JAMES O. BROWNING, District Judge.
On June 7, 2007, Sawyer was in a motor vehicle accident. See Verified Complaint for Damages for Breach of Contract, Insurance Bad Faith, Violation of the Insurance Code, and Breach of Fiduciary Duties
On May 24, 2010, Sawyer filed her Complaint in state court, Sawyer v. USAA Insurance Co., D-911-CV-201000101.
On February 24, 2011, the Clerk of the District Court of the Ninth Judicial District of the State of New Mexico certified that "it appears from the return made by Chris Quinn[, the person who served the Complaint], that the process was served on Defendant USAA Insurance Company by mailing the same to USAA Insurance Company, c/o Superintendent of Insurance for the Dept. of Ins. For the State of NM." Sawyer v. USAA Ins. Co., Case No. D-0911-CV-0201000101, Certificate as to the State of the Record and Non-Appearance at 11-13 (dated February 24, 2011), filed June 14, 2011 (Doc. 1-1)("State Certificate"). The Clerk certified process as to BCBS Association and BCBS Kansas City as well. See State Certificate at 1-2. Sawyer moved for default judgment the same day as the entry of the State Certificate. See Application for Entry of Default Judgment (dated February 24, 2011), filed June 14, 2011 (Doc. 1-1)("Default Judgment Application"). Sawyer asserted that no "Defendant has filed an Answer to the Complaint, and the time for filing an Answer has expired" and requested that "default be entered against each Defendant." Default Judgment Application at 2. She represented that the Defendants had been served "as indicated by the Return of Service." Default Judgment Application at 1.
On May 5, 2011, the Honorable Drew Douglas Tatum, District Court Judge for the Ninth Judicial District, Roosevelt County, State of New Mexico, held a hearing on the Default Judgment Application. See Sawyer v. USAA Ins. Co., Case No. D-0911-CV-0201000101, Transcript of Hearing at 3:1-9 (May 5, 2011)(Judge Tatum)("Default Judgment Tr."). At the hearing, Sawyer stated that no Defendant had entered an appearance and that notice of the hearing was sent to the Superintendent of Insurance.
On June 14, 2011, the Defendants filed their Notice of Removal. See Doc. 1. The Defendants assert that BCBS Kansas City is an independent licensee of BCBS Association. See Notice of Removal ¶ 2, at 2. They contend that removal is timely, because they removed within thirty days of becoming aware of the litigation, in conformance with 28 U.S.C. § 1446(b). See Notice of Removal ¶ 7, at 3. They argue that the one-year time limit for removal, set forth in 28 U.S.C. § 1446(b), is expressly limited to diversity removals. See Notice of Removal ¶ 8, at 4. The Defendants assert that the federal proceeding is not an appeal, but a continuation of the state proceedings, and that the Default Judgment is not a final judgment, because the Complaint also sought costs. See Notice of Removal ¶ 9, at 4.
BCBS Kansas City asserts that it is only authorized to transact insurance in Missouri and Kansas, and not in New Mexico, and that it is an "unauthorized" insurer under N.M.S.A.1978, § 59A-5-11(H). Notice
The Defendants assert that the Court has federal jurisdiction under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 to 1461. They argue that the Supreme Court of the United States has held that ERISA "bars all claims of close relation," and that "the preemptive force of [29 U.S.C. § 1132(a)] of ERISA is so extraordinary that it converts a state claim into a federal claim for purposes of removal and the well-pleaded complaint rule." Notice of Removal ¶¶ 32-33, at 11 (citing Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); Lind v. Aetna Health, Inc., 466 F.3d 1195, 1197 (10th Cir.2006)). They contend that the group health plan that BCBS Kansas City issued to Sawyer's former employer meets all the criteria of an employee benefit plan under ERISA. See Notice of Removal ¶¶ 35-36, at 12. The Defendants assert that "all of Plaintiff's attempted state law claims against BCBSKC[,] BCBSA[,] and Nueterra Healthcare are based on alleged improper processing of her claim for benefits under the group health plan," and that all of Sawyer's "purported state law claims" relate to the employee benefit plan. Notice of Removal ¶¶ 41-43, at 13-14. They argue that Sawyer's "attempted state law claims ... conflict with ERISA's comprehensive civil enforcement scheme and are therefore completely preempted." Notice of Removal ¶ 45, at 14.
The Defendants then filed several motions to set aside the default judgment, and Sawyer filed a motion to remand.
On July 13, 2011, United Services filed its motion. See Doc. 10. United Services argues that it was never served with notice of this lawsuit, and never had an opportunity
United Services notes that the returns of service that Sawyer filed relating to each Defendant demonstrate only that Sawyer's counsel sent a copy of the Complaint to each Defendant in care of the Superintendent of Insurance and that Paul S. Lucero received each summons on June 7, 2010. See United Services Motion at 2 (citing Certified Mail Receipt at 19 (dated June 7, 2010), filed June 14, 2011 (Doc. 1-1)("USAA Receipt"); Certified Mail Receipt at 22 (dated June 7, 2010), filed June 14, 2011 (Doc. 1-1)("BCBS Association Receipt"); Certified Mail Receipt at 25 (dated June 7, 2010), filed June 14, 2011 (Doc. 1-1)("BCBS Kansas City Receipt")). It contends that John Franchini, Superintendent of Insurance, has admitted that "[s]ervice of process was not done on USAA and BCBS of NM by the Superintendent of Insurance," and that, "as for the other companies[,] they are not doing business in New Mexico and we could not serve them." United Services Motion at 2-3 (citing Letter from John G. Franchini to Andrew Schultz at 1 (dated June 29, 2011), filed July 13, 2011 (Doc. 10-1)("Franchini Letter")).
United Services argues that, when a case is removed from state court, the federal court takes the case in its current posture and treats previously entered orders as its own. See United Services Motion at 4 (citing 28 U.S.C. § 1450; Granny Goose Foods v. Bhd. of Teamsters, Local No. 70, 415 U.S. 423, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974)). It asserts that a federal district court should also treat a state default judgment as its own and that rule 55(c) of the Federal Rules of Civil Procedure allows for relief from a default judgment in accordance with rule 60(b). See United Services Motion at 5. It contends that the Default Judgment is void, because neither USAA Insurance nor United Services was served with process, which offends due process. See United Services Motion at 6 (citing Armstrong v. Manzo, 380 U.S. 545, 550, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965)). It asserts that the Default Judgment is also void because the
On July 26, 2011, Sawyer filed her Memorandum of Points and Authorities in Opposition to Defendant United Services Automobile Association's Motion to Set Aside Default Judgment. See Doc. 21 ("United Services Response"). Sawyer argues that United Services, which she denotes as "USAA," is subject to the Default Judgment, that the United Services Motion is untimely, and that she properly served process on United Services. United Services Response at 1. Sawyer asserts that the United Services Motion is untimely, because, under New Mexico law, a court retains jurisdiction over a judgment for a period of thirty days and a party has only thirty days in which to appeal the judgment. See United Services Response at 2. She represents that United Service's time to file this motion expired on June 10, 2011, and that, when a judgment becomes final, there is no case or controversy over which the Court can exercise jurisdiction. See United Services Response at 2. She argues that the Defendants' removal is "nothing more than forum shopping." United Services Response at 3.
Sawyer further asserts that, even if the Court has jurisdiction, the Default Judgment should not be set aside, because she properly served United Services and because personal service is not a due-process requirement. See United Services Response at 3. Sawyer represents that the New Mexico Legislature has determined that companies offering insurance services within New Mexico agree that service of process on the Superintendent is sufficient to give notice of a complaint. See United Services Response at 3-4. Sawyer states that she served process on the Superintendent of Insurance and that, through her services, constructive notice was given to the Defendants. See United Services Response at 4. Sawyer also argues that any meritorious defense that the Defendants may have had are now stale, because the Defendants had notice of the state court action within the thirty-day time limit established under state law. See United Services Response at 5.
