Benton et al v. State Farm Fire & Casualty Company et al
MEMORANDUM OPINION AND ORDER that the 5 MOTION to Remand be and is hereby GRANTED and that this case is hereby REMANDED to the Circuit Court of Montgomery County, Alabama; DIRECTING the Clerk to take the action necessary to accomplish the remand of this case to the Circuit Court of Montgomery County, Alabama. Signed by Honorable Judge Charles S. Coody on 5/15/2014. (wcl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
KIMBERLY BENTON, et al.,
STATE FARM FIRE & CAS. CO., et al.,
CIVIL ACT. NO. 2:14cv77-CSC
MEMORANDUM OPINION AND ORDER
Before the court is the Plaintiff’s motion to remand (Doc. 5). Having considered the
motion, the court concludes that the motion is due to be granted.
Standard of Review
Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 377 (1994); see also Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095
(11th Cir. 1994). This court is “‘empowered to hear only those cases within the judicial
power of the United States as defined by Article III of the Constitution,’ and which have
been entrusted to them by a jurisdictional grant authorized by Congress.” Univ. of S. Ala. v.
Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d
1365, 1367 (11th Cir. 1994)). Therefore, a federal court is obligated to inquire into subject
matter jurisdiction sua sponte “at the earliest possible stage in the proceedings.” Id. at 410.
“It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of
establishing the contrary rests upon the party asserting jurisdiction.” Kokkonen, 511 U.S. at
377. Thus, when a case is removed to federal court, the “heavy” burden of establishing the
existence of subject matter jurisdiction rests on the removing party. Burns, 31 F.3d at 1095.
“[R]emoval is only permissible when plaintiff’s claim could have been filed in federal
court originally.” Burns, 31 F.3d at 1095. Thus, an action filed in state court may be
removed to federal court on the basis of diversity jurisdiction. 28 U.S.C. § 1441(a). When
a case is removed on the basis of diversity jurisdiction, the case must be remanded to state
court if complete diversity is lacking, Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267
(1806). Further, a case removed on the basis of diversity jurisdiction must be remanded if
one of the parties “properly joined and served as [a d]efendant” is a citizen of the state in
which the suit is filed, 28 U.S.C.§ 1441(b), or if the amount in controversy does not meet the
$75,000 jurisdictional minimum specified in 28 U.S.C. § 1332 (a). “[W]here damages are
unspecified, the removing party bears the burden of establishing the jurisdictional amount
by a preponderance of the evidence.” Lowery v. Ala. Power Co., 483 F.3d 1184, 1208 (11th
Cir. 2007). All questions or doubts as to subject matter jurisdiction are to be resolved in
favor of returning the matter to state court. Burns, 31 F.3d at 1095.
On March 19, 2013, Kimberly and John Benton and their daughter, Faith Benton, filed
a complaint in the Circuit Court of Montgomery County, Alabama, asserting state law claims
against State Farm Fire and Casualty Company and Alex Bowden, who is a State Farm
insurance agent. (Doc. 1-10 ¶ 5). The Bentons and Defendant Bowden are Alabama
citizens. (Doc. 1-10 ¶¶ 1-3, 5). State Farm is a foreign corporation doing business in
Alabama. (Doc. 1-10 ¶ 4).
The Bentons assert state law claims alleging that, after their home was damaged on
August 4, 2011, by a sudden and accidental water leak, State Farm, in bad faith, did not pay
the claim despite being obligated to do so by the terms of the Benton’s homeowners’
insurance policy. (Doc. 1-10 ¶¶ 7, 16-24). The Bentons also assert state law claims alleging
that State Farm and Bowden fraudulently misrepresented or suppressed the terms of the
insurance policy and that State Farm negligently or wantonly hired, trained, or supervised its
agents, adjusters, and claims representatives. (Doc. 1-10 ¶¶ 25-45).
On February 6, 2014, the Defendants filed a notice of removal. The Defendants
contend that the Bentons’ January 21, 2014, deposition testimony revealed that they cannot
arguably prove certain facts necessary to their claims against Bowden.
