Zapata v. Allied Property and Casualty Insurance Company et al

Filing 15

MEMORANDUM AND ORDER - Zapata's Motion to Remand (filing no. 4 ) is granted. This matter is dismissed without prejudice and hereby remanded to the District Court of Sheridan County, Nebraska. Ordered by Judge John M. Gerrard. (Copy mailed to pro se party) (Copy mailed to District Court of Sheridan County as directed) (TEL)

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.) For the reasons discussed below, the Motion 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, and in bad faith,
denied his insurance claim relating to property damage caused by a broken water line.
(Id. at CM/ECF p. 5.) Zapata sought damages in an “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 stated 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.)
On June 26, 2012, the court reviewed Zapata’s Motion to Remand and stated:
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 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.
....
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.
(Filing No. 10 at CM/ECF pp. 2-3.)

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On June 26, 2012, Zapata filed a Supplemental Reply to Defendants’ Brief in
Opposition to his Motion to Remand. (Filing No. 11.) In the Supplemental Reply,
Zapata stated that on November 10, 2009, he submitted an insurance claim to
Defendants for damages in the amount of $57,413.00. (Id.) However, he also states
that this amount is not the “final amount” of his claim. (Id.)
On July 9, 2012, Defendants filed a Supplement along with an Index of
Evidence and an Affidavit in Support. (Filing Nos. 12, 13, and 14.) In the Index of
Evidence, Defendants filed a copy of a loss notice referencing Policy
#ACP7203117841, the policy Zapata identifies in his complaint. (Filing No. 13-2;
Filing No. 1 at CM/ECF p. 5.) This policy has limits of $120,000.00. (Filing Nos.
13-2 and 14.) Defendants argue that “a fact finder could legally conclude by a
preponderance of the evidence that the amount in controversy is greater than
$75,000.00 when the amount of $57,413.00 . . . and the facts surrounding the
purported limits of the policy as noted on the Plaintiff’s Loss Notice are added to the
unspecified general damages purported claim for first-party bad faith.” (Filing No.
12 at CM/ECF p. 2.)
II.

ANALYSIS

In order to avoid remand, Defendants must prove by a preponderance of the
evidence that the amount in controversy at the time of removal exceeded $75,000.00.
In re Minn. Mut. Life Ins. Co., 346 F.3d at 834. As discussed above, Defendants
argue that, in determining the amount in controversy, the court should consider (1)
the facts surrounding the insurance policy limits as noted on Zapata’s loss notice, and
(2) the unspecified general damages of Zapata’s bad faith claim. (Filing No. 12 at
CM/ECF p. 2.) The court will explore each argument in turn.

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A.

Policy Limits

Insurance policy limits are relevant to determining the amount in controversy
when the validity of the entire policy is at issue or the value of an underlying tort
claim exceeds the limits. See Scottsdale Ins. Co. v. Universal Crop Protection
Alliance, LLC, 620 F.3d 926, 932 (8th Cir. 2010) (citing Budget Rent-A-Car v.
Higashiguchi, 109 F.3d 1471, 1473 (9th Cir. 1997)). However, where a case involves
the applicability of an insurance policy to a particular occurrence, “the jurisdictional
amount in controversy is measured by the value of the underlying claim . . . not the
face amount of the policy.” 14AA Charles Alan Wright, Arthur R. Miller & Edward
H. Cooper, Federal Practice and Procedure § 3710 (4th ed. 2012).
Here, Defendants have not provided any evidence to show that the validity of
the insurance policy is at issue. Moreover, Zapata’s allegations relate to the
applicability of Policy #ACP720311784 to a particular occurrence, namely, damage
caused to Zapata’s property by a broken water line. (Filing No. 11; Filing No. 1 at
CM/ECF p. 5.) In light of this, the court will measure the amount in controversy by
the value of Zapata’s claim and not the policy limits.
B.

Bad Faith Claim

Defendants also ask the court to consider the unspecified general damages of
Zapata’s bad faith claim. Defendants cite to LeRette v. Am. Med. Security, Inc., 705
N.W.2d 41, 47 (Neb. 2005), to show that, in certain situations, Nebraska recognizes
first-party bad faith claims for general damages in connection with insurance policies.
(Filing No. 12 at CM/ECF p. 2.) However, Defendants have not provided any
evidence to show that the facts in this case present a similar situation to that in
LeRette, nor have they provided any evidence to show the value of Zapata’s bad faith

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claim.1 (See Filing No. 12.) In short, speculation and belief that Zapata’s damages
exceed $75,000.00 are insufficient to meet Defendants’ burden of proof. See, e.g.,
Hill v. Ford Motor Co., 324 F. Supp. 2d 1028, 1036 (E.D. Mo. 2004) (concluding a
removing defendant must provide some specific facts or evidence demonstrating that
jurisdiction has been met).
Overall, the court finds that Defendants have not proven by a preponderance
of the evidence that, at the time of removal, Zapata’s claims exceeded $75,000.00.
Indeed, a district court is required to resolve all doubts about federal jurisdiction in
favor of remand. Transit Cas. Co. v. Certain Underwriters at Lloyd’s of London, 119
F.3d 619, 625 (8th Cir. 1997).
IT IS THEREFORE ORDERED that:
1.

Zapata’s Motion to Remand (filing no. 4) is granted.

2.
This matter is dismissed without prejudice and hereby remanded to the
District Court of Sheridan County, Nebraska.
3.
The clerk’s office shall mail a copy of this Memorandum and Order to
the District Court of Sheridan County, Nebraska, and may take any other action
necessary to effectuate the remand.
4.
A separate judgment will be entered in accordance with this
Memorandum and Order.
DATED this 15th day of August, 2012.

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In LaRette, the Nebraska Supreme Court reversed a $25,000.00 verdict for a
bad faith claim. 705 N.W.2d at 45-46, 51.
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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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