White v. Allstate Insurance Company

Filing 10

ORDER denying Plaintiff's 4 Motion to Remand. Signed by District Judge Halil S. Ozerden on May 16, 2018. (ENW)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
KATHY WHITE

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v.
ALLSTATE INSURANCE COMPANY

PLAINTIFF
Civil No. 1:17cv350-HSO-JCG
DEFENDANT

MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFF’S [4] MOTION TO REMAND
BEFORE THE COURT is the Motion to Remand [4] filed by Plaintiff Kathy
White. This Motion is fully briefed. Having considered the Motion, the record, and
relevant legal authority, the Court finds that Plaintiff’s Motion to Remand [4]
should be denied.
I. BACKGROUND
This dispute arises out of a vehicular crash which occurred on or about
September 28, 2014, in Waveland, Mississippi. See Compl. [2] at 2. While the facts
of the crash are not completely clear from the record, the incident apparently
involved Plaintiff Kathy White (“Plaintiff”) and another individual, Paul White.
Id. at 2-3. Plaintiff alleges that the collision was the result of Paul White’s
negligence, and that she sustained “substantial personal injuries, medical expenses,
severe pain and suffering, and mental anguish.” Id. at 3.
Defendant Allstate Insurance Company (“Defendant” or “Allstate”) tendered

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policy limits of $25,000.00 to Plaintiff on behalf of its insured Paul White, but
Plaintiff claims that this amount failed to adequately compensate her for the
extensive injuries she suffered. She now seeks underinsured motorist coverage
under her own underinsured insurance policy, which also happens to be issued by
Allstate. Id. According to Plaintiff, Allstate has refused to pay her the benefits to
which she is entitled without having a reasonable or arguable basis to deny her
claim. Id.
On September 12, 2017, Plaintiff filed a Complaint in the Circuit Court of
Hancock County, Mississippi, naming Allstate as the sole Defendant. Compl. [2] at
1. The Complaint advances claims for uninsured motorist coverage and bad faith
failure to pay benefits. Id. Although Plaintiff has not demanded a specific sum of
monetary damages in an ad damnum clause, the Complaint seeks damages “not
limited to the amount of the uninsured coverage available under the applicable
ALLSTATE policy, compensatory damages, interest and costs of suit and punitive
damages.” Id. at 4.
On December 15, 2017, Allstate removed the case to this Court, invoking
diversity jurisdiction pursuant to 28 U.S.C. § 1332. Notice of Removal [1] at 2.
Plaintiff has filed the present Motion to Remand [4], contending that the amountin-controversy requirement of § 1332 is not satisfied. Pl.’s Mot. [4] at 1-2.
Defendant responds that, in light of the bad faith claim and request for an
unspecified amount of punitive damages in the Complaint, the amount in
controversy exceeds $75,000.00. Def.’s Resp. [6] at 1-2; Def.’s Mem. [7] at 3-7.
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While a copy of the policy has not been submitted, the parties appear to agree that
the amount of the underinsured motorist benefits available under the policy is
limited to $25,000.00. Def.’s Resp. [6] at 1; Pl.’s Reply [9] at 3.
In support of Plaintiff’s request to remand, she has submitted an Affidavit [8]
with her Reply [9], in which she purportedly attempts to limit her ability to recover
damages from Allstate. Aff. of Kathy White [8] at 1-2. Plaintiff “agree[s] to never
seek damages from defendant in excess of $75,000.00, including costs, attorney fees
and interest.” Id. at 2. Plaintiff further “agree[s] to never seek to amend [her]
complaint at a later time to seek damages in excess of $75,000.00.” Id.
II. DISCUSSION
A.

Relevant Legal Standards
“The burden is on the removing party to show that removal is proper.”

Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir. 2014). “The party
seeking to invoke federal diversity jurisdiction bears the burden of establishing both
that the parties are diverse and that the amount in controversy exceeds $75,000.”
Garcia v. Koch Oil Co. of Texas Inc., 351 F.3d 636, 638 (5th Cir. 2003). “Any doubts
regarding whether removal jurisdiction is proper should be resolved against federal
jurisdiction.” Vantage Drilling Co., 741 F.3d at 537 (quotation omitted).
28 U.S.C. § 1332(a)(1) provides that
[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-(1)
citizens of different States . . . .

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28 U.S.C. § 1332(a)(1). The parties do not dispute that they are of diverse
citizenship; the pertinent question is whether the amount-in-controversy
requirement is satisfied.
28 U.S.C. § 1446(c)(2) provides that
[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).
The United States Supreme Court has interpreted § 1446(c)(2) to mean that
if a defendant’s amount-in-controversy allegation in the notice of removal is
challenged, “both sides submit proof and the court decides, by a preponderance of
the evidence, whether the amount-in-controversy requirement has been satisfied.”
Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554 (2014); see also
Statin v. Deutsche Bank Nat. Trust Co., 599 F. App’x 545, 547-48 (5th Cir. 2014)
(remanding case for limited purpose of receiving relevant evidence from both sides
and determining whether amount in controversy exceeds $75,000.00 after plaintiff
challenged the amount in controversy for the first time on appeal).

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Jurisdictional facts, including the amount in controversy, are judged as of the
time of removal. Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000);
see also Toney v. State Farm Lloyds, 661 F. App’x 287, 290 (5th Cir. 2016). When an
insurance policy is at issue, under certain circumstances the policy limit will
establish the amount in controversy. See, e.g., Hartford Ins. Grp. v. Lou-Con Inc.,
293 F.3d 908, 911 (5th Cir. 2002). “[I]f an insurance policy limits the insurer’s
liability to a sum below the jurisdictional threshold, the fact that a claimant wants
more money does not increase the amount in controversy.” Id. However, in
ascertaining the amount in controversy, a court may also include punitive damages
and other items for which an insurer could be liable under state law. St. Paul
Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998); see also Toney,
661 F. App’x at 290.
Under Mississippi law, “[a] punitive damages claim should be decided by a
jury if 1) there was no arguable or legitimate basis for denying coverage, and 2) the
insurance company acted with malice or gross and reckless disregard for the rights
of the insured.” United States Fid. & Guar. Co. of Mississippi v. Martin, 998 So. 2d
956, 970 (Miss. 2008). A plaintiff bears a heavy burden when seeking punitive
damages, which are not to be imposed “simply because a mistake was made
regarding coverage.” Id. at 970-71.
“[I]f it is facially apparent from the petition that the amount in controversy
exceeds $75,000 at the time of removal, post-removal affidavits, stipulations, and
amendments reducing the amount do not deprive the district court of jurisdiction.”
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Gebbia, 233 F.3d at 883. A court may consider a post-removal affidavit when the
jurisdictional amount was ambiguous on the face of the state petition and the
affidavit helps clarify the jurisdictional facts as of the time of removal. St. Paul
Reinsurance Co., 134 F.3d at 1254 n.18.
“Remand is warranted when a plaintiff submits a binding post-removal
affidavit clarifying that the amount in controversy was not met as of the date of
removal.” McNamee v. Alfa Mut. Gen. Ins. Co., No. 3:17-CV-496-DCB-LRA, 2018
WL 386763, at *1 (S.D. Miss. Jan. 11, 2018) (citing Asociacion Nacional de
Pescadores a Pequena Escala O Artesanales de Colombia (ANPAC) v. Dow Quimica
de Colombia, S.A., 988 F.2d 559, 566 (5th Cir. 1993), abrogated on other grounds by
Marathon Oil Co. v. Ruhrgas, 145 F.3d 211 (5th Cir. 1998)). District courts in the
Fifth Circuit have held that “[a] post-removal affidavit is binding if, in it, the
plaintiff renounces her ability to recover more than the jurisdictional minimum in
state court.” Id. (collecting cases). This generally means that the plaintiff avers
that she will not accept more than the jurisdictional minimum. Id. (collecting
cases).
B.