Accordingly, the Defendants argue that Bowden was fraudulently joined and that diversity
of citizenship exists in this case for purposes of establishing subject matter jurisdiction. See
Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1332 (11th Cir. 2011) (“‘When a plaintiff names
a non-diverse defendant solely in order to defeat federal diversity jurisdiction, the district
court must ignore the presence of the non-diverse defendant and deny any motion to remand
the matter back to state court.’” (quoting Henderson v. Washington Nat’l Ins. Co., 454 F.3d
1278, 1281 (11th Cir. 2006)).
However, to establish diversity jurisdiction, the removing party must not only
demonstrate that the properly-joined parties are completely diverse,1 but, where the amount
in controversy is not evident from the face of the complaint, the removing party must also
demonstrate “by a preponderance of the evidence” that the amount in controversy exceeds
the $75,000 jurisdictional minimum. Lowery, 483 F.3d at 1208. The Bentons argue that,
even if Bowden must be ignored for purposes of determining the existence of diversity of
citizenship, the case must be remanded because the evidence does not demonstrate that the
amount of damages sought in this case exceeds the jurisdictional threshold of $75,000. 28
U.S.C. § 1332 (a).
In their complaint, the Bentons seek unspecified compensatory damages for repairs
for water and mold damage to their home. The Defendants have submitted two contractors’
estimates for repairs to the Benton’s home: one estimate in the amount of $47,300, and one
in the amount of $19,169.02. (Doc. 1-7; Doc. 1-8). However, the lower estimate contains
caveats such as “estimate is based on visual scope of repair,” “there are a lot of things hidden
at this time that will need to be addressed once walls are opened up,” “price may vary
depending on actual damages that may be unknown or not visible at the time inspection was
made,” and “not sure where water is coming from in several locations price may vary.”
(Doc. 1-8 pp. 1, 8). The court finds that, particularly given the numerous caveats in the lower
estimate, the higher estimate is a more credible assessment of the cost of home repairs for
water and mold damage. Therefore, the Defendants have shown by a preponderance of the
Because the Defendants have not met their burden to establish that the amount in controversy
exceeds $75,000, the court pretermits consideration of whether Bowden was fraudulently joined.
evidence that, with respect to repairs to the Bentons’ home, the amount in controversy is at
The Defendants have presented no evidence as to the probable value of the remaining
claims for damages. Instead, relying on Roe v. Michelin N. Am., Inc., 613 F.3d 1058 (11th
Cir. 2010)2 , the Defendants argue that this court can simply apply “judicial experience and
common sense” to determine that, more likely than not, the remaining damages exceed
$27,700, i.e., the amount necessary to meet the jurisdictional minimum when combined with
the Bentons’ $47,300 claim for the cost of home repairs. As the Defendants point out,
evidence establishing the jurisdictional amount is not necessary where it is “‘facially
The court notes that, in Roe, the Eleventh Circuit addressed a case that was removed within thirty
days of service of the initial complaint, prior to discovery, and no evidence was submitted in support of the
notice of removal. 613 F.3d at 1060. In Roe, the court expressly noted that its “opinion considers only
removal” under the provisions of 28 U.S.C. 1446(b) that allow for removal on the basis of the initial
complaint alone, where it is “facially apparent” from the allegations in the initial complaint that the
jurisdictional minimum is met, even though the plaintiff did not state specifically the amount of damages
sought. Roe, 613 F.3d at 1061 n.3. The court expressly stated that its opinion was not directed at, and
“specifically” did not decide “whether or under what circumstances” a defendant could present evidence to
establish removability in circumstances such as those at issue in Lowery v. Alabama Power Co., 483 F.3d
1184 (11th Cir. 2007), where, as here, the notice of removal was filed within thirty days of receipt from the
plaintiff of some pleading or paper (other than the initial complaint) from which it could first be ascertained
that the action was or had become removable. Roe, 613 F.3d at 1061 n.4. This case is somewhat unusual
in that the Defendants argue that removability first became unequivocally apparent upon receipt of the
Bentons’ deposition testimony, which allegedly establishes diversity of citizenship, but that a “common
sense” review of the facial allegations of the complaint, combined with evidentiary submissions, establishes
that the amount in controversy has been met. To the extent that Roe considered a court’s ability to draw
reasonable inferences from the specific allegations of the complaint to determine whether the jurisdictional
amount has been met, the court finds that, under the circumstances of this case, Roe does not require a
different result than Lowery and is informative, if not binding precedent. But see Pretka, 608 F.3d at 760
(indicating that, in cases removed on the basis of pleadings or papers other than the initial complaint, § 1446
“seems to require a greater level of certainty or that the facts supporting removal be stated unequivocally”
(quoting Bosky v. Kroger Tex., LP, 288 F.3d 208, 211 (5th Cir. 2002)). Specifically, neither Roe nor Lowery
permit a court to use “judicial experience and common sense” to draw inferences from the complaint about
the amount in controversy in the absence of specific factual allegations to support those inferences, and,
where competing factual inferences may be fairly drawn from the allegations of the complaint, neither case
requires a court to indulge those inferences least favorable to remand.
