Hawkins v. ACE American Insurance Company, 2:21-cv-01459-RAJ

November 16, 2016 motor-vehicle collision in Washington involving plaintiff Shelly Hawkins, Fatemah Alsuwaidan (driving a rental), and Edwin Miguel (driving a Sears van).
Hawkins sued Miguel, Sears entities, and the Alsuwaidans in Snohomish County Superior Court in 2018; service on Alsuwaidan was effected via the Washington Secretary of State under RCW 46.64.040 after diligent search.
Miguel settled with Hawkins in June 2021, admitted negligence, assigned his claims against Ace American to Hawkins, and a confession of judgment for $1.5M was entered in Hawkins’ favor; Hawkins agreed not to execute on Miguel’s personal assets.
Alsuwaidan never appeared; a default judgment for $280 was entered against her in September 2021; the state court did not enter a CR 54(b) finality determination disposing of all parties/claims.
Ace American removed to federal court asserting diversity jurisdiction; Hawkins moved to remand, arguing non-diverse Washington parties remain and all served defendants’ consent was required.
The magistrate judge recommended remand and an award of attorney’s fees under 28 U.S.C. § 1447(c), finding Ace failed to establish complete diversity and removal lacked an objectively reasonable basis.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Complete diversity	Hawkins: Washington plaintiffs/defendants (Hawkins, Miguel, Alsuwaidan) destroy diversity	Ace: Non-diverse defendants no longer have an interest after settlement/default, so diversity exists	Remand: Ace failed to demonstrate complete diversity; non-diverse defendants remain parties of interest
Consent of co-defendants	Hawkins: all served defendants must join removal; Miguel did not consent	Ace: Miguel’s consent unnecessary because he’s effectively eliminated or aligned with Hawkins	Remand: Miguel was not dismissed and did not consent; joinder/consent required; alignment insufficient to cure defect
Effect of settlement/default	Hawkins: settlement with Miguel and default against Alsuwaidan did not remove them as parties for diversity	Ace: Settlement/Judgment resolves their interests so they need not be counted for diversity	Remand: Settlement without formal dismissal and default judgment without CR 54(b) finality do not render action removable (voluntary-involuntary rule controls)
Attorneys’ fees/sanctions	Hawkins: removal was improper; seeks fees under §1447(c) and Rule 11 sanctions	Ace: removal arguable based on settlement/default theories	Fees granted: removal lacked an objectively reasonable basis; fees awarded under §1447(c) (Rule 11 not adopted)

Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) (attorney-fee standard for remand: fees when removal lacks an objectively reasonable basis)
Self v. General Motors Corp., 588 F.2d 655 (9th Cir. 1978) (voluntary-involuntary rule: plaintiff’s voluntary acts control removability)
Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567 (2004) (distinguishing cures to jurisdictional defects based on change in party citizenship vs change in parties)
Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (removal statute strictly construed against removal)
Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (1978) (complete diversity required for §1332 jurisdiction)
Hewitt v. City of Stanton, 798 F.2d 1230 (9th Cir. 1986) (all defendants must join removal unless nominal or fraudulently joined)
Emrich v. Touche Ross & Co., 846 F.2d 1190 (9th Cir. 1988) (fraudulent joinder doctrine excusing joinder requirement)
Continental Airlines, Inc. v. Goodyear Tire & Rubber Co., 819 F.2d 1519 (9th Cir. 1987) (realignment of parties when interests coincide)
Great Northern Ry. Co. v. Alexander, 246 U.S. 276 (1918) (plaintiff’s pleadings and voluntary actions determine removability)