Rebecca Pontiero v. GEICO General Insurance Company et al
MINUTES (IN CHAMBERS) by Judge Jesus G. Bernal DENYING Plaintiff's 10 MOTION to Remand: (see document image for specifics). IT IS SO ORDERED. (ad)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
EDCV 17-1125 JGB (DTBx)
Date August 14, 2017
Title Rebecca Pontiero v. Geico General Insurance Company, et al.
Present: The Honorable
JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE
Attorney(s) Present for Plaintiff(s):
Attorney(s) Present for Defendant(s):
Order: DENYING Plaintiff’s Motion to Remand (Dkt. No. 10)
Before the Court is Plaintiff’s Motion to Remand. (Dkt. No. 10.) This matter is appropriate
for resolution without a hearing. See Fed. R. Civ. P. 78; L.R. 7-15. After considering all papers
timely filed in support of, and in opposition to the Motion, the Court DENIES Plaintiff’s Motion
A. Procedural History
On December 8, 2016, Rebecca Pontiero (“Plaintiff”) filed a complaint for damages in the
Superior Court for the County of Los Angeles against Geico General Insurance Company
(“Geico” or “Defendant”) and Does one through 100, alleging breach of contract and breach of
the implied covenant of good faith and fair dealing. (“Complaint,” Dkt. No. 1, Ex. A.)
Plaintiff’s claims arise from Geico’s alleged failure to promptly pay policy benefits under an
automobile underinsured motorist policy. (Id. at ¶ 1.) Plaintiff was involved in a motor vehicle
accident during which she sustained severe injuries, and the value of her claims for those injuries
exceeded the negligent driver’s policy limit of $15,000. (Id.) Plaintiff ultimately prevailed in
arbitration, but alleges that Geico’s delay in providing policy benefits caused her to incur costs
attendant to litigation. (Id. at ¶ 2.) As such, Plaintiff seeks compensatory and punitive damages
“for Geico’s bad faith conduct in adjusting and handling Plaintiff’s claim, and prejudicing
Plaintiff in her effort to recover for damages as a result of the collision.” (Id. at ¶ 3.)
On June 8, 2017, Geico filed a notice of removal, to which it attached seven exhibits and the
Declaration of Suzanne Y. Badawi in support. (Dkt. No. 1; Exs. A through 6, Dkt. Nos. 1-1
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through 1-7; Badawi Decl., Dkt. No. 1-8.) On July 12, 2017, Plaintiff filed a Motion to Remand.
(“Motion,” Dkt. No. 10.) In support of her Motion, Plaintiff attached the following exhibits:
Exhibit A: complaint filed in the Superior Court for the County of Los Angeles on
December 8, 2016, Case No. BC 643312 (Id. at 15);
Exhibit B: proof of service dated December 16, 2016 (id. at 27);
Exhibit C: email correspondence between counsel for Plaintiff, Lauri L. Brenner, and
counsel for Defendant, Susan Y. Badawi (id. at 29);
Exhibit D: email from Ms. Badawi to Ms. Brenner on April 5, 2017 (id. at 31); and
Exhibit E: meet and confer letter from Ms. Brenner to Ms. Badawi regarding Plaintiff’s
Motion dated June 29, 2017 (id. at 33.)
Geico opposed Plaintiff’s Motion on July 24, 2017, attaching the Declaration of Suzanne Y.
Badawi, and Geico’s February 27, 2017 request for a statement of damages. (“Opposition,” Dkt.
No. 12; Badawi Opp. Decl., Dkt. No. 12-1.) On July 31, 2017, Plaintiff filed her Reply. (“Reply,”
Dkt. No. 13.)
B. Plaintiff’s Motion
Plaintiff moves to remand the matter to state court because Geico’s removal was untimely
under 28 U.S.C. section 1446(b). (Motion at 2.) To this end, Plaintiff argues that the facts
alleged in the Complaint allowed Geico to ascertain that the amount in controversy exceeded
$75,000. (Id.) Also, Plaintiff asserts that even if Geico could not ascertain the amount in
controversy from the face of the Complaint, as of March 31, 2017, when counsel for both parties
discussed punitive damages, Geico had notice that the jurisdictional minimum had been met.
