Cutrer v. Scottsdale Insurance Company

Filing 17

ORDER denying 10 Motion to Remand to State Court. Signed by Judge Ivan L. R. Lemelle. (gec, )

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA ROLAND L. CUTRER, JR. VERSUS SCOTTSDALE INSURANCE COMPANY CIVIL ACTION NO. 08-1658 SECTION "B"(2)

ORDER and REASONS Before the Court are Roland Cutrer, Jr.'s ("Plaintiff")

Motion to Remand (Rec. Doc. 10) his case to the 34th Judicial District Court for the Parish of St. Bernard, Louisiana, and Scottsdale Insurance Company's ("Defendant") opposition. Doc. 16). (Rec.

After review of the pleadings and applicable law, and

for the reasons that follow, IT IS ORDERED that Plaintiff's Motion to Remand is DENIED.

BACKGROUND On August 27, 2007, Plaintiff filed the instant suit

against Scottsdale, his insurer, in the 34th Judicial District Court for the Parish of St. Bernard. claim arose from alleged losses (Rec. Doc. 1-2). incurred to The his

Plaintiff

property as a result of the heavy rains and high winds caused by Hurricane Katrina. sustained mold, (Id. at 5). damage, Plaintiff's building allegedly and damage to the walls and

roof

1

windows.

(Id.).

He further claims to have lost the use of the

building for a period of time due to the hurricane, as well as other personal property. (Id.).

Moreover, Plaintiff was allegedly underpaid by Defendant on the insurance policy for his property damages. As such, in his opinion, Plaintiff was (Rec. Doc. 1-2). to recover

entitled

statutory penalties and attorneys' fees due to Defendant's bad faith failure to pay Plaintiff in full in addition to the other damages owed him under the policy. (Id. at 7).

Plaintiff asserted in his petition, without justification, that his damages would not exceed $75,000, exclusive of interest and costs. (Id.). Thereafter, the parties commenced the

discovery process.

On March 24, 2008, Defendant was served with (Rec. Doc. 1-4). In response

Plaintiff's discovery responses.

to Defendant's Requests for Admission, Plaintiff "admitted" that his damages would not exceed $75,000. (Id. at 1). In contrast,

the documents produced by Plaintiff indicated the damages to which he was of entitled the totaled in up his to $77,900. was Plaintiff's as follows:

breakdown

damages

response

$53,215 for damage to property and mold remediation; $16,775 for damage (Rec. to Doc. personal 1-4). property; Relying on 2 and the $8,000 in living expenses. by

documentation

produced

Plaintiff himself, Defendant filed a Notice of Removal on April 15, 2008 pursuant to 28 U.S.C. §1332. (Rec. Doc. 1).

Plaintiff seeks to have the case remanded because in his view, Defendant allegedly submitted the Notice of Removal

untimely.

(Rec. Doc. 10-2).

Plaintiff asserts that the Notice

of Removal was filed eight (8) months after the filing of the initial petition which was well beyond the statutory requirement of thirty (30) days from the date Defendant discovered that the damages were likely to exceed $75,000, exclusive of interests and costs. (Id.). According to Plaintiff, because Defendant

claims the penalties and attorneys' fees sought by Plaintiff could in and of themselves, satisfy the amount in controversy requirement; Defendant should have attempted to remove the case within thirty (30) days of filing the petition. (Id. at 4).

Plaintiff also avers that the "amount in controversy" is insufficient (Id.). petition to give this Court subject matter jurisdiction.

Plaintiff insists it is not facially apparent from his that the amount in controversy exceeds $75,000

exclusive of interests and costs. that in response to

Plaintiff further represents Requests for Admission,

Defendant's

Plaintiff admitted his claim does not exceed the statutorily required amount. (Rec. Doc. 1-4 at 1). 3 Similarly, Plaintiff

urges that Defendant has not provided sufficient evidence to satisfy his burden of proving the amount in controversy would be in excess of $75,000. (Rec. Doc. 10-2).

