Opinion

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES--GENERAL

Case No. 5:25-cv-01078-DTB Date: December 12, 2025

Title: Yan Zhang v. Geico General Insurance Company, et al.

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DOCKET ENTRY

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PRESENT:

HON. DAVID T. BRISTOW, MAGISTRATE JUDGE

Rachel Maurice n/a

Deputy Clerk Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFF: ATTORNEYS PRESENT FOR DEFENDANT(S):

None present None present

PROCEEDINGS: (IN CHAMBERS) ORDER DENYING PLAINTIFF’S

MOTION TO REMAND CASE [DOCKET NO. 14]

I. PROCEEDINGS

On December 24, 2024, plaintiff Yan Zhang (“Plaintiff”) filed a Complaint in San

Bernardino County Superior Court, naming as defendants Geico Insurance Company and

DOES 1 through 10, inclusive. (Docket No. 4-1). The gist of the Complaint is that

following a June 10, 2017 car accident involving Plaintiff (Plaintiff was not at fault),

defendant, with whom Plaintiff had comprehensive insurance with under-insured

coverage, unreasonably denied and delayed Plaintiff’s under-insured claim and medical

payment claim, gave Plaintiff an unreasonably low offer for Plaintiff’s under-insured

claim, refused to engage in non-binding arbitration, and delayed in filing for arbitration.

(Complaint at 4-10). The Complaint alleges the following claims: Breach of contract;

breach of covenant of good faith and fair dealing; bad faith denial of insurance claim;

bad faith delay of insurance claim payment; bad faith unreasonable low ball offer for

claim; unfair business practice; fraudulent misrepresentation; constructive fraud; and

injunctive relief. (Id. at 2, 10-19).1 Plaintiff seeks, among other things, injunctive relief

and general and punitive damages. (Id. at 19-20).

For the parties’ pleadings, the Court cites to the CM/ECF pagination at the top of each

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page.

On May 2, 2025, pursuant to 28 U.S.C. §§ 1332, 1441, and 1446, defendant Geico

General Insurance Company (“Defendant”) (erroneously sued as Geico Insurance

Company) removed the action to this Court based on the amount in controversy (in

excess of $75,000.00) and on diversity of citizenship. (Docket No. 1; see also Docket

Nos. 4-6).

On June 2, 2025, pursuant to 28 U.S.C. § 1447(c), Plaintiff filed a Motion to

Remand the Case (“Motion to Remand”), accompanied by several exhibits. (Docket No.

14). The Motion to Remand is based on the following grounds: (1) The Complaint does

not raise a substantial federal question; (2) anticipated or potential defenses based on

federal laws or treaties or the United States Constitution do not support removal; (3)

Plaintiff and Defendant are located in California, and therefore, there is no diversity of

citizenship; and (4) Defendant’s removal of the case to this Court was untimely. (Id. at

1-5).

On June 18, 2025, Defendant filed an Opposition to the Motion to Remand

(“Opposition”). (Docket No. 18).

Thus, this matter now is ready for decision. For the reasons stated below, the

Court denies the Motion to Remand.2

II.

LEGAL AUTHORITY

“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life

Ins. Co. of Am., 511 U.S. 375, 377 (1994). A district court has original jurisdiction of a

civil action where the “matter in controversy exceeds the sum or value of $75,000,

exclusive or interest and costs,” and the matter in controversy is between “citizens of

different States[.]” 28 U.S.C. § 1332(a); see also Hunter v. Philip Morris USA, 582 F.3d

1039, 1043 (9th Cir. 2009) (“As for diversity jurisdiction, federal district courts have

jurisdiction overs suits for more than $75,000 where the citizenship of each plaintiff is

different from that of each defendant.”) (citing 28 U.S.C. § 1332(a)).

