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Squillante v. Cigna Corp.

November 28, 2012

MICHAEL SQUILLANTE, PLAINTIFF,
v.
CIGNA CORPORATION, LIFE INSURANCE COMPANY OF NORTH AMERICA, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM LIFE AND ACCIDENT ASSURANCE COMPANY, STATE FARM FIRE AND CASUALTY COMPANY, STATE FARM GENERAL INSURANCE COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.

OPINION AND ORDER

I. INTRODUCTION

Michael Squillante commenced this action in the Supreme Court of New York County, New York, against Cigna Corporation ("Cigna"); Life Insurance Company of North America ("LINA"); and State Farm Mutual Automobile Insurance Company, State Farm Life and Accident Assurance Company, State Farm Fire and Casualty Company, and State Farm General Insurance Company (collectively "State Farm"). Squillante alleges four causes of action: (1) breach of contract against Cigna and LINA; (2) deceptive business practices under New York General Business Law ("NYGBL") Section 349 against Cigna and LINA; (3) declaratory judgment against Cigna and LINA; and (4) breach of contract against State Farm. Defendant LINA timely removed this action to this Court based on diversity of citizenship. Presently pending before the Court is Squillante's motion to remand. For the reasons that follow, the motion is granted.

II. BACKGROUND*fn1

Michael Squillante is a citizen of New York who worked as an independent contractor for State Farm prior to becoming disabled.*fn2 State Farm is a group of Illinois corporations with principal places of business in Illinois.*fn3 Cigna is a Delaware corporation of which LINA, another Delaware corporation, is a subsidiary.*fn4 LINA issued the Group Long Term Disability Policy, Policy Number LK6903 (the "Policy"), effective January 1, 1999, to State Farm, allegedly for the benefit of State Farm's independent contractors.*fn5 Subject to a 180-day waiting period, the Policy provides for the payment of up to one thousand dollars per month in the event that a covered individual becomes disabled. Subject to another 180-day waiting period, the Policy also provides for the payment of up to fourteen thousand dollars per month if the covered individual's State Farm Agent's Agreement is terminated at any time prior to two years and 180 days of the date of disability.*fn6

Squillante allegedly became disabled on April 2, 2010, when he fell off a ladder and injured his back.*fn7 He then timely filed a claim under the Policy with LINA, which investigated his claim.*fn8 Ultimately, Cigna and LINA denied his long-term disability claim based on the terms of the Policy.*fn9 As a result, Squillante "seeks monetary damages in an amount to be determined by the trier of fact after trial, but not less than . . . $1,000 per month for each month from September 29, 2010," as well as interest and costs.*fn10

In the alternative, Squillante seeks the same amount from State Farm, on the theory that he was an intended third party beneficiary of the Policy.*fn11 As another alternative, Squillante seeks the same amount, plus attorneys' fees, on the theory that each refusal to pay his disability claim was an unfair or deceptive trade practice in violation of NYGBL § 349.*fn12

Finally, Squillante seeks a declaratory judgment that: (1) he is "disabled" under the Policy; (2) Cigna and LINA are obligated to make payments under the Policy for as long as Squillante remains disabled; and (3) Squillante may seek another declaratory judgment should it be necessary.*fn13

By a Notice of Removal dated August 6, 2012, LINA removed the action to this Court under 28 U.S.C. § 1441 on the basis of diversity of citizenship pursuant to 28 U.S.C. § 1332 ("section 1332").*fn14 The Notice of Removal alleges that "[c]ombining all of [Squillante]'s claims, the amount in controversy is in excess of $75,000."*fn15 LINA argues that this assertion is justified because: (1) the value of future, unaccrued benefits under the Policy exceeds seventy-five thousand dollars; and (2) the benefits accrued under the Policy, combined with Squillante's possible recovery under NYGBL § 349, exceed seventy-five thousand dollars.*fn16

III. STANDARD OF REVIEW

A. Federal Removal Jurisdiction

Any civil action brought in state court may be removed to federal court if the federal court could exercise jurisdiction over the action.*fn17 A federal district court may exercise jurisdiction only if so authorized by the Constitution and by statute.*fn18 Under section 1332, district courts have original jurisdiction over "all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different states . . . ."*fn19 The "existence of federal subject matter jurisdiction over an action removed from state court to federal court is normally to be determined as of the time of removal . . . ."*fn20

B. Remand

"On a motion to remand, the party seeking removal from state court bears the burden of establishing that federal jurisdiction is proper."*fn21 Due to concerns of comity and federalism, the removal statute is generally strictly construed against the party seeking removal.*fn22 Moreover, the party asserting federal ...


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