Sutton Storage, LLC v. Safeco Insurance Co. of America

Filing 16

ORDER granting 12 Motion to Remand without prejudice to State Court; finding as moot 14 Stipulation. Signed by Judge Timothy M. Burgess on 6/24/14. (RMC, COURT STAFF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
SUTTON STORAGE LLC,
No. 3:14-cv-00083-TMB
Plaintiff,
vs.

ORDER GRANTING THE
MOTION TO REMAND
[Docket 12]

SAFECO INSURANCE CO. OF
AMERICA,
Defendant.

I.

PENDING MOTION
At Docket 12 Plaintiff Sutton Storage LLC (“Sutton Storage”) filed a Motion to Remand.

Defendant Safeco Insurance Co. of America (“Safeco”) has opposed the motion.1 The court has
determined that neither reply by Sutton Storage nor oral argument would materially assist in the
resolution of the issue before the court. Accordingly, the matter is submitted for decision on the
opening and opposing briefs.2
II.

BACKGROUND/ISSUE PRESENTED
Sutton Storage, an Alaska LLC, initiated this suit in the Alaska Superior Court against

Safeco, a New Hampshire Corporation having its principal place of business in Boston,
Massachusetts. Safeco removed the action to this court.3 The issue presented to this Court is
whether or not the amount in controversy exceeds the jurisdictional floor, $75,000.00.4

1

Docket 15.

2

D.Ak LR 7.2(a)(3)[B].

3

See 28 U.S.C. § 1446(b).

4

28 U.S.C. § 1332(a).

III.

DISCUSSION
In its prayer for relief Sutton Storage does not specify the amount of the damages sought;

instead Sutton Storage prays for judgment against Safeco as follows:
a.
b.
c.
d.

payment of benefits under the “Landlord Protection Insurance Policy”;
compensatory, consequential, general, special, statutory and exemplary
damages within the jurisdictional limit of this court;
interest, costs, and attorney fees as provided by the rules of court, state
decisional law, Alaska Statutes; and
such other relief the court deems fair, just and equitable.5

In its Notice of Removal Safeco contends that the amount in controversy exceeds $75,000. Thus,
removal of this action is governed by § 1446(c)(2), which provides:
(2) If removal of a civil action is sought on the basis of the jurisdiction conferred by
section 1332(a), the sum demanded in good faith in the initial pleading shall be
deemed to be the amount in controversy, except that—
(A) the notice of removal may assert the amount in controversy if the initial
pleading seeks—
(i) nonmonetary relief; or
(ii) a money judgment, but the State practice either does not permit
demand for a specific sum or permits recovery of damages in excess
of the amount demanded; and
(B) removal of the action is proper on the basis of an amount in controversy
asserted under subparagraph (A) if the district court finds, by the preponderance of
the evidence, that the amount in controversy exceeds the amount specified in section
1332(a).
Controlling circuit law requires that “[w]here it is not facially evident from the complaint
that more than $75,000 is in controversy, the removing party must prove, by a preponderance of
the evidence, that the amount in controversy meets the jurisdictional threshold.”6 In making this
determination, this court may consider the facts presented in the removal petition, “as well as any
summary-judgment-type evidence relevant to the amount in controversy at the time of removal.”7
Furthermore, “[w]here doubt regarding the right to removal exists, a case should be remanded to

5

Docket 1-2 at 8.

6

Matheson v. Progressive Speciality Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

7

Id. (internal quotation marks and citations omitted).

ORDER GRANTING MOTION TO REMAND [DOCKET 12]
Sutton Storage, LLC v. Safeco Ins. Co., 3:14-cv-00083-TMB 2

state court.”8 “Conclusory allegations as to the amount in controversy are insufficient.”9 In
holding that a bare allegation based upon information and belief that the amount exceeded
$75,000 was insufficient, the Ninth Circuit explained that the party seeking removal has the
burden to provide evidence establishing the factual basis supporting its assertion that the
jurisdictional floor exists.10 This court must apply those principles to this case.
Neither party has provided any evidence addressing the total amount in controversy.
Indeed, Sutton Storage declines to specifically state the amount it seeks in damages. Safeco’s
motion relies upon the fact that Sutton Storage initiated this action in the Alaska Superior Court,
not the Alaska District Court. As relevant to the motion sub judice, Alaska law provides that the
district courts are courts of limited jurisdiction having jurisdiction over cases in which the
amount in controversy does not exceed $100,000.00.11 Superior courts on the other hand are
courts of general jurisdiction without a monetary limitation.12 Thus, on its face, Safeco’s position
has some modicum of logic. Upon further analysis, however, it is unpersuasive.
The fatal flaw in Safeco’s position is that under Alaska law, except for certain matters not
relevant to this case,13 the jurisdiction of district and superior courts where the amount of does
not exceed $100,000 is concurrent.14 Thus, there may be tactical reasons, other than the amount
in controversy, for filing a complaint in the superior court instead of the superior court in cases,
such as this, where the damages sought are less than the jurisdictional limit of district courts.
While one might logically infer from a filing in the superior court that the damages sought might
exceed $100,000, Safeco has not cited and independent research by this court has not revealed

8

Id.

