Lane v. State Farm Mutual Automobile Insurance Company et al

Filing 11

ORDER granting 6 Motion to Remand. The Clerk shall remand this case to Maricopa County Superior Court. Signed by Judge David G Campbell on 6/20/12. (Attachments: # 1 Copy of Remand Letter)(LAD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Burley J. Lane, Jr.

No. CV12-0771 PHX DGC
Plaintiff,

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ORDER

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v.

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State Farm Mutual Automobile Insurance
Company, an Illinois corporation,

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Defendant.

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I.

Background.

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Plaintiff filed a complaint against Defendant in Arizona state court on

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December 19, 2011. The complaint asserts breach of contract and bad faith tort claims

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arising out of Plaintiff’s underinsured motorist policy. Plaintiff seeks compensatory,

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consequential, and punitive damages. Doc. 1-1.

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Defendant removed the action to this Court on April 12, 2012. Defendant asserts

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in its notice of removal that the Court has subject matter jurisdiction under 28 U.S.C.

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§ 1441 because the court has original jurisdiction under 28 U.S.C. § 1332(a). Doc. 1-3.

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II.

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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There is a “strong presumption” against removal and “[f]ederal jurisdiction must be

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rejected if there is any doubt as to the right of removal in the first instance.” Gaus v.

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

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removal jurisdiction means that the defendant always has the burden of establishing that

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removal is proper.” Id. “If at any time before final judgment it appears that the district

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court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

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III.

“The ‘strong presumption’ against

Discussion.

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The complaint in this case does not demand a specific dollar amount. “Where the

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complaint does not demand a dollar amount, the removing defendant bears the burden of

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proving by a preponderance of the evidence that the amount in controversy exceeds

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[$75,000].” Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997)

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(citing Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)); see

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Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (“Where it is not

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facially evident from the complaint that more than $75,000 is in controversy, the

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removing party must prove, by a preponderance of the evidence, that the amount in

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controversy meets the jurisdictional threshold.”). To meet its burden, Defendant “must

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provide evidence establishing that it is ‘more likely than not’ that the amount in

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controversy exceeds [$75,000].” Sanchez, 102 F.3d at 404; see Gaus, 980 F.2d at 566-

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67.

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[complaint] is silent” as to the dollar amount of damages the plaintiff seeks. Singer, 116

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F.3d at 377.

“[R]emoval ‘cannot be based simply upon conclusory allegations’ where the

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In its response to the motion to remand, Defendant correctly states that Plaintiff’s

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recovery could be as much as $100,000, the limit of his insurance policy. This number,

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however, represents the maximum recovery that Plaintiff could receive under his policy

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and not the actual amount sought. Defendant must still submit evidence that the damages

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sought by Plaintiff are likely exceed the statutory minimum for diversity jurisdiction.

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Defendant argues that Plaintiff certified in state court that this case was not subject

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to mandatory arbitration because the damages, including punitive damages but excluding

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attorney’s fees, exceeded $50,000. Defendant relies on this certification to say that the

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amount in controversy is likely to exceed $75,000. Plaintiff’s certification, however,
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only says that the damages sought will be over $50,000; it says nothing determinative

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about the likelihood that the damages will exceed $75,000.

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Defendant argues that the potential recovery of sizeable attorney’s fees, plaintiff’s

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current medical bills totaling $35,000, and damages for severe and permanent injuries

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requiring continued treatment are likely to exceed the jurisdictional minimum.

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Attorney’s fees, however, may only be included in the amount in controversy if they were

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incurred prior to the date of removal; future attorney’s fees are too speculative to be

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included. Dukes v. Twin City Fire Ins. Co., CV-09-2197-PHX-NVW 2010 WL 94109 at

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*2 (D. Ariz. Jan. 6, 2010). Defendant fails to identify any attorneys’ fees incurred to

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date.

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Defendant points to the $35,000 in medical expenses as evidence that the amount

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in controversy will likely exceed $75,000. Although it is certainly possible that the

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amount needed to pay for future medical treatment and lost wages will exceed $75,000,

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Defendant has not provided sufficient evidence to show that it more likely than not will

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exceed that amount. Speculative estimates of damages “neither overcome[] the ‘strong

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presumption’ against removal jurisdiction, nor satisf[y] [Defendant]’s 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.

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While Defendant is correct in stating that the Plaintiff neither in his motion to

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remand nor in his reply in support of the motion to remand eliminates the possibility that

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his recovery may be greater than $75,000, Plaintiff is not required to eliminate that

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possibility in order to prevail in this motion. Defendant bears the burden of showing that

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that “it is ‘more likely than not’ that the amount in controversy exceeds [$75,000].”

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Sanchez, 102 F.3d at 404. Defendant has failed to meet their burden. The Court

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accordingly will remand this matter to state court. See 28 U.S.C. § 1447(c); Valdez, 372

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F.3d at 1118 (“If the district court determines that it is sufficiently doubtful that the

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amount-in-controversy requirement has been met and thus that federal subject matter

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jurisdiction is lacking, the district court should…remand to state court.”); Matheson, 319
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F.3d at 1090 (“Where doubt regarding the right to removal exists, a case should be

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remanded to state court.”); Sanchez, 102 F.3d at 406 (directing the district court to

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remand to state court where the defendant had failed to establish the jurisdictional

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amount by a preponderance of the evidence).

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IT IS ORDERED:

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1. The motion to remand (Doc. 6) is granted.

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2. The Clerk shall remand this case to Maricopa County Superior Court.

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Dated this 20th day of June, 2012.

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