Paul Allman v. Geico General Insurance Company
2:19-cv-09567
C.D. Cal.Feb 18, 2020Background:
- On Oct. 21, 2019 Paul Allman (pro se) sued GEICO and individual defendants in California state court for claims arising from an Oct. 21, 2018 hit‑and‑run and related insurer conduct (breach, negligence, intentional tort, motor vehicle claim).
- GEICO removed to federal court on diversity grounds, alleging GEICO was Maryland‑citizen and that certain individual defendants were fraudulently joined to defeat diversity.
- GEICO later notified the court that it had settled with Allman and the remaining defendant was a California resident, prompting remand.
- Allman moved for costs and attorney’s fees under 28 U.S.C. § 1447(c), arguing removal was unreasonable because the complaint adequately alleged claims against the California defendant (Snodgrass).
- GEICO produced a November 19, 2019 settlement agreement releasing GEICO and related parties from “any and all . . . costs, attorney’s fees” arising out of or relating to the accident; Allman disputed the release’s applicability but did not submit the purported email he referenced.
- The court found GEICO’s removal position was not objectively reasonable but held the settlement released Allman’s fee claim, denied fees and costs, declined Rule 11 sanctions, and denied the in forma pauperis request as moot.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GEICO had an objectively reasonable basis for removal and thus whether fees should be awarded under §1447(c) | Allman: removal unreasonable because complaint alleges claims against California defendant (Snodgrass) | GEICO: defendants were fraudulently or improperly joined; misjoinder justified removal | Court: Removal lacked objective reasonableness, but fee award denied because the settlement released fee claims |
| Whether Snodgrass was properly joined or a sham/fraudulently joined defendant | Allman: complaint alleges negligent acts, ownership/permission, negligent entrustment against Snodgrass | GEICO: Snodgrass was a sham or improper party added only to defeat diversity | Court: Complaint states a plausible negligent entrustment claim; sham/fraudulent joinder not supported |
| Whether the settlement agreement released the motion for attorney’s fees and costs | Allman: parties intended to preserve remand/fee dispute (points to bargaining) | GEICO: settlement expressly released all costs and attorney’s fees arising out of or relating to the accident | Court: Release language unambiguous and not reasonably susceptible to Allman’s contrary interpretation; fee claim released and barred |
| Whether Rule 11 sanctions or an award to a pro se plaintiff are appropriate | Allman: removal was improper; sanctions or fees appropriate | GEICO: removal not improper in purpose; no Rule 11 violation; pro se not entitled to fees | Court: No Rule 11 sanctions (procedural/merits reasons) and pro se litigant not eligible for attorney’s fees |
Key Cases Cited
- Martin v. Franklin Capital Corp., 546 U.S. 132 (U.S. 2005) (awarding fees under §1447(c) requires showing removal lacked an objectively reasonable basis)
- Med. Protective Co. v. Pang, 740 F.3d 1279 (9th Cir. 2014) (court enforces settlement terms when assessing entitlement to costs)
- Trident Ctr. v. Conn. Gen. Life Ins. Co., 847 F.2d 564 (9th Cir. 1988) (parol evidence may be considered to interpret parties’ intent in California contracts)
- Pac. Gas & Elec. Co. v. G.W. Thomas Drayage & Rigging Co., 442 P.2d 641 (Cal. 1968) (parol evidence rule and interpretation of contract ambiguity under California law)
- Snyder v. Enter. Rent-A-Car Co. of San Francisco, 392 F. Supp. 2d 1116 (N.D. Cal. 2005) (negligent entrustment standard under California law)
- Blanchard v. Morton Sch. Dist., 509 F.3d 934 (9th Cir. 2007) (pro se plaintiffs are not entitled to attorney’s fees)