Zapata v. Allied Property and Casualty Insurance Company et al

Filing 10

MEMORANDUM AND ORDER - The court will defer ruling on the Motion to Remand and Defendants shall have until July 9, 2012, to supplement the record with facts and evidence sufficient to establish this court's jurisdiction. If Defendants fail to supplement the record, or fail to establish jurisdiction, the court will remand this matter to the District Court of Sheridan County, Nebraska. Defendants' Motion for More Definite Statement (filing no. 5 ) and Motion to Conduct Limited Dis covery (filing no. 8 ) are denied. Zapata's Objection to Defendants' Motion for More Definite Statement (filing no. 7 ) is granted. The Clerk of Court is directed to set a pro se case management deadline in this case with the following text: "July 9, 2012: Check for supplement." Ordered by Judge John M. Gerrard. (Copy mailed to pro se party)(GJG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
JOHN ZAPATA, an Individual and
as Assignee,
Plaintiff,
v.
ALLIED PROPERTY AND
CASUALTY INSURANCE
COMPANY, and NATIONWIDE
MUTUAL INSURANCE
COMPANY, an Ohio Corporation,
Defendants.

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8:12CV193

MEMORANDUM
AND ORDER

This matter is before the court on Plaintiff John Zapata’s (“Zapata”) Motion to
Remand. (Filing No. 4.) Also pending are Defendants’ Motion for More Definite
Statement (filing no. 5), Zapata’s Objection to Defendants’ Motion for More Definite
Statement (filing no. 7), and Defendants’ Motion to Conduct Limited Discovery
(filing no. 8). For the reasons discussed below, Defendants shall have until July 9,
2012, to supplement the record with facts and evidence sufficient to establish this
court’s jurisdiction. Defendants’ Motion for More Definite Statement and Motion to
Conduct Limited Discovery are denied. Zapata’s Objection to Defendants’ Motion
for More Definite Statement is granted.
I.

BACKGROUND

On May 1, 2012, Zapata filed a complaint against Allied Insurance (“Allied”)
and Nationwide Mutual Insurance Company (“Nationwide”) in the District Court of
Sheridan County, Nebraska. (Filing No. 1 at CM/ECF p. 4.) In this complaint,
Zapata asserted that (1) he was a resident of Lancaster County, Nebraska, (2) Allied
was headquartered in Des Moines, Iowa, and (3) Nationwide was organized under the

laws of Ohio. (Id.) Zapata also alleged that Defendants wrongfully denied his
insurance claim relating to property damage caused by a broken water line. (Id. at
CM/ECF p. 5.) Zapata sought damages in “amount yet to be determined, plus costs,
including an award of legal fees.” (Id. at CM/ECF p. 6.)
On June 1, 2012, Defendants filed a Notice of Removal seeking to remove
Zapata’s state-court complaint to this court pursuant to 28 U.S.C. §§ 1441(a) and
1332. (Id. at CM/ECF p. 1.) In the Notice, Defendants state that the parties are
diverse and the amount in controversy is “reasonably estimated to exceed
$75,000.00.” (Id. at CM/ECF p. 2.)
In response to Defendants’ Notice, Zapata filed a Motion to Remand, arguing
that the amount in controversy in this matter does not exceed $75,000.00. (Filing No.
4.) Defendants then filed a Motion for More Definite Statement, asking the court to,
among other things, direct Zapata to make his “Prayer for Relief” more “definite and
certain.” (Id. at CM/ECF p. 2.) Zapata objected to Defendants’ Motion for More
Definite Statement, arguing that it is premature because the jurisdiction of this court
has not yet been determined. (Filing No. 6.)
On June 20, 2012, Defendants filed a Motion to Conduct Limited Discovery
along with a Brief in Support. (Filing Nos. 8 and 9.) In their Brief, Defendants ask
the court to either deny Zapata’s Motion to Remand, order Zapata to make his
complaint more definite and certain by requiring him to state an amount in
controversy, or permit limited discovery on the issue of damages. (Filing No. 9 at
CM/ECF p. 9.)
II.