On August 1, 2011, United Services filed United Services Automobile Association's Reply in Support of Motion to Set Aside Default Judgment. See Doc. 23 ("United Services Reply"). United Services describes Sawyer's state Default Judgment as a "chimerical victory," because the undisputed facts are that no "USAA Insurance Company" exists. United Services Reply at 1-2. It asserts that, even if USAA Insurance Company is a real entity, Sawyer failed to serve it in the manner required under New Mexico law, because service of process on the insurer is complete only "upon receipt, or, in the event of refusal to accept, the date of such refusal," and that actual notice is required. United Services Reply at 4 (citing N.M.S.A.1978, § 59A-5-32(B)). United Services notes that there is no evidence that Sawyer paid the statutorily required fee or filed an affidavit demonstrating compliance with N.M.S.A.1978, § 59A-15-8. See United Services Reply at 5. With respect to timeliness, United Services asserts that this action
On July 13, 2011, BCBS Kansas City filed its motion. See Doc. 11. BCBS Kansas City states that Sawyer had a policy with it that expired on May 31, 2007 and that they have no record of Sawyer obtaining a COBRA
BCBS Kansas City further asserts that the Default Judgment against it should be set aside because of a misrepresentation to the state court. See BCBSKC Memo at 4. It argues that the Default Judgment, "at the urging of plaintiff's counsel," included damages not pled in the Complaint and duplicative damages. BCBSKC Memo at 4. It contends that it has meritorious defenses, because all of Sawyer's allegations are grounded on the assumption that she had a valid right to health care benefits and there is no evidence that she had any such right under COBRA. See BCBSKC Memo at 5. BCBS Kansas City asserts that the lack of any evidence of a valid COBRA election relieved BCBS Kansas City from any obligation to provide Sawyer with health care benefits following her
On July 26, 2011, Sawyer filed her Memorandum of Points and Authorities in Opposition to Defendant Blue Cross and Blue Shield of Kansas City's Motion to Set Aside Default Judgment. See Doc. 22 ("BCBSKC Response"). In her BCBSKC Response, Sawyer makes substantially the same timeliness, service of process, and meritorious defense arguments as in her United Services Response. See BCBSKC Response at 2-4, 5. Sawyer disputes that any misrepresentation occurred, and argues that, even if a misrepresentation occurred, it would not justify setting aside the entire Default Judgment. See BCBSKC Response at 5.
On August 3, 2011, BCBS Kansas City filed the Reply of Defendant Blue Cross and Blue Shield of Kansas City in Support of Motion to Set Aside Default Judgment. See Doc. 26 ("BCBSKC Reply"). BCBS Kansas City argues that Sawyer failed to rebut its evidence that it did not obtain service and that failure to properly serve BCBS Kansas City voids the Default Judgment. See BCBSKC Reply at 1. It asserts that Sawyer does not address the provisions of the Insurance Code which address service on an unauthorized insurers and argues that the plaintiff owes actual notice to an unauthorized insurer. See BCBSKC Reply at 2. It contends that the Court has subject matter jurisdiction, because, had "the case not been removed, BCBSKC would have had exactly the same grounds for setting aside the default judgment under NMRA Rule 1-060(B)(4) without regard to the time for filing an appeal from the default judgment." BCBSKC Reply at 5.
BCBS Association filed its motion on July 14, 2011. See Doc. 14. BCBS Association represents that it is an Illinois not-for-profit corporation and argues that, because it does not transact insurance in New Mexico, it is not subject to service of process under the New Mexico Insurance Code, N.M.S.A.1978, § 59A-15-7 See BCBSA Motion ¶¶ 2, 4, at 1-2. It argues that it has a meritorious defense, because it is not a party to the agreement between Nueterra and BCBSKC and does not owe Sawyer coverage of her alleged medical bills. See BCBSA Motion ¶¶ 5-6, at 2. BCBS Association contends that the state court did not obtain personal jurisdiction over it, because it was never served, and it "does not maintain an office in New Mexico, has no operations in New Mexico, and does not routinely transact business in New Mexico." BCBSA Motion ¶¶ 8-9, at 3. Sawyer did not file a written response to the BCBSA Motion. See Notice of Completion of Briefing at 1-2, filed August 3, 2011 (Doc. 25).
Sawyer filed her motion on August 4, 2011. See Doc. 28. Sawyer moves, pursuant
Sawyer argues that, in "distributing to courts the authority to hear matters, the `authority to review final judgments of a state court in judicial proceedings' was withheld from federal district courts, and `such review may be had only in the United States Supreme Court.'" Sawyer Memo at 3 (citing Van Sickle v. Holloway, 791 F.2d 1431, 1436 (10th Cir.1986)). She assert that, because no appeal or post-judgment motion could be made, the Default Judgment was final, and "no case or controversy exists over which this Court can exercise jurisdiction." Sawyer Memo at 4. She further asserts that, in Nieto v. University of New Mexico, the Court determined that removal following a state court dismissal was appropriate, because a case or controversy still existed, but that the Court added the caveat that removal is appropriate "so long as there is time to insist on reconsideration or appellate review." Sawyer Memo at 4. Sawyer contends that the Defendants did nothing until BCBS Kansas City and BCBS Association untimely removed this matter to federal court and that, because of "their own lack of diligence," they lost that chance to move to set aside the Default Judgment or appeal in the state court system. Sawyer Memo at 5. Sawyer also requests attorney's fees under 28 U.S.C. § 1447(c). See Sawyer Memo at 5.
On August 12, 2011, United Services filed United Services Automobile Association's Response to Plaintiff's Motion to Remand (Doc. 28). See Doc. 30 ("United Services' Sawyer Response"). United Services argues that the Court has subject-matter jurisdiction over the case, and that the Sawyer Motion is premised on "unsupported factual assertions" and "a fundamental misunderstanding of legal authorities." United Services' Sawyer Response at 1. It disputes several of Sawyer's facts
United Services argues that Sawyer misunderstands the Rooker-Feldman doctrine, which is confined to "cases brought by state-court losers complaining of injuries cause by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." United Services' Sawyer Response at 3 (citing Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005)). It asserts that Sawyer's reliance on this doctrine falters because proper removal does not constitute an appeal. See United Services' Sawyer Response at 3. United Services notes that Sawyer has waived any argument with respect to removal other than subject-matter jurisdiction, because the motion to remand was made more than thirty days after the notice of removal. See United Services' Sawyer Response at 5 (citing 28 U.S.C. § 1447(c)). United Services argues that the Court has jurisdiction to consider whether to set aside the Default Judgment. See United Services' Sawyer Response at 5. United Services also includes substantially the same discussion of the Court's opinion in Nieto v. University of New Mexico as in the United Services Reply. See United Services' Sawyer Response at 6-7. United Services contends that Sawyer is not entitled to attorneys fees. See United Services' Sawyer Response at 7-8.
