Stacy v. Reliance Standard Life Insurance Company
ORDER GRANTING 7 Motion to Remand to State Court. Clerk is DIRECTED to take appropriate to effectuate the remand. Signed by District Judge Terry F. Moorer on 7/29/2022. (fz)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
RELIANCE STANDARD LIFE
CIV. ACT. NO. 1:21-cv-511-TFM-MU
MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiff’s Motion to Remand and/or Motion for Judicial
Estoppel (Doc. 7, filed 12/8/21). Plaintiff moves the Court to remand this matter back to state
court or, in the alternative, judicially estop Defendant from applying a disability retirement offset
in the benefit calculations at issue. After careful consideration of the motion, response, reply, and
relevant law, the Court GRANTS the motion for remand (Doc. 7). The motion for judicial
estoppel remains for resolution by the state circuit court.
This matter was originally filed in the Circuit Court of Mobile County, Alabama on
October 25, 2021. Doc. 1-1 at 4. In the Complaint, Plaintiff Dawn Stacy (“Stacy”) brings claims
of breach of contract and bad faith against Defendant Reliance Standard Life Insurance Company
(“Reliance”). Id. On November 29, 2021, Reliance timely removed this matter to this Court
asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). Doc. 1 at 1. On December 3,
2021, Reliance filed its Answer. Doc. 5.
On December 8, 2021, Stacy filed the instant motion to remand with an alternative request
for judicial estoppel, and the Court ordered Reliance to show cause why this matter should not be
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remanded to the state circuit court. Docs. 7-8. Reliance filed its response to the Court’s show
cause order and Stacy filed her reply. Docs. 11-12. The Court finds oral argument is unnecessary
and the motion is fully briefed and ripe for review.
STANDARD OF REVIEW
Federal courts have a strict duty to exercise jurisdiction conferred on them by Congress.
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S. Ct. 1712, 1721, 135 L. Ed. 2d 1 (1996).
However, federal courts are courts of limited jurisdiction and possess only that power authorized
by the Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377,
114 S. Ct. 1673, 1675, 128 L. Ed. 2d 391 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095
(11th Cir. 1994). The removing party has the burden of establishing federal jurisdiction. See
Leonard v. Enter. Rent a Car, 279 F.3d 967, 972 (11th Cir. 2002) (citing Williams v. Best Buy Co.,
269 F.3d 1316, 1318 (11th Cir. 2001)). Further, the federal removal statutes must be construed
narrowly and doubts about removal must be resolved in favor of remand. Allen v. Christenberry,
327 F.3d 1290, 1293 (11th Cir. 2003) (citing Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.
1996)); Burns, 31 F.3d at 1095 (citations omitted).
DISCUSSION AND ANALYSIS
“Diversity jurisdiction exists where the suit is between citizens of different states and the
amount in controversy exceeds the statutorily prescribed amount [of] $75,000.” Williams, 269
F.3d at 1319 (citing 28 U.S.C. § 1332(a)). “The existence of federal jurisdiction is tested at the
time of removal.” Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1294-95 (11th Cir.
2008) (citing Whitt v. Sherman Int’l Corp., 147 F.3d 1325, 1332 (11th Cir. 1998)); see also
Rockwell Int’l Corp. v. United States, 549 U.S. 457, 474 n.6, 127 S. Ct. 1397, 1409 n.6, 167 L. Ed.
2d (2007) (“It is true that, when a defendant removes a case to federal court based on the presence
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of a federal claim, an amendment eliminating the original basis for federal jurisdiction generally
does not defeat jurisdiction.”); Poore v. Am.-Amicable Life Ins. Co. of Tex., 218 F.3d 1287, 129091 (11th Cir. 2000) (“[E]vents occurring after removal . . . do not oust the district court’s
jurisdiction.”). Significantly, this means the Court may not consider damages accrued after
removal. See Burns, 31 F.3d at 1097.
The parties agree that diversity of citizenship exists. Doc. 11 at 2; Doc. 7 at 6. The Court
agrees. Therefore, remand turns on whether the amount in controversy has been met. See
Williams, 269 F.3d at 1319.
The Complaint does not state a specific monetary demand for compensatory and punitive
damages. Doc. 1-1 at 19, 22. Where a plaintiff does not state a specific monetary demand, “the
removing defendant must prove by a preponderance of the evidence that the amount in controversy
exceeds the jurisdictional requirement” of $75,000. Williams, 269 F.3d at 1319. “A removing
defendant may rely on its own affidavits, declarations, or other documentation to establish the
amount in controversy.” McGee v. Sentinel Offender Servs., LLC, 719 F.3d 1236, 1241 (11th Cir.
2013) (per curiam) (citing Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 755 (11th Cir. 2010)).
To determine the amount in controversy, the Court is permitted:
[T]o make reasonable deductions, reasonable inferences, or other reasonable
extrapolations from the pleadings to determine whether it is facially apparent that
a complaint is removable. Put simply, a district court need not suspend reality or
shelve common sense in determining whether the face of a complaint establishes
the jurisdictional amount. Instead, courts may use their judicial experience and
common sense in determining whether the case stated in a complaint meets the
federal jurisdictional requirements.
Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061-62 (internal quotation marks and citations
omitted). However, “without 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 Lower v. Ala. Power Co., 483 F.3d 1184, 1209 (11th Cir. 2007)).
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To meet its burden to prove the amount in controversy, Reliance levies several arguments,
focusing on both a $120,000 settlement demand made on September 23, 2021, and their
calculations of Stacy’s claimed benefits at $37,048.01. Doc. 1 ¶¶ 16-18. The Court will address
each in turn.
Reliance points to Stacy’s September 23 demand for $120,000 as evidence that the amount
in controversy has been met. Id. The settlement offer states:
In litigation only past due benefits may be sought, however, mental anguish
damages and punitive damages will also be sought. The amount at stake in
litigation is likely to be $70,000 inclusive of all damages, although that amount will
rise the longer the litigation stays pending. Mental anguish and punitive damages
will be exponentially increased as time progresses.
Doc. 1-4 at 14. Reliance alleges that this acknowledges that the amount in controversy at the time
of the settlement demand was $70,000, and because it was rising “exponentially[,]” the amount
reached $75,000 by removal on November 29, two months later. Doc. 11 at 12.
However, the letter also states on the same page, and Reliance notes, that “[i]nterest,
together with past due benefits totals $11,943.30. Future benefits reduced to present value using
a factor of 3% are $72,863.65.” Id.; Doc. 1-4 at 14. Elsewhere, the letter states that the amount at
stake for the short-term disability claim is $16,105.37, exclusive of mental anguish and punitive
damages. Id. at 9. Taken together, this would suggest that the amount at stake totaled, at that
moment, $28,048.67. Doc. 11 at 12. Moreover, Stacy points out that the $70,000 demanded
referred to the expense of “future litigation” and was couched by the language that the amount was
only “likely to be $70,000[.]” Doc. 12 at 17 (emphasis in original).
“[S]ettlement offers that provide specific information to support the plaintiff’s claim for
damages . . . are entitled to more weight” than vague offers characterized more by “puffing and
posturing[.]” Jackson v. Select Portfolio Servicing, Inc., 651 F. Supp. 2d 1279, 1281 (S.D. Ala.
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2009). Although this offer provides specific information detailing Stacy’s calculations, this
information does not support removal. Reliance’s arguments require speculation not only as to
the amount accrued since the settlement demand, but also as to which of Stacy’s figures to credit.
Accordingly, the Court finds that Reliance has not met its burden of proving that the amount in
controversy was satisfied at the time of removal despite pointing to the settlement offer.
Second, Reliance argues that Stacy is seeking $37,048.01 in past-due benefits, relying on
an affidavit by Zeke Cuny, an employee of Reliance who calculated Stacy’s benefits. Doc. 1-2;
Doc. 1 ¶ 16. Reliance asserts that Stacy must be claiming at least $37,952 ($75,000 minus the
past-due benefits) in mental anguish and punitive damages. Id. ¶ 18. Reliance further argues a
greater amount is likely because “a 1:1 ratio on both mental anguish and punitive damages to the
benefit amount of $37,048.01 . . . would be $111,144.03[.]” Id. In essence, Reliance asks the
Court to apply a multiplier to the compensatory damages claim. In support, Reliance cites
Blackwell v. Great American Financial Resources, Inc., in which that court more than doubled the
claimed compensatory damages to reach the amount in controversy.1 620 F. Supp. 2d 1289, 1291
(N.D. Ala. 2009).
This Court agrees with the court in Mustafa v. Market Street Mortgage Corp., which found
Blackwell unpersuasive. 840 F. Supp. 2d 1287, 1291-92 (M.D. Ala. 2012).
[A]pplying a single digit multiplier sufficiently high enough to satisfy the amountin-controversy requirement, without more, assumes away the removing party’s
burden to prove the propriety of removal by a preponderance of the evidence.
Second, it also ignores the Eleventh Circuit’s command in Lowery v. Alabama
Power Company to look at the facts supporting a damages assertion, because “the
existence of jurisdiction should not be divined by the stars.” Woodenly applying a
single digit multiple of the compensatory damages claimed, without a nonspeculative reason to believe the jury would come back with such an award, violates
The claimed compensatory damages were $23,172.28 against a $50,000 amount in controversy
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Lowery’s explicit commands . . . [U]sing a multiplier, without more, would trigger
grave federalism concerns[.]
Id. (internal citations omitted). Here, Reliance has not provided a “non-speculative reason to
believe the jury would come back with . . . an award” that would more than double Stacy’s
$37,048.01 in past-due benefits that Reliance proposes. Id., Doc. 1 ¶ 16. Consequently, Reliance
has not met its burden of proof. Leonard, 279 F.3d at 972.
Since the Court has found that it does not have jurisdiction, it cannot address Plaintiff’s
judicial estoppel argument which, though an alternative request, will remain for resolution by the
Accordingly, based on the foregoing analysis, Plaintiff Dawn Stacy’s motion to remand
(Doc. 7) is GRANTED and this matter is REMANDED to the Circuit Court of Mobile County,
Alabama. The Clerk of Court is DIRECTED to take the appropriate steps to effectuate the
DONE and ORDERED this the 29th day of July 2022.
/s/ Terry F. Moorer
TERRY F. MOORER
UNITED STATES DISTRICT JUDGE
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