610 F. App'x 734
10th Cir.2015Background
- Lundahl sued in Wyoming state court to collect a Utah judgment against an ABIC insured; ABIC removed the case to federal court alleging diversity jurisdiction and >$75,000 in controversy.
- District court denied remand and granted ABIC’s motion to dismiss; it also ordered Lundahl to show cause under Rule 11.
- Lundahl filed multiple post-judgment motions, failed to appear at a scheduled Nov. 22, 2013 hearing, and persisted in numerous filings the court deemed frivolous.
- The district court entered final judgment, denied reconsideration, and on Feb. 5, 2014 imposed Rule 11 sanctions against Lundahl for frivolous pleadings, misrepresentations, bad faith litigation conduct, and failing to appear.
- Lundahl filed a late notice of appeal (Feb. 27, 2014) from several post-judgment orders; the district court denied an extension to file the appeal. The appeals were consolidated.
- The Tenth Circuit affirmed the Rule 11 sanctions and denial of the extension, dismissed other appellate claims for lack of jurisdiction due to Lundahl’s untimely notice of appeal, denied IFP, and dismissed Lundahl’s sister’s attempt to proceed as an appellant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of removal / remand | Removal defective because ABIC attached original, not amended, complaint (assignment to Holli) | Any omission cured by ABIC’s timely supplement of state-court filings under §1446(a); removal statement adequate under Dart | Removal was proper; district court correctly denied remand |
| Diversity jurisdiction / “direct action” under §1332(c)(1) | Lundahl contends her suit was a direct action that imputes insurer citizenship and defeats diversity | ABIC argues Lundahl obtained judgment against the insured first and then sought to collect from ABIC, so this is not a §1332(c)(1) direct action | Court held §1332(c)(1) inapplicable; diversity jurisdiction proper |
| Timeliness of appeal / jurisdiction to review dismissal and related orders | Lundahl’s notice of appeal from Dec. 19, 2013 order was filed Feb. 27, 2014 (late); she sought extension claiming confusion | ABIC urged dismissal for lack of appellate jurisdiction; opposed extension | Court held timely notice is jurisdictional (Bowles); dismissed challenges for lack of jurisdiction and found denial of extension was not an abuse of discretion |
| Rule 11 sanctions and fee award | Lundahl challenged Rule 11 sanctions and fee award and denial of sanctions against ABIC | ABIC supported sanctions based on frivolous filings, misrepresentations, bad faith, and failure to attend hearing | Court reviewed for abuse of discretion, found ample record support, and affirmed Rule 11 sanctions and fee award |
Key Cases Cited
- Countryman v. Farmers Ins. Exch., 639 F.3d 1270 (10th Cir. 2011) (omission of state-court papers in notice of removal is curable procedural defect)
- Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547 (2014) (removal notice needs only a short, plain statement of jurisdictional grounds)
- Velez v. Crown Life Ins. Co., 599 F.2d 471 (1st Cir. 1979) (discussion of “direct action” meaning under §1332)
- Monroe v. Roedder, 583 F. Supp. 2d 1031 (E.D. Mo. 2008) (garnishment proceedings are not §1332(c)(1) direct actions)
- Bowles v. Russell, 551 U.S. 205 (2007) (timely filing of notice of appeal is jurisdictional)
- Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (standard of review and principles for Rule 11 sanctions)
- Bishop v. Corsentino, 371 F.3d 1203 (10th Cir. 2004) (denial of extension of time to file appeal reviewed for abuse of discretion)