Mirasol Homeowners Association v. Travelers Property Casualty Company of America et al

Filing 4

ORDER DISMISSING CASE and Remanding to State Court. Signed by Judge M. James Lorenz on 8/24/2009. (Certified copy sent to Superior Court)(mjj)(kaj).

1 2 3 4 5 6 7 8 9 10 11 MIRASOL HOMEOWNER'S ASSOCIATION, 12 Plaintiff, 13 v. 14 TRAVELERS PROPERTY CASUALTY 15 COMPANY OF AMERICA, 16 17 18 Defendant. ) ) ) ) ) ) ) ) ) ) ) ) UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA Civil No. 09cv1823-L(CAB) ORDER REMANDING ACTION TO STATE COURT

Defendant Travelers Property Casualty Company of America removed this insurance bad

19 faith and breach of contract action from State court. Its notice of removal is based on diversity 20 jurisdiction pursuant to 28 U.S.C. §§ 1332 and 1441. For the reasons which follow, the action is 21 REMANDED. 22 "Federal courts are courts of limited jurisdiction. They possess only that power

23 authorized by Constitution or a statute, which is not to be expanded by judicial decree. It is to be 24 presumed that a cause lies outside this limited jurisdiction and the burden of establishing the 25 contrary rests upon the party asserting jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 26 511 U.S. 375, 377 (1994). "Except as otherwise expressly provided by Act of Congress, any 27 civil action brought in a State court of which the district courts of the United States have original 28 jurisdiction, may be removed by the defendant or the defendants, to the district court of the
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1 United States for the district and division embracing the place where such action is pending." 28 2 U.S.C. §1441(a). Original jurisdiction exists in cases of complete diversity, where each of the 3 plaintiffs is a citizen of a different state than each of the defendants, and the amount in 4 controversy exceeds $ 75,000. 28 U.S.C. §1332; Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 5 (1996). 6 Consistent with the limited jurisdiction of federal courts, the removal statute is strictly

7 construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); 8 see also Sygenta Crop Prot. v. Henson, 537 U.S. 28, 32 (2002); O'Halloran v. University of 9 Wash., 856 F.2d 1375, 1380 (9th Cir. 1988). "Federal jurisdiction must be rejected if there is 10 any doubt as to the right of removal in the first instance." Gaus, 980 F.2d at 566. "The strong 11 presumption against removal jurisdiction means that the defendant always has the burden of 12 establishing that removal is proper." Id.; see also Nishimoto v. Federman-Bachrach & Assoc., 13 903 F.2d 709, 712 n.3 (9th Cir. 1990); O'Halloran, 856 F.2d at 1380; Rockwell Int'l Credit 14 Corp. v. U.S. Aircraft Ins. Group, 823 F.2d 302, 304 (9th Cir. 1987), overruled on other 15 grounds, Partington v. Gedan, 923 F.2d 686 (9th Cir. 1991). "The traditional rule of burden 16 allocation in determining removal jurisdiction was meant to comport with what the Supreme 17 Court has termed `[t]he dominant note in the successive enactments of Congress relating to 18 diversity jurisdiction,' that is, `jealous restriction, of avoiding offense to state sensitiveness, and 19 of relieving the federal courts of the overwhelming burden of business that intrinsically belongs 20 to the state courts in order to keep them free for their distinctive federal business.'" Abrego 21 Abrego v. The Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006) quoting Indianapolis v. Chase 22 Nat'l Bank, 314 U.S. 63, 76 (1941). 23 The complaint does not allege damages in excess of $75,000. Plaintiff alleged that it

24 suffered fire damage and submitted a claim for $158,280. (Compl. at 3.) Defendant chose a 25 different contractor and paid $124,000 to repair the damage. (Id.) Plaintiff claims that the 26 contractor chosen by Defendant did not adequately perform its job. (Id. at 3-4.) As a result 27 Plaintiff incurred "in excess of $70,000" in construction management fees. (Id. at 4.) Plaintiff 28 / / / / /
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1 seeks to recover the construction management fees and unspecified other damages. In the notice 2 of removal, Defendant argues that damages will exceed $75,000. 3 To determine whether the amount in controversy has been met on removal, "[t]he district

4 court may consider whether it is `facially apparent' from the complaint that the jurisdictional 5 amount is in controversy." Abrego Abrego, 443 F.3d at 690, quoting Singer v. State Farm Mut. 6 Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997). Based on the allegations in the complaint, this 7 is not "facially apparent." See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004) 8 (when the complaint falls short of seeking the threshold amount, it is not facially apparent that 9 the amount in controversy requirement has been met.) 10 When the plaintiff alleges damages in an amount less than the jurisdictional amount, "a

11 defendant will be able to remove the case to federal court by showing a legal certainty that the 12 amount in controversy exceeds the statutory minimum." Lowdermilk v. U.S. Bank Nat'l Assoc., 13 479 F.3d 994, 999 (9th Cir. 2007). Defendant's argument in its notice of removal, unsupported 14 by any evidence, falls short of this standard. 15 In the alternative, the complaint can be interpreted as not stating a specific amount of

16 damages because Plaintiff requests $70,000 plus unspecified other damages. When a plaintiff 17 does not specify the amount of damages, the court looks beyond the complaint to determine 18 whether the suit meets the jurisdictional requirement. Lowdermilk, 479 F.3d at 998 & n. 4; 19 Abrego Abrego, 443 F.3d at 690. In such cases, "the defendant seeking removal must prove by a 20 preponderance of the evidence that the amount in controversy requirement has been met." 21 Lowdermilk, 479 F.3d at 998; Abrego Abrego, 443 F.3d at 683. "Under this burden, the 22 defendant must provide evidence that it is more likely than not that the amount in controversy 23 satisfies the federal diversity jurisdictional amount requirement." Sanchez v. Monumental Life 24 Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). Defendant's argument is unsupported by any 25 evidence and therefore "neither overcomes the `strong presumption' against removal 26 jurisdiction, nor satisfies [the] burden of setting forth, in the removal petition itself, the 27 underlying facts supporting the assertion that the amount in controversy exceeds [the 28 jurisdictional requirement]." Id. (quotation marks omitted, emphasis in original).
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Defendant has failed to meet its burden of establishing removal jurisdiction. "If at any

2 time before final judgment it appears that the district court lacks subject matter jurisdiction, the 3 case shall be remanded." 28 U.S.C. § 1447(c). Accordingly, this action is REMANDED to the 4 Superior Court of the State of California for the County of San Diego. 5 6 7 DATED: August 24, 2009 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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IT IS SO ORDERED.

M. James Lorenz United States District Court Judge