Mendy et al v. Allstate Insurance Company

Filing 13

ORDER denying 9 Motion to Remand case; Further, having found that Defendant validly removed this case, IT IS ALSO ORDERED that Plaintiffs' request for sanctions are DENIED. Signed by Judge Carl Barbier on 1/20/10. (sek, )

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA CHARLES MENDY ET AL VERSUS ALLSTATE INSURANCE COMPANY ORDER AND REASONS Before the Court is Plaintiffs' Motion to Remand and for Sanction (Rec. Doc. 9) and Defendant's Response Memorandum in Opposition (Rec. Doc. 12). PROCEDURAL HISTORY AND BACKGROUND FACTS In this matter, Plaintiffs claim that their property, located at 11607 Will Taley Road, Bogulusa, Louisiana, was damaged as a result of Hurricane Gustav. After the hurricane, CIVIL ACTION NO: 09-7052 SECTION: J(2)

Plaintiffs allegedly notified their property insurer, Allstate Insurance Company ("Allstate" or "Defendant"), of the damage to their property. However, Plaintiffs allege that Allstate, acting

in bad faith, failed to pay the full value of their claim. On September 18, 2009, Plaintiffs filed this suit in the 22nd Judicial District Court of the Parish of Washington, State of Louisiana. On October 27, 2009, Defendant removed this case Plaintiffs have therefore

to the Eastern District of Louisiana.

filed this motion to remand, claiming that the removal was improper because the amount in controversy has not been met. Plaintiffs also ask this court to sanction Defendant for wrongly

removing this case to federal court. THE PARTIES' ARGUMENTS Plaintiffs claim that the amount in controversy is less than $75,000 because they made an offer of settlement for $75,000 shortly before the matter was removed and because in their complaint, they expressly stated that the amount in controversy is insufficient for federal jurisdiction. Defendant argues that

neither one of these acts/statements are sufficient to establish that the amount in controversy does not exceed $75,000. DISCUSSION Defendant, as the proponent of jurisdiction, has to prove by a preponderance of evidence that the amount in controversy exceeds $75,000. (5th Cir. 1999). Simon v. Wal-Mart Stores, 193 F.3d 848, 850 If Defendant does this, Plaintiffs can defeat

removal by establishing, with legal certainty, that the claims are for less than $75,000. In this matter, Defendant has proven

by a preponderance of the evidence that the amount in controversy exceeds $75,000. Defendant points to the amount of recoverable

proceeds under the insurance policy and the potential alleged bad faith penalties, all of which are considered for jurisdictional amount purposes. See St. Paul Reins. Co., Ltd. v. Greenberg, 134

F.3d 1250, 1253 (5th Cir. 1998); Stonewall Ins. Co. v. Lopez, 544 F.2d 198, 199 (5th Cir. 1976). Plaintiffs therefore have the burden of proving, with legal 2

certainty, that their claims are for less than $75,000. they have failed to meet this burden.

However,

Plaintiffs' only basis for

asserting that the jurisdictional amount is less than $75,000 is that they made an offer of settlement for $75,000 shortly before the matter was removed and that in their complaint, they state that the amount in controversy is insufficient for federal jurisdiction. As argued by Defendant, these acts/statements are See Davis v.

sufficient to deny this court of jurisdiction.

State Farm Fire & Casualty, 2006 WL 15181272 at *2 (E.D. La. Jun., 7, 2006). On the contrary, had Plaintiffs signed a binding stipulation stating that they would not seek an amount exceeding $75,000, they would have proven, with legal certainty, that their claims were for less than $75,000. Id. However, despite requests by

Defendant to get Plaintiffs to sign such an agreement, Plaintiffs declined to do so. Accordingly, IT IS ORDERED that Plaintiffs' request to remand this case is DENIED. Further, having found that Defendant validly removed this case, IT IS ALSO ORDERED that Plaintiffs' request for sanctions are DENIED. Hello This is a Test

New Orleans, Louisiana, this 20th day of ___________, 2010. ___ January

United States District Judge

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