apparent’ from the pleading itself that the amount in controversy exceeds the jurisdictional
requirement, even when ‘the complaint does not claim a specific amount of damages.” Roe,
613 F.3d at 1061 (quoting Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 754 (11th Cir.
However, although Roe recognizes that “judicial experience and common sense” may
support “reasonable inferences” drawn “from the pleadings” to determine whether “the case
stated in [the] complaint meets federal jurisdictional requirements,” nothing in Roe permits
the court to indulge in speculation or fill empty gaps in the plaintiff’s factual averments with
unfounded assumptions about what the evidence may show. 613 F.3d at 1061 (emphasis
added). “Judicial experience and common sense” are useless for making “reasonable”
deductions, inferences, and extrapolations when the complaint is devoid of any averments
from which to deduce, infer, or extrapolate. “[W]ithout facts or specific allegations, the
amount in controversy” can be determined “only through speculation—and that is
impermissible.” Pretka, 608 F.3d at 753-54 (citing Lowery v. Ala. Power Co., 483 F.3d
1184, 1209, 1215 (11th Cir. 2007)). Moreover, it is axiomatic that, on a motion to remand,
all questions or doubts as to subject matter jurisdiction are to be resolved in favor of
returning the matter to state court, see Burns, 31 F.3d at 1095; thus, to the extent that
competing inferences may be drawn from the specific factual allegations of the complaint,
the court must indulge those inferences most favorable to remand.
On the face of the complaint, in addition to the cost of home repairs, the Bentons seek
compensatory damages for past policy premiums paid and for unspecified past and
continuing physical damage, mental anguish, and emotional distress, including Faith
Benton’s continuing “severe pulmonary and respiratory difficulties, seizures, breathing
complications, asthma, and recurring sinus infections” that have required hospitalization and
treatment by medical specialists. (Doc. 1-10 ¶¶ 14, 20). Absent from the complaint,
however, are specific factual allegations from which the extent of any those damages could
reasonably be inferred. For instance, it is not possible to discern from the complaint how
much money the Bentons paid in policy premiums. Similarly, the extent of the Bentons’
“physical and mental distress” and “emotional anguish” is left entirely to the reader’s
speculation; although the complaint alleges that these damages are “continuing” and have
required “medical treatment,” it is impossible to determine from the face of the complaint
exactly what those damages encompass. In the court’s “judicial experience,” “physical and
mental distress” and “emotional anguish” vary widely depending on the circumstances, and
similar circumstances may affect different plaintiffs in different ways. Granted, Faith
Benton’s continuing pulmonary and respiratory damages are allegedly “severe,” (Doc. 1-10
¶ 14), but that allegation means nothing in a vacuum. There is nothing in the complaint to
suggest what kind of “pulmonary and respiratory” conditions are at issue, the extent of
hospitalization or medical care required, the nature and cost of Faith Benton’s medical care,
the nature and extent of limitations caused by these conditions, her prognosis, or anything
else to indicate how severe those damages allegedly have been or will continue to be.
Further, although discovery has occurred in this case, the Bentons have been deposed, and
their medical records have been subpoenaed, the Defendants have presented no evidence
regarding the amount of policy premiums paid or the nature and extent of the Bentons’
physical and mental damages.