A defendant may remove an action from state court to a district court if the

plaintiff could have originally filed the action in federal court. 28 U.S.C. § 1441(a); see

also Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 993,

1000 (2002) (“Diversity jurisdiction, including the amount in controversy, is determined

On May 9, 2025 (prior to the filing of the Motion to Remand), Defendant filed a Motion

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to Dismiss the Complaint (Docket No. 9) and a Motion to Strike Portions of the Complaint (Docket

No. 10). Plaintiff filed an Opposition to the Motion to Dismiss the Complaint and the Motion to

Strike Portions of the Complaint on June 12, 2025. (Docket No. 17). Defendant filed a Reply in

support of the Motion to Dismiss and Motion to Strike on June 18, 2025. (Docket No. 19). The

Court will address the Motion to Dismiss the Complaint and the Motion to Strike Portions of the

Complaint in a separate order.

at the instant of removal.”). “The notice of removal ‘need include only a plausible

allegation that the amount in controversy exceeds the jurisdictional threshold,’ and need

not contain evidentiary submissions.” Fritsch v. Swift Transportation Co. of Arizona,

LLC, 899 F.3d 785, 788 (9th Cir. 2018) (quoting Dart Cherokee Basin Operating Co.,

LLC v. Owens, 574 U.S. 81, 90 (2014)). “‘Where . . . it is unclear from the face of a

state-court complaint whether the requisite amount in controversy is pled, the removing

defendant bears the burden of establishing, by a preponderance of the evidence, that the

amount in controversy exceeds the jurisdictional threshold.’” Fritsch, 899 F.3d at 793

(citation omitted); see also Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th

Cir. 1996) (when a state court complaint does not specify a particular amount of

damages, the removing defendant has the burden of establishing that it is “more likely

than not” that the amount in controversy exceeds the threshold amount); Gaus v. Miles,

Inc., 980 F.2d 564, 566-67 (9th Cir. 1992) (“If it is unclear what amount of damages the

plaintiff has sought, . . . then the defendant bears the burden of actually proving the facts

to support jurisdiction, including the jurisdictional amount.”) (citation omitted; emphasis

in original). “In calculating the amount in controversy, a removing defendant may make

reasonable assumptions based on the plaintiff’s complaint.” Perez v. Rose Hills Co., 131

F.3d 804, 806 (9th Cir. 2025). A district court’s determination about the amount in

controversy is based on allegations in the Complaint, the removal petition, and

“‘summary-judgment-type evidence relevant to the amount in controversy at the time of

removal.’” Id. (citation omitted). The amount in controversy is the “amount at stake in

the underlying litigation.” Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644,

648 (9th Cir. 2016); see also Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 418 (9th

Cir. 2018) (“[T]he amount in controversy includes all relief claimed at the time of

removal to which the plaintiff would be entitled if she prevails.”). The amount in

controversy “includes damages (compensatory, punitive or otherwise)” and future

attorneys’ fees recoverable under a statute or contract. Fritsch, 899 F.3d at 793-94;

Gibson v. Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001) (“It is well established that

punitive damages are part of the amount in controversy in a civil action.”) (citations

omitted).

“. . . [R]emoval statutes should be construed narrowly in favor of remand to

protect the jurisdiction of state courts.” Harris v. Bankers Life and Cas. Co., 425 F.3d

689, 698 (9th Cir. 2005) (citation omitted); see also Nevada v. Bank of America Corp.,

672 F.3d 661, 667 (9th Cir. 2012) (“Removal statutes are to be ‘strictly construed against

removal jurisdiction.”) (citation omitted). “Federal jurisdiction must be rejected if there

is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980

F.2d 564, 566 (9th Cir. 1992) (citation omitted). “The ‘strong presumption’ against

removal jurisdiction means that the defendant always has the burden of establishing that

removal is proper.” Id. (citation omitted).

III.

DISCUSSION

As noted above, Plaintiff has moved to remand this action based on the absence of

diversity citizenship, on the lack of a substantial federal question raised by the

Complaint, on Defendant’s possible affirmative defenses, and on the untimeliness of

Defendant’s removal of this action to this Court.3

A. This Court Has Jurisdiction Based on Diversity of Citizenship.4

Plaintiff contends that there is no diversity of citizenship supporting the removal

of this action. (Motion to Remand at 1-2, 4). Plaintiff, a resident of San Bernardino,

California, claims that there is no diversity of citizenship because: (1) Defendant

actively conducts business in California; (2) in March 2022, Defendant, through counsel,

filed a case in San Bernardino County Superior Court (case number CIVSB 2202284) to

compel Plaintiff to answer discovery for Plaintiff’s under-insured claim with Defendant,

and Defendant later moved to stay the case for arbitration; and (3) Defendant’s counsel

in Plaintiff’s under-insured claim still represents Defendant and is Plaintiff’s “point of

contact” with Defendant. (Id. at 2-4).

