Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Georgia-Pacific Corp v. Sentry Select Insurance Co.

May 26, 2006

GEORGIA-PACIFIC CORPORATION, A GEORGIA CORPORATION, PLAINTIFF,
v.
SENTRY SELECT INSURANCE COMPANY, BRIAN ELKINS, SVETLANA ELKINS, AND MCLEOD EXPRESS, L.L.C., DEFENDANTS.



The opinion of the court was delivered by: Herndon, District Judge

MEMORANDUM & ORDER

I. INTRODUCTION & BACKGROUND

Presently before the Court is a Motion to Remand, filed by plaintiff Georgia-Pacific Corporation ("Ga-Pac") (Doc. 10). Ga-Pac is a Georgia corporation with its principal place of business in Georgia. Ga-Pac transacts certain amounts of its business in Illinois (Doc. 2, ¶ 1). Defendant Sentry Select Insurance Company ("Sentry") is a Wisconsin corporation with its principal place of business in Wisconsin and also transacts business in Illinois (Id. at ¶ 2; see also Doc. 1, ¶ 9). Defendants Brian Elkins and Svetlana Elkins are both citizens of Illinois (Doc. 1, ¶ 10). Defendant McLeod Express ("McLeod")is an Indiana corporation with its principal place of business in Illinois (Id.).

McLeod is a trucking company that on or about June 28, 2004, transported and delivered a trailer containing a product shipment obtained at GaPac's Mt. Olive, Illinois, facility to a Procter & Gamble facility in St. Louis, Missouri. On or about July 1, 2004, Brian Elkins was required by his employer, USF Logistics, to unload the trailer containing the Ga-Pac material/product when it reached the Procter & Gamble facility. While unloading the trailer, Brian Elkins was allegedly injured. Brian Elkins and Svetlana Elkins, his wife, filed suit against both McLeod and Ga-Pac, alleging claims of negligence and requesting damages in an amount in excess of $50,000 (hereinafter, the "Underlying Action") (see Doc. 2, ¶¶ 5-8 and Ex. B).

McLeod had entered into a Contract Carriage Agreement (the "Agreement") with Ga-Pac approximately a year prior to Brian Elkins's alleged accident (Doc. 2, ¶¶9-10 and Ex. C). This Agreement required McLeod to carry certain insurance and to name Ga-Pac as "an additional insured on its Commercial General Liability and Automobile Liability policies" (Doc. 2, p. 4). McLeod obtained this primary coverage insurance from Sentry in the form of a truckers/motor carrier policy of insurance to McLeod (the "Policy")(Doc. 2, ¶ 4). McLeod was the named insured on the Policy.

Once Brian and Svetlana Elkins filed the Underlying Action, Ga-Pac tendered its defense to Sentry, stating it was covered as an "additional insured" under the Policy, but Sentry refused this tender of defense and immunity from GaPac (Doc. 2, ¶¶ 20-21), apparently finding the circumstances and underlying claims excluded Ga-Pac from coverage. Denial of coverage prompted Ga-Pac to file a declaratory judgment action against Defendants in the Circuit Court of Madison County, Illinois, seeking a determination of whether Sentry owes a duty to defend and indemnify Ga-Pac regarding the Underlying Action (see Doc. 2).

Sentry removed Ga-Pac's case to federal court on November 17, 2005, asserting that diversity jurisdiction exists pursuant to 28 U.S.C. § 1332 (Doc. 1). Sentry acknowledges that under 28 U.S.C. § 1441(b), this action, where jurisdiction is based upon diversity, is only removable "if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." Thus, because defendants McLeod,*fn1 Brian and Svetlana Elkins are all considered citizens of Illinois -- the state in which Ga-Pac originally filed this action -removal would be improper. However, Sentry argues that McLeod, Brian and Svetlana Elkins should not be considered for removal purposes because they are nominal parties to the action (Doc. 1, ¶¶ 14 - 16). Additionally, Sentry claims an amount in controversy in excess of $75,000 exists, as the Underlying Action seeks aggregate damages in the excess of $100,000 and the Policy limits also exceed the jurisdictional amount (Id. at ¶ 6).

Noting that nominal parties need not consent or join in the removal, Sentry states that it nevertheless made a request for all Defendants to consent to the removal (Id. at ¶ 16). While McLeod has consented*fn2 (Doc. 4), Sentry explains that Brian and Svetlana Elkins did not give their consent "because they are taking the position that [they] are not necessary parties to this declaratory judgment action" and so their consent is not required*fn3 (Doc. 1, ¶ 16). However, Sentry offers nothing to affirmatively substantiate this assertion.