Analysis
1.

Plaintiff’s Affidavit [8]

In this case, Plaintiff filed a post-removal Affidavit [8] on January 24, 2018,
the same day that she filed her Reply [9] in support of her Motion to Remand.
Plaintiff has essentially raised a new argument for the first time in her Affidavit [8]
and Reply [9], which is procedurally improper.
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In addition, the Court is not persuaded that the Affidavit [8] constitutes “a
binding post-removal affidavit clarifying that the amount in controversy was not
met as of the date of removal.” McNamee, 2018 WL 386763, at *1. Plaintiff does
not attempt to elaborate on the amount in controversy at the time of removal, but
instead appears to want to now limit her recovery post-removal because she
“desire[s] to litigate this claim in the Circuit Court of Hancock County, Mississippi.”
Aff. of Kathy White [8] at 1. Plaintiff swears that she will never seek damages from
Allstate in excess of $75,000.00, but she does not aver that she will never accept
such damages in excess of the jurisdictional minimum. See Aff. of Kathy White [8]
at 2. The Court cannot say that this is the type of binding clarification in an
affidavit that would be sufficient to require remand in and of itself. See, e.g.,
McNamee, 2018 WL 386763, at *1. In short, the Court does not find Plaintiff’s
Affidavit [8] to be of any assistance in clarifying the amount of damages sought at
the time of removal.
2.

The Amount in Controversy at the Time of Removal

Plaintiff did not demand a specific amount of damages in her Complaint, but
did seek damages “not limited to the amount of uninsured coverage available under
the applicable ALLSTATE policy, compensatory damages, interest and costs of suit
and punitive damages.” Compl. [2] at 4. The parties agree that the applicable
policy limit is $25,000.00, see Def.’s Resp. [6] at 1; Pl.’s Reply [9] at 3, and it is
beyond dispute that the Complaint contains a demand for an unspecified amount of
punitive damages, Compl. [2] at 3-4. Therefore, at the time of removal Plaintiff
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sought damages “not limited to” the $25,000.00 policy limit plus an unspecified
amount of punitive damages. See id. at 4.
The Complaint charges that Allstate lacked a reasonable or arguable basis to
deny Plaintiff’s claim and that its conduct “was deliberately undertaken,
intentional, wanton, willful, and in reckless disregard of the rights and well-being of
plaintiff . . . .” Compl. [2] at 3. The Complaint sets forth facts which, if proven,
could justify an award of punitive damages under Mississippi law. An award of
such damages in a “single digit ratio” to the requested $25,000.00 in compensatory
damages could easily exceed the $75,000.00 jurisdictional minimum. See generally,
e.g., Gentiva Certified Healthcare Corp. v. Rayborn, No. 5:14-CV-97-DCB-MTP, 2016
WL 164322, at *3 (S.D. Miss. Jan. 13, 2016) (holding that the requisite $75,000.00
jurisdictional amount compared to a potential $13,000.00 compensatory award is
less than a 6 to 1 ratio, well within the “single digit ratio” which the Supreme Court
suggests complies with due process) (citing State Farm Mut. Auto. Ins. Co. v.
Campbell, 538 U.S. 408, 425 (2003)).
Based upon the foregoing, Allstate has carried its burden of demonstrating
that the amount in controversy in this particular case exceeds the sum or value of
$75,000.00, exclusive of interest and costs. See 28 U.S.C. § 1332(a). The Court
possessed subject-matter jurisdiction at the time of removal and will deny Plaintiff’s
Motion to Remand.
III. CONCLUSION
For the foregoing reasons, Plaintiff’s Motion to Remand will be denied.
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IT IS, THEREFORE, ORDERED AND ADJUDGED, that Plaintiff’s
Motion to Remand [4] is DENIED.
SO ORDERED AND ADJUDGED, this the 16th day of May, 2018.

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

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