Cowart v. Geico Insurance Company

Filing 10

ORDER granting 5 Motion to Remand to State Court. This action is remanded to the Circuit Court of Mobile County. Signed by District Judge William H. Steele on 2/1/18. (mbp)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
MISTY COWART,

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) CIVIL ACTION 17-0482-WS-B
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Plaintiff,
v.
GEICO INSURANCE COMPANY,
Defendant.1

ORDER
This matter is before the Court on the plaintiff's motion to remand. (Doc.
5). The parties have filed briefs and evidentiary materials in support of their
respective positions, (Docs. 5-1, 5-2, 7, 8), and the motion is ripe for resolution.
After careful consideration, the Court concludes the motion is due to be granted.
BACKGROUND
This case began as a suit against Zachariah Cowart ("Zachariah") for
damages the plaintiff suffered when Zachariah ran over her while driving her car,
resulting in compound fractures of her left leg and ankle. The complaint asserted
claims of negligence and wantonness and sought damages for medical expenses,
lost wages, mental anguish (all past and future) and permanent physical
disfigurement and impairment. (Doc. 1-2).
In October 2017, the plaintiff filed an amended complaint, eliminating
Zachariah as a defendant and adding Geico. According to that pleading, the
plaintiff had recently settled with Zachariah, his liability insurance carrier paying
1

The defendant states that its correct name is Geico Casualty Company. (Doc. 1
at 1). A complaint cannot be amended by a defendant's assertion. The Court therefore
utilizes the nomenclature of the amended complaint and will refer to the defendant as
"Geico."

policy limits. The amended complaint seeks underinsured motorist benefits from
Geico, the plaintiff's insurer. The amended complaint lists the plaintiff's damages
similarly to the original complaint. No specific amount of damages is demanded.
(Doc. 1-3).
Geico timely removed on the basis of diversity of citizenship. The parties
agree that complete diversity exists,2 but the plaintiff denies that Geico has carried
its burden of showing that the amount in controversy at the time of removal
exceeded $75,000, exclusive of interest and costs.
DISCUSSION
“A court’s analysis of the amount-in-controversy requirement focuses on
how much is in controversy at the time of removal, not later.” Pretka v. Kolter
City Plaza II, Inc., 608 F.3d 744, 751 (11th Cir. 2010). “[W]here jurisdiction is
based on a claim for indeterminate damages, ... the party seeking to invoke federal
jurisdiction bears the burden of proving by a preponderance of the evidence that
the claim on which it is basing jurisdiction meets the jurisdictional minimum.”
Federated Mutual Insurance Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807
(11th Cir. 2003). “[A] removing defendant must prove by a preponderance of the
evidence that the amount in controversy more likely than not exceeds the …
jurisdictional requirement.” Roe v. Michelin North America, Inc., 613 F.3d 1058,
1061 (11th Cir. 2010) (internal quotes omitted); accord 28 U.S.C. § 1446(c)(2)(B).
Geico acknowledges its burden. (Doc. 1 at 3).
"When the complaint does not claim a specific amount of damages,
removal from state court is proper if it is facially apparent from the complaint that
the amount in controversy exceeds the jurisdictional amount. If the jurisdictional
2

Zachariah and the plaintiff are both citizens of Alabama. (Doc. 1-2 at 1).
However, Zachariah was dismissed from the action at 1:31 p.m. on October 31, 2017,
(Doc. 1-5 at 178), with Geico then removing the case at 4:47 p.m. the same day. Thus, at
the moment of removal, complete diversity existed.

