Ankerson et al v. American Zurich Insurance Company

Filing 7

ORDER OF REMAND TO STATE COURT: Ordered that this case is remanded to the Circuit Court of Jackson County. Signed by District Judge Halil S. Ozerden on 2/2/2015. (JCH)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
SCOTT ANKERSON and
BRITTNEY ANKERSON
V.
AMERICAN ZURICH
INSURANCE COMPANY

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PLAINTIFFS/
COUNTER-DEFENDANTS
CIVIL NO. 1:14-cv-433-HSO-JCG
DEFENDANT/
COUNTER-CLAIMANT

ORDER OF REMAND TO STATE COURT
This matter comes before the Court sua sponte, upon its January 14, 2015,
Order [7] which directed briefing on the issue of the Court’s subject matter
jurisdiction, particularly the amount in controversy. Defendant American Zurich
Insurance Company filed a Memorandum Brief in Support of Subject Matter
Jurisdiction [6] on January 28, 2015. Having considered the record as a whole and
relevant legal authorities, the Court is of the opinion that it lacks subject matter
jurisdiction and that this case must be remanded to the Circuit Court of Jackson
County, Mississippi.
I. BACKGROUND
A.

Factual Background
Plaintiffs Scott and Brittney Ankerson [“Plaintiffs”] contend that they are

named insureds under a builder’s risk policy [the “Policy”] issued by Defendant
American Zurich Insurance Company [“Defendant”] or [“American Zurich”]. Compl.
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[1-2] at 3-4. According to Plaintiffs, the Policy covers their dwelling, dwelling
extension, personal property, and related loss of use for their property located at
7329 Amberwood Lane, Lucedale, Mississippi. Id. The dwelling was under
construction at all times relevant to this dispute. Id. at 4. Plaintiffs allege that on
or about August 25, 2014, Plaintiff Scott Ankerson’s “contractors box” containing his
tools was stolen while it was stored and being used on the dwelling’s premises. Id.
Plaintiffs maintain that they timely presented a claim to American Zurich for the
loss, but that American Zurich “improperly handled and/or denied the Plaintiffs
[sic] claim and refused to provide the Plaintiffs with fair compensation for the
covered losses.” Id.
B.

Procedural History
Plaintiffs filed their Complaint [1-2] in the Circuit Court of Jackson County,

Mississippi, on October 14, 2014, naming American Zurich as the sole Defendant.
Compl. [1-2] at 3. The Complaint advances claims for breach of contract and
negligence. Id. at 4-6. Plaintiffs seek compensatory damages; consequential and
extra-contractual damages including compensation for emotional distress,
inconvenience, attorneys’ fees, and costs of litigation; and punitive damages. Id. at
6-7. The Complaint does not contain a specific monetary demand.
American Zurich removed the case to this Court on November 26, 2014,
invoking diversity jurisdiction pursuant to 28 U.S.C. § 1332. Notice of Removal [1]
at 1-2. The Notice of Removal [1] does not reveal the amount in controversy, but
asserts generally that the amount in controversy is satisfied because Plaintiffs seek
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both compensatory damages and an unspecified amount of punitive damages. Id. at
2.
On January 14, 2015, the Court required American Zurich to file a brief
containing additional information demonstrating that the amount in controversy in
this case exceeds the jurisdictional minimum. Order [5] at 2. On January 28, 2015,
American Zurich filed a Memorandum Brief in Support of Subject Matter
Jurisdiction [6]. According to American Zurich, “[u]pon information and belief, the
alleged value of Plaintiffs’ contractors box and tools is $4,320.” Mem. Br. [6] at 1-2
(citing Tool Inventory [6-2] at 1). American Zurich relies upon Plaintiffs’ request for
unspecified liquidated consequential and punitive damages to argue that the
amount in controversy requirement is nevertheless satisfied. Id. at 2-4.
II. DISCUSSION
A.

Removal Standard
28 U.S.C. § 1441 provides for the removal of civil actions brought in a state