On August 12, 2011, BCBS Kansas City and BCBS Association filed BCBSKC's and BCBSA's Response to Plaintiff's Motion to Remand. See Doc. 31 ("BCBS' Sawyer Response"). BCBS Association asserts that it is not an insurance company and that the Superintendent of Insurance cannot be its agent for service of process. See BCBS' Sawyer Response at 1-2. BCBS Kansas City asserts that service was proper only if Sawyer sent copies of the notice of service and court process, and filed an affidavit of her compliance. See BCBS' Sawyer Response at 2. It argues that Sawyer did not meet the service requirements and that it was not served. See BCBS' Sawyer Response at 3. BCBS Kansas City and BCBS Association contend that Sawyer waived any non-jurisdictional arguments, because the Sawyer Motion was filed more than thirty days after removal. See BCBS' Sawyer Response at 4. They assert that the New Mexico courts have repeatedly held that the time limits in N.M.S.A.1978, § 39-1-1 yield to the longer time limits in N.M.R.A. 1-060 and that N.M.R.A. 1-060 motions remain viable "indefinitely." BCBS' Sawyer Response at 4 (emphasis original). They also argue that removal jurisdiction is original, not appellate, and, thus, the Rooker-Feldman doctrine does not apply. See BCBS' Sawyer Response at 6.
On February 9, 2012, the Court held a hearing. The Court asked United Services how it learned of the Default Judgment. See Transcript of Hearing at 4:13-15 (February 9, 2012)(Court)("Tr.").
The Court then asked BCBS Kansas City and BCBS Association what evidence they had to show that they were not served. See Tr. at 17:19-24 (Court). BCBS Kansas City and BCBS Association responded that they supplied affidavits from company employees who have attested that neither company received service of process from the Superintendent of Insurance and that the Franchini Letter confirms that the Superintendent of Insurance did not forward any copies of the Complaint Sawyer that provided him. See Tr. at 17:25-18:11 (Bartell). They argued that Sawyer has only provided the certified mail receipt, which established no more than that the Superintendent of Insurance received service. See Tr. at 18:12-17 (Bartell). BCBS Association asserted that its service of process argument is clear-cut, because it is not an insurance company and does not transact insurance, such that the Superintendent of Insurance is not its agent and no statute permits substituted service to the Superintendent of Insurance. See Tr. at 18:18-19:1 (Bartell). It represented that it is the holder of the Blue Cross Blue Shield trademark and that it has no corporate ties to the other Blue Cross Blue Shield Defendants. See Tr. at 20:4-19 (Bartell). BCBS Kansas City admitted that Sawyer, at one time, had insurance with it through her employer. See Tr. at 20:20-21:2 (Bartell). It asserted that it is an unauthorized insurer and that the N.M.S.A.1978, § 59A-15-7 sets forth the means of serving an unauthorized insurer. See Tr. at 22:5-15 (Bartell). It contended that Sawyer treated all of the Defendants as if they were authorized insurers and that she did not follow § 59A-15-7, because, in addition to serving the Superintendent of Insurance, New Mexico law requires that a plaintiff send a copy of the summons and the complaint directly to an unauthorized insurer. See Tr. at 22:16-23:23 (Bartell). BCBS Association and BCBS Kansas City argued that the Default Judgment is void for lack of proper service and that the state court did not have personal jurisdiction over them in the absence of proper service. See Tr. at 23:24-25:8 (Bartell). BCBS Association and BCBS Kansas City asserted that the Court has jurisdiction over the action, and that Sawyer's references to Nieto v. University of New Mexico are misguided. See Tr. at 24:16-25:6 (Bartell). They represented that, if these motions were before the state court, the state court would have had jurisdiction to set aside the default judgment once it determined that process had never been served. See Tr. at 25:7-18 (Bartell). They contended that there is a live controversy sufficient to support the Court's subject-matter jurisdiction and that the Court should set aside the Default Judgment. See Tr. at 26:4-16 (Bartell).
The Court asked Sawyer whether she believed the Court would be sitting in an appellate fashion if Judge Tatum had entered summary judgment and then the Defendants properly removed. See Tr. at 27:19-28:2 (Court). Sawyer responded that, if the case was removed within thirty days of service, it would also be inside the thirty-day requirement under N.M.S.A. 1978, § 39-1-1, which permits a court to dispose of any post-judgment motion. See Tr. at 28:3-12 (Collins). Sawyer admitted that, with respect to rule 60(b)(4), the thirty-day rule under § 39-1-1 would not have any impact, but that the thirty-day rule would dispose of the rule 60(b)(6) motion — that Sawyer negligently named USAA Insurance rather than United Services. See Tr. at 28:24-29:2 (Collins). Sawyer asserted that United Services should be treated differently from the other Defendants, because it is arguing that it was improperly named, and contended that United Services' argument was a "red herring," because it had sufficient notice that it was
Sawyer represented that the Supreme Court of New Mexico has not addressed the statutes discussing service of process on authorized and unauthorized insurers, but that it has ruled on service of process on an agent in the context of a corporation. See Tr. at 31:19-25 (Collins). She stated that, in 1935, in Silva v. Crombie & Co., 39 N.M. 240, 44 P.2d 719 (1935), a corporation appointed an agent who subsequently left the state and the Supreme Court of New Mexico held that serving the Secretary of State of New Mexico, who failed to forward the process, was sufficient. See Tr. at 32:3-12 (Collins). Sawyer asserted that the Supreme Court of New Mexico held that the Secretary of State's negligence is not chargeable to the plaintiff. See Tr. at 32:13-18 (Collins). Sawyer also pointed the Court to Abarca v. Henry L. Hanson, Inc., 106 N.M. 25, 738 P.2d 519 (Ct.App. 1987). See Tr. at 33:23-25 (Collins). The Court then asked, assuming that Sawyer correctly interpreted the statutes and that service was proper when made on the Superintendent of Insurance, whether a federal court could find good cause to set aside the Default Judgment, because United Services, BCBS Association, and BCBS Kansas City did not receive the full benefits of service under those statutes. See Tr. at 35:14-21 (Court). Sawyer responded that actual notice is not required under due process. See Tr. at 35:22-23 (Collins). Sawyer asserted that the only process due to the Defendants is process reasonably calculated to give the Defendants notice and that the State of New Mexico has determined that insurance companies have notice when service is made on the Superintendent. See Tr. at 36:4-20 (Collins). She argued that the Superintendent of Insurance was served, giving United Services, BCBS Association, and BCBS Kansas City notice, and asked that the Court remand the matter to state court and deny the Defendants' motions. See Tr. at 36:21-37:4 (Collins). With respect to Nieto v. University of New Mexico, Sawyer contended that the Court held that, when there is no issue that can be appealed, there is no case or controversy for the Court to decide. See Tr. at 37:12-19 (Collins). She admitted, however, that, if BCBS Association and BCBS Kansas City had not removed, the Defendants probably would have been able to bring a rule 60(b) or 55(c) motion in state court. See Tr. at 38:17-22 (Collins).
The Court asked why United Services had standing to contest the Default Judgment. See Tr. at 41:4-6 (Court). United Services responded that it had standing insofar as Sawyer has represented that she intends to enforce the Default Judgment
A defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction" 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). The right to remove is a statutory right, and thus removing defendants must carefully follow all statutory requirements. See Bonadeo v. Lujan, No. 08-0812, 2009 WL 1324119, at *9-10 (D.N.M. Apr. 30, 2009) (Browning, J.). Removal statutes are strictly construed, and ambiguities should be resolved in favor of remand. See Shamrock Oil & Gas v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir.1982). Doubtful cases are resolved in favor of remand, because "there is a presumption against removal jurisdiction." Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir.1995). On the other hand, strict construction and a presumption against Congressionally allowed removal should not become a judicial hostility toward removal cases. See Bonadeo v. Lujan, 2009 WL 1324119, at *12 ("Strict construction does not mean judicial hostility toward removal.").
Section 1446 of Title 28 of the United States Code governs the procedure for removal. See 28 U.S.C. § 1446(b). It demands that "[t]he notice of removal ... be
McEntire v. Kmart Corp., No. 09-0567, 2010 WL 553443, at *4 (D.N.M. Feb. 9, 2010)(Browning, J.) (citations omitted). The Court follows the last-served rule.
