Henares-Levy v. State Auto Property and Casualty Insurance Company

Filing 10

MEMORANDUM AND ORDER... IT IS HEREBY ORDERED that the motion of Defendant State Auto Property and Casualty Insurance Company to strike Plaintiff's claims for mental anguish and punitive damages is GRANTED, to the extent these claims seek common-law mental anguish and punitive damages. (Doc. No. 6 .) Signed by District Judge Audrey G. Fleissig on 7/7/2015. (NEB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

LOURDES HENARES-LEVY,
Plaintiff,
v.
STATE AUTO PROPERTY AND
CASUALTY INSURANCE COMPANY,
Defendant.

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No. 4:15-CV-00753-AGF

MEMORANDUM AND ORDER
This matter is before the Court on the motion of Defendant State Auto Property
and Casualty Insurance Company (Doc. No. 6) to strike Plaintiff’s claims for mental
anguish and punitive damages. For the reasons stated below, this motion shall be
granted.
BACKGROUND
This matter arises out of the failure of Defendant to indemnify Plaintiff for, and
pay a claim relating to, hail and wind damage to Plaintiff’s home under the terms of
Plaintiff’s homeowner’s insurance policy with Defendant. Plaintiff filed suit in state
court on February 10, 2015, asserting two counts. Count I states a claim for breach of
insurance contract, and seeks compensatory damages in the amount of $55,941.80.
Count II states a claim for vexatious refusal to pay claim under Missouri Revised Statute
§ 375.420, and also asks for punitive damages and damages for mental stress and anguish

arising out of Defendant’s alleged vexatious refusal to pay. Count II does not specify the
amounts sought for these damages.
On May 12, 2015, Defendant removed the case to this Court on the basis of
diversity jurisdiction, pursuant to 28 U.S.C. § 1332. Defendant’s notice of removal stated
that diversity jurisdiction is proper in this case because complete diversity of citizenship
between the parties exists, and the amount in controversy exceeds $75,000. In support of
its argument that the minimum amount in controversy is met, Defendant stated that
Plaintiff declined to stipulate that her total damages were less than $75,000, and that,
therefore, Plaintiff seeks damages in excess of that amount.
On May 19, 2015, Defendant filed the present motion to strike Plaintiff’s requests
for mental anguish and punitive damages from Count II, contending that vexatious
refusal to pay a claim is a statutory cause of action which specifically provides a calculus
for awarding compensatory damages and attorney’s fees, but does not authorize mental
anguish or punitive damages. Plaintiff failed to respond to Defendant’s motion to strike
within the time allowed to do so.
On June 18, 2015, the Court issued an Order for Plaintiff to show cause why
Defendant’s motion to strike should not be granted. (Doc. No. 9.) The Court warned
Plaintiff that failure to respond may result in the striking of these claims. Plaintiff has not
responded to the Court’s Order, and the time to do so has passed.

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DISCUSSION
Motion to Strike
Under Federal Rule of Civil Procedure 12(f), “the court may strike from a
pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous
matter.” Fed. R. Civ. P. 12(f). While district courts enjoy “broad discretion” in
determining whether to strike a party’s pleadings, such an action is “an extreme
measure.” Stanbury Law Firm v. IRS, 221 F.3d 1059, 1063 (8th Cir. 2000).
Plaintiff’s vexatious refusal claim is controlled by Missouri statute, which allows
for statutory penalty damages and attorney’s fees for the vexatious and unreasonable
denial of a claim. Mo. Rev. Stat. § 375.420. In such a cause of action, common-law
punitive damages are not permitted. See SSM Health Care Corp. v. Repwest Ins. Co., No.
4:14CV1552 CDP, 2014 WL 5800214, at *3 (E.D. Mo. Nov. 7, 2014) (citing Overcast v.
Billings Mut. Ins. Co., 11 S.W.3d 62, 68 (Mo. banc 2000)). Furthermore, tort theories of
recovery, such as claims for mental anguish and emotional distress, are not provided for
under the Missouri law. See Easter v. Farmers Ins. Co., No. 13–3412–CV–S–REL, 2014
WL 1237161, at *2 (W.D. Mo. Mar. 26, 2014); Luechtefeld v. Unumprovident Corp., No.
4:06CV1241 HEA, 2006 WL 3257719, at *2 (E.D. Mo. Nov. 9, 2006). It is not clear
from Plaintiff’s petition whether she is seeking common-law mental anguish and punitive
damages, or merely statutory penalty damages. To the extent she is seeking common-law
mental anguish and punitive damages, the Court will strike these references from Count
II. See SSM Health Care Corp., 2014 WL 5800214, at *3 (“[R]equests for damages not