ANALYSIS

Defendants seek to remove this matter on the basis of diversity jurisdiction.
(Filing No. 1 at CM/ECF p. 1.) See 28 U.S.C. § 1332 (giving district courts original
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jurisdiction over matters where there is diversity of citizenship and where the matter
in controversy exceeds $75,000.00). Although Defendants state that the parties are
diverse and that the amount in controversy in this action is “reasonably estimated to
exceed $75,000.00[,]” Zapata’s complaint does not specify an amount of damages and
the amount of damages is not facially apparent. (See Filing No. 1 at CM/ECF pp. 2,
6.) “Where, as here, the complaint alleges no specific amount of damages . . . , the
removing party . . . must prove by a preponderance of the evidence that the amount
in controversy exceeds $75,000.” In re Minn. Mut. Life Ins. Co., 346 F.3d 830, 834
(8th Cir. 2003). Defendants have not provided any facts or evidence to demonstrate
that the amount in controversy exceeds $75,000.00. Moreover, in their Motion for
More Definite Statement and Motion to Conduct Limited Discovery, Defendants
acknowledge that the amount in controversy is unclear. (Filing No. 5 at CM/ECF p.
2; Filing No. 8 at CM/ECF p. 2.)
As discussed above, Defendants have asked the court to permit limited
discovery on this issue of damages. (Filing No. 8.) However, such discovery should
have been conducted at the state court level. Indeed, “defendants who wish to
remove an action to federal court on diversity grounds may face daunting proof
obstacles and difficult strategic choices, particularly as to whether to remove the case
right away or to develop additional evidence on damages via discovery before pulling
the removal trigger.” Lambeth v. Peterbilt Motors Co., No. 12-0169-WS-N, 2012
WL 1712692, at *5 (S.D. Ala. May 15, 2012); see also 28 U.S.C. § 1446(b)
(providing that if the case as stated in the initial pleadings is not removable, the notice
of removal may be filed within thirty days of when the defendant first discovers the
case is removable); In re Willis, 228 F.3d 896, 897 (8th Cir. 2000) (holding that “the
thirty-day time limit of section 1446(b) begins running upon receipt of the initial
complaint only when the complaint explicitly discloses the plaintiff is seeking
damages in excess of the federal jurisdictional amount”). Although Defendants argue
that “there is a fundamental unfairness in requiring Defendants to prove Plaintiff’s
damages” at this stage of the proceedings (filing no. 8 at CM/ECF p. 8), such
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“unfairness or hardship is not a valid reason to excuse removing defendants from
their strict jurisdictional burden of proving by a preponderance of the evidence that
the amount in controversy exceeds $75,000.” Lambeth, 2012 WL 1712692, at *5.
Accordingly, Defendants’ Motion to Conduct Limited Discovery is denied.
Overall, Defendants’ estimate of damages, standing alone, is insufficient to
satisfy the jurisdictional requirements of 28 U.S.C. § 1332. See, e.g., Hill v. Ford
Motor Co., 324 F. Supp. 2d 1028, 1036 (E.D. Mo. 2004) (“Speculation and belief that
plaintiff’s damages exceed $75,000.00 are insufficient to meet the defendant’s burden
of proof . . . [A removing defendant must provide] some specific facts or evidence
demonstrating that the jurisdiction amount has been met[.]”); see also Bilal v Kaplan,
904 F.2d 14, 15 (8th Cir. 1990) (concluding that if the court or an opposing party
challenges jurisdictional allegations, the burden of proof as to the existence of federal
jurisdiction is on the party claiming that jurisdiction exists). However, on the court’s
own motion, Defendants shall have until July 9, 2012, to supplement the record with
facts and evidence sufficient to establish, by a preponderance of the evidence, that the
amount in controversy exceeds $75,000.00. If Defendants fail to supplement the
record, or fail to establish jurisdiction, the court will remand this matter to the District
Court of Sheridan County, Nebraska.
In light of this, and because subject matter jurisdiction is still in question, the
court will deny Defendants’ Motion for More Definite Statement (filing no. 5)
without prejudice to reassertion after subject matter jurisdiction is established.
IT IS THEREFORE ORDERED that:
1.
The court will defer ruling on the Motion to Remand and Defendants
shall have until July 9, 2012, to supplement the record with facts and evidence
sufficient to establish this court’s jurisdiction.

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2.
If Defendants fail to supplement the record, or fail to establish
jurisdiction, the court will remand this matter to the District Court of Sheridan
County, Nebraska.
3.
Defendants’ Motion for More Definite Statement (filing no. 5) and
Motion to Conduct Limited Discovery (filing no. 8) are denied.
4.
Zapata’s Objection to Defendants’ Motion for More Definite Statement
(filing no. 7) is granted.
5.
The Clerk of Court is directed to set a pro se case management deadline
in this case with the following text: “July 9, 2012: Check for supplement.”
DATED this 25th day of June, 2012.
BY THE COURT:
s/ John M. Gerrard
United States District Judge

*This opinion may contain hyperlinks to other documents or Web sites. The
U.S. District Court for the District of Nebraska does not endorse, recommend,
approve, or guarantee any third parties or the services or products they provide on
their Web sites. Likewise, the court has no agreements with any of these third parties
or their Web sites. The court accepts no responsibility for the availability or
functionality of any hyperlink. Thus, the fact that a hyperlink ceases to work or
directs the user to some other site does not affect the opinion of the court.
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