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Delaware Federal Court Examines When a Defendant’s Time To File A Notice of Removal Begins to Run Under 28 U.S.C. § 1446(b)(1)

Willard G. Twaddell v. Standard Security Life Insurance Company of New York
Case No. 15-564-LPS (United States District Court for the District of Delaware, March 21, 2016)
by Richard J. Medoff, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.ded.uscourts.gov/sites/default/files/opinions/lps/2016/march/15-564.pdf

In Willard G. Twaddell v. Standard Security Life Insurance Company of New York, the United States District Court for the District of Delaware held that the thirty (30) day period for the corporate Defendant to file a notice of removal of a civil action or proceeding under 28 U.S.C. § 1446(b)(1), began to run on the date of Plaintiff’s service on the Defendant’s registered agent, not on the date the Defendant received the summons and complaint from its registered agent. Based on this calculation, the Court concluded that Defendant’s removal was untimely, and therefore, the Court granted Plaintiff’s Motion to Remand.

By way of factual background, on February 17, 2015, Plaintiff Willard G. Twaddell ("Plaintiff''), a resident of Delaware, filed a civil action against Defendant Standard Security Life Insurance Company of New York ("SSLI" or "Defendant"), in the Superior Court of Delaware for New Castle County. On March 3, 2015, service of the Summons and Complaint was made on the Delaware Insurance Commissioner, which was SSLI's statutory agent for service of process. On March 9, 2015, the Department of Insurance mailed the Summons and Complaint to Corporation Trust Company ("CTC"), SSLI's registered agent for service of process. On June 4, 2015, SSLI received a letter from Plaintiff’s attorney, which included the Summons and Complaint. SSLI represented that it had “no record of ever receiving the Summons and Complaint from CTC or anyone else prior to receiving them when SSLI received the June 4 Letter."

Defendant filed a Notice of Removal in the United States District Court for the District of Delaware on July 1, 2015, contending that the Court had subject matter jurisdiction based on diversity of citizenship, 28 U.S.C. § 1332(a). On July 27, 2015, Plaintiff filed a Motion to Remand, arguing that, pursuant to 28 U.S.C. § 1446(b)(l), Defendant's Notice of Removal was not timely.

The Court began its analysis by noting that 28 U.S.C. § 1446(b)(1) provides that "the notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based." See 28 U.S.C. § 1446(b)(1). Additionally, the Court noted that the removal statue was "strictly construed against removal and all doubts should be resolved in favor of remand." Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990).

Turning to the facts of the case, the Court noted that the record included evidence that the Summons and Complaint were mailed to CTC - Defendant's registered agent for service of process - on March 9, 2015. Defendant did not deny that CTC received the Complaint and Summons, and that "the common law has long recognized a presumption that an item properly mailed was received by the addressee." In re Cendant Corp. Prides Litig., 311 F.3d 298, 304 (3d Cir. 2002). Instead, Defendant argued only that it did not receive the Summons and Complaint itself, until June 4, 2015.

According to the Court, however, whether or not Defendant itself received the Summons and Complaint from its registered agent was not the relevant inquiry. The Court explained that, in Delaware, service on a foreign corporation's registered agent constitutes service on the foreign corporation. See 8 Del. C. § 376(a). Thus, the Court found that Defendant’s time for removal began to run from the date of Plaintiff’s service on CTC. See Edling v. EMI Sys., Inc., 2002 WL 240135 (N.D. Tex. Feb. 15, 2002) ("[A] defendant's time for removal begins to run from the date of plaintiffs service on the defendant's registered agent"); Barr v. Zurich Inc. Co., 985 F.Supp. 701, 702 (S.D. Tex. 1997) ("[A]s a general rule, a complaint is considered received by a corporation when it is received by an agent authorized to accept service of process.").

The Court noted that the Summons and Complaint were mailed to CTC on March 9, 2015, that it was presumed to have been received by CTC, and that Defendant did not dispute that it was in fact received by CTC. Accordingly, the Court concluded that Defendant's Notice of Removal was not timely filed within thirty (30) days of receipt of the Summons and Complaint, as required under 28 U.S.C. § 1446(b)(1). Thus, the Court granted Plaintiff’s Motion to Remand.