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7 United States District Court 8 Central District of California 9 10 11 ERIC HODONSKY, Case No. 2:19-cv-01049-ODW (GJSx) 12 Plaintiff, ORDER DENYING AS MOOT 13 v. DEFENDANTS’ MOTION FOR 14 ALLSTATE INSURANCE COMPANY; SUMMARY JUDGMENT [13] AND 15 ALLSTATE INSURANCE COMPANY SUA SPONTE REMANDING TO OF CALIFORNIA; ALLSTATE STATE COURT 16 NORTHBROOK INDEMNITY

17 COMPANY, 18 Defendants. 19 I. INTRODUCTION 20 21 Plaintiff, Eric Hodonsky brings this action against Allstate Insurance Company, 22 Allstate Insurance Company of California, and Northbrook Indemnity Company for 23 failing to insure his automobile collision claim. (See Notice of Removal Ex. 1 24 (“Compl.”), ECF No. 1-1.) Defendants asserts that Hodonsky’s collision occurred the 25 day before he purchased automobile insurance, and therefore, Defendants owe no 26 contractual obligation to pay for the collision damages. 27 28 1 Pending before the Court is Defendants’ Motion for Summary Judgment 2 (“Motion”). (Mot., ECF No. 13.) For the following reasons, the Court DENIES 3 Defendants’ Motion and sua sponte REMANDS the matter.1 4 II. BACKGROUND 5 A. Hodonsky’s Experience with Allstate 6 On November 4, 2017, Hodonsky visited Defendants’ website and began an 7 application for an auto insurance policy. (Def.s’ Statement of Uncontroverted Facts 8 (“DSUF”) ¶ 1, ECF No. 13-2.) Parties dispute whether he completed the application 9 and paid for a policy. 10 On November 5, 2017, Hodonsky was involved in an automobile accident with 11 two motorcyclists and later found at fault. (DSUF ¶ 4.) At the scene of the accident, 12 Hodonsky called Defendants’ toll-free number and a representative advised him that 13 his insurance payment was incomplete. (PODSUF ¶ 6.) The day after the accident 14 Hodonsky called Defendants’ sales agent Paul Park. (DSUF ¶ 5.) Park assisted 15 Hodonsky in completing the application and processing the premium payment 16 required to activate coverage. (DSUF ¶ 7.) Per Defendants’ records, Hodonsky had 17 active auto insurance beginning at 9:30am on November 6. (DSUF ¶ 8.) Hodonsky’s 18 bank statements also confirm that the first payment made to Defendants was on 19 November 6, 2017 at 9:30am. (DSUF ¶ 18.) 20 Hodonsky then provided the motorcyclists with this insurance information who 21 in turn provided it to their insurance carriers. (DSUF ¶¶ 9–10.) After receiving notice 22 of the accident, Defendants opened a claim but discovered, on November 9, that 23 Hodonsky’s policy went into effect the day after the accident. (DSUF ¶ 11.) 24 Defendants conducted their own investigation and ultimately determined that they 25 could not provide coverage for the accident. (DSUF ¶¶ 12–15.) 26 27

28 1 After considering the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78(b); C.D. Cal. L.R. 7-15. 1 B. Hodonsky’s Complaint 2 On August 16, 2018, Hodonsky filed the present lawsuit in California state 3 court asserting seven claims for relief: (1) breach of insurance contract and/or implied- 4 in-fact insurance contract; (2) breach of covenant of good faith and fair dealing; 5 (3) concealment; (4) intentional infliction of emotional distress; (5) negligent 6 infliction of emotional distress; (6) negligence; and (7) negligence per se. (See 7 Compl.) On November 16, 2018, the state court dismissed Hodonsky’s fourth, fifth, 8 sixth, and seventh claim with leave to amend. (Mot. 6; DSUF ¶ 22; Feldman Decl. 9 Ex. 15, ECF No. 13-9.) Hodonsky did not amend his original complaint. (Mot. 6; 10 DSUF ¶ 22.) 11 Defendants subsequently removed the remaining claims on February 12, 2019 12 on the basis of diversity jurisdiction and now moves for summary judgment. (Mot. 2.) 13 III. LEGAL STANDARD 14 Federal courts are courts of limited jurisdiction, having subject-matter 15 jurisdiction only over matters authorized by the Constitution and Congress. U.S. 16 Const. art. III, § 2, cl. 1; e.g., Kokkonen v. Guardian Life Ins. Co. of Am.,

375, 377 (1994). A suit filed in state court may be removed to federal court if the 18 federal court would have had original jurisdiction over the suit.

(a). 19 But courts strictly construe the removal statute against removal jurisdiction, and 20 “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal 21 in the first instance.” Gaus v. Miles, Inc.,

(9th Cir. 1992). The 22 party seeking removal bears the burden of establishing federal jurisdiction. Durham v. 23 Lockheed Martin Corp.,

(9th Cir. 2006) (citing Gaus,

at 566). 25 Federal courts have original jurisdiction where an action presents a federal 26 question under

, or diversity of citizenship under

. 27 A defendant may remove a case from a state court to a federal court pursuant to the 28 federal removal statute,

, on the basis of federal question or diversity 1 jurisdiction. To exercise diversity jurisdiction, a federal court must find complete 2 diversity of citizenship among the adverse parties, and the amount in controversy must 3 exceed $75,000, exclusive of interest and costs.

(a). 4 IV. DISCUSSION 5 Here, complete diversity is lacking among the Parties, and therefore, the Court 6 lacks subject matter jurisdiction. Consequently, “[i]f at any time before final 7 judgment it appears that the district court lacks subject matter jurisdiction, the case 8 shall be remanded.”

(c). “[Rule] 12(h)(3) provides that a court may 9 raise the question of subject matter jurisdiction, sua sponte, at any time during the 10 pendency of the action, even on appeal.” Snell v. Cleveland, Inc.,

, 826 11 (9th Cir. 2002). 12 Concerning the Parties citizenship, Hodonsky is a citizen of California. 13 (Compl. ¶ 1.) Allstate Insurance Company and Northbrook Indemnity Company are 14 citizens of Illinois. (Notice of Removal ¶¶ 8–9, ECF No. 1.) However, Allstate 15 Insurance Company of California is also a citizen of California. (Notice of Removal 16 ¶ 10.) 17 While Defendants assert that Allstate Insurance Company of California is a 18 sham defendant in their notice of removal, Defendants failed to file a motion to 19 dismiss the party. Notably, in their motion for summary judgment, they specifically 20 stated that all arguments applied equally to the three Defendants. (Mot. 1 n.1.) This 21 affirms that Allstate Insurance Company of California, the non-diverse party, is still a 22 party in the matter. Therefore, the Court lacks jurisdiction. Accordingly, the Court 23 REMANDS the matter to state court. 24 25 26 27 28 1 V. CONCLUSION 2 For the foregoing reasons, the Court DENIES as moot Defendants’ Motion for 3 || Summary Judgment and REMANDS the matter. (ECF No. 13.) This action shall be 4 || remanded to the Los Angeles County Superior Court, 600 E Broadway, Glendale, CA 5 || 91206. The Clerk of the Court shall close this case. 6 7 IT IS SO ORDERED. 8 \ 9 March 19, 2020 SR 10 GieL hee ll OTIS D. GHT, I UNITED STATES DISTRICT JUDGE

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