Navarro et al v. American Family Mutual Insurance Company et al

Filing 18

ORDER granting 11 Motion to Remand to State Court. This case is remanded to Maricopa County Superior Court. Signed by Judge David G Campbell on 7/17/17. (Attachments: # 1 Remand Letter)(DXD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Thomas Navarro, et al.,
Plaintiffs,

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ORDER

v.

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No. CV17-1609-PHX-DGC

American Family Mutual Insurance
Company, et al.,

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Defendants.

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Defendant American Family removed this case on the basis of diversity

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jurisdiction. At the case management conference on July 14, 2017, the Court discussed

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the basis for its jurisdiction with the parties. Plaintiffs explained that although the

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appraised loss amount in this case was about $30,000, all but about $7,000 had been paid

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by Defendant before removal, and Plaintiffs have made a settlement demand for a

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remaining $45,000. Thus, in Plaintiffs’ view, the amount in controversy is well below

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$75,000. Defendant believes the value of the case exceeds $75,000, apparently because

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Plaintiffs make claims for punitive damages and attorneys’ fees.

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For a federal court to exercise removal jurisdiction under 28 U.S.C. § 1446, the

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amount in controversy must “exceed[] the sum or value of $75,000, exclusive of interest

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and costs.” 28 U.S.C. § 1332(a). Courts “strictly construe the removal statute against

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removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “The

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strong presumption against removal jurisdiction means that the defendant always has the

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burden of establishing that removal is proper.” Id.

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When a state court complaint does not clearly plead the requisite amount in

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controversy and the plaintiff contests the amount, the removing defendant “must provide

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evidence establishing that it is more likely than not that the amount in controversy

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exceeds [$75,000].” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.

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1996) (quotation marks omitted). A defendant cannot establish removal jurisdiction by

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speculation and conjecture. Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir.

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2015).

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The mere possibility of a punitive damages award is insufficient to prove that the

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amount in controversy requirement has been met. Burk v. Med. Sav. Ins. Co., 348 F.

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Supp. 2d 1063, 1069 (D. Ariz. 2004). Plaintiffs’ complaint does not specify an amount of

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punitive damages sought, and Plaintiffs’ counsel asserts that he has made an overall

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settlement demand of $45,000. The Court concludes that the claim for punitive damages

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does not satisfy the amount in controversy requirement.

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Attorneys’ fees are part of the amount in controversy “if authorized by statute or
contract,” Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th Cir. 2005), but Defendant
can only speculate as to the ultimate amount of recoverable attorneys’ fees in this case,
and such speculation cannot establish the jurisdiction of this Court. See Ibarra, 775 F.3d
at 1197.
IT IS ORDERED that this case is remanded to Maricopa County Superior Court.
Dated this 17th day of July, 2017.

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