If a defendant removes a matter to federal court, the plaintiff may challenge the removal by filing a motion to remand in federal district court. See Caterpillar Inc. v. Lewis, 519 U.S. 61, 69, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996). The procedure for motions to remand is governed primarily by 28 U.S.C. § 1447. Grounds for remand include a lack of subject-matter jurisdiction, see 28 U.S.C. § 1447(c), or a defect in the removal procedure, see Bonadeo v. Lujan, 2009 WL 1324119, at *6 (citing McShares, Inc. v. Barry, 979 F.Supp. 1338, 1341 (D.Kan. 1997)). A defect in the removal notice or any "[f]ailure to comply with the requirements of § 1446(b) constitutes a `defect in removal procedure.'" Page v. City of Southfield, 45 F.3d 128, 131 (6th Cir.1995) (citing In re Cont'l Cas. Co., 29 F.3d 292, 294 (7th Cir.1994)). Under 28 U.S.C. § 1447(c), "[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a)." 28 U.S.C. § 1447(c).
There is some disagreement whether a defendant may remove a case to federal court after the state trial court has entered
The statutes governing procedures for removal appear to require only: (i) an existing "civil action," 28 U.S.C. §§ 1441, 1446(a)-(b); (ii) over which the federal district court has original jurisdiction, see 28 U.S.C. § 1441(a); and (iii) that the defendant file a notice of removal within thirty days of receipt of service, see 28 U.S.C. § 1446(b). There is no express requirement that the removal occur at any particular stage of the adjudicatory process.
Article III of the Constitution limits the judicial power of the federal courts to particular "cases" or "controversies." The Clause states:
U.S. Const. Art. III, § 2. To satisfy Article III's core justiciability requirements, a plaintiff must have standing, his or her claims must not be moot, and his or her claims must be ripe. To have standing, a plaintiff must show: (i) that he or she has suffered an injury in fact — an invasion of a legally protected interest that is concrete and particularized, and actual or imminent, not conjectural or hypothetical; (ii) that there is a fairly traceable causal connection between the injury and the defendant's conduct complained of; and (iii) that it is likely that a favorable decision will redress the injury. See D.L.S. v. Utah, 374 F.3d 971, 974 (10th Cir.2004); Morgan v. McCotter, 365 F.3d 882, 887-88 (10th Cir.2004).
Claims become moot when the issues that they present are no longer "live" or the parties lack a legally cognizable interest in the outcome. County of L.A. v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979). A claim may become moot if "(i) it can be said with assurance that there is no reasonable expectation that the alleged violation will recur, and (ii) interim relief or events have completely and irrevocably eradicated the effects of the alleged violation." County of L.A. v. Davis, 440 U.S. at 631, 99 S.Ct. 1379. The burden of establishing mootness is a heavy one. See County of L.A. v. Davis, 440 U.S. at 631, 99 S.Ct. 1379.
The ripeness doctrine focuses on whether the harm asserted has matured sufficiently to warrant judicial intervention. In determining whether a case is ripe, a court must evaluate the fitness of the issues and record presented for judicial review, and the potential hardship to the parties of withholding court consideration.
Although several federal district courts have found that, when a case is removed after the state court has issued a final judgment, the district court lacks jurisdiction and must remand the case to state court,
Several federal courts have recognized that the case-or-controversy requirement is met even after a state-court judgment. The Tenth Circuit, in Jenkins v. MTGLQ Investors, implicitly recognized that a case or controversy exists when a case is removed after the entry of a state-court default judgment. There, the Tenth Circuit granted a motion to amend the notice of removal to more specifically discuss the defendant's citizenship and found that the notice of removal was timely "despite being filed more than three months after entry of the default judgment and more than eight months after Mr. Jenkins filed his complaint." 218 Fed.Appx. at 724. The Tenth Circuit held that, after removal, "MTGLQ had the `right to the opinion of
872 F.2d at 965-66. Although the Eleventh Circuit did not state this proposition in terms of the case-or-controversy requirement, it acknowledged that there was a federal court action from which the defendant could appeal to the Eleventh Circuit. The Court finds the reasoning of the Eleventh Circuit persuasive.
In Resolution Trust Corp. v. BVS Development, Inc., 42 F.3d 1206 (9th Cir.1994), the United States Court of Appeals for the Ninth Circuit addressed whether a case or controversy exists in a case pending appeal in state court.
Resolution Trust Corp. v. BVS Dev., Inc., 42 F.3d at 1211. In other words, the Ninth Circuit believed that, so long as there is a legal dispute between the parties that a federal court could legitimately resolve, there exists a case or controversy under Article III.
In FDIC v. Kahlil Zoom-In Markets, Inc., 978 F.2d 183 (5th Cir.1992), the United States Court of Appeals for the Fifth Circuit addressed "the question of the jurisdiction of a federal court of appeals where a matter has been removed to federal district court while appeal is pending in a state court of appeals." 978 F.2d at 183. The case dealt with a different removal statute — 12 U.S.C. § 1819(b)(2) — but the case is instructive.
In Federal Deposit Insurance Corporation v. Yancey Camp Development, 889 F.2d 647 (5th Cir.1989), the Fifth Circuit exercised jurisdiction, when a defendant removes to federal court after the state court has entered a judgment. See 889 F.2d at 648. The Fifth Circuit explained that "[a] state court judgment in a case properly removed to federal court — like the one before us — can be vacated under Federal Rule of Civil Procedure 60(b)." 889 F.2d at 648 (citing Beighley v. FDIC, 868 F.2d 776, 781-82 (5th Cir.1989); Northshore Dev., Inc. v. Lee, 835 F.2d 580 (5th Cir.1988); Azzopardi v. Ocean Drilling & Exploration Co., 742 F.2d 890 (5th Cir.1984)). The Fifth Circuit also exercised jurisdiction after entry of a state-court judgment in Murray v. Ford Motor Co., 770 F.2d 461 (1985). The court in Murray v. Ford Motor Co. addressed whether the district court had authority to set aside the state-court's judgment pursuant to rule 60(b) after removal. See 770 F.2d at 463. The Fifth Circuit did not directly address whether a case or controversy existed or whether the district court had jurisdiction over the removal after entry of the state-court default judgment, but both courts were charged with determining their own jurisdiction, and the Fifth Circuit made no mention of any concern that jurisdiction might be lacking. The Court finds this authority persuasive and that such authority indicates that the Court can also exercise jurisdiction.
