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Montanaro v. State Farm Mutual Automobile Insurance Co.

United States District Court, D. South Carolina, Charleston Division

June 27, 2014

David Montanaro, Susan Montanaro, and Coastal Collision Works, LLC, Plaintiffs,
v.
State Farm Mutual Automobile Insurance Company, State Farm Fire and Casualty Company, Becky Snelgrove, and Steve Fields, Defendants

Page 663

For David Montanaro, Susan Montanaro, Coastal Collision Works LLC, Plaintiffs: George J Kefalos, Oana D Johnson, LEAD ATTORNEYS, George J Kefalos Law Office, Charleston, SC; John E Parker, William Franklin Barnes , III, LEAD ATTORNEYS, Peters Murdaugh Parker Eltzroth and Detrick, Hampton, SC.

For State Farm Mutual Automobile Insurance Company, State Farm Fire and Casualty Company, Becky Snelgrove, Steve Fields, Defendants: Charles R Norris, Robert W Whelan, LEAD ATTORNEYS, Nelson Mullins Riley and Scarborough, Charleston, SC.

Page 664

ORDER

PATRICK MICHAEL DUFFY, United States District Judge.

This matter is before the Court on Plaintiff David Montanaro, Susan Montanaro, and Coastal Collision Works, LLC's (" Coastal" ) (collectively " Plaintiffs" ) Motion to Remand pursuant to 28 U.S.C. § 1447. For the reasons set forth herein, Plaintiffs' Motion to Remand is granted.

BACKGROUND

This action arises out of a business dispute between Plaintiffs and State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company (collectively " State Farm" ). Plaintiffs allege that in January 2013, David and Susan Montanaro (collectively " Montanaros" ) opened Coastal, an automotive body repair shop in Charleston, South Carolina, after having previously operated a body repair shop in the Atlanta, Georgia area. As a body repair shop, Coastal repairs cars insured by State Farm and other insurers. Since January 2013, Plaintiffs and State Farm have disagreed over the reasonableness of the scope and cost of repairs performed by Coastal on automobiles of State Farm's insureds and claimants under State Farm policies.

On March 7, 2014, Plaintiffs commenced this action against Defendants in the Charleston County Court of Common Pleas, alleging the following causes of action: (1) defamation, (2) violation of the South Carolina Unfair Trade Practices Act (" SCUTPA" ), and (3) breach of contract.[1]

Page 665

In this suit, Plaintiffs contend that State Farm sent letters to its customers concerning the repairs performed by Coastal that defamed Plaintiffs. Plaintiffs also claim that State Farm's practices in estimating and adjusting claims for repairs at Coastal violate the SCUTPA and are in breach of the contracts between State Farm and its insureds. Defendants deny these allegations.

Defendants filed a Notice of Removal on April 7, 2014, asserting that this Court has diversity jurisdiction over the matter. Defendants admit that Fields, who consents to removal, is a resident of the State of South Carolina, but they contend that this fact does not defeat diversity jurisdiction because Fields was fraudulently joined as a " sham" defendant. After Defendants answered the Complaint, Plaintiffs filed the instant Motion to Remand on April 17, 2014, maintaining that Fields is not a " sham" defendant and that this Court lacks diversity jurisdiction under 28 U.S.C. § 1332. Defendants filed their Response in Opposition to Plaintiffs' Motion to Remand on May 2, 2014. Plaintiffs' Motion to Remand is now ripe for consideration.

STANDARD OF REVIEW

The burden of demonstrating jurisdiction resides with " the party seeking removal." Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (citing Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994)). District courts are obliged to construe removal jurisdiction strictly because of the " significant federalism concerns" implicated. Id. Section 1447 of the United States Code provides that, " [i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). Therefore, " [i]f federal jurisdiction is doubtful, a remand [to state court] is necessary." Dixon, 369 F.3d at 816; see also Hartley v. CSX Transp., Inc., 187 F.3d 422, 425 (4th Cir. 1999) (" [C]ourts should 'resolve all doubts ...


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