Duncan v. State Farm Mutual Automobile Insurance Company

Filing 22

ORDER signed by District Judge Kimberly J. Mueller on 11/20/2019 DENYING 8 Motion to Remand. (Huang, H)

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federal question or (2) there is diversity of citizenship between the parties and the amount in

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controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 1332(a).

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The amount in controversy is an “estimate of the total amount in dispute.” Lewis

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v. Verizon Communications, Inc., 627 F.3d 395, 400 (9th Cir. 2010) (citation omitted). In this

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circuit, when the amount of damages is unspecified, the removing party must show by a

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preponderance of the evidence that the amount in controversy exceeds the jurisdictional

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threshold. Id. at 397; Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)

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(“Under this burden, the defendant must provide evidence establishing that it is ‘more likely than

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not’ that the amount in controversy exceeds [the jurisdictional amount].”). To determine if the

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amount in controversy is met, the district court considers the complaint, allegations in the

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removal petition, and “summary-judgment-type evidence relevant to the amount in controversy,”

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Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th Cir. 2005) (citation omitted); see also Fritsch

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v. Swift Transportation Co. of Arizona, LLC, 899 F.3d 785, 788 (9th Cir. 2018) (clarifying

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amount in controversy not limited to amount at time of removal, at least with respect to future

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attorneys’ fees), as well as evidence filed in opposition to the motion to remand, Lenau v. Bank of

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Am., N.A., 131 F. Supp. 3d 1003, 1005 (E.D. Cal. 2015) (citing Cohn v. Petsmart, Inc., 281 F.3d

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837, 840 n.1 (9th Cir. 2002) (per curiam)). Ultimately, “[w]here doubt regarding the right to

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removal exists, a case should be remanded to state court.” Matheson v. Progressive Specialty Ins.

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Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (citation omitted).

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II.

DISCUSSION

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Plaintiff, Raven Duncan, does not specify an amount of damages in her complaint.

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Compl, ECF No. 1, at 12. Therefore, defendant must show it is more likely than not that the total

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amount in dispute exceeds $75,000.

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In the complaint, plaintiff alleges defendant breached the parties’ contract and the

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covenant of good faith and fair dealing when it denied plaintiff’s insurance claim after her vehicle

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was stolen. Id. ¶¶ 18–37. Plaintiff alleges the value of her vehicle was $33,000. Id. ¶ 21. In

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addition to compensatory damages, plaintiff asks for punitive damages, emotional and mental

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distress damages, and attorneys’ fees. Id. at 12.
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A.

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Punitive Damages
Defendant argues plaintiff’s claim for emotional distress and punitive damages

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causes the amount in controversy to exceed $75,000. ECF No. 14 at 6. Punitive damages may be

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considered in amount in controversy calculations if they are recoverable under state law. Gibson

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v. Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001) (citing, inter alia, Bell v. Preferred Life

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Assur. Society, 320 U.S. 238, 240 (1943)). In California, punitive damages are recoverable for

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implied breach of covenant claims, such as plaintiff’s second claim for violation of the covenant

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of good faith and fair dealing. Campbell v. Hartford Life Ins. Co., 825 F. Supp. 2d 1005, 1008

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(E.D. Cal. 2011) (citing Cal. Civ. Code § 3294).

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“When assessing the probable amount of unspecified punitive damages for

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

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approximation.” Id. (citing Simmons v. PCR Technology, 209 F. Supp. 2d 1029, 1033 (N.D. Cal.

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2002)). Defendant has identified only one similar case decided by a district court in the Ninth

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Circuit in which plaintiff’s breach of contract damages were relatively small, and a jury awarded

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punitive damages in excess of the jurisdictional minimum. Opp’n at 9–10 (citing, inter alia,

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McCoy v. Progressive West Insurance Company, 2007 WL 2068578 (Mar. 29, 2007) (jury

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awarded $17,175 on breach of contract and $100,000 in punitive damages)). The other cases

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defendant cites either do not involve punitive damages or do not contain enough information to

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determine what portion of the judgment was for punitive damages specifically. See Ellingson

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Decl., Ex. 2–7. Moreover, defendant has not articulated why the “particular facts that are alleged

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in the instant case might warrant extraordinary damages.” Scalzo v. Allied Prop. & Cas. Ins. Co.,

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No. 1:11-CV-00612 LJO, 2011 WL 2709001, at *3 (E.D. Cal. July 11, 2011) (emphasis in

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original) (citation omitted), report and recommendation adopted, 2011 WL 3418806 (E.D. Cal.

