Lafferty v. Liberty Mutual Insurance Company et al

Filing 20

MEMORANDUM AND ORDER overruling #12 Motion to Remand to State Court. Signed by District Judge Kathryn H. Vratil on 11/16/2020. (heo)

Case 2:20-cv-02485-KHV-ADM Document 20 Filed 11/16/20 Page 1 of 4

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
RANDY LAFFERTY,

)
)
Plaintiff,
)
)
v.
)
)
LIBERTY MUTUAL INSURANCE
)
COMPANY and
)
OHIO SECURITY INSURANCE COMPANY,
)
)
)
Defendants.
)
____________________________________________)

CIVIL ACTION
No. 20-2485-KHV

MEMORANDUM AND ORDER
On August 14, 2020, in the District Court of Bourbon County, Kansas, Randy Lafferty
filed suit against Liberty Mutual Insurance Company (“Liberty”) and Ohio Security Insurance
Company (“OSIC”) alleging breach of contract, violation of state statute and breach of fiduciary
duties. See Petition (Doc. #1-1). On September 29, 2020, defendants filed a Notice Of Removal
(Doc. #1) asserting diversity jurisdiction. This matter is before the Court on plaintiff’s Motion
To Remand To State Court (Doc. #12) filed October 8, 2020. For the reasons stated below, the
Court overrules plaintiff’s motion.
Factual Background
Plaintiff’s complaint alleges as follows:
On or about October 7, 2019, plaintiff sustained serious injuries in an automobile accident.
At the time of the accident, Liberty insured the plaintiff with OSIC providing coverage. Plaintiff
does not further specify the relationship between defendants. Under the policy, plaintiff was
entitled to personal injury protection (“PIP”) benefits composed of medical benefits up to $4,500
and lost wages up to $900 per month. Despite plaintiff’s insurance coverage, defendants did not

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administer plaintiff’s benefits under the policy.

Plaintiff alleges that defendants’ failure

constitutes a breach of contract, a violation of Kansas statute and a breach of fiduciary duties.
Legal Standards
A district court has original jurisdiction over civil actions in which the parties are of diverse
citizenship and “the matter in controversy exceeds the sum or value of $75,000, exclusive of
interest and costs.” 28 U.S.C. § 1332(a). In assessing the amount in controversy, a court will
include attorney fees if they are allowable as part of recovery. Lininger v. State Farm Fire & Cas.
Co., 958 F. Supp. 519, 520 (D. Kan. 1997) (citing Bank IV Salina v. Aetna Cas. & Surety Co., 783
F. Supp. 1315, 1317 (D. Kan. 1992)). A defendant may remove a civil action from state court if
the plaintiff could have originally brought the action in federal court. 28 U.S.C. § 1441(a). The
Court is required to remand “[i]f at any time before final judgment it appears that the district court
lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). Because federal courts are courts of
limited jurisdiction, the law imposes a presumption against federal jurisdiction. See Frederick &
Warinner v. Lundgren, 962 F. Supp. 1580, 1582 (D. Kan. 1997) (citing Basso v. Utah Power &
Light Co., 495 F.2d 906, 909 (10th Cir. 1974)). Accordingly, the Court must strictly construe the
federal removal statute. See Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982).
Analysis
Defendants removed this action based on diversity jurisdiction. Liberty is a resident of
Massachusetts, its state of incorporation and principal place of business. Notice Of Removal
(Doc. #1), ¶ 17. OSIC is a resident of Massachusetts, its principal place of business, and New
Hampshire, where it is incorporated. Id., ¶ 8. Plaintiff is a citizen of Kansas. Id., ¶ 6. Plaintiff
does not dispute complete diversity. Thus, the only issue regarding diversity jurisdiction is the
amount in controversy.
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Plaintiff contends that the Court lacks diversity jurisdiction because the complaint does not
meet the $75,000 threshold.

Plaintiff’s complaint, however, alleges damages in excess of

$75,000. Petition (Doc. #1-1). Plaintiff argues that the maximum available damages under
plaintiff’s causes of action is $15,300.1 Motion To Remand (Doc. #12), ¶ 7. Plaintiff argues that
the only way for the amount in controversy to exceed $75,000 is if attorney fees make up the
difference. Id., ¶ 8. Under Kansas statute, attorney fees are recoverable in an action for PIP
benefits. See K.S.A. § 40-3111. “For the record” plaintiff represents that his counsel will not
seek attorney’s fees high enough to place the amount in controversy in excess of $75,000. Motion
To Remand (Doc. #12), ¶ 8. Defendants argue that the amount in controversy must be derived
from the face of the complaint and subsequent events or stipulations by plaintiff cannot divest the
Court of jurisdiction. See Response (Doc. #15).
If removal was proper, plaintiff cannot divest the Court of jurisdiction by reducing the
amount of damages sought. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 294
(1938) (voluntary reduction of amount demanded cannot defeat jurisdiction once removal
proceedings perfected); Mahoney v. KC Waterpark Mgmt., LLC, No. 18-2585-JAR-JPO, 2019
WL 161502, at *5 (D. Kan. 2019) (same). The Court evaluates the propriety of removal from
state court based on the complaint at the time of removal. Pfeiffer v. Hartford Fire Ins. Co., 929
F.2d 1484, 1488–89 (10th Cir. 1991). If a plaintiff’s amendment could divest the Court of
jurisdiction, then defendant’s statutory right of removal would be subject to plaintiff’s caprice.
See St. Paul Mercury, 303 U.S. at 294. Plaintiff’s assertion of damages in the complaint is

1

Specifically, plaintiff states that the amount sought is $4,500 in medical benefits
and $10,800 in lost wages, totaling $15,300. See Motion To Remand (Doc. #6) at ¶ 7.
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deemed to be the amount in controversy, if that amount is asserted in good faith. See Dart
Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 84 (2014).
Plaintiff argues that in Kansas state court it is standard practice to generically allege
damages in excess of $75,000 when the amount in controversy is not a sum certain. Motion To
Remand (Doc. #12), ¶ 4. Plaintiff’s argument is unpersuasive. In Kansas, a plaintiff may only
generically assert damages exceeding $75,000 in lieu of a specific amount if he or she actually
seeks damages exceeding $75,000. See K.S.A. § 60-208(a)(2) (“Except in contract actions, every
pleading demanding relief for money damages in excess of $75,000, without demanding a specific
amount of money, must state only that the amount of damages is in excess of $75,000.”). If
plaintiff seeks damages in an amount of $75,000 or less, plaintiff must specify the amount of
damages sought. See id. (“Every pleading demanding relief for money damages in an amount of
$75,000 or less must specify the amount sought as damages.”). In his Petition plaintiff sought
damages exceeding $75,000. Petition (Doc. #1-1). After removal, plaintiff cannot divest this
Court of jurisdiction by now claiming less than $75,000 in damages.
IT IS THERFORE ORDERED that plaintiff’s Motion To Remand To State Court
(Doc. #12) filed October 8, 2020 is OVERRULED.
Dated this 16th day of November, 2020 at Kansas City, Kansas.

s/ Kathryn H. Vratil
KATHRYN H. VRATIL
United States District Judge

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