National Foam, Inc. v. Zurich American Insurance Company

Background

National Foam filed a state-court complaint against Zurich American Insurance Company for breach of contract. Zurich removed the case to federal court on August 2, 2023, relying on diversity jurisdiction. The parties did not dispute that they were diverse or that more than $75,000 was at stake.

National Foam moved to remand, meaning it asked the federal court to return the case to state court. It argued that Zurich missed the 30-day deadline for removal under 28 U.S.C. § 1446. National Foam contended that service occurred on June 26, when Zurich’s counsel emailed that Zurich agreed to accept service. Zurich argued that service occurred on July 20, when its counsel signed and returned the notice and acknowledgment of service.

Court’s analysis

The court explained that the 30-day removal period begins after formal service, not merely when a defendant receives the complaint or has actual notice of the lawsuit. Under California law, service by mail is complete when the defendant executes and returns the notice and acknowledgment, provided the form is returned to the sender.

The court held that formal service occurred on July 20, 2023. Zurich’s August 2 removal therefore occurred within the 30-day period. The court rejected National Foam’s argument that the June 26 email alone made service effective, explaining that the parties’ later conduct showed that they treated the written acknowledgment as necessary. The court stated that it did not need to decide whether National Foam was prevented from contesting timeliness based on the parties’ conduct.

Ruling

The court denied National Foam’s motion to remand and stated that the order resolved ECF No. 12. The order decided the removal-timing issue; it did not decide the underlying breach-of-contract dispute. Judge Laurel Beeler, a United States Magistrate Judge, signed the order.