not challenge removal on any other basis. In response, Defendant asserts that the thirty-day period to file Notice of Removal does not begin to run until the summons and petition are received by Defendant rather than the date of service on the Oklahoma Insurance Commissioner.

         STANDARD OF DECISION

         28 U.S.C. § 1446(b)(1) states that “[t]he notice of removal of a civil action or proceeding shall 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.” Removal statutes are strictly construed and all doubts are to be resolved against removal. Fajen v. Found. Reserve Inc. Co., Inc., 683 F.2d 331, 333 (10th Cir. 1982) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941) and Greenshields v. Warren Petroleum Corp., 248 F.2d 61, 65 (10th Cir.), cert. denied, 355 U.S. 907, 78 S.Ct. 334, 2 L.Ed.2d 261 (1957)). The burden of proof for removal jurisdiction is on the party seeking removal. Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th Cir. 2001), abrogated on other grounds by Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 554, 190 L.Ed.2d 495 (2014).

         State law governing service of process is applied when determining the time period within which a notice of removal must be filed. Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 351, 119 S.Ct. 1322, 1327, 143 L.Ed.2d 448 (1999). Oklahoma law provides that service of process “against a foreign or alien insurer shall be made only by service of process upon the Insurance Commissioner.” Okla. Stat. tit. 36, § 621(B). Service of “legal process against an insurer for whom the Insurance Commissioner is agent” is complete when the Commissioner “promptly forward[s] a copy thereof by mail with return receipt requested to the person last so designated by the insurer to receive the same.” Okla. Stat. 36 § 622(A) and (B).[1]

         DISCUSSION

         “Service of process, under longstanding tradition in our system of justice, is fundamental to any procedural imposition on a named defendant.” Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350, 119 S.Ct. 1322, 1326, 143 L.Ed.2d 448 (1999). The legislative history of 28 U.S.C. § 1446 demonstrates Congress' repeated attempts to account for variances across state laws “[t]o ensure that the defendant would have access to the complaint before commencement of the removal period.” Id. at 351. Likewise, Okla. Stat. tit. 36, § 622(B) specifically states that service upon an insurer is not complete until the Insurance Commissioner forwards a copy of legal process “by mail with return receipt requested to the person last so designated by the insurer to receive the same” as provided in Okla. Stat. tit. 36, § 622(A).[2]

         Plaintiff incorrectly asserts that the thirty day period for removal is calculated under Oklahoma law from the date of service on the Insurance Commissioner. Plaintiffs' Motion to Remand, 3. This is contrary to the governing Oklahoma statutes and this Court's previous determination that the date upon which service is complete for calculations of deadlines is the date the Insurance Commissioner forwards the summons and petition “with return receipt requested.” See Robison v. Reliance Standard Life Ins. Co., CIV-14-1262-D, 2015 WL 4647213, at *3 (W.D. Okla. Aug. 4, 2015) (relying on Okla. Stat. tit. 36, § 622(B) in calculating the deadline for the defendant insurance company's answer from the date the Insurance Commissioner forwarded service by mail).

         Plaintiff served the Insurance Commissioner on September 15, 2017, but the Commissioner did not forward the summons and petition by certified mail until September 19, 2017. Plaintiffs' Motion to Remand, Exhibit 1 [Doc. No. 9-1], pg. 3; Defendant's Response, Exhibit 1 [Doc. No. 16-1], pg. 10. The earliest date from which the time period for removal can be calculated is September 19, 2017, the certified mail postage date.[3] Defendant filed its Notice of Removal on October 17, 2017. Notice of Removal [Doc. No. 1]; Defendant's Response, pg. 2. Defendant's Notice of Removal was filed twenty- eight (28) days from the date service was complete pursuant to Okla. Stat. tit. 36, § 622(A) and (B) and is, therefore, timely under 28 U.S.C. § 1446(b)(1).

         CONCLUSION

         Plaintiffs Motion to Remand is DENIED for the reasons set forth herein.

         IT ...


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