Dewey v. GEICO Insurance Agency, Inc. et al
ORDER Signed by Magistrate Judge Jeremiah C. Lynch on 4/7/2017. (TXB)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GEICO INSURANCE AGENCY,
INCORPORATED; d/b/a GEICO
INDEMNITY COMPANY, and JOHN
Plaintiff Ashley Dewey was injured in an automobile accident in June 2015,
and in December 2016 she commenced this insurance coverage and bad faith
action against Defendant Geico Insurance Agency Incorporated, d/b/a Geico
Indemnity Company (“Geico”) in the Montana Eleventh Judicial District Court.
The First Amended Complaint (“Complaint”) asserts the following causes of
action: breach of contract (Count I); unfair claims settlement practices, breach of
fiduciary duties, and bad faith (Count II); common law bad faith (Count III), and;
negligent infliction of emotional distress (Count IV). The Complaint states that
the Geico insurance policy at issue provided for $25,000 in underinsured motorist
benefits, and otherwise seeks an unspecified amount of compensatory and punitive
damages together with an award of attorney fees.
On March 10, 2017, Geico removed the case to this Court pursuant to 28
U.S.C. § 1441, based on diversity of citizenship. Dewey has filed a motion to
remand pursuant to 28 U.S.C. § 1447(c), on the ground that this Court lacks
subject matter jurisdiction because the amount in controversy does not exceed the
$75,000 threshold necessary to establish diversity jurisdiction.
Removal of a civil action from state court to federal court is appropriate if
the action could have originally been filed in federal court. 28 U.S.C. § 1441(a);
Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). The “removal statute is
strictly construed, and any doubt about the right of removal requires resolution in
favor of remand.” Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244
(2009) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). There is a
strong presumption against removal jurisdiction, which means that the defendant
always bears of the burden establishing facts to support jurisdiction. Gaus, 980
F.2d at 566-67. If, at any time, the federal court finds that it lacks subject matter
jurisdiction over a removed action, it must remand the case to state court. 28
U.S.C. § 1447(c).
A removal notice must include a “short and plain statement of the grounds
for removal.” 28 U.S.C. § 1446(a). Geico’s notice of removal cites diversity
jurisdiction under 28 U.S.C. § 1332(c) as the basis for removing Dewey’s
Complaint. For the Court to have diversity jurisdiction, all plaintiffs must be of
different citizenship than all defendants, and the amount in controversy must
exceed $75,000. See 28 U.S.C. § 1332. It is undisputed that the parties are
completely diverse. The only issue is whether Geico has met its burden of
demonstrating that the amount in controversy exceeds $75,000.
Where, as here, the plaintiff seeks a money judgment but state law does not
permit demand for a specific sum or permits recovery of damages in excess of the
amount demanded, the removing defendant need only make a “plausible allegation
that the amount in controversy exceeds the jurisdictional threshold.” LaCross v.
Knight Transp. Inc., 775 F.3d 1200, 1202 (9th Cir. 2015). Absent a challenge to
the notice of removal, the court may accept a good faith allegation that the amount
in controversy exceeds the requisite $75,000. See 14 A.A. Charles Alan Wright &
Arthur Miller, Federal Practice and Procedure § 3702.3 (4th ed. 2012).
If the defendant’s assertion of the amount in controversy is challenged,
however, “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). The
court may order jurisdictional discovery to determine whether the party seeking
removal has met its burden of establishing the amount in controversy. Abrego
Abrego v. The Dow Chem. Co., 443 F.3d 676, 691 (9th Cir. 2006). Thus, “‘the
court may consider facts in the removal petition, and may require parties to
submit-summary judgment-type evidence relevant to the amount in controversy at
the time of removal’.” Vangsnes v. Liberty Mutual Group, Inc., 2013 WL 2255901
*4 (D. Mont. May 22, 2013) (quoting Singer v. State Farm Mut. Auto. Ins. Co.,
116 F.3d 373, 377 (9th Cir. 1997)). Ultimately, the court must make findings of
jurisdictional facts using a preponderance of the evidence standard. Abrego
Abrego, 443 F.3d at 391; see 28 U.S.C. § 1446(c)(2)(B).
Here, Dewey’s Complaint alleges that the Geico insurance policy at issue
provided for $25,000 in underinsured motorist benefits, and otherwise seeks an
unspecified amount of compensatory and punitive damages together with an award
of attorney fees. A request for punitive damages may be considered in
determining the amount in controversy. Gibson v. Chrysler Corporation, 261 F.3d
927, 945 (9th Cir. 2001). A request for attorney’s fees may also be considered as
part of the amount in controversy if the substantive law of the forum state allows
them to be recovered. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 700 (9th
Cir. 2007). Geico thus alleges based on the face of the Complaint that the amount
in controversy exceeds the $75,000 jurisdictional threshold.
But because Dewey challenges that assertion in his motion to remand, and it
is not facially apparent from the Complaint whether Dewey is seeking damages in
excess of $75,000, the Court will allow the parties to engage in limited
jurisdictional discovery for purposes of establishing the amount in controversy.
Likewise, Dewey may clarify the amount in controversy by filing an affidavit
stating that she will not seek to recover damages in excess of $75,000 inclusive of
compensatory damages, punitive damages, and attorney fees. See Plentywood
Hardware, Inc. v. Liberty Mutual Group, Inc., 2015 WL 5692800 *3 (D. Mont.
Sept. 28 2015) (“A federal court can require a plaintiff to file an affidavit or
stipulation stating that he will not seek to recover damages in excess of $75,000 as
a pre-condition for remand); Sherman v. Nationwide Mutual Ins. Co., 2013 WL
550265 *2 (D. Mont. Jan. 15, 2013).
For the reasons set forth above,
IT IS ORDERED that the parties may engage in limited jurisdictional
discovery with respect to the amount placed in controversy by the Complaint. The
discovery may consist of requests for admissions or interrogatories which shall be
served on before April 21, 2017. Responses to any discovery requests propagated
pursuant to this order shall be served on or before May 1, 2017. If Dewey
chooses to file an affidavit clarifying the amount in controversy, she must do so on
or before April 17, 2017.
IT IS FURTHER ORDERED that unless the parties reach an agreement
regarding the amount placed in controversy by the Complaint, they shall, on or
before May 12, 2017, file simultaneous supplemental briefs addressing the
propriety of remand.
DATED this 7th day of April, 2017
Jeremiah C. Lynch
United States Magistrate Judge
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