Frederick v. Hartford Underwriters Insurance Company

Filing 34

ORDER granting 14 Plaintiffs Motion for Remand to Boulder County, Colorado District Court, by Judge William J. Martinez on 3/13/2012.(ervsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 11-cv-02306-WJM-KLM
LARRY D. FREDERICK,
Plaintiff,
v.
HARTFORD UNDERWRITERS INSURANCE COMPANY,
Defendant.
_____________________________________________________________________
ORDER GRANTING PLAINTIFF’S MOTION FOR REMAND
_____________________________________________________________________
This is a putative class action asserting claims against Defendant Hartford
Underwriters Insurance Company (“Hartford”) arising out of the sale of
uninsured/underinsured motorist coverage to residents of Colorado. Before the Court is
Plaintiff’s Motion for Remand to Boulder County, Colorado District Court. (ECF No. 14).
For the reasons set forth below, Plaintiff’s Motion for Remand is GRANTED.
I. BACKGROUND
Plaintiff filed his Complaint in Boulder County, Colorado District Court on August
1, 2011.1 On September 9, 2011, Defendant filed a Notice of Removal (ECF No.1 ),
removing the case to this Court based on diversity jurisdiction. See 28 U.S.C. § 1332.
On September 30, 2011, Plaintiff filed a Motion for Remand arguing that the amount in

1

Plaintiff filed a nearly identical Complaint in Boulder County District Court on
March 29, 2011. Defendant removed the case to this Court. See Civil Action No. 11-cv-1142CMA-BNB. On July 5, 2011, Plaintiff voluntarily withdrew his initial Complaint from this Court
and then re-filed it in Boulder County District Court after changing the Complaint’s damages
language.

controversy was not sufficient to confer jurisdiction on this Court. (Motion (ECF No. 14.)
On October 24, 2011, Defendant filed its Opposition to Plaintiff’s Motion for Remand
(Opp. (ECF No. 18), and Plaintiff filed his Reply in Support of his Motion for Remand on
November 7, 2011 (ECF No. 28).
II. ANALYSIS
A federal district court has jurisdiction to resolve a class action civil lawsuit where
the amount in controversy exceeds $5,000,000, exclusive of interest and costs, and
where the parties are diverse and other requirements are satisfied. See 28 U.S.C. §
1332(d). Here, the only contested issue is the amount in controversy. Plaintiff argues
that the amount in controversy in under $5,000,000 and that this Court, therefore, lacks
jurisdiction.2 (Motion at 5-11.) Defendant counters that the amount stated in Plaintiff’s
Complaint is not controlling and that the amount in controversy exceeds $5,000,000.
(Opp. at 3-5.)
In addressing the issue here, “courts must rigorously enforce Congress’ intent to
restrict federal jurisdiction in controversies between citizens of different states,” and
there is presumption against removal jurisdiction. Martin v. Franklin Capital Corp., 251
F.3d 1284, 1289 (10th Cir. 2001). Where “plaintiff and defendant clash about
jurisdiction, uncertainties are resolved in favor of remand.” Id. at 1290 (quoting Burns v.
Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994)). Moreover, the party invoking
the Court’s jurisdiction has the burden of establishing such jurisdiction. Id.

2

In addition to unspecified compensatory damages, Plaintiff’s Complaint seeks
the following: “Award Plaintiff and the class members punitive damages at such time as they
may be properly pled and awarded, in an amount such that the total award for compensatory
and punitive damages does not exceed $4,999,999.99." (Comp.¶ 51(c.))

2

When a complaint is filed in federal court, “the sum claimed by the plaintiff
controls if the claim is apparently made in good faith” unless it is shown “to a legal
certainty that the claim is really for less than the jurisdictional amount to justify
dismissal.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938).
When a case is removed from state court to federal court “the status of the case as
disclosed by the plaintiff’s complaint is controlling.” Id. at 291. Thus, for the purposes
of removal, “[t]he amount in controversy is ordinarily determined by the allegations of
the complaint, or, where they are not dispositive, by the allegations in the notice of
removal.” Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995). Accordingly, “if
the in-state plaintiff wishes to remain in state court, all it needs to do is to refrain from
alleging any particular sum in its prayer for relief (assuming that is permitted, as it often
is, under state court rules of procedure).” McPhail v. Deere & Co., 529 F.3d 947, 953
(10th Cir. 2008).
A number of courts have held that where the plaintiff alleges that damages are
less than the required amount for diversity jurisdiction, a defendant must prove “to a
legal certainty” that the amount in controversy is actually more than what the plaintiff
has stated. See Burns, 31 F.3d at 1095; Morgan v. Gay, 471 F.3d 469, 473 (3d Cir.
2006); Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994, 1000 (9th Cir. 2007). Other
courts, however, have held that the defendant need only prove jurisdictional facts by a
preponderance of the evidence rather than a “legal certainty.” See, e.g., Bell v.
Hershey Co., 557 F.3d 953 (8th Cir. 2009); Oshana v. Coca-Cola Co., 472 F.3d 506
(7th Cir. 2006); De Aguilar v. Boeing Company, 47 F.3d 1404 (5th Cir. 1995).

3

While the Tenth Circuit has not had occasion to address the standard to be
applied in these circumstances, this Court recently analyzed a near identical complaint
and motion for remand in Schatke v. Progressive Cas. Ins. Co., 11-cv-02305-MSKKMT, 2011 WL 5834748 (D. Colo. Nov. 18, 2011).3 In Schatke, Unites States District
Judge Marcia S. Krieger, after a thorough analysis, granted Plaintiff’s motion to remand
reasoning that “[i]t is not necessary [to] determine whether a preponderance of the
evidence or “proof to a legal certainty” is applicable [because] . . . regardless of the
standard of proof, [Defendant] has not established facts demonstrating that the current
amount in controversy exceeds $5 million.” Id. at *3.
As in Schatke, the Court finds that Defendant here has not established facts
demonstrating that the current amount in controversy exceeds $5,000,000. The
Complaint here, as in Schatke, claims recovery not to exceed $4,999,999.99. Id. The
Court takes this statement at face value.4 Furthermore, while Plaintiff may request
punitive damages, Plaintiff has also expressly stated that any award will be voluntarily
limited so when combined with compensatory damages, will not exceed the amount
sought in the Complaint. (Reply at 5-9.) As such, Defendant’s contention that total
3

Other than different parties, the complaint in Schatke and the instant Complaint
appear to be identical, as both complaints arise from the same underlying insurance
controversy. (Motion at 1-3).
4

The Court declines to presume bad faith on the part of Plaintiff in bringing his
Complaint for just under the $5,000,000 jurisdictional requirement. It is well recognized that a
plaintiff is the “‘master of the claim’ and may prevent removal [to federal court] by choosing not
to plead a federal claim even if one is available.’” Schmeling v. NORDAM, 97 F.3d 1336, 1339
(10th Cir. 1996) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)); St. Paul Mercury
Indemnity, 303 U.S. at 294 (contemplating that a plaintiff may legitimately seek less than the
jurisdictional amount in order to stay in state court).

4

damages might exceed the federal jurisdictional floor is entirely speculative. See
Schatke, 2011 WL 5834748, at *3.
Accordingly, Defendant has not shown that the amount in controversy meets the
statutory requirement for exercise of federal court jurisdiction. Plaintiff’s Motion for
Remand should therefore be granted.
III. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.

Plaintiff’s Motion for Remand to Boulder County, Colorado District Court (ECF
No. 14) is GRANTED.
Dated this 13th day of March, 2012.
BY THE COURT:

William J. Martínez
United States District Judge

5