9

Id. at 1090–91.

10

Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004).

11

Alaska Stats. § 22.15.030(a)(1).

12

Alaska Stats. § 22.10.020(a).

13

See, e.g., Alaska Stats. § 22.15.050 (excluding actions involving title to real property and
some equitable actions).
14

Alaska Stats. § 22.10.030(b); see Stephens v. Hammersly, 552 P.2d 652, 653 n.6 (Alaska

1976).
ORDER GRANTING MOTION TO REMAND [DOCKET 12]
Sutton Storage, LLC v. Safeco Ins. Co., 3:14-cv-00083-TMB 3

any authority for the proposition that, standing alone, it is sufficient evidence to support removal
jurisdiction.15 Indeed, what “evidence” there is in the record tends to undermine removal
jurisdiction.16
That being said, it is not conclusively established that this court lacks jurisdiction. Here,
Sutton Storage has not committed itself to the amount of damages in controversy. Instead,
Sutton Storage relies on the fact that the amount is not evident from the face of the complaint and
the lack of evidence concerning that amount. Sutton Storage, the party seeking damages,
declines to reveal the amount of damages sought.17 The parties are reminded of the provisions of
28 U.S.C. § 1446(c)(3), which provides that notwithstanding that removal was not determinable
from the initial pleading, where the record subsequently developed in the state court, including
discovery, establishes a factual basis for removal, the case may be removed.
IV.

ORDER
IT IS THEREFORE ORDERED THAT the Motion to Remand at Docket 12 is

GRANTED.
IT IS FURTHER ORDERED THAT this matter is remanded to Superior Court for the
State of Alaska, Third Judicial District, for such further proceedings as may be appropriate or
necessary.
15

See Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992); see also Singer v. State Farm
Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997) (explaining Gaus); Sanchez v. Monumental Life
Ins. Co.. 102 F.3d 398, 401-03 (9th Cir. 1996) (explaining the difference in the standards applied when a
case is brought in federal court originally and when it is removed to federal court).
16

Attached to the complaint are copies of correspondence between Safeco and Leonard
Kelly relating to this matter. On July 18, 2012, Safeco tendered $38,492.05 in satisfaction of the
“Replacement Cost Coverage” [Docket 6-3 at 28]. Nothing in the record indicates whether Sutton
Storage accepted this tender. On the same date, in separate correspondence, Safeco advised Kelly that it
was continuing investigation into the claim for water damage [Docket 6-4 at 5 – 9]. On October 1, 2012,
Safeco notified Kelley that it was denying coverage for the water damage [Docket 6-4 at 22]. Nowhere
in the correspondence between the parties is there any indication of the amount of the damages resulting
from water damage. Because the $38,492.05 tender is not in controversy, the amount in controversy
consists solely of the amount claimed for the water damages and any amount in excess of the $38,492.05
tendered for the replacement cost, plus any other incidental damages. It appears unlikely at this point
that those amounts combined exceeds the $75,000 jurisdictional floor.
17

Although Sutton Storage may be compelled to disclose the damages sought, including
the evidentiary underpinnings, during discovery, it is not obligated to make that disclosure at this time.
ORDER GRANTING MOTION TO REMAND [DOCKET 12]
Sutton Storage, LLC v. Safeco Ins. Co., 3:14-cv-00083-TMB 4

IT IS FURTHER ORDERED THAT this Order is without prejudice to the right of
Defendant Safeco Insurance Co. of America to remove this action to this Court should
subsequent discovery reveal that the amount in controversy equals or exceeds the jurisdictional
floor for invoking the diversity jurisdiction of this court.
Dated: June 24, 2014.
s/ Timothy M. Burgess
TIMOTHY M. BURGESS
UNITED STATES DISTRICT JUDGE

ORDER GRANTING MOTION TO REMAND [DOCKET 12]
Sutton Storage, LLC v. Safeco Ins. Co., 3:14-cv-00083-TMB 5