Devenport et al v. Milbank Insurance Company et al

Filing 17

ORDER, Plaintiffs' motion to remand 13 is granted; Plaintiffs' request for attorneys' fees 13 is denied; Defendants' motion to dismiss 5 is remanded to Maricopa County Superior Court. Signed by Judge David G Campbell on 9/8/11.(REW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Tuco Devenport and Crystal Diana Kay
Devenport,

No. CV11-1450-PHX-DGC
ORDER

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Plaintiffs,

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vs.

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Milbank Insurance Company, a foreign
corporation; State Automobile Mutual
Insurance Company, a foreign corporation;
State Auto Property & Casualty Insurance
Company, a foreign corporation; John and
Jane Does 10V; Black and White
Corporations I-V,

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Defendants.

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Plaintiffs filed a Complaint in Maricopa County Superior Court against

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Defendants Milbank Insurance Company (“Milbank”), State Automobile Mutual

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Insurance Company (“State Mutual”), and State Auto Property & Casualty Insurance

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Company (“State Auto”), all foreign corporations, alleging that they had not been

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properly compensated for a robbery that occurred at their Glendale home. Doc. 1.1 at 2-

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3. Defendants removed the case to District Court. State Mutual and State Auto then filed

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a motion to dismiss Plaintiffs’ complaint as against them, asserting that they were
improper parties to Plaintiffs’ breach of contract and bad faith claims. Doc. 5. Plaintiff
does not oppose this motion. Doc. 14. Plaintiff, however, filed a motion to remand to
Maricopa County Superior Court for lack of subject matter jurisdiction and for late filing

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for removal. Doc. 13. Plaintiff maintains that dismissal should take place in Superior

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Court. Doc. 13 at 2. For the reasons set forth below, the Court will grant Plaintiffs’

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motion to remand. The Court therefore makes no ruling on Defendants’ motion to

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dismiss.
Plaintiffs also requests Attorneys’ fees and costs related to filing their motion to

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remand. The Court will deny this request.

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I.

Removal and Remand Standards.

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Pursuant to the removal statute, 28 U.S.C. ' 1441, any civil action brought in state

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court over which the federal district courts have original jurisdiction may be removed to

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the federal district court for the district where the action is pending. 28 U.S.C. ' 1441(a).

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Courts strictly construe the statute against removal jurisdiction. Gaus v. Miles, Inc.,

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980 F.2d 564, 566 (9th Cir. 1992).

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removal and A[f]ederal jurisdiction must be rejected if there is any doubt as to the right of

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removal in the first instance.@ Id. AThe >strong presumption= against removal jurisdiction

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means that the defendant always has the burden of establishing that removal is proper.@

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Id. AIf at any time before final judgment it appears that the district court lacks subject

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Indeed, there is a Astrong presumption@ against

matter jurisdiction, the case shall be remanded.@ 28 U.S.C. ' 1447(c).
II.

Motion to Remand.
This Court has subject matter jurisdiction over cases in which the parties are

diverse and the amount in controversy exceeds $75,000. 28 U.S.C. ' 1332. Plaintiff
argues that the amount in controversy is not met in this case. Doc. 13 at 2. Plaintiffs’
prayer for relief includes actual and punitive damages, attorneys’ fees, and allowable
interest, but it is silent as to an actual dollar amount. See Doc. 1.1 at 5. Defendants
therefore Abear[] the burden of establishing, by a preponderance of the evidence, that the
amount in controversy exceeds [$75,000].@ Sanchez v. Monumental Life Ins. Co., 102
F.3d 398, 404 (9th Cir. 1996). To meet this burden, Defendants Amust provide evidence
establishing that it is >more likely than not= that the amount in controversy exceeds
[$75,000].@ Id.; see Gaus, 980 F.2d at 566-67 (AIf it is unclear what amount of damages

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

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facts to support jurisdiction, including the jurisdictional amount.@) (emphasis in original);

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McNutt v. GM Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936) (A[T]he court may

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demand that the party alleging jurisdiction justify his allegations by a preponderance of

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evidence.@).

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Defendants allege that the amount in controversy is more likely than not to exceed

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$75,000 based upon two specific findings of fact: (1) Plaintiffs’ February 22nd

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“Certificate Regarding Compulsory Arbitration” claiming that the amount of damages in

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this case exceeds $50,000, and (2) an affidavit from Defense attorney Michael Hensley

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estimating the likely amount of attorneys’ fees to be between $50,000 and $75,000. Doc.

