Kelly v. State Farm Mutual Automobile Insurance Company

Filing 16

ORDER Denying Plaintiff's 9 Motion to Remand to State Court. Signed by Judge Robert C. Jones on 02/12/2016. (Copies have been distributed pursuant to the NEF - NEV)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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______________________________________
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KENYA L. KELLY,
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Plaintiff,
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vs.
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STATE FARM MUTUAL AUTOMOBILE )
INSURANCE COMPANY,
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Defendant.
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2:15-cv-02169-RCJ-GWF
ORDER

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This case arises out of an insurance company’s alleged refusal to make a fair and

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adequate payment under two underinsured motorist (“UM”) policies. Pending before the Court is

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a Motion to Remand (ECF No. 9). For the reasons given herein, the Court denies the motion.

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I.

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FACTS AND PROCEDURAL HISTORY
Plaintiff Kenya L. Kelly was a passenger in a car involved in an accident with a hit-and-

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run driver on July 7, 2014. (Compl. ¶¶ 12–16, ECF No. 1). At the time of the accident, she had

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an active UM policy issued by Defendant State Farm Mutual Automobile Insurance Company

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(“State Farm”) providing coverage of $15,000 (“Policy #1”). (Id. ¶ 6). The vehicle in which

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Plaintiff traveled was also insured by a UM policy issued by State Farm providing coverage of

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$15,000 (“Policy #2”). (Id. ¶ 5). In her Complaint, Plaintiff claims that as a result of the accident

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she incurred medical bills in excess of $10,000 as well as other “medical damages.” (Id. ¶¶ 18–

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20). Plaintiff submitted a UM claim to Defendant under each policy and demanded a policy limit

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payment under each policy. (Id. ¶ 21). Plaintiff alleges that Defendant “refused to make a fair

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and adequate payment or reasonable offer to the Plaintiff” as required by the policies. (Id. ¶ 22).

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Plaintiff sued Defendant in state Court on five causes of action: (1) breach of contract; (2)

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unfair claims practices; (3) contractual breach of implied covenant of good faith and fair dealing;

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(4) tortious breach of the implied covenant of good faith and fair dealing; and (5) bad faith.

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Plaintiff asks for special and contractual damages, general damages, and punitive damages, along

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with attorney’s fees and costs. Defendant removed based on diversity jurisdiction. Plaintiff has

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moved to remand for failure to satisfy the amount-in-controversy requirement.

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II.

LEGAL STANDARDS

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Assuming complete diversity between the parties, federal courts have jurisdiction over

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state claw claims where the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a).

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Where a complaint specifies no precise amount of damages, a removing defendant bears the

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burden of showing by a preponderance of the evidence that the amount in controversy exceeds

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$75,000. See Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403–04 (9th Cir. 1996).

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Punitive damages and attorney’s fees are included in the calculation of the amount in controversy

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if available by statute, rule, or contract. See Barry v. Edmunds, 116 U.S. 550, 562–65 (1886)

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(punitive damages); Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1155 (9th Cir.1998) (attorney’s

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fees). A court can consider information provided by a defendant in briefing a motion to remand

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as an amendment to a notice of removal. Cohn v. Petsmart, Inc., 281 F.3d 837, 840, n.1 (9th Cir.

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2002).

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III.

ANALYSIS
The Court is convinced by a preponderance of the evidence that the amount in

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controversy exceeds $75,000. In her Complaint, Plaintiff prays for special and contractual

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damages, general damages, and punitive damages, each “in excess of ten thousand dollars.”

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(Compl., 17, ECF No. 1). The question is not answered, however, by the amount prayed for in a

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complaint. In Nevada, a plaintiff must include in her complaint a recital that she seeks in excess

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of $10,000 in order to invoke the general jurisdiction of the district court and avoid the limited

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jurisdiction of the justice court, no matter what amount she seeks above $10,000. The amount

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sought in a complaint therefore means little for the purpose of determining the amount in

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controversy. Plaintiff argues the amount in controversy cannot be more than $75,000 because she

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has never demanded more than $50,000 to settle the case, (Mot., 3, ECF No. 1), but it is not

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relevant that a plaintiff has offered to settle for a fixed amount below $75,000. Nor is it relevant

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that a defendant denies liability outright, as Defendant has done here. The question is whether it

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is more probable than not that the plaintiff, if she prevails on the theories she has alleged in her

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complaint, can recover more than $75,000 in damages, fees, and costs. That is the definition of

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the amount in controversy.

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Plaintiff claims medical special damages of $22,521.02 along with general damages in

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excess of $10,000. (Compl., 17; Mot., 9). She also asks for punitive damages for her claims of

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unfair claims practice, breach of the implied covenant of good faith and fair, dealing, and bad

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faith. Defendant argues that punitive damages are available for Plaintiff’s bad faith claim.

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Defendant reviews the verdict from a similar case in which the plaintiff received a verdict of

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$40,000 for breach of contract, $50,000 for unfair trade practices and breach of the covenant of

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good faith and fair dealing, and $25,000 in punitive damages. See Cabrera v. Am. Family Fin.

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Servs., 2009 WL 2923011 (April 3, 2009, District Court of Nevada, Eighth Judicial District,

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Clark County); see also Simmons v. PCR Tech., 209 F. Supp. 2d 1029, 1033 (N.D. Cal. 2002) (a

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defendant may introduce evidence of jury verdicts to establish probable punitive damages).

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Here, Plaintiff has demanded Defendant pay the limits on the two policies, equal to a

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total of $30,000. If successful on her claims, Plaintiff would likely obtain the $30,000 limit

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because she is asking for $22,521.02 in medical special damages in addition to at least $10,000

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in general damages. If Plaintiff also prevails on her tort claims, and the jury awards punitive

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damages, then she could likely receive a verdict comparable to the $115,000 verdict in Cabrera.

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Any attorney’s fees and costs would only increase the total award. The Court is convinced by a

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preponderance of the evidence that the amount in controversy exceeds $75,000.

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CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Remand (ECF No. 9) is DENIED.

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IT IS SO ORDERED.

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DATED: This 12th dayFebruary, 2016.
Dated this 2nd day of of February, 2016.

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_____________________________________
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ROBERT C. JONES
ROBERT C. JONES
ERT
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United States District Judge
s District
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