Treadway et al v. State Farm Mutual Automobile Insurance Company
ORDER AND REASONS denying 8 Motion to Remand to State Court. Signed by Judge Martin L.C. Feldman on 1/25/2012. (tsf, )
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
JULIE C. TREADWAY, ET AL.
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO.
ORDER & REASONS
Before the Court is the plaintiffs’ motion to remand.
the reasons that follow, the motion is DENIED.
This case arises out of a dispute over insurance payments
for plaintiffs’ stolen and burned pickup truck.
purchased the vehicle in September 2010 for $48,625, using a
combination of cash and loans from Capital One Bank.
plaintiffs took out an insurance policy on the vehicle with State
Farm, insuring for, among other contingencies, property damage.
The State Farm policy ran for six months, from March 15, 2011
through August 8, 2011.
In early May 2011, the pickup went missing.
presumed the truck stolen and reported the suspected theft to the
Plaquemine Parish Sheriff’s Office.
The vehicle was located on
the same day, burned, on the levee.
The plaintiffs filed a claim
with State Farm in late June 2011.
The plaintiffs listed the
amount of the loan balance on the truck as being $31,359.
According to plaintiffs, State Farm has neither denied, nor paid
Plaintiffs sued State Farm in state court on November 22,
2011, seeking what plaintiffs claim State Farm has wrongfully
failed to pay in connection with the theft and damage of the
In their petition, plaintiffs allege that State Farm
breached its duties of good faith and fair dealing under
Louisiana Revised Statutes 22:1973 and 22:1892.
in the petition that
when such failure is found to be arbitrary,
capricious, or without probable cause, it
shall subject the insurer to penalties
including but not limited to the amount of
the loss, fifty percent damages or more on
the amount found to de due from the insurer
to the insured, as well as reasonable
attorney fees and costs.
Plaintiffs accuse State Farm of “willfully and wantonly failing
to properly investigate and evaluate the claim and either pay it
or deny it.”
Plaintiffs further assert that State Farm’s
“actions have been arbitrary, capricious, and without probable
Plaintiffs request in their petition “the maximum in
penalties allowed by Louisiana law, plus all attorneys’ fees and
The plaintiffs also list the following types of
damages that they assert they suffered as a result of State Farms
actions and inactions:
loss of monies continuing to be paid to the
lienholder; past, present and future
emotional distress, both intentional and
negligent; past, present and future mental
anguish; loss of enjoyment of life; any and
all other damages which will be proved with
particularity at the time of trial.
State Farm removed the case to this Court on December 2,
2011, invoking the Court’s diversity jurisdiction.
now move to remand, arguing that the amount in controversy falls
below the required $75,000.
To determine whether it has jurisdiction, the Court must
consider the allegations in the state court petition as they
existed at the time of removal.
See Manguno v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720 (5th Cir. 2002); see also Cavallini
v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir.
Louisiana law prohibits the plaintiffs from petitioning for
a specified amount.
See La. Code Civ. P. art. 893(A)(1).
plaintiffs’ petition, in conformity with Louisiana law, is silent
regarding the amount of damages.
When the plaintiffs have
alleged an indeterminate amount of damages, the removing party
must prove by a preponderance of the evidence that the amount in
controversy exceeds $ 75,000.
Simon v. Wal-Mart Stores, 193 F.3d
848, 850 (5th Cir. 1999); see also De Aguilar v. Boeing Co., 47
F.3d 1404, 1412 (5th Cir. 1995).
This showing may be made by
either (1) showing that it is facially apparent that the
plaintiffs’ claims likely exceed $ 75,00 or (2) setting forth the
facts in controversy that support a finding of the jurisdictional
Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th
When the dispute concerns the coverage provided by an
insurance policy, the object of the litigation is the insurer's
total potential liability, including the insurer's contractual
liability under that policy, plus any penalties allowed by state
Buras v. Birmingham Fire Insurance Co. of Penn., 327 F.2d
238, 238-39 (5th Cir. 1964).
If the defendant meets its burden, the plaintiff can defeat
removal only by establishing with legal certainty that the claims
are for less than $ 75,000.
De Aguilar v. Boeing Co., 47 F.3d
1404, 1411 (5th Cir. 1995).
The Fifth Circuit has suggested that
this burden may be satisfied by demonstrating that state law
prevents recovery in excess of $ 75,000 or that the plaintiffs
are somehow "bound irrevocably" to an amount under the federal
Id. at 1412.
In Louisiana, a plaintiff wishing to prevent removal must
affirmatively renounce the right to accept a judgment in excess
of $ 75,000 in its state court pleadings or a stipulation filed
with the complaint.
See La. Code Civ. Proc. art. 862; Davis v.
State Farm Fire & Cas., 2006 U.S. Dist. LEXIS 37226, 2006 WL
1581272, at *3 (E.D. La. 2006).
The Court finds that State Farm has proved by a
preponderance of the evidence that the damages in this case could
The Court notes that plaintiffs have not
stipulated that their damages would be less than $75,000 (nor
have they apparently offered to settle their claims for less than
State Farm asserts that it has valued the plaintiffs’ truck
State Farm also asserts that under L.R.S. 22:1892,
the Court could possibly award a penalty equal to fifty percent
of the truck’s value.
That statute provides:
(1) Failure to make such payment within
thirty days after receipt of such
satisfactory written proofs and demand
therefor or failure to make a written offer
to settle any property damage claim,
including a third-party claim, within thirty
days after receipt of satisfactory proofs of
loss of that claim, as provided in Paragraphs
(A)(1) and (4), respectively, or failure to
make such payment within thirty days after
written agreement or settlement as provided
in Paragraph (A)(2), when such failure is
found to be arbitrary, capricious, or without
probable cause, shall subject the insurer to
a penalty, in addition to the amount of the
loss, of fifty percent damages on the amount
found to be due from the insurer to the
insured, or one thousand dollars, whichever
is greater, payable to the insured, or to any
of said employees, or in the event a partial
payment or tender has been made, fifty
percent of the difference between the amount
paid or tendered and the amount found to be
due as well as reasonable attorney fees and
costs. Such penalties, if awarded, shall not
be used by the insurer in computing either
past or prospective loss experience for the
purpose of setting rates or making rate
State Farm calculates that this would lead
to a combined damages amount just below $60,000 ($39,819 for the
vehicle plus $19,909 in penalties).
But plaintiffs have also
alleged damages for “loss of monies, including monies continuing
to be paid to the lienholder.”
State Farm pegs the monthly loan
payments at $583 per month, which would total $4,662 since May
2011, when the plaintiffs’ truck was stolen and burned.
assuming that the plaintiffs seek only the value of payments they
have made since the truck was stolen.
The total amount
outstanding on the loan is $31,358, and the plaintiffs may try to
recover more than the $4,662 they paid since May.
also points out, correctly, that the plaintiffs’ generic claim
for past, present and future emotional distress, both intentional
and negligent; past, present and future mental anguish, and loss
of enjoyment of life would push the amount well over $75,000.
plaintiffs truly seek less than $75,000, then they should let
defendant know that in a credible way.
But, on this record, this
Court has diversity jurisdiction.
Accordingly, IT IS ORDERED: the plaintiffs’ motion is
New Orleans, Louisiana, January 25, 2012.
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
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