Campbell v. Hartford Life Insurance Company et al

Filing 26

ORDER signed by Judge Morrison C. England, Jr on 9/19/2011 ORDERING that Plaintiff's 6 Motion to Remand is DENIED.(Duong, D)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10
11

DOROTHY CAMPBELL,

12
13
14
15

No. 2:11-cv-01540-MCE-CMK

Plaintiff,
v.

MEMORANDUM AND ORDER

HARTFORD LIFE INSURANCE
COMPANY; and DOES 1 through
20, inclusive,

16

Defendants.

17

----oo0oo----

18
19

Plaintiff Dorothy Campbell (“Plaintiff”) originally

20

initiated this action against Defendant Hartford Life Insurance

21

Company (“Defendant”) in the Superior Court of the State of

22

California in and for the County of Modoc.

23

Defendant removed the case to this Court, and Plaintiff has since

24

filed a Motion to Remand.

25

Motion is DENIED.1

On June 7, 2011,

For the following reasons, Plaintiff’s

26
27
28

1

Because oral argument will not be of material assistance,
the Court ordered this matter submitted on the briefing. E.D.
Cal. Local Rule 230(g).
1

BACKGROUND

1
2
3

Plaintiff, a California citizen, filed suit against

4

Defendant, a Connecticut insurance corporation, in Modoc County

5

Superior Court alleging causes of action for breach of contract,

6

bad faith breach of the implied covenant of good faith and fair

7

dealing (hereafter “Bad Faith”) and violation of California’s

8

Fair Trade Practices Act, California Insurance Code § 790.03.

9

Plaintiff contends that Defendant wrongfully withheld accidental

10

death benefits owed to Plaintiff under a policy insuring the life

11

of her husband, Richard Campbell.

12

contends she timely submitted a covered claim to Defendant under

13

the above policy after her husband was killed in a car accident.

14

According to Plaintiff, however, Defendant failed to reasonably

15

and adequately investigate and evaluate her claim before denying

16

her benefits.

17

More specifically, Plaintiff

In her original Complaint, Plaintiff alleged the face value

18

of the policy was $10,000.

19

Faith claim, Plaintiff sought general damages, including, among

20

other things, damages for mental and emotional distress, in

21

excess of $25,000.

22

attorneys’ fees.

23

In addition, pursuant to her Bad

Plaintiff also sought punitive damages and

Approximately one month after Plaintiff filed her original

24

Complaint, Plaintiff filed an amendment to the Complaint to

25

correct errors made in the naming of Defendant as a party.

26

///

27

///

28

///
2

1

Defendant then timely removed the action to this Court, asserting

2

diversity jurisdiction pursuant to 28 U.S.C. § 1332, and filed a

3

Motion to Dismiss Plaintiff’s third cause of action.

4

in turn, filed a Motion to Remand.

5

filed a stipulation by which Plaintiff voluntarily dismissed the

6

challenged claim, Defendant withdrew its Motion to Dismiss, and

7

the parties agreed Plaintiff would file a Second Amended

8

Complaint (“SAC”).2

9

Plaintiff’s Motion to Remand, which remains pending before this

10

Plaintiff,

The parties subsequently

The parties’ stipulation did not affect

Court.

11

Plaintiff has since filed the operative SAC, still asserting

12

the original breach of contract and Bad Faith causes of action.

13

Her damages allegations also remain the same, with one exception:

14

Plaintiff now alleges she sustained at least $50,000 in general

15

damages pursuant to her Bad Faith claim.

16
STANDARD

17
18
19

A defendant may remove any civil action from state court to

20

federal district court if the district court has “original

21

jurisdiction” over the matter.

22

district courts have original jurisdiction over civil actions in

23

two instances:

24

///

25

///

26

///

28 U.S.C. § 1441(a).

Generally,

27
2

28

The parties apparently considered the amendments filed in
state court to have resulted in a First Amended Complaint.
3

1

(1) where there is complete diversity between the parties and the

2

amount in controversy exceeds $75,000; or (2) where a federal

3

question is presented in an action arising under the

4

Constitution, federal law, or treaty.

5

1332.

6

28 U.S.C. §§ 1331 and

Courts construe the removal statute strictly against

7

removal.

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

8

(citations omitted).

9

right of removal in the first instance, remand must be granted.

Therefore, if there is any doubt as to the

10

See id.