(Id.) Plaintiff therefore maintains that Geico’s June 8, 2017 removal falls outside the 30-day
period for removal under Section 1446(b). (Id.) Geico counters that it is not evident from the
face of the Complaint that the amount in controversy exceeds $75,000. (Opposition at 7.) In so
doing, Geico contends that contrary to Plaintiff’s assertion, it could not have removed based on
the arbitration award of “$285,000” because the Complaint provides no basis to assume that she
had a 33-40% contingency fee agreement with her attorney. (Id. at 14.) For that reason, Geico
argues that its notice of removal was timely because it was not until May 16, 2017, when Plaintiff
submitted her interrogatory responses claiming over $118,000 in damages, that the 30-day
removal period was triggered. (Id. at 15-16; Badawi Opp. Decl. ¶ 11.)
A. Legal Standard
Federal courts are courts of limited jurisdiction, possessing only that power authorized by
Constitution and statute. Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013). As such, federal courts
only have original jurisdiction over civil actions in which a federal question exists or in which
there is complete diversity of citizenship between the parties and the amount in controversy
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exceeds $75,000. See 28 U.S.C. §§ 1331, 1332.1 “Complete diversity” means that “each
defendant must be a citizen of a different state from each plaintiff.” In re Digimarc Corp.
Derivative Litigation, 549 F.3d 1223, 1234 (9th Cir. 2008). Geico removed on the basis of
diversity jurisdiction under 28 U.S.C. section 1441. (Dkt. No. 1.) The parties do not dispute the
existence of complete diversity. At issue here is whether Geico’s notice of removal was timely.
To remove a state action to federal court, the defendant must file a notice of removal with
both the state court where the case was filed and the federal court to which it will be transferred.
28 U.S.C. § 1441. The notice of removal must be filed within 30 days of the first removable
document, and the case must be removed to the federal district court that encompasses the state
court where the action was initiated. Id. If the case stated by the initial pleading is not
removable, a notice of removal may be filed within 30 days after the case becomes removable.
28 U.S.C. § 1446(b)(3). This 30–day limit begins to run when the defendant receives “an
amended pleading, motion, order or other paper from which it may first be ascertained that the
case is one which is or has become removable.” Id.
The party seeking removal has the burden of establishing federal jurisdiction. Emrich v
Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988). “Where 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.” Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).
Moreover, the Ninth Circuit “strictly construe[s] the removal statute against removal
jurisdiction,” and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of
removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); see also
Jackson v. Specialized Loan Servicing, LLC, No. CV 14-05981 MMM PLAX, 2014 WL 5514142,
(a) The district courts shall have original jurisdiction of all civil actions where the matter
in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is
between-(1) citizens of different States;
(2) citizens of a State and citizens or subjects of a foreign state, except that the district
courts shall not have original jurisdiction under this subsection of an action between
citizens of a State and citizens or subjects of a foreign state who are lawfully admitted for
permanent residence in the United States and are domiciled in the same State;
(3) citizens of different States and in which citizens or subjects of a foreign state are
additional parties; and
(4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a
State or of different States.
28 U.S.C. § 1332.
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at *6 (C.D. Cal. Oct. 31, 2014). Indeed, doubts as to removability must be resolved in favor of
remanding the case to state court. Id. at *6. To determine whether Geico’s notice of removal
was timely, the Court must determine when the case was first removable.
1. 28 U.S.C. § 1446(b)(1)
Plaintiff argues that Geico knew, “at the outset, that the amount in controversy exceeded the
jurisdictional minimum” because her Prayer for Relief “included compensatory damages,
general damages, attorney’s fees, and punitive damages.” (Reply at 3.) As discussed, Geico
claims that Plaintiff’s Complaint could not have triggered the first 30-day window for removal
because it “does not on its face affirmatively quantify Plaintiff’s damages claim.” (Opp. at 10.) In
that vein, Geico asserts that “a complaint that merely alleges indeterminate amounts of punitive
damages, emotional distress damages, and attorneys’ fees, does not give rise to a right of
removal.” (Opp. at 12.) Under these circumstances, the Court agrees. The Court finds that the
30-day removal period could not have been triggered by Plaintiff’s Complaint, which fails to
allege any facts from which to deduce the amount of damages Plaintiff seeks. While the
calculation of the amount in controversy takes into account claims for general damages, special
damages, punitive damages, and attorney’s fees recoverable by statute or contract, these figures
must be reasonably ascertainable from the allegations for the Complaint to trigger the first 30-day
period for removal. Rodriguez v. Boeing Co., No. CV 14-04265-RSWL, 2014 WL 3818108, at *4
(C.D. Cal. Aug. 1, 2014). In other words, “notice of removability under § 1446(b) [must be]
determined through the four corners of the applicable pleadings.” Harris v. Bankers Life & Cas.