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amount is not facially apparent from the complaint, the court should look to the
notice of removal and may require evidence relevant to the amount in controversy
at the time the case was removed." Williams v. Best Buy Co., 269 F.3d 1316, 1319
(11th Cir. 2001).
Geico relies on the following to meet its burden: (1) its policy limits
exceed $75,0003; (2) the plaintiff demanded payment of benefits under the policy;
(3) the plaintiff characterized her injuries as life-threatening; (4) the amended
complaint contains a laundry list of damages; and (5) medical records and
deposition testimony reflect the extent of the plaintiff's injuries and medical
treatment. (Doc. 1 at 3-5; Doc. 7 at 1-3).
That policy limits exceed $75,000 establishes that the amount in
controversy could exceed that amount, but it says nothing about whether it does
exceed that amount, for the simple reason that an insured plaintiff's damages in
any given case may fall far short of her policy limits.
Had the plaintiff demanded policy limits, that would say a great deal about
the amount in controversy, but she did not. Geico relies on the amended
complaint's allegation that the plaintiff "has made demand upon GEICO for
payment of benefits pursuant to her contract of automobile insurance." (Doc. 1-3
at 2). This language indicates a demand simply for the payment of such benefits
as would make her whole, which begs the question of what that amount would be.4
Before addressing the remainder of Geico's arguments, it is necessary to
recount the history of this action. As noted, the plaintiff's injuries were caused by
Zachariah, and the plaintiff settled with him before suing Geico. That settlement
3

Geico originally identified its policy limits as $100,000. (Doc. 1 at 3). Geico
later asserted that the plaintiff could stack two policies, resulting in limits of $200,000.
(Doc. 7 at 1).
4

Geico relies on Webb v. CUNA Mutual Group, 2010 WL 366688 (S.D. Ala.
2010). Webb involved a suit for life insurance benefits, where the only relief possible is
payment of the insured amount, such that a demand for policy benefits necessarily is a
demand for policy limits. Webb has no application here.
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involved payment of policy limits by Zachariah's insurer. Those limits, which the
plaintiff received, were $100,000. (Doc. 5-1 at 2). The parties disagree regarding
the impact of these facts on the amount in controversy. The plaintiff believes this
payment reduced the amount in controversy by $100,000, pre-removal, from
whatever it would have been but for the payment. (Doc. 5-1 at 2). Geico believes
the payment is irrelevant to the amount in controversy at the moment of removal
and that the payment can be considered only at the conclusion of the litigation,
when it can demand a setoff of $100,000 against any verdict rendered against it.
(Doc. 7 at 2 n.1).
The only relevant case cited by either side is Reed v. State Farm Mutual
Automobile Insurance Co., 2007 WL 2230586 (S.D. Ala. 2007). That case,
though presented by Geico, supports the plaintiff's position. In Reed, the plaintiff
sued the defendant for uninsured/underinsured motorist benefits. Only $50,000 in
such benefits was available, but the defendant argued that $155,000 was in
controversy because the plaintiff had received $105,000 in other insurance and so
would have to prove $155,000 in damages in order to recover the $50,000. The
Court ruled that, for purposes of determining the amount in controversy, what
mattered was the amount of damages the plaintiff could recover, not the amount of
damages he would have to prove in order to recover the lower amount. Id. at *2.
"The portion that [the defendant and other insurers] have already paid is not in
controversy for purposes of determining the jurisdictional amount in this action."
Id. Geico itself offers and embraces this quotation. (Doc. 7 at 1).
The Court agrees that, under the circumstances presented here, the
$100,000 settlement affects the amount in controversy. The plaintiff suffered
damages from a single event as to which two others - Zachariah and Geico - could
be required to provide compensation. Whatever those damages were, the amount
remaining unpaid fell by $100,000 the instant Zachariah's insurer paid her that
amount, prior to removal. The amount-in-controversy requirement addresses the