In 1955, the United States Court of Appeals for the Sixth Circuit recognized that a case may be removed after entry of a default judgment against the defendant, and exercised jurisdiction over the case. In Munsey v. Testworth Laboratories, 227 F.2d 902 (6th Cir.1955), Munsey sued Testworth Laboratories. The case had a peculiar procedural posture, because Munsey had served Testworth with a summons four months before he filed his complaint. Munsey then filed his complaint on one day, served Testworth with a copy of the complaint two days later, and received a default judgment a mere two days after service. See Munsey v. Testworth Labs., 227 F.2d at 902-03. Within a week after the complaint was filed — and two days after the default judgment was entered — Testworth removed to federal court. See Munsey v. Testworth Labs., 227 F.2d at 903. Munsey argued that the federal district court lacked jurisdiction to proceed. The Sixth Circuit stated:
Munsey v. Testworth Labs., 227 F.2d at 903. The Sixth Circuit thus affirmed the district court's decision to set aside the default judgment against Testworth that the Tennessee trial court entered. Several
In Philpott v. Resolution Trust Corp., 739 F.Supp. 380 (N.D.Ill.1990), the United States District Court for the Northern District of Illinois held that a defendant could not remove a closed case, because "[t]here is no jurisdiction to remove a case if no case or controversy exists," see 739 F.Supp. at 383-84,
When a case is removed from state court, the federal court takes the case in its current posture and treats previously entered orders as its own. The Supreme Court in Granny Goose Foods v. Brotherhood of Teamsters, Local No. 70, stated:
415 U.S. at 436-37, 94 S.Ct. 1113. See 28 U.S.C. § 1450 (stating that all orders entered before removal "shall remain in full force and effect until dissolved or modified by the district court"); Fed.R.Civ.P. 81(c)(1) (stating that the Federal Rules of Civil Procedure "apply to a civil action after it is removed from a state court"). In Wallace v. Microsoft Corp., 596 F.3d 703, 707 (10th Cir.2010), the Tenth Circuit stated:
596 F.3d at 707 (citations omitted)(internal quotation marks omitted). After removal, "[t]he district court then c[an] set aside [a] default judgment under Fed.R.Civ.P. 55(c) and 60(b)." Jenkins v. MTGLQ Investors, 218 Fed.Appx. at 724 (affirming the federal district court's application of rule 60(b) to set aside the state court's dismissal of a case based on improper service of process).
After removal, a federal court treats the state court orders as its own. The United States Court of Appeals for the Fifth Circuit stated in Azzopardi v. Ocean Drilling & Exploration Co., 742 F.2d 890 (5th Cir.1984):
742 F.2d 890, 895. See In re Savers Fed. Sav. & Loan Ass'n, 872 F.2d 963, 966 (11th Cir.1989) ("In the instant case, in which removal and notice of appeal were timely, we will take the case as we find it on removal and treat everything that occurred in the state court as if it had taken place in the district court below."). As the Ninth Circuit has recognized, "a federal court must take a case as it finds it on removal, requiring a district court to treat
Although it has a complex history and was for a long time shrouded in mystery, the Rooker-Feldman doctrine embodies the simple principle that federal district courts have no jurisdiction to sit as courts of appeal to state courts. "The Rooker-Feldman doctrine prevents the lower federal courts from exercising jurisdiction over cases brought by `state-court losers' challenging `state-court judgments rendered before the district court proceedings commenced.'" Lance v. Dennis, 546 U.S. 459, 460, 126 S.Ct. 1198, 163 L.Ed.2d 1059 (2006) (quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005)). See Erlandson v. Northglenn Mun. Court, 528 F.3d 785, 788-89 (10th Cir.2008); Mann v. Boatright, 477 F.3d 1140, 1146 (10th Cir.2007). The elements, thus, are: (i) a state-court loser; (ii) who is asking a federal district court; (iii) to review the correctness of a judgment rendered by a state court; and (iv) which judgment was rendered before the commencement of the federal proceeding. See Guttman v. Khalsa, 446 F.3d 1027, 1032 (10th Cir.2006) ("The Rooker-Feldman doctrine ... is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.")(quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. at 284, 125 S.Ct. 1517). The Tenth Circuit has made clear that "the Rooker-Feldman doctrine is confined to cases brought after the state proceedings have ended." Mann v. Boatright, 477 F.3d at 1146 (internal quotation marks omitted). See Guttman v. Khalsa, 446 F.3d at 1031-32 (holding that Rooker-Feldman doctrine applies only where state court appeals process has run its full course).
The Tenth Circuit has addressed the Rooker-Feldman doctrine in the context of a motion to set aside a default judgment in federal court at least three times. In Jenkins v. MTGLQ Investors, the Tenth Circuit stated that the plaintiff's argument evidenced a "fundamental misunderstanding of both Rooker-Feldman and removal." 218 Fed.Appx. at 723. The Tenth Circuit stated:
Jenkins v. MTGLQ Investors, 218 Fed. Appx. at 723-24 (citations omitted). In Sheriff v. Accelerated Receivables Solutions, 283 Fed.Appx. 602 (10th Cir.2008) (unpublished), a default judgment was entered against the federal court plaintiff in state court, and the federal court plaintiff then filed a federal court action seeking money damages for alleged constitutional violations arising out of the state court debt collection default judgment. See 283 Fed.Appx. at 604-05. The Tenth Circuit determined that the "default judgment entered by the district court could not be considered `final,'" because, as a result of the absence of a rule 60(b) motion, the "clock for filing an appeal of the judgment had not even started running prior to the filing of the federal suit." Sheriff v. Accelerated Receivables Solutions, 283 Fed. Appx. at 606-07. In Edwards v. Bank of New York, 63 Fed.Appx. 445 (10th Cir. 2003) (unpublished), the Tenth Circuit held that Rooker-Feldman applied where the federal-court plaintiff filed a "Motion for a Stay on the Property, a Petition for Review and Writ of Subpoena, and a Notice of Removal" in federal court, after he had appealed the state court's entry of default judgment to the Supreme Court of New Mexico. 63 Fed.Appx. at 445-46. There, the Tenth Circuit found that the federal-court plaintiff was seeking review of a final state court decision and affirmed the district court's finding that it lacked subject-matter jurisdiction. See Edwards v. Bank of N.Y., 63 Fed.Appx. at 445-46.
A Court may set aside a default judgment under rule 60(b) of the Federal Rules of Civil Procedure. See Fed.R.Civ.P. 55(c); Advanced Optics Elec., Inc. v. Robins, 769 F.Supp.2d 1285, 1310 (D.N.M.2010)(Browning, J.). Rule 60(b) governs motions for relief from a judgment or orders in federal court. The Tenth Court imposes a rigorous standard for rule 60(b)(6).
N.M.R.A. 1-060(B) largely mirrors rule 60(b) of the Federal Rules of Civil Procedure. It provides that, on a motion and upon just terms, a court may relieve a party from a final judgment, order, or proceeding for:
N.M.R.A. 1-060(B). A motion under rule 1-060(B) "shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than one-year after the judgment, order or proceeding was entered or taken." N.M.R.A. 1-060(B). Under New Mexico state procedure rule 1-060(B), a
New Mexico law provides that final judgments and decrees "entered by district courts ... shall remain under the control of such courts for a period of thirty days after the entry thereof, and for such further time as may be necessary to ... dispose of any motion which may have been filed within such period." N.M.S.A. 1978, § 39-1-1. That statute further provides that "the provisions of this section shall not be construed to amend, change, alter or repeal the provisions of Sections 4227 or 4230, Code 1915." N.M.S.A.1978, § 39-1-1. The Court of Appeals of New Mexico has held:
Archuleta v. N.M. State Police, 108 N.M. 543, 547, 775 P.2d 745, 749 (Ct.App.1989). In another case, the Court of Appeals of New Mexico stated that "Section 39-1-1... has never been viewed as depriving the district court of jurisdiction to consider and resolve a subsequent timely motion under Rule 60(B)." A.C. v. C.B., 113 N.M. at 584, 829 P.2d at 663 (citing Wooley v. Wicker, 75 N.M. 241, 244-45, 403 P.2d 685, 687-88 (1965)). See also Gordon v. Gordon, 149 N.M. 783, 788, 255 P.3d 361, 367 (Ct.App.2011) (holding that, after the expiration of the time limits under § 39-1-1, "Rule 1-060(B) N.M.R.A. [is] the only authority for the district court to modify the decree").