Co., 425 F.3d 689, 694 (9th Cir. 2005).
In Harris v. Bankers Life & Casualty Co., the Ninth Circuit considered when the thirty-day
removal clock was triggered where “it is unclear from the complaint whether the case is
removable.” Id. at 692-93. The Court rejected the notion that a defendant has a duty to
investigate a basis for removal when the pleading does not disclose one on its face. Id. Relevant
here, the Court also rejected the proposition that the defendant’s subjective knowledge or a
“clue” in the complaint might trigger the thirty-day clock. Id.
The potential damages for Plaintiff’s breach of contract and insurer bad faith claims are not
apparent from the face of the Complaint. Plaintiff seeks compensatory damages for the
attorney’s fees she expended due to Geico’s “fail[ure] to fully pay monies under the contract, by
unreasonably and unnecessarily causing a delay in paying the monies under the contract and by
forcing Plaintiff to submit to arbitration in an effort to recover the monies under the contract”
and punitive damages under California Civil Code section 3294. (Complaint at ¶33.) Plaintiff
alleges she ultimately recovered $266,697 in the underlying underinsured motorist arbitration.
(Id. at ¶ 13.) The Court cannot discern from these allegations alone whether the amount in
controversy exceeds $75,000.
As Geico notes, the Complaint does not indicate that the attorney hired to represent Plaintiff
in the underlying arbitration was retained on a contingency basis, and a defendant need not
investigate facts outside the pleadings and litigation papers to determine removability. Babasa v.
Lenscrafters, Inc., 498 F.3d 972, 975 (9th Cir. 2007). This does not mean, however, as Plaintiff
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points out, that Geico can avoid making simple calculations using objective facts contained within
those pleadings and papers to ascertain the amount in controversy. Garcia v. Wal-Mart Stores
Inc., 207 F. Supp. 3d 1114, 1130 (C.D. Cal. 2016). Under some circumstances, courts have found
that a complaint may trigger the 30-day period for removal even in the absence of specifically
pled damages. Rodriguez v. Boeing Co., No. CV 14-04265-RSWL, 2014 WL 3818108, at *5
(C.D. Cal. Aug. 1, 2014)(“In light of litigation realities, in a case in which a long-term employee,
such as Plaintiff, seeks lost income, damages for emotional pain and suffering, punitive damages,
and attorney’s fees, the amount in controversy is likely to exceed $75,000.”). In such cases, the
defendant typically has sufficient objective facts on which to estimate plaintiff’s damages, such
as, plaintiff’s wages, statutory penalties, or specific contract damages. That is not the case here.
There are simply insufficient factual allegations in the initial pleading to permit any damages
calculation to be made. The Court will not read a “standard contingency rate” into the
Complaint where objective facts suggesting the existence of such an agreement have not been
alleged and are otherwise completely absent. Cf. Durham v. Lockheed Martin Corp., 445 F.3d
1247, 1251 (9th Cir. 2006)(stating that a defendant is not required to speculate facts that support
removal jurisdiction). Thus, there is no apparent basis to “reasonably  assume that Plaintiff
incurred at minimum $80,000.00 in attorney’s fees  in the underlying litigation.” (Motion at
Plaintiff’s prayer for punitive damages similarly fails to put Geico on notice that the
jurisdictional minimum had been met as of December 16, 2016. While Plaintiff relies on Conrad
Assocs. v. Hartford Acc. & Indem. Co., 944 F. Supp. 1196 (N.D. Cal. 1998), to argue that
punitive damages may be properly considered when evaluating whether the jurisdictional
minimum has been met, Conrad actually illustrates why merely including punitive damages in the
prayer for relief does not establish that Plaintiff’s damages are likely to exceed $75,000:
The court has not been presented with any facts that would support an award of punitive
damages in this case. Defendant’s burden cannot be met simply by pointing out that the
complaint seeks punitive damages and that any damages awarded under such a claim could
total a large sum of money, particularly in light of the high burden that must be met in
order for a plaintiff even to be eligible for receipt of discretionary punitive damages.
