The opinion of the court was delivered by: Leslie G. Foschio United States Magistrate Judge
This case was referred to the undersigned by Honorable William M. Skretny on May 23, 2006, for decision and order on non-dispositive motions. The matter is presently before the court on Plaintiffs' motion to remand*fn1 (Doc. No. 4), filed May 22, 2006.
Plaintiffs Angela Pennock ("Pennock") and her husband, Brian Pennock ("Mr. Pennock") (together, "Plaintiffs"), commenced this action in New York Supreme Court, Erie County ("New York Supreme Court"), on January 4, 2002, seeking to recover for personal injuries Pennock allegedly sustained as a result of an automobile accident on September 11, 2000, as well as a loss of consortium claim on behalf of Mr. Pennock ("the personal injury action"). Plaintiffs specifically allege that on September 11, 2000, a truck owned by Defendant Allied Systems, Ltd. (L.P.) ("Allied"), and driven by Defendant John Michael Deal, III ("Deal") (together, "Defendants"), collided with a vehicle driven by Pennock at the intersection of Transit Road and Rehm Road in the Town of Lancaster, New York, causing Pennock severe injuries, for which Pennock seeks monetary damages in the amount of $500,000, and based on which Mr. Pennock asserts his derivative loss of consortium claim for $100,000. Defendants' answer was filed in New York Supreme Court on April 23, 2002, and an amended answer was filed on June 20, 2003. Although Allied maintains its principal place of business in Georgia, and Deal is a resident of Michigan, and the jurisdictional threshold for diversity jurisdiction has been met based on the pleadings, Defendants did not remove the action to federal district court pursuant to 28 U.S.C. § 1441 based on diversity jurisdiction. On January 27, 2005, while the action was pending in New York Supreme Court, Plaintiffs filed a motion for summary judgment.
On July 31, 2005, Allied Holdings, Inc. ("the Debtor"), a holding company of which Defendant Allied and others are affiliates ("the Debtors"), filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code ("the bankruptcy proceeding") in United States Bankruptcy Court for the Northern District of Georgia ("the Bankruptcy Court"). On August 2, 2005, an Order Enforcing Sections 362 and 525 of the Bankruptcy Code ("the Code") was entered with regard to the bankruptcy proceeding, thereby enforcing the Code's automatic stay and anti-discrimination provisions with regard to the Debtors' bankruptcy estate, including staying, restraining and enjoining the continuation of any judicial proceedings or recovery on a claim against any Debtors that arose prior to the commencement of the bankruptcy proceeding.
On August 3, 2005, Defendants filed in New York Supreme Court a response in opposition to Plaintiffs' pending summary judgment motion (Defendants' Summary Judgment Response"). Defendants' Summary Judgment Response neither mentions the Debtors' recently commenced bankruptcy proceeding nor relies upon the automatic stay provisions of the Code.
On January 11, 2006, Plaintiffs moved in the bankruptcy proceeding to exclude the personal injury action from the automatic stay, arguing that Plaintiffs do not seek to recover damages, in the instant action, in excess of $2 million, which is the amount of liability insurance coverage per claim carried by Allied for the relevant period in which the accident occurred. In particular, according to Defendants, between January 1, 2001 and February 28, 2003, Allied obtained automobile liability insurance through Kemper Insurance Companies ("Kemper").*fn3 The relevant insurance policy ("the Kemper policy"), provides for a $500,000 deductible per incident, and a per claim limit of $2 million. Allied paid Kemper $6.46 million for the insurance policy, of which Kemper retained $460,000 as premiums and administrative costs, and remitted the $6 million difference, referred to as "Loss Funds", to Haul Insurance Limited ("Haul"), for reinsurance coverage for Allied's deductibles should Allied fail to pay the deductible amount to a third-party liability claimant on an automobile claim. Haul retained the Loss Funds as collateral for letters of credit issued in favor of Kemper. Thus, if Allied failed to pay the deductible amount, Kemper would be required to pay the entire amount of a liability claim to a third-party automobile liability claimant, including Allied's deductible portion. Kemper could then seek reimbursement from Haul by drawing on the letters of credit issued by Haul, and Allied would then be ineligible for a return of such collateral from Kemper.
On February 22, 2006, Plaintiffs filed a Proof of Claim in the bankruptcy proceeding. On March 22, 2006, Plaintiffs and Allied executed a Consent Order Modifying Automatic Stay ("Stay Relief Order"),*fn4 granting the limited relief Plaintiffs sought from the automatic stay. In particular, the automatic stay was modified solely, and only to the extent necessary, to permit [Plaintiffs] to (a) continue their existing state court action against [Allied] in respect of those certain personal injury tort claims asserted by [Plaintiffs] against [Allied] set forth in the Motion (the "Claims") in order to proceed to final judgment upon, or settlement of, the Claims, and (b) attempt to recover any liquidated final judgment upon, or settlement of, the Claims, from available insurance policies of the Debtor, if any, related to the Claims. [Plaintiffs'] recovery, if any, against [Allied] shall be limited to the insurance policy proceeds, if any, under [Allied's] applicable insurance policies in relation to the Claims. Any such insurance policy proceeds received by [Plaintiffs] shall be in full and final settlement and satisfaction of the Claims. Other than with respect to such insurance policy proceeds, [Plaintiffs] shall not be entitled to seek recovery upon the Claims from [Allied] or its estate . . . .
Stay Relief Order ¶ 2 (bracketed text and underlining added).*fn5
On April 21, 2006, Defendants filed a Notice of Removal (Doc. No. 1) ("Removal Notice"), thereby removing the personal injury action from New York Supreme Court to this court, asserting jurisdiction pursuant to 28 U.S.C. §§ 157, 1334 and 1425. The Removal Notice is supported by attached exhibits A through E ("Defendants' Exh(s). ___"), the Index of Record (Doc. No. 2) ("Record Index"), attached to which are copies of all pleadings and papers filed in connection with the personal injury action in New York Supreme Court, and the Affidavit of David J. Sleight, Esq. (Doc. No. 3). On May 22, 2006, Plaintiffs filed the instant motion to remand the personal injury action to New York Supreme Court (Doc. No. 4) ("Remand Motion"). The Remand Motion is supported by the attached Affidavit of Philip Celniker, Esq. ("Celniker Affidavit"), and Memorandum of Law ("Plaintiffs' Memorandum"). On June 23, 2006, Defendants filed a Memorandum opposing the motion to remand (Doc. No. 7) ("Defendants' Memorandum"). Plaintiffs filed not reply. Oral argument was deemed unnecessary.
Based on the following, Plaintiffs' motion to remand the instant action to New York Supreme Court is GRANTED.
Removal of an action filed in state court to federal court is generally governed by 28 U.S.C. § 1441 which provides for removal of any action over which, as filed, the district court would have original jurisdiction based on either the presence of a federal question or diversity of the parties' citizenship. 28 U.S.C. § 1441(b) ("§ 1441(b)"). Although the instant action, as filed, could have been removed pursuant to § 1441(b) based on diversity jurisdiction, it was not, and the one year in which to do so pursuant to 28 U.S.C. § 1446(b), has long elapsed. Rather, Defendants have removed the instant action pursuant to 28 U.S.C. § 1452(a) ("§ 1452(a)"), which, as relevant, provides for the removal of "any claim or cause of action in a civil action . . . ...