A Hartford unit told an Alabama federal court Friday that it should still be allowed to remove a Japanese restaurant's fire loss coverage action to federal court despite a one-year removal deadline, saying the restaurant acted in bad faith by trying to manipulate its pleadings to defeat removability.
In its notice of removal in Ooka Sushi Hibachi Restaurant Inc.'s action against the unit Hartford Underwriters Insurance Co., Hartford said that after Ooka first sued in state court in August 2023, Hartford was ultimately served this past August with a second amended complaint filed in late July.
A day after service, Ooka then moved to voluntarily dismiss the "non-diverse" defendants in the action, namely an insurance agency and one of its employees, thereby leaving only Hartford as the lone defendant, the insurer said.
"So when, as here, a plaintiff disguises a matter's removability by manipulating the addition or subtraction of parties around the one-year deadline, courts routinely find bad faith," Hartford argued. It added that because Ooka has "never" responded to the insurer's November 2023 discovery requests, there has been "no progress" made in state court and "removal would not cause substantial delay."
According to court filings, Ooka first sued an insurance agency, one of its employees and Hartford in state court in August 2023, asserting misrepresentation, fraudulent suppression and negligence claims against them after Hartford denied its first-party property insurance coverage for a January 2023 fire loss.
Ooka generally alleged that the defendants misrepresented the type and scope of coverage the restaurant was purchasing.
The afternoon before a January 2024 hearing was scheduled on Hartford's motion to dismiss the original lawsuit, the insurer said Friday that Ooka then filed an amended lawsuit, for which the insurer said it also sought to dismiss. But "days later" and without responding to the dismissal motion, Ooka then voluntarily dismissed the insurer without prejudice, leaving only its claims against the agency and employee pending, Hartford said.
Ooka then "re-added" Hartford to the case in the July second amended action, the insurer continued, noting it only lodged a single breach of contract claim against Hartford.
"It does not make claims against the non-diverse defendants, and it does not incorporate plaintiff's prior complaints," Hartford said. The insurer further noted that in the 2019 case Hoyt v. Lane Construction Corp. , the Fifth Circuit upheld a lower court's bad faith finding after the plaintiffs similarly dismissed claims against non-diverse defendants two days before a removal deadline.
Representatives of the parties did not immediately respond to a request for comment.
Ooka is represented by Christopher Sanspree of Sanspree & Moncus LLC.
Hartford is represented by Christopher C. Frost, Caleb C. Wolanek and Harrison F. Smith of Maynard Nexsen PC.
The case is Ooka Sushi Hibachi Restaurant Inc. v. Hartford Underwriters Insurance Co. et al., case number 2:25-cv-01503, in the U.S. District Court for the Northern District of Alabama.
Sep 5
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