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available under the applicable law are proper subjects for a motion to strike.”) (citation
omitted).
Subject Matter Jurisdiction
A court has a “special obligation” to consider whether it has subject matter
jurisdiction in every case. Hart v. United States, 630 F.3d 1085, 1089 (8th Cir. 2011).
This includes the responsibility to “consider sua sponte the court’s subject matter
jurisdiction where the court believes that jurisdiction may be lacking.” Id. (citation
omitted).
For a district court to have diversity jurisdiction under § 1332, there must be
complete diversity between the parties, and the amount in controversy must exceed
$75,000. 28 U.S.C. § 1332(a). Federal courts are courts of limited jurisdiction, and the
amount in controversy requirement for diversity jurisdiction is to be strictly construed.
See Williams v. Omaha Paper Stock, Inc., No. 4:06CV884 FRB, 2006 WL 2085463, at
*1 (E.D. Mo. July 25, 2006). When calculating the amount in controversy, “punitive
damages may not be added to actual damages when their recovery is impossible . . .
under the applicable state law.” Dixon v. Northwestern Nat. Bank of Minneapolis, 276 F.
Supp. 96, 104 (8th Cir. 1967); see also Allison v. Sec. Ben. Life Ins. Co., 980 F.2d 1213,
1215 (8th Cir. 1992) (affirming dismissal for lack of jurisdiction where amount in
controversy could not be met without including claim for punitive damages, which were
not recoverable as alleged). Statutory attorney fees may be included in calculating the
amount in controversy. See Crawford v. F. Hoffman-La Roche Ltd., 267 F.3d 760, 766
(8th Cir. 2001). Remand is appropriate if the court determines “to a legal certainty” that
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the claim is for less than the requisite amount. See Hargis v. Access Capital Funding,
LLC, 674 F.3d 783, 790 (8th Cir. 2012).
Because the Court has found that Plaintiff’s claims for punitive and mental
anguish damages are not recoverable as a matter of law, the Court feels it prudent to more
closely scrutinize the amount in controversy to ensure that the exercise of diversity
jurisdiction remains appropriate. Count I of the complaint requests compensatory
damages in the amount of $55,941.80. Count II of the complaint states a claim under
Missouri Revised Statute § 375.420, which allows for statutory damages for vexatious
refusal to pay a claim, “not to exceed twenty percent of the first fifteen hundred dollars of
the loss, and ten percent of the amount of the loss in excess of fifteen hundred dollars and
a reasonable attorney’s fee.” Mo. Rev. Stat. § 375.420. Twenty percent of the first
$1,500 is $300. Ten percent of the alleged loss in excess of $1,500 would be $5,444.18.
This brings the amount in controversy to $61,685.98. Thus, as long as Plaintiff incurs
reasonable attorney’s fees of, or exceeding, $13,314.02 the minimum amount in
controversy will be met. In litigation of this kind, the Court cannot say, as a legal
certainty, that Plaintiff will not incur such costs. See, e.g., Bjornestad v. Progressive
Northern Ins. Co., 664 F.2d 1195, 1198-99 (8th Cir. 2011) (affirming attorney fee award
of $45,718.60 in a vexatious refusal case); Tripp v. Western Nat. Mut. Ins. Co., 664 F.3d
1200, 1208 (8th Cir. 2011) (affirming attorney fee award of $65,000 in a vexatious
refusal case). Thus, the Court concludes that diversity jurisdiction in this case exists.

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CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that the motion of Defendant State Auto Property
and Casualty Insurance Company to strike Plaintiff’s claims for mental anguish and
punitive damages is GRANTED, to the extent these claims seek common-law mental
anguish and punitive damages. (Doc. No. 6.)

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AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 7th day of July, 2015.

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