Ga-Pac challenges the removal, instead filing its Motion to Remand on December 13, 2005 (Doc. 10). Contrary to Sentry's belief, Ga-Pac argues that McLeod, Brian and Svetlana Elkins are necessary parties of interest, thereby making this case not removable under 28 U.S.C. § 1441(b) (Docs. 10 & 11). Ga-Pac further argues that the removal is defective because consent of all defendants (namely, Brian and Svetlana Elkins) was not obtained pursuant to 28 U.S.C. § 1446(b). Sentry has filed a Response in opposition to Ga-Pac's Motion to Remand (Doc. 25).

Examining the relevant pleadings, it is obvious that the central issue determining whether removal was proper is whether McLeod, Brian and Svetlana Elkins can be considered necessary parties of interest to Ga-Pac's suit. For the following reasons, Ga-Pac's Motion to Remand is granted (Doc. 10).

II. ANALYSIS

A. REMOVAL

The removal statute, 28 U.S.C. § 1441, is construed narrowly, and doubts concerning removal are resolved in favor of remand. Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993).Defendants bear the burden to present evidence of federal jurisdiction once the existence of that jurisdiction is fairly cast into doubt. See In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir. 1997). "A defendant meets this burden by supporting [its] allegations of jurisdiction with 'competent proof,' which [the Seventh Circuit] requires the defendant to offer evidence which proves 'to a reasonable probability that jurisdiction exists.' " Chase v. Shop 'N Save Warehouse Foods, Inc., 110 F.3d 424, 427 (7th Cir. 1997)(citations omitted). However, if the district court lacks subject matter jurisdiction, the action must be remanded to state court pursuant to 28 U.S.C. § 1447(c).

Whether removal in this case was proper hinges on two aspects. First, as previously explained, under the removal statute, a case cannot be removed to federal district court based upon diversity jurisdiction if any of the necessary party defendants are citizens of the state in which the action was brought. 28 U.S.C. § 1441(b). Therefore, because defendants McLeod, Brian and Svetlana Elkins are all Illinois citizens, removal would not be proper if they are deemed necessary parties to this action. Second, under 28 U.S.C. § 1446(b), each defendant must consent to removal affirmatively and officially communicate this to the Court. See, e.g., Northern Ill. Gas Co. v. Airco Industrial Gases, Div. of Airco, Inc., 676 F.2d 270, 272 (7th Cir. 1982). One exception to consent is when the party defendant is considered unnecessary or nominal to the suit. See Ryan v. State Bd. of Elections of State of Ill., 661 F.2d 1130, 1134 (7th Cir. 1981). Because it believes Brian and Svetlana Elkins are not necessary parties to this declaratory judgment action, Sentry argues it did not need to obtain their consent for removal.

B. NECESSARY PARTIES

No Seventh Circuit or Supreme Court case law appears to be on point with the central issue in this matter of whether McLeod, Brian and Svetlana Elkins are necessary parties to Ga-Pac's declaratory judgment suit against Sentry. The parties cite to several germane Illinois state appellate opinions and opinions from the United States District Court for the Northern District of Illinois, which the Court will use as interpretative guidance for its analysis.

In removing this case, Sentry relies on the holdings in both Winklevoss Consultants, Inc. v. Federal Insurance Co., 174 F.R.D. 416 (N.D. Ill. 1997) and Fathers of the Order of Mount Carmel, Inc. v. National Ben Franklin Insurance Co. of Illinois, 697 F. Supp. 971 (N.D. Ill. 1988) (Doc. 1, ¶ 12). Sentry asserts that the above cases support the theory that in a duty to defend declaratory judgment action brought by an insured party against the insurer, McLeod, Brian and Svetlana Elkins should be considered nominal parties, not considered for removal purposes. Opposing the removal, Ga-Pac cites to Flashner Medical Partnership v. Marketing Management, Inc., 189 Ill. App. 3d 45, 54, 545 N.E.2d 177, 183, 136 Ill. Dec. 653 (1st Dist. 1989), supporting its remand argument that McLeod, Brian and Svetlana Elkins are instead necessary parties to this declaratory judgment action and, as such, removal was improper because 28 U.S.C. § 1441(b) ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.