Linnell v. Allstate Insurance Company et al

Filing 17

ORDER, Plaintiff's motion to remand 8 is granted; the Clerk shall remand this action to state court. Signed by Judge David G Campbell on 3/5/15.(REW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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John Anders Linnell,
Plaintiff,

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No. CV15-0051 PHX DGC
ORDER

v.
Allstate Insurance Company, an Illinois
corporation,

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Defendant.

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Plaintiff has filed a motion to remand this case to state court. Doc. 8. At the Case

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Management Conference held on March 5, 2015, the Court addressed the motion with the

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parties. The Court concludes that federal subject matter jurisdiction is lacking and that

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the case must be remanded to state court.

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I.

Background.

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Plaintiffs filed a complaint against Defendant in Arizona state court.

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complaint asserts claims for breach of contract and bad faith arising out of property

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damage caused by a windstorm. Plaintiffs seek compensatory damages, consequential

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damages, and attorneys’ fees. Doc. 1-2 at 14.

The

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Defendant removed the action to this Court. Defendant asserts in its notice of

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removal that the Court has subject matter jurisdiction under 28 U.S.C. § 1332 because the

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parties are diverse and the matter in controversy exceeds $75,000. Doc. 1.

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II.

Removal and Remand Standards.

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Pursuant to the removal statute, any civil action brought in state court over which

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the federal district courts have original jurisdiction may be removed to the federal district

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court for the district where the action is pending. 28 U.S.C. § 1441(a). Courts strictly

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construe the statute against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566

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(9th Cir. 1992). Indeed, there is a “strong presumption” against removal and “[f]ederal

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jurisdiction must be rejected if there is any doubt as to the right of removal in the first

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instance.” Id. “The ‘strong presumption’ against removal jurisdiction means that the

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defendant always has the burden of establishing that removal is proper.” Id.

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III.

Discussion.
The complaint identifies two dollar amounts – $50,216.40 in replacement cost

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benefits and $38,133.40 in cash value benefits.

The parties confirmed at the Case

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Management Conference that these amounts are mutually exclusive. An insured may

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obtain either replacement cost or cash value benefits under the policy, but not both. As a

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result, the largest amount of damages identified in the complaint is $50,216.40.

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Defendant “bears the burden of establishing, by a preponderance of the evidence,

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that the amount in controversy exceeds [$75,000].” Sanchez v. Monumental Life Ins. Co.,

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102 F.3d 398, 404 (9th Cir. 1996); see Matheson v. Progressive Specialty Ins. Co., 319

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F.3d 1089, 1090 (9th Cir. 2003). To meet its burden, Defendant “must provide evidence

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establishing that it is ‘more likely than not’ that the amount in controversy exceeds

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[$75,000].” Id.; see Gaus, 980 F.2d at 566-67 (“If 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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Defendant argues that compensatory damages and attorneys’ fees, when added to

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the $50,216.40 identified in the complaint, could exceed $75,000. Such a possibility

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“neither overcomes the ‘strong presumption’ against removal jurisdiction, nor satisfies

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[Defendant’s] burden of setting forth . . . the underlying facts supporting its assertion that

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the amount in controversy exceeds [$75,000].” Gaus, 980 F.2d at 567 (emphasis in
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original); see also Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 375 (9th Cir.

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1997) (“removal ‘cannot be based simply upon conclusory allegations’ where the

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[complaint] is silent” as to the amount of damages) (citation omitted); Valdez v. Allstate

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Ins. Co., 372 F.3d 1115, 1116-17 (9th Cir. 2004) (removal cannot be based upon mere

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“information and belief” that the amount in controversy exceeds $75,000); see also

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Haisch v. Allstate Ins. Co., 942 F. Supp. 1245, 1249 (D. Ariz. 1996) (“It would be

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inherently speculative for this Court to conclude that the amount in controversy

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requirement can be met by simply asserting that large punitive damages have been

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awarded in the past against insurance companies.”).

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Because the amount-in-controversy requirement has not been met in this case,

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federal subject matter jurisdiction is lacking. The Court accordingly will remand this

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

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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 (district court should remand to state court where the defendant

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has failed to establish the jurisdictional amount by a preponderance of the evidence).

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Both parties seek attorneys’ fees for this motion. The Court finds both parties’
positions to have been taken in good faith, and therefore will not award fees.

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IT IS ORDERED:

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1.

Plaintiff’s motion to remand (Doc. 8) is granted.

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2.

The Clerk shall remand this action to state court.

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Dated this 5th day of March, 2015.

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