Markel American Insurance Company et al v. SCHMIDT ADVISORY SERVICES, INC., d/b/a CATALYST WEALTH MANAGEMENT, an Illinois corporation et al
| Sanford Schmidt and Markel American Insurance Company |
| Ethan Schmidt, Christopher Lorenzen, James Muraff, Diane Fowler, SCHMIDT ADVISORY SERVICES, INC., d/b/a CATALYST WEALTH MANAGEMENT, an Illinois corporation, CBL Investments, LLC, Jordan Schmidt and SCHMIDT FINANCIAL GROUP, LLC, an Illinois limited liability company |
| 1:2024cv10682 |
| October 17, 2024 |
| US District Court for the Northern District of Illinois |
| Lindsay C Jenkins |
| Contract: Insurance |
| 28 U.S.C. § 1332 Diversity-Contract Dispute |
| Defendant |
Docket Report
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| Filing 22 REMAND with certified copy of Order dated 11/13/24 and letter to Circuit Court of Cook County via email. (gcy, ) |
Filing 21
ORDER Signed by the Honorable Lindsay C. Jenkins on 11/13/2024. Mailed notice. (jlj, )
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| Filing 20 MINUTE entry before the Honorable Lindsay C. Jenkins: Defendants' motion for reconsideration #17 is denied. See attached order for further details. The Clerk shall remand this case to the Circuit Court of Cook County. Civil case terminated. Mailed notice. (jlj, ) |
| Filing 19 RESPONSE by Diane Fowlerin Opposition to MOTION by Defendants SCHMIDT ADVISORY SERVICES, INC., d/b/a CATALYST WEALTH MANAGEMENT, an Illinois corporation, Ethan Schmidt, SCHMIDT FINANCIAL GROUP, LLC, an Illinois limited liability company, Jordan Schmidt, Diane Fowler, Plaintiff Sanford Schmidt #17 Response to Motion to Remand (Loftus, Alexander) |
| Filing 18 MINUTE entry before the Honorable Lindsay C. Jenkins: Defendants seek reconsideration of the Court's order of remand #16 , highlighting, among other things, a recent decision in this district, Great W. Cas. Co. v. CR Express, Inc., No. 23-cv-16942 N.D. Ill. July 22, 2024). The Court was aware of Great W. Cas. based on its own research. In fairness, however, the Court will permit any party (including Defendant Fowler) to file a supplemental brief on the issue of remand only. This should allow Defendant(s) an opportunity to be fully heard on the motion as they have requested. The Court elects to decide the issue of remand first, so it will not consider any arguments concerning arbitration until it reconsiders the question of remand. Any supplemental brief must be filed by November 4, 2024. No replies by any party to the supplemental briefs unless the Court orders a reply. The order of remand #16 is stayed. Mailed notice. (jlj, ) |
| Filing 17 MOTION by Defendants SCHMIDT ADVISORY SERVICES, INC., d/b/a CATALYST WEALTH MANAGEMENT, an Illinois corporation, Ethan Schmidt, SCHMIDT FINANCIAL GROUP, LLC, an Illinois limited liability company, Jordan Schmidt, Diane Fowler, Plaintiff Sanford Schmidt for reconsideration regarding order on motion to dismiss,,,,,,,,,,,,,, order on motion to remand,,,,,,,,,,,,,, order on motion for extension of time,,,,,,,,,,,,,, terminate hearings,,,,,,,,,,,,,, terminated case,,,,,,,,,,,,, #16 (Loftus, Alexander) |
| Filing 16 MINUTE entry before the Honorable Lindsay C. Jenkins: Not every diversity case qualifies for removal. 28 U.S.C. 1441(b)(2), also known as the forum defendant rule, provides that a state lawsuit otherwise removeable solely on the basis of diversity jurisdiction "may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 1441(b)(2). Reviewing the underlying complaint filed in Cook County (and not the incomplete notice of removal analysis Defendant Fowler filed, which omitted several of the LLC Defendants), at least one Defendant is a citizen of the State of Illinois. Dkt. 1-2 at 3-4. Plaintiff is a citizen of Virginia, and at a minimum, the Schmidt, Catalyst Wealth and Muraff Defendants are citizens of Illinois, a fact the Schmidt Defendants do not genuinely dispute. Plaintiff as the non-removing party, promptly objected to removal within the 30-day period provided by 1447(c), so remand is required. Hurley v. Motor Coach Indus., Inc., 222 F.3d 377, 379 (7th Cir. 2000) ("The rule is designed to preserve the plaintiff's choice of a (state) forum, under circumstances where it is arguably less urgent to provide a federal forum to prevent prejudice against an out-of-state party. After removal, if the plaintiff wants to remain in state court, she can file a timely motion for remand.") The Court recognizes that the Schmidt Defendants have attempted to take advantage of so-called pre-service removal or the snap removal exception to the forum defendant rule. Pa. Mfrs.' Ass'n Ins. Co. v. Fidelitone, Inc., 2024 WL 1461459, at *7 (N.D. Ill. 2024) (snap removal "enables such defendants to file a notice of removal in just a few hours, exploiting statutory language that suggests in-state defendants