In its opposition, Defendant contends that its Notice of Removal was, in fact, timely. (Rec. Doc. 16). Defendant claims

that it did not learn the case was removable until it received Plaintiff's discovery responses on March 24, 2008. 1). In support of this claim, Defendant contends the fact that the "amount in controversy" is in excess of $75,000 is (Rec. Doc.

sufficiently evidenced by Plaintiff's responses to Defendant's Requests for Production of Documents. (Rec. Doc. 16).

Defendant avers the estimates and receipts produced by Plaintiff clearly indicate damages of up to $77,900, in addition to the penalties and attorneys' fees sought by Plaintiff. (Id. at 2).

In Defendant's view, Plaintiff has not met his burden of proving he will not be able to recover the requisite jurisdictional amount by either (1) providing state procedural rules binding Plaintiff to his pleadings; or (2) filing a binding stipulation or affidavit to that effect with the initial complaint. Doc. 16). (Rec.

4

DISCUSSION Timely Removal In considering the procedure to remove a case from state court to Federal Court, "the time limit within which the movant must file his notice of removal is thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based." 28 U.S.C.A. §1446(b)

(2009).

If not apparent by looking at the initial pleading that

the case is removable, "a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." Id. To resolve

ambiguities as to what can be classified as an "other paper" within the meaning of the statute, courts have described it as one that results from a plaintiff's voluntary act which gives the defendant notice that the case is now under federal

jurisdiction.

Halmekangas v. State Farm Fire and Cas. Co., No.

07-1006, 2007 U.S. Dist. WL 1125760, at *3 (E.D. La. April 16, 2007). In any case, "a claim may not be removed on the basis of more than one year after commencement of the

jurisdiction action."

28 U.S.C.A. §1446(b) (2009). 5

Thomas v. Exxon Mobil Corp., No. 03-2269, 2003 U.S. Dist. WL 22533677, at *2 (E.D. La. Nov. 5, 2003) set forth the proper interpretation to be afforded § 1446(b). The court stated, "in

essence, when read as a whole, § 1446(b) provides a two-step test for determining whether a defendant timely removed a case." Id. With respect to its application, the first paragraph of §

1446(b) applies to cases that are removable as initially filed; the second paragraph applies to cases which, although not Id.

initially removable, become removable at a later time.

Pursuant to Exxon, if the case stated by the initial pleading is removable, then a notice of removal must be filed within thirty days from the defendant's receipt of the initial pleading. Id.

Conversely, if the case stated by the initial pleading is not removable, then notice of removal must be filed within thirty days from the receipt of an amended pleading, motion, order or "other paper" from which the defendant may ascertain that the case is removable. Id.; 28 U.S.C.A. §1446(b) (2009).

In instances where a party attempts to remove a state case to federal court, he must also satisfy the basic federal

evidentiary burden of proof.

Generally, a defendant may remove

a civil action filed in state court to a federal court if such a federal action. court would have had original jurisdiction over the

See 28 U.S.C.A. §1446(b) (2009). 6

The removing party

bears the burden of showing that federal jurisdiction exists at the time of removal. Gasquet v. Lexington Ins. Co., No. 06-

5931, 2006 U.S. Dist. WL 3497777, at *1 (E.D. La. Nov. 30, 2006). However, if at any time before final judgment it appears

that the district court lacks subject matter jurisdiction, the case shall be remanded. According to the 28 U.S.C.A. §1447(c) (2009). court in Gasquet, supra, a removing

defendant's burden of showing that the amount in controversy is sufficient to support federal jurisdiction depends on whether the plaintiff's complaint alleges a specific amount of monetary damages. Gasquet at *2. When the plaintiff claims a damage

figure that is greater than the required amount in controversy, that amount controls if made in good faith. Id. If a plaintiff

pleads damages less than the jurisdictional amount, this figure will also generally control, barring removal. Id.

The plaintiff's in Gasquet filed their action in Louisiana state courts. Under Louisiana law, parties are not permitted to Id. Thus, where the demand, the

plead a specific amount of money damages. petition does not include a specific

monetary

removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. Id.; See also

Manguno v. Prudential Property and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). This requirement is met if (1) it is 7

apparent

from

the

face

of

the

petition

that

the

claims

are

likely to exceed $75,000, or, alternatively, (2) the defendant sets forth summary judgment type evidence of facts in Id.

controversy that support a finding of the requisite amount.