In addition to compensatory damages, in conjunction with claims for wanton and
intentional fraudulent misrepresentation and suppression, bad faith failure to pay an
insurance claim, and wanton failure to hire, train, and supervise agents, adjusters, and claims
representatives,3 the Bentons seek “such . . . punitive damages as a jury deems reasonable and
may award.” (Doc. 1-10 ¶ ¶ 24, 29, 33, 36, 42). Citing Roe and Blackwell v. Great American
Financial Resources, Inc., 620 F. Supp. 2d 1289, 1291 (N.D. Ala. 2009), the Defendants
argue that, using judicial experience and common sense, this court can determine, based on
the facial allegations of the complaint, that a constitutionally-permissible punitive damages
award would be enough, combined with the other damages at issue, to satisfy the
jurisdictional minimum. Specifically, the Defendants posit that the jurisdictional amount
The Bentons also seek punitive damages in conjunction with their breach-of-contract claim, which
does not contain an independent allegation of promissory fraud. (Doc. 1-10 ¶ 20). In determining the amount
in controversy, the court has not considered the request for punitive damages for breach of contract because
it appears to a legal certainty that punitive damages are not available for that claim. See Ala. Code 1975 §
6-11-20(a) (providing that punitive damages may not be awarded except in wrongful death cases and in tort
cases “where it is proven by clear and convincing evidence that the defendant consciously or deliberately
engaged in oppression, fraud, wantonness, or malice with regard to the plaintiff”); Holley Equip. Co. v.
Credit Alliance Corp., 821 F.2d 1531, 1535 (11th Cir. 1987) (holding that, for purposes of determining the
amount in controversy, punitive damages are not to be considered when it is a “legal certainty” that such
damages are unavailable); Heisz v. Galt Indus., Inc., 93 So. 3d 918, 925 (Ala. 2012) (holding that mere
breach of a contract, without evidence of a “present intent not to perform” at the time the contract was made,
does not give rise to an action for promissory fraud); Exxon Mobil Corp. v. Ala. Dep’t of Conservation &
Natural Res., 986 So. 2d 1093, 1117 (Ala. 2007) (noting that, in general, Alabama law prohibits “punitive
damages for breach of contract, even where the breach seems particularly egregious”).
may be met by a punitive damages award that bears a constitutionally-permissible ratio to the
compensatory damages requested.
The likely amount of “such . . . punitive damages as a jury deems reasonable and may
award” (Doc. 1-10 ¶ ¶ 24, 29, 33, 36, 42), as demanded in the complaint, cannot be
determined (as the Defendants suggest) simply by considering whether the jurisdictional
minimum could be met by multiplying the compensatory damages by some constitutionallypermissible ratio of punitive damages that seems reasonable based on “common sense and
judicial experience.” The propriety of the ratio of punitive damages to compensatory
damages is only one factor in determining the reasonableness of a potential punitive-damages
award and is determined in light of the facts of each individual case, not by applying a rigid
mathematical formula. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425
(2003); Pensacola Motor Sales, Inc. v. Daphne Automotive, LLC, __ So.3d__, __, 2013 WL
6360967 at *14 (Ala. 2013). Further, contrary to the requirement that the court must presume
that this case lies outside its limited jurisdiction, Kokkonen, 11 U.S. at 377, the approach
suggested by the Defendants requires the court to ignore that, in light of “judicial experience
and common sense,” punitive damages bearing a constitutionally-permissible ratio to
compensatory damages could also fall below the jurisdictional minimum. The court’s task
is not to merely decide whether the punitive damages at issue in this case could satisfy the
minimum jurisdictional requirement, but whether it is more likely than not that they do. See
Roe, 613 F.3d at 1061.