Turning to federal law, rule 60(b) allows a court to relieve a party from a final judgment for "mistake, inadvertence, surprise, or excusable neglect," Fed. R.Civ.P. 60(b)(1), where "the judgment is void," Fed.R.Civ.P. 60(b)(4), or for "any other reason that justifies relief," Fed. R.Civ.P. 60(b)(6). "Rule 60(b) is an extraordinary procedure permitting the court that entered judgment to grant relief therefrom upon a showing of good cause within the rule." Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc., 715 F.2d 1442, 1444 (10th Cir.1983). Rule 60(b) "is not a substitute for appeal, and must be considered with the need for finality of judgment." Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc., 715 F.2d at 1444 (citing Brown v. McCormick, 608 F.2d 410, 413 (10th Cir.1979)). The rule was designed to strike a "delicate balance" between respecting the finality of judgment and, at the same time, recognizing the court's principal interest of executing justice. Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc., 715 F.2d at 1444.
Motions to reconsider based on "mistake, inadvertence, surprise, or excusable neglect" must be brought "within a reasonable time ... no more than a year after the entry of the judgment or order or the date of the proceeding." Fed.R.Civ.P. 60(c)(1). See Blanchard v. Cortes-Molina, 453 F.3d 40, 44 (1st Cir.2006) ("[R]elief from judgment for reasons of `mistake, inadvertence, surprise, or excusable neglect,'
Motions to reconsider because the judgment is void must be brought within a "reasonable time." Fed.R.Civ.P. 60(c). Relief under rule 60(b)(4) is "not a discretionary matter; it is mandatory." Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1166 (10th Cir.2011). Under both New Mexico and federal law, where a plaintiff has failed to properly serve a defendant, the court lacks personal jurisdiction, and a judgment is void. See Hukill v. Okla. Native Am. Domestic Violence Coal., 542 F.3d at 801 ("Because the service in the case, attempted under Oklahoma law, did not substantially comply with the law of that state, the district court did not have personal jurisdiction.... Therefore, the district court erred in denying defendants' motion to set aside the default judgment under Fed.R.Civ.P. 60(b)(4)."); Edmonds v. Martinez, 146 N.M. 753, 756, 215 P.3d 62, 65 (Ct.App.2009) ("New Mexico has long recognized that `a court lacks jurisdiction to pronounce judgment over a defendant of respondent unless that defendant or respondent has been properly summoned to court.' A court has no power to bind a party to judgment when that party has not been properly served").
Rule 60(b)(6) provides that a court may relieve a party from final judgment, order, or proceeding for "any other reason that justifies relief." Fed.R.Civ.P. 60(b)(6). No time limit applies to rule 60(b)(6), save that the motion be made within a reasonable time. See Fed.R.Civ.P. 60(c)(1). "Courts have found few narrowly-defined situations that clearly present `other reasons justifying relief.'" 11 C. Wright, A. Miller & M. Kane, Federal Practice & Procedure, § 2864 (2d ed. 2011). In Pioneer Investment Services Co. v. Brunswick Associates Ltd., 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993), the Supreme Court reasoned that, to avoid abrogating the one year time limit for rule 60(b)(1) to (3), rule 60(b)'s "provisions are mutually exclusive, and thus a party who failed to take timely action due to `excusable neglect' may not seek relief more than a year after the judgment by resorting to subsection (6)." 507 U.S. at 393, 113 S.Ct. 1489 (citing Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 863 & n. 11, 108 S.Ct. 2194, 100 L.Ed.2d 855 (1988)). The Supreme Court expounded:
Pioneer Inv. Servs. Co. v. Brunswick Associates Ltd., 507 U.S. at 393, 113 S.Ct. 1489
The Defendants removed this case while post-judgment motions could still be filed. Accordingly, there is a case or controversy for the Court to resolve, and the Court has subject-matter jurisdiction over the case. Because United Services, BCBS Kansas City, and BCBS Association were not properly served, the default judgment entered against them is void.
In the responses that Sawyer filed to the motions to set aside the Default Judgment, Sawyer asserted that "no case or controversy exists as a result of the lapse of time in which Defendant could have brought any post-judgment motion or appeal... Defendant's motion must be denied." United Services Response at 3. See BCBSKC Response at 3. She asserts that, because no appeal or post-judgment motion could be made, the Default Judgment was final, and "no case or controversy exists over which this Court can exercise jurisdiction." Sawyer Memo at 4. She further asserts that, in Nieto v. University of New Mexico, the Court determined that removal following a state court dismiss was appropriate, because a case or controversy still existed, but that the Court added the caveat that removal is appropriate "so long as there is time to insist on reconsideration or appellate review." Sawyer Memo at 4. Additionally, Sawyer asserts that the Court should remand this matter, because "the `authority to review final judgments of a state court in judicial proceedings' was withheld from federal district courts, and `such review may be had only in the United States Supreme Court.'" Sawyer Memo at 3 (citing Van Sickle v. Holloway, 791 F.2d at 1436; Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. at 482, 103 S.Ct. 1303). She argues that "no jurisdiction lies for any challenge `to state-court decisions in particular cases arising out of judicial proceedings even if those challenges allege that the state court's action was unconstitutional.'" Sawyer Memo at 3 (citing Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. at 486, 103 S.Ct. 1303).
The Court held, in Nieto v. University of New Mexico, that it had jurisdiction over a case which the state court had dismissed before the defendants removed
New Mexico provides thirty days in which to appeal from the entry of judgment. See N.M.S.A.1978, § 39-1-1. Because the Default Judgment was entered on May 11, 2011, the last day to appeal Judge Tatum's decision was June 10, 2011. The Notice of Appeal was filed on June 14, 2011; accordingly, the Defendants had no appellate rights at the time they removed. The state district court could, however, still entertain a motion for reconsideration under rule 1-060, because "Section 39-1-1 ... has never been viewed as depriving the district court of jurisdiction to consider and resolve a subsequent timely motion under Rule 60(B)." A.C. v. C.B., 113 N.M. at 584, 829 P.2d at 663. Removal was within the one-year limitations period for rule 60(B)(1) — mistake inadvertence, surprise or excusable neglect, (2) — newly discovered evidence, and (3) — fraud, and likely within the "reasonable time" requirement for (4) — a void judgment, (5) — a satisfied judgment, and (6) — any other reason justifying relief. N.M.R.A. 1-060(B). Because the state court had jurisdiction to reconsider its entry of default judgment, its judgment did not terminate the case or controversy, and the Defendants properly removed the case. As the Court held in Nieto v. University of New Mexico, "it is standard to consider the case still to be a case if the parties are contemplating post-trial motions, requests for fees, or appeals." 727 F.Supp.2d at 1191. The Court finds that this matter, like Nieto v. University of New Mexico, fits the legal and common-sense understanding of a case and controversy.
Moreover, the Court's holding is bolstered by the many federal courts, including the Tenth Circuit, which have held that a district court may reconsider or set aside a state default judgment when the case is removed to federal court. In Jenkins v. MTGLQ Investors, the Tenth Circuit, without discussing whether a case or controversy existed, affirmed a district court order setting aside a district court default judgment several months after judgment was entered in state court. See 218 Fed. Appx. at 724, 726. The Tenth Circuit found that "removal based on diversity of citizenship was appropriate." Jenkins v. MTGLQ Investors, 218 Fed.Appx. at 723. It also took notice of the several courts which have "implicitly approved of removal even after a state court has entered a default judgment." Jenkins v. MTGLQ Investors, 218 Fed.Appx. at 724 (citing Murray v. Ford Motor Co., 770 F.2d at 463, 465; Butner v. Neustadter, 324 F.2d 783, 785-87 (9th Cir.1963); Munsey v. Testworth Labs., 227 F.2d at 903; Cady v. Associated Colonies, 119 F. 420, 423 (C.C.N.D.Cal.1902)). In Price v. Wyeth Holdings Corp., 505 F.3d 624 (7th Cir. 2007), the United States Court of Appeals for the Seventh Circuit affirmed, without discussing whether a case or controversy existed, a district court decision setting aside a default judgment in a case removed approximately four years after it was entered.