Furthermore, “[i]f at any time before final judgment it

11

appears that the district court lacks subject matter

12

jurisdiction, the case shall be remanded” to state court as well.

13

28 U.S.C. § 1447(c).

14
ANALYSIS

15
16
17

The parties’ only dispute in this case is whether the amount

18

in controversy alleged exceeds the jurisdictional amount.

19

Defendant bears the burden of establishing this amount.

20

v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988).

21

order to defeat a motion to remand an action removed pursuant to

22

28 U.S.C. § 1332 when, as here, the state court complaint does

23

not specify an amount of damages, the removing defendant must

24

prove by a “preponderance of the evidence” that the amount in

25

controversy requirement has been met.

26

///

27

///

28

///
4

Ethridge
In

1

Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.

2

1996) (“[T]he defendant must provide evidence establishing that

3

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

4

exceeds that amount.”); Guglielmino v. McKee Foods Corp.,

5

506 F.3d 696, 701 (9th Cir. 2007).

6

action is removed on the basis of diversity, the requisite

7

diversity must exist at the time the action is removed to federal

8

court.”

9

However, in determining whether the jurisdictional requirement

In addition, “[w]hen an

Miller v. Grgurich, 763 F.2d 372, 373 (9th Cir. 1985).

10

has been met in such cases, the court may consider evidence

11

submitted subsequent to the notice of removal, including evidence

12

submitted in conjunction with an opposition to a motion to

13

remand.

14

89 S. Ct. 1813, 23 L. Ed. 2d 396 (1969) (“[I]t is proper to treat

15

the removal petition as if it had been amended to include the

16

relevant information contained in the later-filed affidavits.”);

17

Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n.1 (9th Cir. 2002);

18

Mattel, Inc. v. Bryrant, 441 F. Supp. 2d 1081, 1093-94 (C.D. Cal.

19

2005) (Court can consider “post-removal” evidence in determining

20

the propriety of its jurisdiction.) (internal citations omitted).

21

See Willingham v. Morgan, 395 U.S. 402, 407 n.3,

“The jurisdictional minimum may be satisfied by claims for

22

special and general damages, punitive damages, and attorneys’

23

fees.”

24

(N.D. Cal. 2002).

25

single defendant, all claims can be aggregated to meet the

26

minimum jurisdictional amount.

27

///

28

///

Simmons v. PCR Technology, 209 F. Supp. 2d 1029, 1031
In an action by a single plaintiff against a

5

1

Bank of Calif. Nat’l Ass’n v. Twin Harbors Lumber Co., 465 F.2d

2

489, 491 (9th Cir. 1972); Wolde-Meskel v. Vocational Instruction

3

Project Community Services, Inc., 166 F.3d 59, 62 (2d Cir. 1999).

4

By way of her breach of contract claim, Plaintiff asserts a

5

contract amount of $10,000 and seeks damages to be determined at

6

trial.

7

originally alleged damages of at least $25,000, but has since

8

clarified that those same general damages are worth at least

9

$50,000.3

In addition, pursuant to her Bad Faith claim, Plaintiff

See Complaint, ¶ XVI; SAC, ¶ XVI.

Therefore,

10

Plaintiff herself has pled damages totaling, at a minimum,

11

$60,000.

12

the other damages claimed by Plaintiff, punitive damages and

13

attorney’s fees, exceeds $15,000, thereby satisfying the

14

jurisdictional amount in controversy.

15

The only remaining question is thus whether the sum of

Punitive damages may be considered in determining the amount

16

in controversy if they are recoverable as a matter of state law.

17

Gibson v. Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001);

18

Anthony v. Security Pac. Fin. Servs., Inc., 75 F.3d 311, 315

19

(7th Cir. 1997).

20

pursuant to breach of implied covenant claims.

In California, punitive damages are available

21
22
23
24
25
26
27
28

3

Since this Court can consider post-removal evidence in
evaluating its own jurisdiction, the Court will consider the
allegations in Plaintiff’s SAC to the extent they reflect on the
amount in controversy as it stood at the time Plaintiff’s action
was removed. The only material change between Plaintiff’s
Complaint/FAC and SAC is her omission of her third cause of
action. Plaintiff’s other causes of action remain the same.
Moreover, her new allegation that she has suffered at least
$50,000 in general damages is entirely consistent with her
original allegation that she suffered at least $25,000 in
damages. Accordingly, the Court interprets the allegations in
the SAC as an admission reflecting on the actual damages alleged
within the FAC at the time of removal.
6

1

Cal. Civ. Code § 3294.