In Roe, the court noted that, in cases brought under Alabama’s Wrongful Death Act,
in which only punitive damages can be awarded, the “factors used to determine the value of
the claims pled by” the plaintiff “can generally be evaluated using the complaint’s allegations
regarding the defendant’s behavior.” Roe, 613 F.3d at 1064.4 Here, however, the complaint
contains few, if any, specific factual allegations about the Defendants’ behavior relevant to
the various factors used for determining the value of the punitive damages claims. For
example, although the Bentons allege that the Defendants’ conduct was “wanton,”
“reckless,” and fraudulent, the complaint contains no particular, non-conclusory factual
allegations that shed light on exactly how reprehensible the Defendants’ conduct allegedly
was. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419 (2003) (quoting
BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575 (1996)) (“‘[T]he most important indicium
of the reasonableness of a punitive damages award is the degree of reprehensibility of the
defendant's conduct.’”); see also Roe, 613 F.3d at 1065 (recognizing that, under Alabama
law, “in assessing punitive damages, the worse the defendant’s conduct was, the greater the
damages should be”). By way of contrast, in Roe, the complaint included specific, nonconclusory allegations that the defendant fully knew the potential danger that its conduct
posed and that the hazard was preventable with ordinary care, but “did not even attempt to
In Roe, the Eleventh Circuit did not merely assume that the jurisdictional amount was met based
on the mere potential for a constitutionally-permissible ratio of punitive and compensatory damages to
exceed the jurisdictional minimum. Rather, the court “examine[d] the allegations in light of the particular
causes of action chosen by the plaintiff” and the various factors used for calculating punitive damages in a
wrongful death case. Roe, 613 F.3d at 1065. The court also noted that, under Alabama law, the purpose of
the Wrongful Death Act was to “protect human life by making homicide expensive.” Roe, 613 F.3d at 1065.
take [preventative] measures,” thus causing the plaintiff’s death and “endangering the lives
of thousands of people.” Roe, 613 F.3d at 1066; see also Pensacola Motor Sales at *16
(noting that a reasonable punitive damages award must take into consideration the degree to
which the defendant was aware of the hazards his conduct posed, the degree to which the
defendant recklessly or indifferently endangered others, and whether the defendant’s conduct
was merely an isolated incident).
Further, unlike in Blackwell, which is not controlling precedent, in this case there are
no allegations that the Defendants were aware that the Bentons were particularly financially
vulnerable or that the Defendants engaged in a long-standing pattern of misconduct. Cf.
Blackwell, 620 F.2d at 1291 (noting that the complaint alleged a conspiracy “that continued
for more than two years and, in the process, syphoned away much of an elderly man’s life
savings under false pretenses”); Akins Funeral Home, Inc., v. Miller, 878 So. 2d 267, 279
(Ala. 2003) (recognizing that economic damage inflicted on a financially-vulnerable plaintiff
may support a larger punitive-damages award); Pensacola Motor Sales __ So.3d __, ___,
2013 WL 6360967 at *16 (Ala. 2013) (holding that a reasonable punitive damages award
must take into consideration whether the defendant’s conduct was an isolated incident or part
of a pattern of misconduct, the duration of the conduct, and the plaintiff’s financial
Further, despite the lack of detail in the complaint regarding the reprehensibility of
the Defendants’ alleged conduct, and despite the fact that the Bentons have submitted to
depositions and discovery has been ongoing in the case, the Defendants have not submitted
any evidence to support their assertion that the value of the Bentons’ punitive damages
claims likely exceeds the jurisdictional minimum. Pretka, 608 F.3d at 752 (“[I]t would be
‘impermissible speculation’ for a court to hazard a guess on the jurisdictional amount in
controversy ‘without the benefit of any evidence [on] the value of individual claims.’”
(quoting Lowery, 483 F.3d at 1220).
In the absence of evidence or specific factual allegations in the complaint upon which
to establish the extent of the Bentons’ compensatory and punitive damages (other than the
cost of home repairs), the court cannot simply assume that the amount in controversy in this
case exceeds the jurisdictional minimum. “The absence of factual allegations pertinent to
the existence of jurisdiction is dispositive and, in such absence, the existence of jurisdiction
should not be divined by looking to the stars.” Lowery, 483 F.3d at 1215.
Accordingly, this case must be remanded.
Accordingly, it is
ORDERED that the motion to remand (Doc. 5) be and is hereby GRANTED and that
this case is hereby REMANDED to the Circuit Court of Montgomery County, Alabama.
The Clerk of Court is DIRECTED to take the action necessary to accomplish the
remand of this case to the Circuit Court of Montgomery County, Alabama.
Done this 15th day of May, 2014.
/s/Charles S. Coody
CHARLES S. COODY
UNITED STATES MAGISTRATE JUDGE
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