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16.1 & 16.4 at 2. This estimate “includes the possibility of multiple depositions, expert

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fees, and motion practice.” Doc. 16 at 6. Defendants conclude that “assuming Plaintiffs’

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claims are true, the attorneys’ fees, along with Plaintiffs’ actual and punitive damages

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more likely than not will exceed the $75,000 amount in controversy limit.” Id.

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Although Plaintiffs’ Certificate Regarding Compulsory Arbitration establishes that
prior to removal Plaintiffs sought an award in excess of $50,000, whether the actual
amount of damages sought along with the addition of punitive damages and attorneys’
fees would push the amount in controversy above the $75,000 jurisdictional threshold is
speculative. Litigation often is expensive and frequently proceeds beyond the early
stages; however, the Court will not assume that to be inevitable. Moreover, on August 1,
2011, Plaintiff served an offer of judgment to Defendant Milbank for the sum of $45,000
“inclusive of all damages, taxable court costs, interest and attorneys’ fees incurred to
date.” Doc 13.B. Defendants note that Plaintiffs filed this offer subsequent to removal
for an amount less than Plaintiffs’ earlier certification, but Plaintiffs’ offer is nonetheless
relevant to the current determination because the Court is bound to remand A[i]f at any
time before final judgment it appears that the district court lacks subject matter
jurisdiction.@ 28 U.S.C. ' 1447(c) (emphasis added).

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Under these facts, Defendants’ speculation Aneither overcomes the >strong

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presumption= against removal jurisdiction, nor satisfies [Defendants’] burden of setting

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forth . . . the underlying facts supporting its assertion that the amount in controversy

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exceeds [$75,000].@ Gaus, 980 F.2d at 567 (emphasis in original).

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Court will remand to state court. See 28 U.S.C. § 1447(c); Valdez, 372 F.3d at 1118 (“If

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the district court determines that it is sufficiently doubtful that the amount-in-controversy

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requirement has been met and thus that federal subject matter jurisdiction is lacking, the

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district court should . . . remand to state court.”); Matheson, 319 F.3d at 1090 (“Where

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doubt regarding the right to removal exists, a case should be remanded to state court.”);

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Sanchez, 102 F.3d at 406 (directing the district court to remand to state court where the

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defendant had failed to establish the jurisdictional amount by a preponderance of the

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evidence).

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III.

Accordingly, the

Attorneys’ Fees.

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Plaintiffs have requested an award of attorneys’ fees related to their costs for filing

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the motion to remand. Doc. 13 at 4. Plaintiffs fail to provide a specific statutory basis

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for this request but argue that Defendants lacked an objectively reasonable basis to
remove the case. Id. Under 28 U.S.C. ' 1447(c), “[a]n order remanding the case may
require payment of just costs and any actual expenses, including attorney fees, incurred
as a result of the removal.” 28 U.S.C. ' 1447(c). The Supreme Court has stated that
“[a]bsent unusual circumstances, courts may award Attorneys’ fees under § 1447(c) only
where the removing party lacked an objectively reasonable basis for seeking removal.
Conversely, when an objectively reasonable basis exists, fees should be denied.” Martin
v. Franklin Capital Corp., 546 U.S. 132 (2005).

Here, the Court would have had

original jurisdiction over Plaintiffs’ claims under 28 U.S.C. ' 1332 if the amount in
controversy exceeded $75,000.

While the Court finds that Defendants have not

established by a preponderance of the evidence that the amount in controversy meets this
threshold, the Court nonetheless finds that at the time of removal Defendants had an

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objectively reasonable basis for such a claim. Therefore, Plaintiffs’ request for attorneys’

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fees is denied.

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IV.

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Motion to Dismiss.
Pursuant to the Court’s order to remand this case to state court, the Court lacks

jurisdiction to rule on Defendants’ motion to dismiss.

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IT IS ORDERED:

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1.

Plaintiffs’ motion to remand (Doc. 13) is granted.

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2.

Plaintiffs’ request for attorneys’ fees (Doc. 13) is denied.

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3.

Defendants’ motion to dismiss (Doc. 5) is remanded to Maricopa County

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Superior Court.
Dated this 8th day of September, 2011.

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