Everman v. Grange Property & Casualty Insurance Company

Filing 10

MEMORANDUM OPINION & ORDER: It is hereby ORDERED that the plaintiff's motion to remand [Record No. #6 ] is DENIED. Signed by Judge Danny C. Reeves on 11/16/2020.(JJ)cc: COR

Case: 5:20-cv-00406-DCR-MAS Doc #: 10 Filed: 11/16/20 Page: 1 of 5 - Page ID#: 145

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
(at Lexington)
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JASON EVERMAN,
Plaintiff,
V.
GRANGE PROPERTY & CASUALTY
INSURANCE COMPANY,
Defendant.
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Civil Action No. 5: 20-406-DCR

MEMORANDUM OPINION
AND ORDER

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This matter was removed from Fayette County Circuit Court, but the parties disagree
about whether removal is proper. Plaintiff Jason Everman suffered injuries in a car accident
with an underinsured motorist. He brought this action to recover the balance of his damages
from his insurer, Defendant Grange Property & Casualty Insurance Company (“Grange”).
[Record No. 1-2] At the moment, Everman contends that little money is at stake and, as a
result, the Court must remand the action to state court because it is without jurisdiction under
28 U.S.C. § 1332. [See Record No. 6, p. 3.] However, Grange believes that Everman could
recover much more. [See Record Nos. 1-3; 7, pp. 2-4] Because Grange has the better
argument, Everman’s motion to remand will be denied.
Subject matter jurisdiction constitutes a court’s “power to adjudicate the case.” Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89 (1998) (emphasis in original). To ensure
that this power is exercised appropriately, a court has an “obligation to ensure that [it does] not
exceed the scope of [its] jurisdiction.” Williams v. United States, 927 F.3d 427, 434 (6th Cir.
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2019). Federal district courts have subject matter jurisdiction over “all civil actions where the
matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.”1
28 U.S.C. § 1332. And when an action is removed under 28 U.S.C. § 1441(a), a court has an
independent obligation to determine whether the requisite amount is actually disputed.
Courts take a cautionary approach to this inquiry and “resolve any doubts regarding
federal jurisdiction in favor of remanding a case to state court.” Hackney v. Thibodeaux, No.
CIV-A-10-35-JBC, 2010 WL 1872875, at *1 (E.D. Ky. May 10, 2010). This vigilance is
intended to avoid the undue hardship to the parties that might result from a later determination
that subject-matter jurisdiction was lacking. See United States v. Cotton, 535 U.S. 625, 630
(2002) (even unnoticed “defects in subject-matter jurisdiction require correction” on appeal).
Thus, the Court’s obligation to police its jurisdictional limits exists for the parties’ benefit.
As is often the case, the plaintiff in this matter “seeks to recover some unspecified
amount that is not self-evidently greater or less than the federal amount-in-controversy
requirement.” King v. Household Fin. Corp. II, 593 F. Supp. 2d 958, 959 (E.D. Ky. 2009)
(emphasis in original). In fact, the plaintiff is discouraged, by both state pleading rules and
federal caselaw, from showing his hand. See Ky. R. Civ. P. 8.01 (prohibiting pleadings from
“recit[ing] any sum as alleged damages”); see also Everett v. Verizon Wireless, Inc., 460 F.3d
818, 822 (6th Cir. 2006) (placing the “burden of satisfying the amount-in-controversy
requirement” on the defendant). A defendant who suspects that the amount in controversy
requirement is met must often hypothesize about what the plaintiff could be entitled to recover.

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Of course, the parties must be diverse, 28 U.S.C. § 1332(a)(1), but there is no question
that the diversity requirement is satisfied here.
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The result is that the Court must determine whether the amount in controversy is met by a
preponderance of what little evidence is available.
Grange has shown that Everman seeks damages in excess of the jurisdictional amount.
See King, 593 F. Supp. 2d at 959-60 (The defendant must “affirmatively come forward with
competent proof showing that the amount-in-controversy requirement is satisfied” by a
preponderance of the evidence.). First, Everman’s Complaint alleges that Grange breached its
contract by not paying the proceeds of the policy. [Record No. 1] As a result, he contends
that he suffered “physical, mental pain, emotional distress and anguish[,] and the loss of
enjoyment of life[,] and will continue to suffer such damage in the future.” [Record No. 1-2,
p. 2] Further, in correspondence on October 10, 2020, Everman’s attorney reiterated his “prior
demands” for the full policy amount, which he understood to have a “face value of $100,000.”
[Record No. 7-2, p. 1] The same correspondence provided a computation of Everman’s
“lifetime costs of having to follow orthopedics[] and pain management,” which would
allegedly exceed $185,000. [Id. at p. 3] If Grange had any remaining doubts about the extent
of the damages sought, Everman’s counsel stated that “[w]e believe that the economic numbers
alone are enough to exceed the available coverage.”

[Id. (emphasis added)] This

correspondence confirms what the Complaint implied: that Everman seeks at least the full
policy amount.
Everman did not respond to Grange’s arguments against remand. That does not resolve
the issue, however, as the Court has previously held that a settlement demand alone “does not
establish that it is ‘more likely than not’ that the amount in controversy” requirement is met.
May v. Wal-Mart Stores, Inc., 751 F. Supp. 2d 946, 949 (E.D. Ky. 2010). In May, the “sole
piece of evidence” the defendant produced was a settlement demand letter, and the defendant
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failed to even provide an estimate of its potential liability. Id. Here, however, Grange has
emphasized that its policy with Everman could require it to pay up to $100,000. [Record No.
7, pp. 1-2] Everman’s demands merely confirm that he seeks the full amount (and more) under
the policy. [Id.] Thus, a preponderance of the evidence indicates that Everman seeks more
than $75,000, and remand is inappropriate.
Finally, the Court notes that Everman has made no compelling argument in favor of a
remand. Instead, he has merely rested on his state court pleading and alleged that the defendant
is unable to prove that the amount in controversy requirement is satisfied. According to
Everman, a pleading with an unspecified value is simply not removable, regardless of the
amount in controversy. [Record No. 6-1, p. 3] But if that were the case, nearly every action
filed in a Kentucky state court would remain there. See Ky. R. Civ. P. 8.01. Everman also
argues that “there is no factual scenario where the Plaintiff will be able to recover $75,000 in
damages.” [Record No. 6-1, p. 3 (emphasis added)] By recover, Everman clarifies that he
refers to the amount he would receive after he pays his costs and attorneys’ fees. [Id.] But the
amount that a jury may award is the amount that must exceed $75,000, exclusive of interest
and costs, and Everman readily concedes that his underinsured motorist policy with Grange
contemplates up to $100,000 of liability. [Id.]
In summary, the amount in controversy exceeds the sum of $75,000.00, exclusive of
interest and costs. Therefore, remand is not appropriate. Accordingly, it is hereby
ORDERED that the plaintiff’s motion to remand [Record No. 6] is DENIED.

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Case: 5:20-cv-00406-DCR-MAS Doc #: 10 Filed: 11/16/20 Page: 5 of 5 - Page ID#: 149

Dated: November 16, 2020.

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