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July 27, 2011). The record here is insufficient for the court to find that the amount in controversy

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is met by a preponderance of the evidence based on punitive damages.

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B.

Emotional Distress Damages
To establish the requisite amount in controversy through emotional distress

damages, the defendant bears the same burden as above for punitive damages. Cain v. Hartford
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Life & Acc. Ins. Co., 890 F. Supp. 2d 1246, 1250 (2012) (defendant may show emotional distress

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damages will satisfy jurisdictional threshold by preponderance of evidence by analogizing to

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verdicts in other similar cases). When sufficiently analogous to the case at hand, “settlements and

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jury verdicts in similar cases can provide evidence of the amount in controversy.” Mireles v.

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Wells Fargo Bank, N.A., 845 F. Supp. 2d 1034, 1055 (C.D. Cal. 2012) (citations omitted).

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Of the cases defendant cites, two involve jury awards in which emotional distress

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damages were independently quantified. Opp’n at 9–10 (citing White v. Geico Indemnity Co., 13

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Trials Digest 17th 17, 2014 WL 1394317 (Cal. Super. Ct. Mar. 18, 2014); Martinez v. Mercury

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Ins. Co., 30 Trials Digest 17th 28, 2014 WL 3845738 (Cal. Super. Ct., June 16, 2014)). One of

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those awards was overturned on appeal, Martinez v. Mercury Ins. Co., No. B261003, 2016 WL

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4446576, at *6–7 (Cal. Ct. App., Aug. 24, 2016) (unpublished) (reversing award of $600,000 for

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emotional distress damages). The court looks to the remaining case, White, as well as an additional

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case defendant cites in which plaintiff’s claim for the value of his 2001 Dodge Ram pickup truck and

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emotional distress damages was settled for $190,000. Cortez vs. Farmers Insurance Exchange, 15

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Trials Digest 10th 8, 2007 WL 968427, at *1–2 (Cal. Super. Ct. Jan. 3, 2007); see also White v. Geico

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Indemnity Co., 2014 WL 1394317, at *1–2 (Cal. Super. Ct. Mar. 18, 2014) ($326,000 in emotional

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distress damages awarded where plaintiff’s small claim for vehicle damage wrongfully denied and

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plaintiff sought treatment for emotional distress). These cases, in which defendants denied insurance

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claims for vehicle-related loss based on the allegedly erroneous conclusion plaintiff made material

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misrepresentations, are adequately analogous to the case at hand to signal that emotional distress

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damages are likely to exceed $42,000 if plaintiff is successful here. See Cain v. Hartford Life & Acc.

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Ins. Co., 890 F. Supp. 2d 1246, 1250 (C.D. Cal. 2012) (finding three somewhat analogous cases

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showing emotional distress damages sufficient to meet preponderance of the evidence standard for

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amount in controversy). Accordingly, defendant has shown by a preponderance of the evidence that

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the amount in controversy exceeds $75,000, including $33,000 for compensatory damages and more

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than $42,000 for emotional distress damages.

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C.

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Attorneys’ Fees
Because the court has determined the amount in controversy meets the

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jurisdictional minimum on the basis of plaintiff’s potential emotional distress damages, the court

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need not reach the question whether plaintiff’s prospective attorney’s fees would also be

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sufficient.

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III.

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JUDICIAL ADMISSION
Defendant also argues the court should deny the motion to remand, because

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plaintiff signed the Joint Status Report, which stated the amount in controversy is over $75,000.

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Mot. at 1; JSR, ECF No. 3, at 3, 5. The court also need not reach this issue, because it denies the

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motion to remand for the reasons stated above.

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IV.

CONCLUSION

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The motion to remand is DENIED. This order resolves ECF No. 8.

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IT IS SO ORDERED.

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DATED: November 20, 2019.

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UNITED STATES DISTRICT JUDGE

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