La Issy, Inc. v. Hartford Casualty Insurance Company

Filing 33

ORDER granting 29 Motion to Remand to State Court. This case is REMANDED to the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, for all further proceedings. The Clerk is directed to transmit a certified copy of this Order to the clerk of the state court and close this file. Signed by Judge Kathryn Kimball Mizelle on 6/3/2021. (NPC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
LA ISSY, INC.,
Plaintiff,
v.

Case No: 8:20-cv-1878-KKM-AEP

HARTFORD CASUALTY
INSURANCE COMPANY,
Defendant.

/
ORDER

Before the Court is Plaintiff’s Motion to Remand (Doc. 29). Upon review, the
Court finds that Defendant has failed to demonstrate that this Court has subject matter
jurisdiction. Accordingly, the motion to remand is granted.
This action arises from an insurance contract between LA Issy, Inc., a hair salon
located in Palm Harbor, Florida, and Hartford Casualty Insurance Company. (Doc. 11). Plaintiff LA Issy brings a claim of breach of contract resulting from Defendant
Hartford Insurance Company’s denial of its claims for lost business income resulting
from COVID-19 closures, and it alleges that damages exceed $30,000. (Doc. 1-1 at 3).
Specifically, Plaintiff alleges that Defendant improperly denied its claim for coverage
under the “Civil Authority” provision of its policy, which provides:
(1) This insurance is extended to apply to the actual loss of Business
Income you sustain when access to your “scheduled premises” is

specifically prohibited by order of a civil authority as the direct result of a
Covered Cause of Loss to property in the immediate area of your
“scheduled premises.”
(2) The coverage for Business Income will begin 72 hours after the order
of civil authority and coverage will end at the earlier of:
(a) When access is permitted to your “scheduled premises”; or
(b) 30 consecutive days after the order of the civil authority.
(Doc. 1-1 at 2).
Defendant removed the action on August 11, 2020, claiming this Court has
diversity jurisdiction over the action. (Doc. 1). In support of the requisite amount in
controversy, Defendant contends that the damages sought by Plaintiff are based on the
value of the underlying claim, which is the amount Plaintiff would be due if the policy
covered the claim. (Doc. 1 at 3). Based on Plaintiff’s allegations, Defendant estimates
that Plaintiff was closed for 64 days. Id. at 4. Using an annual income estimate from
Experian Business Data, Defendant suggests that the annual income of Plaintiff is
$619,000; thus, the total lost income from the 64-day closure is $108,537. Id. Defendant
also argues that Plaintiff’s request for attorneys’ fees should be included in the
calculation of the amount in controversy but does not offer a figure for those fees. Id.
Plaintiff moves to remand this action. (Doc. 29). Specifically, Plaintiff argues that
it can recover lost business income only up to 30 days under the contract. Id. at 3.
Plaintiff also provides an affidavit from its president that the total gross sales of the
comparable 30-day period in 2019 were $41,768.80. Id. Even assuming a third of this

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amount was awarded in attorneys’ fees, Plaintiff argues the total award would still be
below the $75,000 threshold. Id. at 4.
Where a defendant removes an action from state court to federal court, the
defendant “bears the burden of proving that federal jurisdiction exists.” Williams v. Best
Buy Co., 269 F.3d 1316, 1319 (11th Cir. 2001). Defendant must present “a plausible
allegation that the amount in controversy exceeds the jurisdictional threshold,” and if
questioned, present evidence establishing that the amount is met by a preponderance
of the evidence. Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 87–89 (2014).
“The absence of factual allegations pertinent to the existence of jurisdiction is
dispositive and, in such absence, the existence of jurisdiction should not be divined by
looking to the stars.” Lowery v. Ala. Power Co., 483 F.3d 1184, 1215 (11th Cir. 2007). To
the extent a question exists about the amount in controversy, any uncertainty about
jurisdiction must be resolved in favor of remand. Bechtelheimer v. Cont’l Airlines, Inc., 776
F. Supp. 2d 1319, 1321 (2011) (“[F]ederal courts must narrowly construe removal
statutes and ‘resolve all doubts about jurisdiction in favor of remand, and employ a
presumption in favor of remand to state courts.’”).
Defendant fails to meet that burden. “In determining the amount in controversy
in the insurance context, . . . it is the value of the claim, not the value of the underlying
policy, that determines the amount in controversy.” Sanchez v. USAA Gen. Indem. Co.,
No. 8:20-cv-2707-T-33SPF, 2020 WL 6886221, at *2 (M.D. Fla. Nov. 24, 2020)