are only prohibited from removing to federal court if "properly served and joined" to defeat the "forum-defendant rule" that had been a mainstay of civil procedure for decades.") Not all courts in this district have reached the same conclusion, but this Court agrees with the analysis in Pa. Mfrs.' that snap removals "turn diversity jurisdiction, designed to shield out-of-state defendants from hometown bias, into a sword for well-resourced defendants to select their forum when they are sued in their own state's courts," and so it "declines to write the forum-defendant rule out of existence." Id. (citing Norwegian Air Shuttle ASA v. Boeing Co., 530 F. Supp. 3d 764, 770 (N.D. Ill. 2021) (cleaned up)). As discussed in those opinions and elsewhere, the practice is inconsistent with the purpose of the forum-defendant rule and deprives a Plaintiff of its forum of choice. And in light of the ambiguity of the language of the forum-defendant rule, "the existence of such doubt weighs toward granting the motion for remand." Pa. Mfrs.', 2024 WL at *4; Morris v. Nuzzo, 718 F.3d 660, 668 (7th Cir. 2013) (courts should "resolve doubts about removal in favor of the Plaintiffs' choice of forum in state court.") The motion to remand #12 is granted and all other pending motions are denied without prejudice as moot. The Clerk shall remand this case to the Circuit Court of Cook County, forthwith. Civil Case Remanded. Mailed notice. (jlj, ) |
| Filing 15 Joint Submission Regarding Proposed Briefing Schedule for Motion for Extension of Time STATEMENT by Markel American Insurance Company, SCHMIDT ADVISORY SERVICES, INC., d/b/a CATALYST WEALTH MANAGEMENT, an Illinois corporation, SCHMIDT FINANCIAL GROUP, LLC, an Illinois limited liability company, Sanford Schmidt, Diane Fowler (Formeller, Daniel) |
| Filing 14 MOTION by Plaintiff Markel American Insurance Company for extension of time to Respond to Schmidt's Motion to Compel Arbitration (Formeller, Daniel) |
| Filing 13 Joint Submission Regarding Proposed Briefing Schedule for Motion to Remand STATEMENT by SCHMIDT FINANCIAL GROUP, LLC, an Illinois limited liability company, Markel American Insurance Company, SCHMIDT ADVISORY SERVICES, INC., d/b/a CATALYST WEALTH MANAGEMENT, an Illinois corporation, Sanford Schmidt, Diane Fowler (Formeller, Daniel) |
| Filing 12 MOTION by Plaintiff Markel American Insurance Company to remand to the Circuit Cook of Cook County (Formeller, Daniel) |
| Filing 11 ATTORNEY Appearance for Plaintiff Markel American Insurance Company by Simone Elise Haugen (Haugen, Simone) |
| Filing 10 ATTORNEY Appearance for Plaintiff Markel American Insurance Company by Sarah Hertz Maisel (Maisel, Sarah) |
| Filing 9 ATTORNEY Appearance for Plaintiff Markel American Insurance Company by Daniel Richard Formeller (Formeller, Daniel) |
| Filing 8 MINUTE entry before the Honorable Lindsay C. Jenkins: Plaintiff's response to the motion to compel arbitration #7 is due by November 4, 2024; and Defendant's reply is due by November 11, 2024. The Court also respectfully requests that future filings comply with L.R. 5.2(h), which governs electronically filed documents. Absent compelling reasons, Defendants should ensure documents and filings are word searchable before being filed on ECF; this can be accomplished by converting any word-processed document into a.pdf document by printing or publishing to.pdf, rather than manually scanning a paper copy into.pdf. The current filing was not printed or published to.pdf and thus is not a searchable text. Mailed notice. (lxk, ) |
| Filing 7 MOTION by Defendants SCHMIDT ADVISORY SERVICES, INC., d/b/a CATALYST WEALTH MANAGEMENT, an Illinois corporation, Ethan Schmidt, Jordan Schmidt, Plaintiff Sanford Schmidt to dismiss 12(b)(3) Venue-Compel Arbitration (Loftus, Alexander) |
| Filing 6 ATTORNEY Appearance for Defendants SCHMIDT ADVISORY SERVICES, INC., d/b/a CATALYST WEALTH MANAGEMENT, an Illinois corporation, Ethan Schmidt, Jordan Schmidt, Plaintiff Sanford Schmidt by Alexander Nicholas Loftus (Loftus, Alexander) |
| Filing 5 MAILED Rule 77d to Counsel of Record. (gcy, ) |
| Filing 4 ATTORNEY Appearance for Defendant Diane Fowler by David Alan Eisenberg (Eisenberg, David) |
| Filing 3 ATTORNEY Appearance for Defendant Diane Fowler by Alexander Nicholas Loftus (Loftus, Alexander) |
| Filing 2 CIVIL Cover Sheet (Loftus, Alexander) |
| Filing 1 NOTICE of Removal from Circuit Court of Cook County, case number (2024CH09499) filed by Diane Fowler Filing fee $ 405, receipt number AILNDC-22621075. (Attachments: #1 Exhibit A, #2 Exhibit B, #3 Exhibit C)(Loftus, Alexander) |
| CASE ASSIGNED to the Honorable Lindsay C. Jenkins. Designated as Magistrate Judge the Honorable Beth W. Jantz. Case assignment: Direct assignment. (Civil Category Direct). (smb, ) |
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