994 F. Supp. at 1201. Given the high burden required for exemplary relief, merely alleging that
Geico acted intentionally and has deep pockets does not provide sufficient information to infer
that punitive damages “alone would be a significant amount far in excess of $75,000.00.” (Reply
at 5.). See Ozolins v. United Parcel Serv., Inc., No. CV0808086DDPRZX, 2009 WL 10671971,
at *6 (C.D. Cal. Mar. 9, 2009)(“Harris found that a defendant had no duty to investigate whether
there could possibly be a basis for removal when the pleading does not disclose one.”).
Further, Plaintiff’s counsel’s prior success in obtaining large punitive damages awards against
Geico bears little on whether Geico’s removal was timely. If this consideration were relevant to
the analysis, then the right to remove could be automatically triggered for insurer bad faith claims
whenever punitive damages are sought against Geico by Plaintiff’s counsel. This approach is
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inconsistent with the strict construction against removal commanded by the removal statute as
well as the bright-line rule envisioned by Harris. Harris, 425 F.3d at 697 (“[O]bjective analysis of
the pleadings brings certainty and predictability to the process and avoids gamesmanship in
pleading.”); see also Gaus, 980 F.2d at 566. In short, the information pertaining to damages
alleged within the Complaint is insufficient to trigger the removal clock.
2. 28 U.S.C. § 1446(b)(3)
Plaintiff argues that a March 31, 2017 phone conversation between counsel for both parties
regarding punitive damages together with the prayer for punitive damages contained in her
Complaint were sufficient to place Geico on notice of the case’s removability. (See, e.g., Reply at
5)(“It was clear in that conversation and by the Complaint filed that Plaintiff was seeking
damages far in excess of $75,000.”). The phone conversation between counsel for Plaintiff and
counsel for Geico could not trigger the 30-day period for removal because an oral statement is not
an “other paper” indicating that the case is removable. See Riggs v. Cont. Baking Co., 678 F.
Supp. 236, 238 (N.D. Cal. 1988) (“The elements of removability must be specifically indicated in
official papers before the statutory period begins to run”)(emphasis added); Molina v. Lexmark
Intern., Inc., No. CV 08-04796 MMM (FMx), 2008 WL 4447678, *17 (C.D Cal. Sep. 30,
2008)(holding that oral settlement offers do not trigger the 30-day period for removal as “[s]uch
inquiry might easily devolve into the type of ‘collateral litigation’ over defendant’s subjective
knowledge that the Harris court sought to avoid.”)(citing Harris, 425 F.3d at 697)). In short, the
March 31, 2017 phone call between Ms. Brenner and Ms. Badawi did not trigger the second 30day period for removal under 28 U.S.C. § 1446(b)(3).
3. Propriety of Removal
On May 16, 2017, Plaintiff served written responses to Geico’s first set of special
interrogatories, representing that she incurred $90,000.00 in attorney’s fees and $28,000.00 in
costs. (Dkt. No. 1-6, 13; Badawi Opp. Decl. ¶ 11.) Written discovery responses may constitute
“other paper” under 28 U.S.C. section 1446(b). DeJohn v. AT & T Corp., No. CV 10–07107,
2011 WL 9105, at *2 (C.D. Cal. Jan.3, 2011) (“[A]ll ‘formal discovery,’ including a ‘deposition,
interrogatory, or request for admission’ meets the definition of ‘other paper’ ”). The Court is
persuaded that this is the first “paper” from which removability could have been ascertained to
trigger the 30-day period for removal. Geico’s removal on June 8, 2017 was within 30 days of
May 16, 2017, and therefore timely under 28 U.S.C. section 1446(b)(3). Accordingly, the Court
DENIES Plaintiff’s Motion to Remand.
Based on the foregoing, the Court DENIES Plaintiff’s Motion to Remand.
IT IS SO ORDERED.
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