Accordingly, this Court may consider

2

punitive damages when determining the amount in controversy.

3

Simmons, 209 F. Supp. 2d at 1033.

4

amount of unspecified punitive damages for jurisdictional

5

purposes, courts may look to verdicts in analogous cases as a

6

reasonable approximation.

7

attempts to highlight jury verdicts with substantial punitive

8

damage awards.

9

Filippo Industries, Inc. v. Sun Insurance Co., 74 Cal. App. 4th

See id.

See

When assessing the probable

To this end, Defendant

See, e.g., Notice of Removal, ¶ 16 (citing

10

1429 (1999) (jury awarded $850,000 in contract damages along with

11

$4,125,000 in tort damages for bad faith and $750,000 in punitive

12

damages)).

13

four-to-one ratio in remitting punitive damages awards, which

14

would result in an estimated $200,000 award in this case.

15

Opposition, 12:2-9 (citing State Farm Mut. Auto. Ins. Co. v.

16

Campbell, 538 U.S. 408 (2003); BMW of North America, Inc. v.

17

Gore, 517 U.S. 559 (1996)).

18

Defendant also points out that courts often apply a

Plaintiff objects to Defendant’s arguments on the basis they

19

are the result of “pure speculation.”

20

According to Plaintiff, “[t]his Defendant can no more factually

21

assert that it is more likely than not that Plaintiff’s claim

22

will result in a bad faith verdict and a punitive damage verdict

23

that exceeds $75,000 then [sic] they can reliably predict the end

24

of the world.”

25

parties’ arguments as even a minimum award of punitive damages

26

would satisfy the jurisdictional requirement.

27

///

28

///

Id., 5:16-18.

Motion, 5:15-16.

The Court need not address the

7

1

Finally, attorney’s fees may also be considered in

2

determining the amount in controversy if such fees are

3

recoverable by plaintiff, either by statute or by contract.

4

G/S v. JSS Scandinavia, 142 F.3d 1150, 1156 (9th Cir. 1998).

5

Attorney’s fees are recoverable “[w]hen an insurer’s tortious

6

conduct reasonably compels the insured to retain an attorney to

7

obtain the benefits due under a policy.”

8

Court, 37 Cal. 3d 813, 815 (1985).

9

attributable to the prosecution of Plaintiff’s breach of contract

Galt

Brandt v. Superior

Because attorney’s fees

10

cause of action are recoverable via her Bad Faith claim, such

11

fees may therefore be included in determining the amount in

12

controversy.

13

Plaintiff thus takes the position that the fees allocable to

14

her breach of contract claim will be minimal.

15

Defendant, on the other hand, argues that some portion of the

16

fees incurred most certainly will be attributed to Plaintiff’s

17

contract cause of action and that litigating this case to

18

completion, especially given Plaintiff’s hiring of two

19

experienced attorneys from two different firms, one of whom has

20

sought $400 per hour in fee recovery in similar litigation, will

21

undoubtedly lead to recoverable fees in excess of $15,000.

22

Opposition, 9:7-10:6; Sur-Reply, 2:15-23.

23

Defendant’s arguments persuasive, the Court again need not

24

address this argument as even a minimal award of attorney’s fees

25

would cause the amount in controversy to exceed the

26

jurisdictional minimum.

27

///

28

///
8

Reply, 3:16-16.

Though the Court finds

1

While an award of punitive damages and attorney’s fees alone

2

would not necessarily exceed $75,000, when viewed in combination

3

with the alleged compensatory damages totaling at least $60,000,

4

the amount in controversy clearly exceeds the jurisdictional

5

minimum.

6

met its burden of proving the jurisdictional minimum by a

7

preponderance of the evidence, and Plaintiff’s Motion to Remand

8

to state court fails.

Therefore, this Court is satisfied that Defendant has

9
CONCLUSION

10
11
12

For the reasons just stated, Plaintiff’s Motion to Remand

13

(ECF No. 6) is DENIED.

14

IT IS SO ORDERED.

15

Dated: September 19, 2011

16
17
18

_____________________________
MORRISON C. ENGLAND, JR.
UNITED STATES DISTRICT JUDGE

19
20
21
22
23
24
25
26
27
28
9