If a defendant meets his burden in either of these ways, the plaintiff, in order to defeat removal, must then show that it is legally certain that his recovery will be less than $75,000. Id. at *2. A plaintiff may show that it is legally certain that he will recover damages in an amount less than the jurisdictional threshold by filing a binding stipulation or affidavit with his complaints. to recovery Id. of Because Louisiana plaintiffs are not limited the damages requested renounce in the their right pleadings, to accept a a

plaintiff

must

affirmatively

judgment in excess of $75,000 for his pre-removal state court pleadings and stipulations to bind him. Id.

A. Scottsdale's Timely Removal In his Motion to Remand, Cutrer asserts that Scottsdale could have attempted to remove the case based on information contained within the original petition, which was filed on

August 27, 2007.

(Rec. Doc. 10-2.)

Cutrer did not plead a

8

specific dollar amount in money damages as required by Louisiana law. See La. C.C.P. art. 893(A)(1). However, Cutrer did

indicate that the claim would not exceed $75,000.

As plaintiff,

Cutrer's claim was presumptively correct unless Scottsdale could provide evidence to the contrary. See De Aguilar v. Boeing Co., Hence, it was unclear from

47 F.3d 1404, 1412 (5th Cir. 1995).

the face of the petition whether the amount in controversy would likely exceed $75,000. Scottsdale received Cutrer's discovery responses on March 24, 2008. (Rec. Doc. 1 at 3). Contradictorily, those responses

indicated that the estimated damages were in excess of $77,900 exclusive of penalties and attorneys' fees. until that time that Scottsdale could, (Id.). and did, It was not reasonably Cutrer's

ascertain that the case was or had become removable.

argument that Scottsdale's Notice of Removal relies in part on facts alleged in the petition is without merit. The fact that

Scottsdale referred to some allegations from the petition in his Notice of Removal does not in any way suggest that he had the statutorily mandated "notice" that the case was removable when it was initially filed. Notwithstanding the amount of damages

listed, Cutrer stipulated in one of the concluding paragraphs of his petition, "Plaintiff specifically alleges that his damages alleged herein do not exceed $75,000.00 exclusive of interest 9

and costs."

(Id.).

It is reasonable to say that this insertion

was taken in good faith by Scottsdale, hence the reason why Scottsdale's Notice of Removal was not submitted soon after the initial filing of the petition. Less than thirty (30) days

after he was served with the discovery responses, on April 15, 2008, Scottsdale filed the Notice of Removal. (Rec. Doc. 1).

Such filing was also within one (1) year of the filing of the original petition, as required by law. Notice of Removal was timely. Therefore, Scottsdale's

B. Amount in Controversy The next inquiry is whether the movant, Scottsdale, has satisfied its burden of having shown by a preponderance of the evidence that this claim falls within the jurisdiction of this Court. In focusing on the face of the initial complaint, the court in Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th Cir. 1999) found that the face of the plaintiff's complaint indicated by a preponderance of the evidence the amount in controversy would likely exceed $75,000. In her petition, the plaintiff

alleged that an airline had lost the luggage containing her prescription heart medication and, therefore, caused her

10

subsequent distress. contract.

heart Id. Id.

failure,

pulmonary

edema,

and

respiratory

She emphasized that she was suing in tort, not The plaintiff also indicated damages for

property, travel expenses, an emergency ambulance trip, her six (6) day stay in the hospital, pain and suffering, humiliation, and her inability to do housework after the hospitalization. Id. Thus, the gravity and specificity of the damages listed was Id.

reasonably sufficient to satisfy the jurisdictional amount. The case at bar is distinguishable from Luckett.

Nothing

in Cutrer's complaint would easily trigger reasonable minds to infer that his claim was in excess of $75,000. Cutrer's The

petition could have been interpreted in a number of ways.

extent of Cutrer's loss is generally described in the complaint as serious damage to the roof, walls, and windows. 1-2). were (Rec. Doc.

Whether any of these things were of pristine quality or in need of extensive repair prior to the was hurricane no degree is of

entirely

speculative.

