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UI Acquisition Holding Co., Inc. v. Arch Insurance Co.

United States District Court, N.D. New York

January 9, 2020

UI ACQUISITION HOLDING CO., INC., Plaintiff,
v.
ARCH INSURANCE CO., and HUB INT'L INSURANCE SERVICES INC., Defendants.

          ANDERSON KILL LAW FIRM Luma Salah Al-Shibib Finley T. Harckham Attorneys for Plaintiff

          KAUFMAN DOLOWICH & VOLUCK LLP Daniel Brody David A. Group Michael Lawrence Zigelman Attorneys for Defendant Arch Insurance Co.

          KAUFMAN BORGEEST & RYAN LLP Lee E. Berger Attorney for Defendant HUB Int'l Insurance Services Inc.

          MEMORANDUM-DECISION AND ORDER

          Hon. Norman A. Mordue, Senior United States District Court Judge

         I. INTRODUCTION

         This matter is an insurance coverage and broker liability action brought by Plaintiff UI Acquisition Holding Co., Inc., a manufacturer of special industry machinery operating in New York State, against its directors and officers liability insurer, Arch Insurance Co. (“Arch”), and its long-time insurance broker and advisor, HUB International Insurance Services Inc. (“HUB”), to recover defense costs incurred by Plaintiff and its director, Lynn Tilton, in a Delaware Chancery Court action commenced against Plaintiff in November 2016. (See Dkt. No. 2). Now before the Court is Plaintiff's motion for remand to state court, (Dkt. Nos. 14, 30), and the Defendants' papers in opposition, (Dkt. Nos. 24, 25, 33). For the following reasons, Plaintiff's motion is granted.

         II. BACKGROUND

         Plaintiff commenced this action in New York State Supreme Court, Broome County, on February 4, 2019. (Dkt. No. 2). Plaintiff asserts state law claims against Arch for breach of contract, declaratory judgment, and in the alternative, reformation of contract, in connection with Arch's alleged wrongful denial of coverage of Plaintiff's insurance claims tendered under Plaintiff's 2016-2017 directors and officers liability policy. (See id., ¶¶ 74-116). Plaintiff also asserts state law claims against HUB, as alternative bases for recovery, for negligence and breach of contract in connection with HUB's procurement of Plaintiff's policy. (Id., ¶¶ 117- 141).

         It is undisputed that service of process was effectuated on Arch on February 5, 2019, and on HUB on February 6, 2019. Due to various delays with its process server and registered agent, Arch claims that it did not receive actual notice of the action until March 6, 2019. (Dkt. No. 25-1, ¶ 2).

         On March 7, 2019, HUB filed a timely Notice of Removal from New York State Supreme Court to this Court. (Dkt. No. 1). HUB asserts that removal is proper because there is complete diversity of citizenship among the parties, and the amount in controversy exceeds $75, 000. (Id., ¶¶ 6-12). On March 21, 2019, Arch's counsel filed a Notice of Appearance along with a request for an extension to respond to the Complaint. (See Dkt. Nos. 8, 10).

         On April 5, 2019, Plaintiff filed a motion to remand the case back to state court on the sole basis that HUB's removal attempt is “procedurally defective” because Arch “did not join in HUB's Notice of Removal or timely submit its own separate notice consenting to the removal.” (Dkt. No. 14-1, p. 1).

         On April 8, 2019, Arch filed its Answer (Dkt. No. 15), and entered a notice consenting to removal to this Court on April 9, 2019, (Dkt. No. 18).

         III. STANDARD FOR REMOVAL

         “[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). A defendant seeking removal of a civil action from state court must file “in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement ...


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