“[A] corporation shall be deemed to be a citizen of every State and foreign state by

which it has been incorporated and of the State or foreign state where it has its principal

place of business[.]” 28 U.S.C. § 1332(c)(1). Under the statute, “principal place of

business” refers to “the place where a corporation’s officers direct, control, and

coordinate the corporation’s activities” and is “normally [] the place where the

corporation maintains its headquarters—provided that the headquarters is the actual

center of direction, control, and coordination, i.e., the “nerve center,” and not simply the

office where the corporation holds its board meetings[.]” Hertz Corp v. Friend, 559 U.S.

As noted above, Defendant removed this action based on the amount in controversy

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exceeding $75,000.00 and on the diversity of citizenship, but not based on the existence of a federal

question, see Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004) (“One category of cases of which

district courts have original jurisdiction is ‘[f]ederal question’ cases: cases ‘arising under the

Constitution, laws, or treaties of the United States.’”) (quoting 28 U.S.C. § 1331). Consequently,

Plaintiff’s arguments that the Complaint does not raise a substantial federal question and that

Defendant’s anticipated or potential affirmative defenses based on federal laws or treaties or the United

States Constitution do not support removal (see Motion to Remand at 1, 3-4) are irrelevant.

Because Plaintiff does not contend that removal of this action was improper based on the

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amount of the matter in controversy, the Court, for purposes of the Motion to Remand, assumes that the

matter in controversy exceeds $75,000.00.

77, 92-93 (2010).

Contrary to Plaintiff’s assertion, and as discussed above, for purposes of diversity

of citizenship, Defendant’s citizenship is not based on the fact that Defendant is

conducting business in California. See 28 U.S.C. § 1332(c)(1). In its Notice of

Removal, Defendant stated that at the time Plaintiff filed this action in state court and at

the time of the removal of this action to this Court, Defendant was incorporated in

Nebraska and had its principal place of business in Maryland. (See Docket No. 1 at 21,

citing Docket No. 4 at ¶ 5, Docket No. 6 at ¶ 1, and Docket No. 6-1 at 1-11). Plaintiff

does not dispute Defendant’s assertion that it is/was a citizen of Nebraska and Maryland.

Since Plaintiff is a citizen of California and Defendant is a citizen of Nebraska and

Maryland, there is complete diversity of citizenship. Therefore, the Court has diversity

jurisdiction over this action, and remand of this action is not warranted.

B. Defendant Timely Removed this Action to this Court.

As an alternative argument, Plaintiff contends that because Plaintiff served the

Summons and Complaint, filed in San Bernardino County Superior Court on December

24, 2024, on Defendant’s counsel in the earlier action involving Plaintiff’s under-insured

claim with Defendant (case number CIVSB 2202284) on February 25, 2025, Defendant’s

removal of this action to this Court on May 2, 2025, was untimely and therefore barred.

(Motion to Remand at 2-5, 28-29).

“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,

or within 30 days after the service of summons upon the defendant if such initial

pleading has then been filed in court and is not required to be served on the defendant,

which period is shorter.” 28 U.S.C. § 1446(b)(1). “[A] named defendant’s time to

remove is triggered by simultaneous service of the summons and complaint, or receipt of

the complaint, ‘through service or otherwise,’ after and apart from service of the

summons, but not by mere receipt of the complaint unattended by any formal service.”

Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999).