court of which the district courts have original jurisdiction. 28 U.S.C. § 1441(a)
(2012). Under 28 U.S.C. § 1332, “[t]he district courts shall have original jurisdiction
of all civil actions where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between . . . citizens of different
States . . . .” 28 U.S.C. § 1332(a)(1).
Federal courts are courts of limited jurisdiction, having subject matter
jurisdiction only over those matters specifically designated by the Constitution or
Congress. Epps v. Bexar-Medina-Atascosa Counties Water Improvement Dist. No. 1,
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665 F.2d 594, 595 (5th Cir. 1982). For this reason, removal statutes are subject to
strict construction. Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988).
Doubts about whether federal jurisdiction exists following removal must be resolved
against a finding of jurisdiction. Acuna v. Brown & Root, Inc., 200 F.3d 335, 339
(5th Cir. 2000) (citing Willy, 855 F.2d at 1164). The party seeking removal bears the
burden of establishing federal jurisdiction over the state court suit. Boone v.
Citigroup, Inc., 416 F.3d 382, 388 (5th Cir. 2005); Willy, 855 F.2d at 1164.
The record reflects that the parties are of completely diverse citizenship. At
issue is whether the amount in controversy is satisfied. According to § 1446(c)(2),
[i]f removal of a civil action is sought on the basis of the jurisdiction
conferred by section 1332 (a), the sum demanded in good faith in the
initial pleading shall be deemed to be the amount in controversy, except
that—
(A)
the notice of removal may assert the amount in controversy if the
initial pleading seeks—
(i)
nonmonetary relief; or
(ii)
a money judgment, but the State practice either does not
permit demand for a specific sum or permits recovery of
damages in excess of the amount demanded; and
(B)
removal of the action is proper on the basis of an amount in
controversy asserted under subparagraph (A) if the district court
finds, by the preponderance of the evidence, that the amount in
controversy exceeds the amount specified in section 1332(a).
28 U.S.C. § 1446(c)(2). Under § 1446, “a defendant’s notice of removal need only
include a plausible allegation that the amount in controversy exceeds the
jurisdictional threshold.” Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct.
547, 554 (2014) (emphasis added). Generally, “when a defendant seeks federalcourt adjudication, the defendant’s amount-in-controversy allegation should be
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accepted when not contested by the plaintiff or questioned by the court.” Id. at 553
(emphasis added). When questioned, § 1446(c)(2)(B) dictates the procedure to
follow: “both sides submit proof and the court decides, by a preponderance of the
evidence, whether the amount-in-controversy requirement has been satisfied.” Id.
at 554.
B.

Diversity Jurisdiction
As this Court has previously found, “[i]t is not facially apparent from the

pleadings that the matter in controversy exceeds the sum or value of $75,000.00,”
and the Court has questioned whether the amount in controversy requirement is
truly satisfied. Order [5] at 2. Based upon the submissions filed by American
Zurich, the Court turns to whether the amount in controversy has been shown by a
preponderance of the evidence. 28 U.S.C. § 1446(c)(2)(B); Dart Cherokee Basin
Operating Co., 135 S. Ct. at 554.
The value of Plaintiffs’ claim which American Zurich denied totaled
$4,320.00. Tool Inventory [6-2] at 1. American Zurich relies upon a string of cases
from the Southern and Northern Districts of Mississippi to argue that the demand
in the Complaint for an unspecified amount of consequential and punitive damages
can account for the other $70,680.00 needed to reach the jurisdictional threshold.
Mem. Br. [6] at 2 (citing Walker v. Scales, No. 1:13-CV-00227-SA-DAS, 2014 WL
670216 (N.D. Miss. Feb. 20, 2014); Harmon v. IBM Lender Business Process
Services, Inc., No. 1:11CV206-SA-DAS, 2012 WL 4588017 (N.D. Miss. Oct. 2, 2012);
Nguyen v. Regions Bank, No. 1:10cv253-HSO-JMR, 2010 WL 5071173 (S.D. Miss.
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Dec. 7, 2010)). A closer review of these decisions reveals that they do not dictate the
result American Zurich suggests.
The compensatory damages sought in each of those cases well exceeded the
$4,320.00 in controversy here. Walker involved a dispute over the plaintiff’s
uninsured motorist coverage, which for bodily injury totaled $25,000.00 per person
and $50,000.00 per accident, and for property damage totaled $25,000.00. Walker,
No. 1:13-CV-00227-SA-DAS, Notice of Removal [1] at 3 (N.D. Miss. Nov. 27, 2013).1
Harmon was a case where the plaintiff asserted claims for wrongful foreclosure,
conversion, and intentional infliction of emotional distress related to a $32,500.00
promissory note. Harmon, 2012 WL 4588017, at *1. In Nguyen, the plaintiff sought
$35,000.00 in wind-hail coverage after the defendant lender allegedly failed to pay
plaintiff’s insurance premium from an escrow account. Nguyen, 2010 WL 5071173,
at *2 n.1.
The facts of the present case are distinguishable. Based upon the record as a
whole, the Court cannot say that American Zurich has shown by preponderance of
the evidence that the amount in controversy exceeds $75,000.00. See 28 U.S.C. §
1446(c)(2). Because the Court must resolve all doubts about whether jurisdiction
exists in favor of remand, remand is required.

The plaintiff in Walker argued that the amount in controversy was less than the
insurer asserted in the Notice of Removal because the plaintiff was the sole occupant of his
vehicle and the insurer had already tendered approximately $4,000.00 to cover his property
damage. Walker, No. 1:13-CV-00227-SA-DAS, Mot. to Remand [4] at 2 (N.D. Miss. Dec. 12,
2013). However, even accepting the plaintiff’s calculation of the amount in controversy, the
compensatory damages sought in Walker were approximately $46,000.00. See id.
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III. CONCLUSION
American Zurich has not carried its burden of demonstrating that the Court
has subject matter jurisdiction over this dispute. The case must be remanded to
state court.
IT IS, THEREFORE, ORDERED AND ADJUDGED that, this civil action
is REMANDED to the Circuit Court of Jackson County, Mississippi, and that a
certified copy of this Order of remand shall be immediately mailed by the Clerk to
the clerk of the state court pursuant to 28 U.S.C. § 1447(c).
SO ORDERED AND ADJUDGED, this the 2nd day of February, 2015.

s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE

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