Sanchez v. American Family Mutual Insurance Company

Filing 28

ORDER Denying 11 Plaintiffs' Motion to Remand to State Court. Signed by Judge Kent J. Dawson on 5/2/12. (Copies have been distributed pursuant to the NEF - EDS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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ERICK SANCHEZ, et al,

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Plaintiffs,

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v.

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Case No. 2:11-CV-01507-KJD -RJJ

AMERICAN FAMILY MUTUAL
INSURANCE COMPANY,

ORDER

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Defendant.
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Before the Court is Plaintiffs Erick and Tania Sanchez’s Motion to Remand (#11). Defendant
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American Family Mutual Insurance Company has filed an opposition (#13) and Plaintiffs have filed
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a reply (#14). Defendants filed a supplemental brief in opposition (#11) and Plaintiffs filed a
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supplemental reply (#27).
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I. Background
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Plaintiffs were injured in an automobile accident which occurred on August 10, 2010.
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Plaintiffs are seeking to claim payments pursuant to an underinsured motorist policy (“UIM”) issued
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by Defendant. The UIM policy limits are $25,000 per person. Plaintiffs filed a complaint in the
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Eighth Judicial District in August 2011 asserting causes of action for breach of contract, bad faith
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breach of the covenant of good faith and fair dealing, and violations of the Nevada Unfair Trade
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Practices Act NRS 686A.310, et seq. On September 20, 2011, Defendant removed the action to this

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Court based on diversity jurisdiction.

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Plaintiffs filed a Motion to Remand (#11) on October 14, 2011. On April 16, 2012 the Court

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issued an Order (#24) setting oral argument on the Motion to Remand and directing the parties “to

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address the issue of awards involving similar claims in this district.” At the hearing, Defendant was

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not prepared to show the Court awards from Nevada courts involving similar claims. The Court

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ordered Defendant to file a supplemental brief with citations to relevant cases and ordered Plaintiffs

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to respond.

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II. Discussion

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Any civil action may be removed to federal district court so long as original jurisdiction

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would lie in the court to which the case is removed. 28 U.S.C. § 1441(a). This Court has original

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jurisdiction over “all civil actions where the matter in controversy exceeds the sum or value of

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$75,000, exclusive of interest and costs, and is between ... citizens of different States.” 28 U.S.C. §

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1332(a)(1). To determine whether the amount in controversy has been met, “the status of a case as

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disclosed by a plaintiff’s complaint is controlling in the case of a removal....” St. Paul Mercury

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Indem. Co. v. Red Cab Co., 303 U.S. 283, 291 (1938); see also Paschinger v. MGM Grand Hotel-Las

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Vegas, Inc., 802 F.2d 362, 363-64 (9th Cir.1986). Where it is not facially evident from the complaint

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that more than $75,000 is in controversy, the removing party must prove, by a preponderance of the

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evidence, that the amount in controversy meets the jurisdictional threshold. Matheson v. Progressive

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Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir.2003) (citing Sanchez v. Monumental Life Ins. Co.,

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102 F.3d 398, 403-04 (9th Cir.1996)). “If it is unclear what amount of damages the plaintiff has

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sought ... then the defendant bears the burden of actually proving the facts to support jurisdiction,

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including the jurisdictional amount.” Krajca v. Southland Corp., 206 F.Supp.2d 1079, 1081

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(D.Nev.2002) (emphasis in original) (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992)).

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Thus, the court will consider “facts presented in the removal petition as well as any

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summary-judgment-type evidence relevant to the amount in controversy at the time of removal.”
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Matheson, 319 F. At 1090. Where doubt regarding the right to removal exists, a case should be

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remanded to state court. Id.

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Here, Plaintiffs argue that the court lacks jurisdiction because the total amount of the policy

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limits for both Plaintiffs is $50,000. In opposition, Defendant argues that the amount in controversy

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is satisfied because Plaintiffs are also requesting punitive damages and attorneys’ fees in their

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complaint. Generally, the amount in controversy may be satisfied by all of a plaintiff’s claims for

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damages, including attorneys’ fees and punitive damages. See Kroske v. U.S. Bank Corp., 432 F.3d

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976, 980 (9th Cir.2005). However, the mere possibility of an award of attorneys’ fees or punitive

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damages is not sufficient to prove that the amount in controversy has been met. In order to meet its

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burden for removal, Defendant must present evidence indicating the amount of punitive damages

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Plaintiffs will seek is more likely than not sufficient to increase the amount in controversy to

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$75,000. See McCaa v. Massachusetts Mutual Life Insurance Company, 330 F.Supp.2d 1143, 1149

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(D.Nev.2004).

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Defendant cites Amber Cabrera v. American Family Insurance Company, Case No. A521507

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Eighth Judicial District Court of Nevada (April 16, 2009). That case involved similar facts, where

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there was a denial of a UIM claim with allegations of bad faith and violations of the Unfair Claims

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Practices Act. The jury awarded $90,000 in compensatory and $25,000 in punitive damages.

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Defendant also cites Miller v. Allstate Insurance Company, Case No. A505614 Eighth Judicial

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District Court of Nevada (February 10, 2011). There, the insurer failed to timely interplead policy

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limits of $25,000 and the jury awarded $1,561,350.84 in damages. Defendant also cites Tracey v.

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American Family Insurance Company, Case No. 2:09-CV-1257-GMN-PAL (D. Nev, 2010) where

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plaintiff asserted claims for breach of contract, bad faith, and violations of the Unfair Claims

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Practices Act associated with the denial of a UIM claim. The similar claims in that case resulted in a

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$50,000 award for breach of contract and a $150,000 award for the Unfair Claims Practices Act

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violations. Defendant cites several more cases from Nevada courts where sizeable awards of

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compensatory and punitive damages were rendered on claims similar to those at issue here. Plaintiffs
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provide no contrary authority in their opposition. Instead they argue that the amount in controversy

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cannot be known at this point in the case and assert the truism that every personal injury case is

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different and therefore valued differently.

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The Court is convinced that it is more likely than not that the amount in controversy exceeds

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$75,000 based on verdicts in similar cases. Because all the requirements for jurisdiction under 28

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U.S.C. § 1332(a)(1) have been met, the Court denies the Motion to Remand.

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III. Conclusion

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IT IS HEREBY ORDERED THAT Plaintiffs’ Motion to Remand (#11) is DENIED.
DATED this 2nd day of May 2012.

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_____________________________
Kent J. Dawson
United States District Judge

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