The Court declines to adopt Sawyer's argument that no case or controversy exists, because the Defendants' "time to file either an appeal or post-judgment motion for relief expired on June 10, 2011." Sawyer Memo at 4. The Court finds that, even though the time for appeal had expired, the Defendants could still file a post-judgment motion pursuant to rule 1-060(B). See A.C. v. C.B., 113 N.M. at 584, 829 P.2d at 663. As the Court has previously held, when parties are contemplating post-judgment motions "it is standard to consider the case to still be a case." Nieto v. Univ. of N.M., 727 F.Supp.2d at 1191. There is still a controversy here — whether the case will proceed, whether the default judgment is void, and, if the case proceeds, what the Court will do procedurally and/or on the merits.
"The Rooker-Feldman doctrine prevents the lower federal courts from exercising jurisdiction over cases brought by `state court losers' challenging `state-court judgments rendered before the district court proceedings commenced.'" Lance v. Dennis, 546 U.S. 459, 460, 126 S.Ct. 1198, 163 L.Ed.2d 1059 (2006). A state court judgment is final when: (i) it is an effective determination of litigation that is not an interlocutory or intermediate judgment; and (ii) it is subject to no further review or correction in any state tribunal.
Here, the Defendants removed the case following a default judgment entered in state court. Sawyer contends that the Court should remand because federal district courts have no authority to review final state court judgments. See Sawyer Memo at 3. First, the Defendants invoke the Court's original jurisdiction, under 28 U.S.C. § 1331, rather than appellate jurisdiction. Freeman v. Bee Mach. Co., 319 U.S. at 452, 63 S.Ct. 1146 ("The jurisdiction exercised on removal is original not appellate."). Second, the Defendants do not attack a separate and final state-court judgment, but ask that the Court set aside a default judgment entered in this same case. A removed action is not separate from the state action; rather, it is a continuation of it. See Jenkins v. MTGLQ Investors, 218 Fed.Appx. at 724. Furthermore, where post-judgment motions are pending or could be filed, the Rooker-Feldman doctrine is inapplicable, because the judgment is not "the final word of a final court." Mkt. St. Ry. Co. v. R.R. Comm'n of State of Cal., 324 U.S. at 551, 65 S.Ct. 770. Accord Motley v. Option One Mtg. Corp., 620 F.Supp.2d 1297, 1302 (M.D.Ala.2009). The Defendants still had time, under rule 1-060(B), to file a post-judgment motion to declare the judgment void in state court or to seek to set aside the default judgment. See N.M.R.A. 1-060(B). See also A.C. v. C.B., 113 N.M. at 584, 829 P.2d at 663.
In their Notice of Removal, BCBS Kansas City and BCBS Association invoked the Court's original jurisdiction, and Sawyer has waived any challenges to removal other than those to the Court's subject-matter jurisdiction. See 28 U.S.C. § 1447(c). Sawyer raises no challenges to the Court's subject-matter jurisdiction beyond asserting that there is no case or controversy, and that the Rooker-Feldman doctrine bars the Court from hearing an appeal of a state-court judgment. Accordingly, the Court will deny the Sawyer Motion, which asks that the Court remand the case to state court, because there is a case or controversy and because the Rooker-Feldman doctrine does not apply.
United Services, BCBS Kansas City, and BCBS Association argue that they were improperly served, lacked notice of the case, and never received a copy of the summons or Complaint. See United Services Motion at 1; BCBSKC Memo at 1; BCBS Association Memo at 1. They assert that, because they were never properly served, the Court should set aside the Default Judgment under rule 60(b)(1) or 60(b)(4). See United Services Motion at 1; BCBSKC Memo at 1; BCBS Association Memo at 1. Sawyer argues that the Defendants were properly served when she served the Superintendent of Insurance. See United Services Response at 4; BCBSKC Response at 4; Tr. at 31:13-15 (Court, Collins).
United Services is an authorized insurer, see United Services Motion at 2, and, as such, is subject to service under N.M.S.A. 1978, § 59A-5-32. Under N.M.S.A.1978, § 59A-5-31, an authorized insurer is required to "appoint the superintendent and his successors in office as its attorney to receive service of legal process issues against the insurer in this state." N.M.S.A.1978, § 59A-5-31(A). Section 59A-5-32 provides:
N.M.S.A.1978, § 59A-5-32 (emphasis added). No New Mexico court, be it state or federal, has analyzed § 59A-5-32. At the hearing, Sawyer argued that, once she served the Superintendent, the Defendants were served under state law. See Tr. at 31:13-15 (Court, Collins). Sawyer asserted that there are similar statutes in the corporate context, and that, in Silva v. Crombie & Co., the Supreme Court of New Mexico had ruled that service of process on a corporate agent, in that case the New Mexico Secretary of State, was sufficient, even if that agent failed to forward service and the corporation received no actual notice. See Tr. at 31:19-32:12 (Collins). Sawyer contended that the Supreme Court of New Mexico held that the negligence of the Secretary of State is not chargeable to the plaintiff and that the negligence of the Superintendent should not be charged to her. See Tr. at 32:13-18 (Collins).
The Superintendent admits that he did not serve USAA Insurance or United Services. See Franchini Letter at 1. The Superintendent had no record of receiving the summons and Complaint. See
Ordinarily, the plain language of the phrase "complete upon receipt" would indicate that the New Mexico Legislature does not consider an authorized insurer served with process until that company receives a copy of the summons and Complaint. United Services argued that, because it did not receive actual service, it was not properly served, see Tr. at 46:16-23 (Schultz), while Sawyer asks the Court to look to the Supreme Court of New Mexico's holdings in the corporate context, see Tr. at 31:19-32:12 (Collins). N.M.S.A. 1978, § 38-1-5 is the relevant New Mexico statute for service of process on a corporation authorized to transact business in New Mexico. It provides that, if there is no corporate agent available, a plaintiff may serve the New Mexico Secretary of State, and explicitly states that "service shall be as effective to all intents and purposes as if made upon an officer, director or the registered agent of the corporation." N.M.S.A.1978, § 38-1-5(A). The differences in language between § 38-1-5(A), which provides that service shall be effective as if on the designated agent, and § 59A-5-32(B), which provides that service is complete upon receipt, counsels that the New Mexico Legislature intended service on the state agent to mean different things in the corporate versus insurance context. "Contrasting language in similar statutes may show that the legislature intended different standards of compliance." 2A N. Singer, Sutherland and Statutory Construction § 57:6 (7th ed.2011). The case which Sawyer cites, Silva v. Crombie & Co., supports the Court's view of these statutes and supports the Court's interpretation of § 59A-5-32 as providing that service is only complete upon receipt of process by the authorized insurer. In Silva v. Crombie & Co., the Supreme Court of New Mexico held that the particular terms of a prior enactment of § 38-1-5(A) were determinative, and that service upon the Secretary of State was effective for all intents and purposes as if on the corporate agent, despite the failure to forward service. See 39 N.M. at 240, 241, 44 P.2d at 719, 720. The Supreme Court of New Mexico went on to say, however, that, if "the Legislature had desired to make the service effective only when the secretary of state had notified such corporation, it could have so stated in plain language," and that such language "is discernable in the case of insurance companies." Silva v. Crombie & Co., 39 N.M. at 241, 44 P.2d at 720. It also commented that the "Legislature chose its terms with discrimination" and made the terms of service "plain." Silva v. Crombie & Co., 39 N.M. at 241, 44 P.2d at 720.
