Reyes et al v. American Security Insurance Company

Filing 19

Order on Motion to Remand denying 16 Motion to Remand. Signed by Judge Robert N. Scola, Jr on 5/25/2017. (lan)

United States District Court
for the
Southern District of Florida
Juan Reyes and Haday Reyes,
Plaintiffs,
v.
American Security Insurance Co.,
Defendant.

)
)
) Civil Action No. 16-23978-Civ-Scola
)
)

Order on Motion to Remand
This matter is before the Court on the Plaintiffs Juan and Haday Reyes’s
motion to remand (ECF NO. 16). The Plaintiffs filed a complaint in state court,
which was served on the Defendant on August 25, 2016, alleging a common
law breach of contract claim and seeking attorney’s fees pursuant Florida
Statutes. (Notice Ex. 3, ECF No. 1-4.) The Defendant American Security
Insurance Company properly removed the complaint on September 16, 2016.
Now, seven months later, the Plaintiffs claim that this Court should remand
the case to state court because the amount in controversy does not exceed the
required $75,000.1 (Mot. ¶¶ 5–6, ECF No. 16.) The Defendants oppose remand
and assert that the Plaintiffs’ claims exceed the jurisdictional amount in
controversy. (Resp. ¶¶ 6–8, ECF No. 18.) Having reviewed the Motion, the
record, and the relevant legal authorities, for the reasons that follow, the Court
denies the motion to remand (ECF No. 16).
1. Background
The Plaintiffs originally filed this action on June 1, 2015, in the Circuit
Court of the Eleventh Judicial Circuit, in and for Miami-Dade County, Florida.
(Notice Ex. 3, Case no. 16-cv-20518-UU, ECF No. 1-4.) American Security
properly removed that case to federal court, but Judge Ursula Ungaro
dismissed the case after the Plaintiffs’ repeated failure to comply with the
court’s orders. (Order, Case no. 16-cv-20518-UU, ECF No. 13.) In that case, the
Plaintiffs admitted that the amount in controversy exceeded $75,000. (Notice
Ex. 6 at 3-4, ECF No. 1-7.)
Then, the Plaintiffs refiled their action in state court on August 19, 2016.
(Notice Ex. 3, ECF No. 1-4.) American Security again removed the case to
The Court notes that the Plaintiffs failed to comply with Local Rule 7.1(a)(3), which requires
the filing attorney to confer with all parties affected by the motion to attempt to resolve issues
prior to seeking judicial intervention. Local Rule 7.1(a)(3) expressly provides that “[f]ailure to
comply with the requirements of this Local Rule may be cause for the Court to grant or deny
the motion.” In other words, this Court could have denied the motion for procedural defects.
1

federal court. (Notice, ECF No. 1.) American Security’s notice of removal
included the cost estimate to repair cosmetic damages totaling $65,018 and the
Plaintiff’s admissions from the earlier case. (Notice Exs. 5 and 6, ECF Nos. 1-6
and 1-7.)
1. Legal Standard for Diversity Jurisdiction
Federal courts are courts of limited jurisdiction. Federated Mut. Ins. Co.
v. McKinnon Motors, LLC, 239 F.3d 805, 807 (11th Cir. 2003). A civil action may
be removed from state court to federal district court if the action is within the
“original jurisdiction” of the federal court. 28 U.S.C. § 1441(a). Original
diversity jurisdiction exists where the action is between citizens of different
states and the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332.
The removing party has the burden to prove by a preponderance of the
evidence that federal jurisdiction exists. Pretka v. Kolter City Plaza II, Inc., 608
F.3d 744, 751 (11th Cir. 2010) (internal citations omitted).
The parties dispute only whether the amount in controversy in this
action exceeds $75,000.00, as required by Section 1332(a). In determining the
amount of damages, “the district court is not bound by the plaintiff’s
representations regarding its claim,” and may review the record for evidence
relevant to the amount in controversy. Roe v. Michelin N. Am., Inc., 613 F.3d
1058, 1061 (11th Cir. 2010). The jurisdictional requirements of removal do not
limit the types of evidence that may be used to satisfy the preponderance of the
evidence standard and defendants may introduce their own “affidavits,
declarations, or other documentation” to meet their burden. Pretka, 608 F.3d
at 755.
2. Analysis
The Plaintiffs’ complaint only specifically seeks $65,018, and their
primary argument for remand rests on the assertion that American Security
improperly included attorney’s fees in the calculation of the amount in
controversy. (Mot. ¶¶ 5, 13–15.) American Security raises three arguments in
opposition: (1) the Plaintiffs sued to recover benefits under an insurance policy
and statutory attorney’s fees; (2) the Plaintiffs previously admitted to an
amount in controversy in excess of $75,000; and (3) if sinkhole activity were
confirmed, Florida law requires American Security to cover not just the cost of
cosmetic damages but also the cost to perform and monitor subsurface repairs.
(Resp. at 2, 4.)
“When a statute authorizes the recovery of attorney’s fees, and the
plaintiff has requested attorney’s fees, a reasonable amount of those fees is
included in the amount in controversy.” DO Restaurants, Inc. v. Aspen Specialty
Ins. Co., 984 F. Supp. 2d 1342, 1345 (S.D. Fla. 2013) (Scola, J.) (citing Missouri