Additionally,

there

certainty as to the actual value of Cutrer's property.

Cutrer

further alleges that his personal property was totally damaged, ruined or lost. (Rec. Doc. 1-2 at 5). There is no indication

as to what particular personal property Cutrer has lost so that Scottsdale would have been able to reasonably infer the degree of Cutrer's loss. Cutrer also contends he is entitled to "loss 11

of use" of the building, thereby incurring additional expenses to run his business. (Id.). Cutrer had not provided any

information regarding what types of expenses he was referring to or even whether his business was a lucrative one. Although the

complaint further stipulates that Scottsdale acted in bad faith (Id. at 7), this contention along with the others are not

reasonably sufficient to show by a preponderance of the evidence that the claim would exceed the requisite amount. Cutrer did not specifically assign values to the damages of his home or property in his complaint, which means that

reasonable minds could disagree as to their extent.

In other

words, in light of Cutrer's statement in his petition that the amount in controversy will not be met (Rec. Doc. 1-2 at 7), it cannot be said with any degree of certainty that the amount in controversy will or will not likely exceed $75,000. Therefore,

the face of the petition, in and of itself, does not show that this claim will likely satisfy the requisite amount. Although the amount in controversy is not clearly apparent on the face of the petition, Scottsdale may also satisfy its burden by providing "summary judgment type" evidence of facts to support a finding that the claim will likely exceed $75,000. See Manguno v. Prudential Property and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Along with its timely filed Notice of 12

Removal, Scottsdale provided this Court with Cutrer's responses to discovery requests. Requests for Admissions While Cutrer's reply to Scottsdale's "admitted" the amount in controversy

would not exceed $75,000 exclusive of interest and costs, the damage estimates and receipts submitted to Scottsdale on March 24, 2008 illustrated the claim would likely exceed this amount. (Rec. Doc. 1-4 at 6 & 7). provided to Scottsdale ­ $53,215; Specifically, the assessments Cutrer as follows: property property and mold and

were

remediation

personal

$16,775;

additional expenses - $8,000.

Thus, the damages to Cutrer's Moreover, Scottsdale has faith penalties in the

property are approximately $77,990. emphasized Cutrer's claim for bad

original petition. penalties and

(Rec. Doc. 1-2 at 7 & 8). would Thus, only serve to

An award of such increase shown by the a

fees sum.

aforementioned

Scottsdale

has

preponderance of the evidence that the claim will likely exceed $75,000. Since Scottsdale has met its burden, Cutrer must then show to a degree of legal certainty that his recovery would be less than the requisite amount in order to defeat removal. In the

instant case, there is no statute limiting Cutrer's recovery. Hence, Cutrer should have submitted a binding stipulation or affidavit with the original complaint 13 that would in effect

renounce his right to recover anything greater than $75,000. See Gasquet at *3. Arguably, Cutrer had attempted to do so in

his petition when he alleged that his damages would not exceed $75,000 exclusive of interest and costs. (Rec. Doc. 1-2 at 7).

However, this statement is not equivalent to Cutrer effectively renouncing his right, and therefore, the possibility of

receiving a greater sum in the event of a favorable judgment. In conclusion, Scottsdale's Notice of Removal was timely because it was filed within thirty (30) days of having It

reasonably ascertained that the case had become removable.

was not until Scottsdale received the discovery responses that Scottsdale became aware the circumstances were such that a

favorable award for Cutrer would likely exceed $75,000, so as to fall within the scope of federal court jurisdiction. Having

filed timely, Scottsdale then proved by a preponderance of the evidence that the claim would meet the requisite amount by

setting forth tangible evidence such as documents of Cutrer's estimates and receipts. On the same token, Cutrer has not shown

with any legal certainty, by means of legal doctrine or binding stipulation filed by him with his petition, that his claim would not exceed $75,000. Accordingly,

14

For

the

aforementioned

reasons,

IT

IS

ORDERED

that

Plaintiff's Motion to Remand is DENIED.

August New Orleans, Louisiana, this ____ day of ___________, 2009.

IVAN L. R. LEMELLE UNITED STATES DISTRICT JUDGE

15