When formal service of process is effectuated is determined by state law. See

Murphy Bros., 526 U.S. at 352-53; City of Clarksdale v. BellSouth Telecommunications,

Inc., 428 F.3d 206, 210 (“Although federal law requires the defendant to file a removal

motion within thirty days of service, the term “service of process” is defined by state

law.”); Lee v. City of Beaumont, 12 F.3d 933, 936-37 (9th Cir. 1993) (“The issue of the

sufficiency of service of process prior to removal is strictly a state law issue.”), overruled

on other grounds by, California Dept. of Water Resources v. Powerex, 533 F.3d 1087,

1096 (9th Cir. 2008); Taylor Morrison of Cal., LLC v. First Specialty Ins. Corp., Case

No. 8:15-cv-01711-JVS (JCG), 2015 WL 8215345, at *3 (C.D. Cal. Dec. 8, 2015)

(“State law determines when the defendant first receives formal service of process.”).

In California, service of a summons and complaint on a corporation can “only be

accomplished be serving some individual as its representative.” Dill v. Berquist

Construction Co., 24 Cal. App. 4th 1426, 1435 (1994). The individuals authorized to

accept service on behalf of a corporation include “the person designated as agent for

service of process as provided” by specific sections of the California Corporations Code

and “the president, chief executive officer, or other head of the corporation, a vice

president, a secretary or assistant secretary, a treasurer or assistant treasurer, a controller

or chief financial officer, a general manager, or a person authorized by the corporation to

receive service of process.” Cal. Code Civ. P. § 416.10(a)-(b).

“A summons may be served by personal delivery of a copy of the summons and of

the complaint to the person served. Service of a summons in this manner is deemed

complete at the time of such delivery.” Cal. Code Civ. P. § 415.10. “A defendant may

also be ‘personally’ served by delivering a copy of the summons and complaint to an

agent authorized to accept service on behalf of that defendant.” American Express

Centurion Bank v. Zara, 199 Cal. App. 4th 99, 389 (2011) (citations omitted).

An alternative to personal service is substitute service. Cal. Code Civ. P. 415.20

provides, in pertinent part, that:

In lieu of personal delivery of a copy of the summons and complaint to the

person to be served as specified in [Cal. Code Civ. P.] Section 416.10 . . . ,

a summons made be served by leaving a copy of the summons and

complaint at the person’s dwelling house, usual place of abode, usual place

of business, or usual mailing address other than a United States Postal

service post office box, in the presence of a competent member of the

household or a person apparently in charge of his or her office, place of

business, or usual mailing address other than a United States Postal Service

post office box, at least 18 years of age, who shall be informed of the

contents thereof, and by thereafter mailing a copy of the summons and of

the complaint by first-class mail, postage prepaid to the person to be served

at the place where a copy of the summons and complaint were left. Service

of a summons in this manner is deemed complete on the 10th day after the

mailing.

Cal. Code Civ. P. 415.20(a).

While Plaintiff states she served the Summons and Complaint on counsel for

Defendant in the case involving Plaintiff’s under-insured claim on February 25, 2025

(Motion to Remand at 2-5), Plaintiff does not state that she personally delivered a copy

of the Summons and Complaint on a person designated by Defendant to be an agent for

service of process or on a person such as an officer or other person authorized by

Defendant to receive service of process, and she does not state that she attempted

substitute service of the Summons and Complaint. In its Notice of Removal, Defendant

stated that Plaintiff’s attempted substitute service of the Summons and Complaint were

deficient for several reasons, including that counsel for Defendant in the case involving

Plaintiff’s under-insured claim was not designated by Defendant to be an agent for

service of process. (Docket No. 1 at 2, 4, citing Docket No. 4 at ¶ 3, Docket No. 4-2 at

1-3, Docket No. 5 at ¶¶ 3-5, Docket No. 5-1 at 1-7, Docket No. Docket No. 6 at ¶ 1, and

Docket No. 6-1 at 1-11).5

Contrary to Plaintiff’s assertion, she did not properly serve the Summons and

Complaint on Defendant in February 2025. Therefore, the Notice of Removal, filed on

May 2, 2025, is not barred as untimely.

Accordingly, Plaintiff’s Motion to Remand is DENIED.

IT IS SO ORDERED.

While Defendant faults Plaintiff for improper substitute service based on her failure to

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exercise “reasonable diligence” in her personal service of the Summons and Complaint (see Motion to

Remand at 5; see also Docket No. 1 at 3-4), that “reasonable diligence” language is contained in Cal.

Code Civ. P. § 415.20(b) and therefore, does not appear to be applicable to this case.