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(Covington, J.) (quoting Martins v. Empire Indem. Ins. Co., No. 08-60004-CIV, 2008 WL
783762, at *2 (S.D. Fla. Mar. 21, 2008) (Marra, J.) (citing cases)). Plaintiff’s action stems
from a claim under the Civil Authority provision of the policy. (Doc. 1-1 at 3–5).
Defendant argues, however, that Plaintiff’s insurance claim was denied under both the
Civil Authority provision and the general coverage provision that covers lost business
income of up to 12 months. Perhaps that is why the Defendant denied Plaintiff’s
insurance claim, but the Court does not read the Complaint as alleging a breach of
contract or seeking a declaratory judgment under both of those provisions. Instead, the
Complaint challenges the denial of coverage solely under the Civil Authority provision.
(Docs. 1-1, 32 at 2, 5). Plaintiff repeatedly alleges that it is “entitled to recover damages
for business interruption due to civil authority.” (Doc. 1-1 at 2, 7); (see also id. at 3, 4, 5,
6) (referring to actions of the “civil authority” as the cause of its lost business income).
At the jurisdictional stage, “the pertinent question is what is in controversy in the
case.” Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 751 (11th Cir. 2010). Because
Plaintiff has only put the Civil Authority coverage in controversy, only the claim under
that provision may be considered. The Civil Authority provision clearly limits the value
of any claim under that provision to the amount of business income lost in a period of

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“30 consecutive days after the order of the civil authority.” (Doc. 1-1). Defendant’s
estimate based on 64 days of closure far exceeds the value of the disputed claim.1
Taking the value of the claim as lost business income for 30 days, the dispositive
issue is the amount of money that could be paid for this insurance claim. Plaintiff and
Defendant submit competing figures for estimating what the lost business income
would be, and Defendant disputes whether Plaintiff’s post-removal affidavit may be
considered by the Court. But the Court need not decide this issue because, even using
Defendant’s method of estimating the lost income from LA Issy, the amount falls short
of $75,000. Using Defendant’s method, the estimated lost income for 30 days of closure
would be 8.2 percent of $619,000, which amounts to $50,876.71.
Defendant also argues that attorneys’ fees should be included in the amount in
controversy because Plaintiff seeks fees under section 627.428, Florida Statutes. It is
true that attorneys’ fees count toward the amount in controversy when they are allowed
by statute or contract. See McKinnon Motors, LLC, 329 F.3d 805, 808 (11th Cir. 2003).
But Defendant provides no evidence or allegations of the sum of attorneys’ fees either
prospectively or retrospectively.2 Without specific allegations that the attorneys’ fees

Defendant does not contest that coverage under the Civil Authority provision would be limited to
30 days of business income, only that Plaintiff’s action is not so circumscribed to that provision.
2
There is a split among district courts within the Eleventh Circuit on whether prospective attorneys’
fees, i.e., an estimate of fees to be incurred through the end of litigation, should be included in the
amount in controversy. See Clayton Consulting Servs., Inc. v. Squire Dental Mgmt., LLC, No. 3:20-cv1165-J-34JBT, 2020 WL 6502662, at *3 n.4 (M.D. Fla. 2020 Nov. 5, 2020) (Howard, J.). Given that
the Defendant did not allege the amount of fees, however, this issue is not before the Court.
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make up the remaining balance of the amount in controversy or a reasonable estimate
of those fees, the Court cannot determine whether it has jurisdiction without engaging
in a “judicial star-gazing.” Reyes v. Am. Sec. Ins. Co., No. 16-23978-Civ-Scola, 2017 WL
2296907, at *2 (S.D. Fla. 2017 May 26, 2017) (Scola, J.) (quoting Northup Props., Inc. v.
Chesapeake Appalachia LLC, 567 F.3d 767, 770–71 (6th Cir. 2009)); see also Pretka, 608
F.3d at 753–54 (explaining that “without facts or specific allegations, the amount in
controversy could be divined . . . only through speculation,” and “that is
impermissible”). Moreover, applying judicial common sense to the amount of fees
would not result in exceeding the $75,000 minimum, as fees in this relatively
straightforward contract dispute would not ordinarily exceed 50 percent of the total
amount that could be paid under the insurance claim. 3
Defendant has not met his burden to establish that the amount in controversy
exceeds $75,000 and that this Court has subject matter jurisdiction. Accordingly, the
Plaintiff’s Motion to Remand is GRANTED. This case is REMANDED to the Circuit
Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, for all
further proceedings. The Clerk is directed to transmit a certified copy of this Order to
the clerk of the state court and close this file.

Indeed, using Defendant’s estimation for business income, attorneys’ fees would still need to
exceed $24,123.29, approximately 50 percent of the potential payment under the policy, to overcome
the $75,000 hurdle.

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ORDERED in Tampa, Florida, on June 3, 2021.

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