JANUARY 2011 BAD FAITH CASES DIVERSITY JURISDICTION PROPERLY USED WHEN REMOVING BAD FAITH CASE TO FEDERAL COURT (Western District)

In Hutton v. State Farm Mutual Automobile Insurance Company, the insured was operating her automobile when it collided with another vehicle, allegedly causing serious and permanent injuries to her.  Both drivers denied liability, and the insured filed a suit in state court against the other driver.

The insured also filed a separate suit against her insurer in state court, alleging breach of contract and bad faith.  The insurer used diversity jurisdiction, 28 U.S.C. § 1332, as the basis for removing the action to federal court, but the insured then filed a motion to remand the case to state court.  The court determined that the removal to federal court was proper because the insurer was an Illinois corporation and the amount in controversy exceeded the $75,000 minimum.  It also dismissed the insured’s argument that the “interest of judicial economy” is a basis for remanding the case, as the insurer had a clear legal right to exercise the removal option.  The court therefore dismissed the insured’s motion to remand the case to state court.

Date of Decision:  January 13, 2011

Hutton v. State Farm Mut. Auto. Ins. Co., 2:10-cv-1730, United States District Court for the Western District of Pennsylvania, 2011 U.S. Dist. LEXIS 3395, (Jan. 13, 2011) (McVerry, J.)