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value of "the claim."5 Geico has identified no reason to believe that, when it
removed this action following payment, the plaintiff still claimed from Geico the
same $100,000 she had already recovered from Zachariah.6
The balance of Geico's argument addresses the extent of the plaintiff's
damages from the accident. Because the plaintiff does not seek recovery from
Geico of the $100,000 she has already received from Zachariah's insurer, in order
for more than $75,000 to remain in controversy as of removal, Geico must show
by a preponderance of the evidence that the amount in controversy prior to that
payment was over $175,000.
As noted, it may be apparent from the face of a complaint that the amount
in controversy exceeds the jurisdictional threshold. Williams, 269 F.3d at 1319.
The Court concludes that the amended complaint does not render it facially
apparent that the amount in controversy prior to the settlement with Zachariah
exceeded $175,000. Cf. id. at 1318, 1320 (allegations that the plaintiff tripped
over a curb and suffered permanent physical and mental injuries, that she incurred
substantial medical expenses, that she suffered lost wages, that she experienced a
diminished earning capacity, and that she would continue to suffer these damages
in the future, along with a demand for both compensatory and punitive damages,
did not render it facially apparent that the amount in controversy exceeded
$75,000).
Geico suggests it must be facially apparent from the amended complaint
that the jurisdictional threshold is met because the plaintiff seeks such an extensive
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E.g., McKinnon Motors, LLC, 329 F.3d at 807.

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The Court is aware that a number of sister courts, especially in the Middle
District of Florida, appear to take a different view. These decisions tend to focus on the
fact that a setoff occurs post-removal, after trial. This is so, but the Court sees the key
question not as when the removing defendant receives formal credit for a pre-removal
settlement but as when the plaintiff abandons any claim to recover from the removing
defendant the amount represented by that settlement. Geico's acquiescience in Reed
obviates any more detailed assessment of these cases.

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list of damages. (Doc. 7 at 2-3). The same, however, was also true in Williams.
Geico points out that the amended complaint describes the plaintiff's injuries as
"life-threatening," (id. at 2), which does distinguish this case from Williams;
however, the amended complaint also identifies the plaintiff's injuries as
compound fractures of her left leg and ankle, undercutting the allegation that her
injuries were truly life-threatening.
This case also differs from Williams in that it was pending in state court for
a year before being removed, and extensive discovery (including the plaintiff's
deposition, written discovery of the plaintiff, and numerous subpoenas to third
parties) was undertaken by Zachariah prior to removal - discovery conducted by
the same counsel now representing Geico. (Doc. 1-5). Despite unusually ample
opportunity to determine the scope of the plaintiff's damages prior to removal,
Geico points to nothing indicating the plaintiff will experience future injury
proximately caused by an accident that occurred over three years ago, nothing
indicating she continues to experience significant pain and suffering, mental
anguish or medical expenses, and nothing indicating her lost wages or her earning
capacity. As to permanent impairment and permanent disfigurement, the
plaintiff's injuries were to her left leg and ankle, and Geico points to nothing
indicating she is immobilized, deformed or otherwise seriously impacted.
Other than unquantified lost income, the only hard damages claimed by the
plaintiff are medical expenses, and Geico acquiesces in her assertion that these are
below $25,000. (Doc. 5-1 at 3-4; Doc. 7 at 2). The only evidence identified by
Geico to demonstrate that the plaintiff's soft damages exceed $150,000 consists of
medical records that, according to Geico, show the plaintiff suffered a mid-shaft
tibia fracture, a closed left medial malleolar fracture, an occult radial tear of the
medial meniscus, and contusions and abrasions, resulting in two surgeries and
multiple hospitalizations to treat resulting infections. (Doc. 7 at 2). No doubt the
plaintiff experienced pain and suffering as well as mental anguish as a result, but

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Geico offers no principled way of extrapolating that the dollar value of her
experience exceeds the jurisdictional threshold.
In short, Geico has failed to sustain its burden of demonstrating by a
preponderance of the evidence that the amount still in controversy at the time of
removal exceeded $75,000, exclusive of interest and costs.
CONCLUSION
For the reasons set forth above, the plaintiff's motion to remand is granted.
This action is remanded to the Circuit Court of Mobile County.
DONE and ORDERED this 1st day of February, 2018.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE

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