Accordingly, under § 59A-5-32's plain language, service is "complete upon receipt." The New Mexico Legislature chose the terms it used in each of the statutes — those applicable to insurers and those applicable to corporations — "with discrimination," and those differences have meaning. Silva v. Crombie & Co., 39 N.M. at 241, 44 P.2d at 720. Accord. 2A N. Singer, Sutherland and Statutory Construction § 57:6. There is no evidence that United Services received service, see Affidavit of Linda Allen ¶¶ 4-5, at 2 (executed June 13, 2011), filed June 14, 2011 (Doc. 1-11); in fact, the Superintendent of Insurance admits that it never served the process delivered for USAA Insurance. See Franchini Letter at 1. Because United Services did not receive service, service of process was never completed. See N.M.S.A.1978, § 59A-5-32(B).
BCBS Kansas City is an unauthorized insurer, see BCBSKC Motion at 2, and, as such, is subject to service under N.M.S.A. 1978, § 59A-15-7. That statute provides:
N.M.S.A.1978, § 59A-15-7. No New Mexico court, be it state or federal, has analyzed § 59A-15-7. In the Franchini Letter, the Superintendent admitted that: "As for the other companies they are not doing business in New Mexico and we could not serve them." Franchini Letter at 1. Furthermore, after a diligent search, BCBS Kansas City asserts that it has found no evidence that it received the summons and Complaint. See BCBSKC Motion at 3. Although the clerk of the court for the Ninth Judicial District Court certified, on February 24, 2011, that "it also appears from the return made by Chris Quinn that process was served on Defendant Blue Cross Blue Shield of Kansas City by mailing the same to Blue Cross Blue Shield of Kansas City, c/o Superintendent of Insurance for the Dept. of Ins. For the State of NM," State Certificate at 11-13, neither Sawyer nor her attorney filed an affidavit showing compliance with N.M.S.A.1978, § 59A-15-7.
N.M.S.A.1978, § 59A-15-6 provides that any
N.M.S.A.1978, § 59A-15-6. N.M.S.A. 1978, § 59A-15-7 establishes that service "upon the superintendent as such attorney shall be service upon the insurer in subsection (A), but, in subsection (B), conditions the sufficiency of such service on complying with subsections (B)(1) and (2)." See N.M.S.A.1978, § 59A-15-7(A)-(B). Sawyer submitted, to the state court, only the certified mail return receipts for service upon the Superintendent, see USAA Receipt at 19; BCBS Association Receipt at 22; BCBS Kansas City Receipt at 25, and the State Certificate refers to those receipts as evidence of service, see State Certificate at 11-13. There is no evidence that Sawyer ever sent a copy of the summons and Complaint to BCBS Kansas City, and, in her BCBSKC Response, Sawyer does not assert that she sent a second copy to BCBS Kansas City or discuss the implications of N.M.S.A.1978, § 59A-15-7. See BCBSKC Response at 4. Sawyer also did not argue her compliance with N.M.S.A.1978, § 59A-15-7 at the February 9, 2012 hearing. Because service on the Superintendent of Insurance is sufficient only "if" a plaintiff sends notice to the defendant, gets a certified mail receipt from the United States Post Office confirming that notice was sent, and files an affidavit indicating compliance with N.M.S.A.1978, § 59A-15-7, and because there is no evidence that Sawyer met any of those requirements, BCBS Kansas City was not properly served.
Sawyer again compared service to BCBS Kansas City to service on a corporation and pointed the Court to Silva v. Crombie & Co. See Tr. at 32:13-18 (Collins). Service on an unauthorized corporation is more similar to Abarca v. Henry L. Hanson, Inc. than to Silva v. Crombie & Co. In Silva v. Crombie & Co., the corporation had previously designated an agent, but declined to replace the agent when the agent left the state, and, when served under N.M.S.A.1978, § 38-1-5, the New Mexico Secretary of State failed to forward service of process. See 39 N.M. at 241, 44 P.2d at 720. The Supreme Court of New Mexico found that such service was sufficient. See Silva v. Crombie & Co., 39 N.M. at 241, 44 P.2d at 720. In Abarca v. Henry L. Hanson, Inc., the corporation had never appointed an agent in the state, and, when served under N.M.S.A.1978, § 38-1-6, the New Mexico Secretary of State failed to forward service of process. See 106 N.M. at 26, 738 P.2d at 520. There, the Supreme Court of New Mexico held that the plaintiff "ought not to profit from the secretary of state's failure" and that, "when notice is a person's due, process which is a mere gesture is not due
Because service was improper, the Court must then determine whether this failure voids the Default Judgment. "[A] default judgment in a civil case is void if there is no personal jurisdiction over the defendant." United States v. Bigford, 365 F.3d at 865 (emphasis omitted). New Mexico follows the same principle. New Mexico courts recognize that "a court lacks jurisdiction to pronounce judgment over a defendant or respondent unless that defendant or respondent has been properly summoned to court." Trujillo v. Goodwin, 138 N.M. at 49, 116 P.3d at 840. A New Mexico court has no power to bind a party to a judgment when that party has not been properly served with process. See Jueng v. N.M. Dep't of Labor, 121 N.M. at 240, 910 P.2d at 316. Because BCBS Kansas City had not been properly served when the Default Judgment was entered against it, the Default Judgment is void. Additionally, the BCBSKC Motion was made within a reasonable time, as required under rule 60(b)(4), because it was made within approximately 60 days of the Default Judgment. Accordingly, the Court will grant the BCBSKC Motion and set aside the Default Judgment as it pertains to BCBS Kansas City.
BCBS Association "is not an insurer, does not transact insurance anywhere, and is not a party to the insuring agreement between BCBSKC and Nueterra." BCBSA Memo at 2 (citing Affidavit of Mary Kay Dudley ¶¶ 2-3, at 1-2 (executed June 13, 2011), filed June 14, 2011 (Doc. 1-9)("Dudley Aff.")). BCBS Association is a not-for-profit corporation that does not share any corporate relationship with BCBS Kansas City or with BCBS New Mexico. See BCBSA Motion ¶ 2, at 1. The Superintendent of Insurance admitted that it did not serve BCBS Association. See Franchini Letter at 1. Sawyer did not introduce any evidence to contravene the Affidavit of Mary Kay Dudley, BCBS Association's counsel, which stated that BCBS is not an insurer. See Dudley Aff. ¶¶ 2-3, at 1-2. Dudley states that, after a diligent search, she was unable to find any evidence that BCBS Association had been served with process of the state case. See Dudley Aff. ¶ 4, at 2.
Sawyer did not file a written response to the BCBSA Motion and, at the hearing, did not address the argument that BCBS Association is not an insurer. Pursuant to D.N.M.LR-Civ. 7.1, the "failure of a party to file and serve a response in opposition to a motion within the time prescribed for doing so constitutes consent to grant the motion." D.N.M.LR-Civ. 7.1(b). Accordingly, Sawyer has consented to the BCBSA Motion. Furthermore, because BCBS Association is not an authorized or unauthorized insurer, service upon the Superintendent of Insurance was improper. See N.M.S.A.1978, § 59A-5-32, § 59A-15-7. Even if BCBS Association was an insurer, the Court has already established that Sawyer's service either under the authorized insurer statute, N.M.S.A.1978, § 59A-5-32, or the unauthorized insurer
12 U.S.C. § 1819(b)(2)(B).
12 U.S.C. § 1441a(l)(3)(A). The Court sees no indication from the language of 12 U.S.C. § 1441a(l) that it would somehow differ from 28 U.S.C. § 1441 with respect to whether a case or controversy exists, or whether a district court could have jurisdiction over a removed case if the case had already reached a final judgment.