State Life Ins. Co. v. Jones, 290 U.S. 199, 201 (1933); Morrison v. Allstate
Indemnity Co., 228 F.3d 1255, 1265 (11th Cir. 2000)). To determine whether
those fees are reasonable a court may look at evidence within the complaint
and the defendants may introduce their own “affidavits, declarations, or other
documentation” to meet their burden. See Pretka, 608 F.3d at 755; Mirras v.
Time Ins. Co., 578 F. Supp. 2d 1351, 1352 (M.D. Fla. 2008). The evidence
provided must establish by a preponderance of the evidence that the attorney’s
fees are not speculative, but the evidence does not need “to establish the
amount in controversy beyond all doubt or banish all uncertainty about it.”
Pretka, 608 F.3d at 755.
The Plaintiffs have requested attorney’s fees under section 627.428,
Florida Statutes (2013), which provides:
Upon the rendition of a judgment or decree by any of the courts of
this state against an insurer and in favor of any named or omnibus
insured . . . under a policy or contract executed by the insurer, the
trial court . . . shall adjudge or decree against the insurer and in
favor of the insured . . . a reasonable sum as fees or compensation
for the insured’s . . . attorney prosecuting the suit in which
recovery is had.
If the Plaintiffs were to prevail, they would be entitled to an award of attorney’s
fees under section 627.428. As such, the inclusion of attorney’s fees in the
calculation of the amount in controversy is appropriate.
In order to reach the jurisdictional amount in controversy, American
Security needed to establish that the Plaintiffs’ reasonable attorney’s fees
would exceed $9,982. Certainly this amount is plausible for an award of
attorney’s fees in sinkhole litigation. However, American Security provided no
evidence to support that assertion. Cf. Northup Props., Inc. v. Chesapeake
Appalachia LLC, 567 F.3d 767, 770–71 (6th Cir. 2009) (concluding that the
defendant’s affidavits were specific enough to prevent the determination of the
amount in controversy “from becoming a matter of judicial star-gazing”). Thus,
the Court cannot determine based on the allegations with respect to attorney’s
fees contained in the notice of removal whether the Court has subject-matter
jurisdiction.
Nonetheless, separate and apart from whether to include attorney’s fees
in the total amount in controversy, the doctrine of judicial estoppel precludes
the Plaintiffs from asserting that their claims do not exceed $75,000. “Judicial
estoppel is an equitable doctrine invoked at the court’s discretion, intended to
protect the integrity of the judicial process by preventing parties from making
one representation in one case, only to change its position in a subsequent,
related case.” James River Ins. Co. v. Fortress Sys., LLC, 899 F. Supp. 2d 1331,

1333 (S.D. Fla. 2012) (Cohn, J.) (citing New Hampshire v. Maine, 532 U.S. 742,
749 (2001). The court in the previous proceeding need not have ruled upon or
accepted the party’s representation. Sumner v. Michelin N. Am., Inc., 966 F.
Supp. 1567, 1577 (M.D. Ala. 1997). Instead, judicial estoppel precludes a party
“from asserting a proposition in the present proceeding merely by the fact of
having alleged or admitted in his pleadings in a former proceeding under oath
an allegation to the contrary.” Bregman v. Alderman, 955 F.2d 660, 664 n.3
(11th Cir. 1992) (internal citation and quotations omitted).
Simply put, judicial estoppel prevents precisely what the Plaintiffs
attempt to do here. In the previous proceeding, arising from exactly the same
breach-of-contract claim at issue here, the Plaintiffs admitted that the amount
in controversy exceeded $75,000. That admission remains conclusively
established. See Fed. R. Civ. P. 36(b) (“A matter admitted under this rule is
conclusively established unless the court, on motion, permits the admission to
be withdrawn or amended.”). Having been conclusively established in the
previous proceedings, the Plaintiffs cannot now attempt to escape the amount
in controversy by alleging a damages amount based only on cosmetic repairs.
Thus, American Security’s notice of removal includes more than a
preponderance of the evidence that the amount in controversy exceeds
$75,000.
Because the Plaintiffs’ admission establishes the jurisdictionally required
amount in controversy, the Court does not reach the issues of whether Florida
law requires American Security to cover costs beyond mere cosmetic repair
and, if so, how that would affect the amount in controversy.
Accordingly, the Court denies the Plaintiffs’ motion to remand (ECF No.
16).
Done and ordered, at Miami, Florida, on May 25, 2017.
________________________________
Robert N. Scola, Jr.
United States District Judge