Jauregui v. Mid-Century Insurance Company et al

Filing 19

ORDER granting 9 Motion to Remand to State Court. Signed by Chief Judge Gloria M. Navarro on 10/13/16. (Copies have been distributed pursuant to the NEF, cc: State Court - JM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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ALBERTO JAUREGUI, individually,
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Plaintiff,
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vs.
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MID-CENTURY INSURANCE COMPANY, )
et al.,
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Defendants.
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Case No.: 2:16-cv-01496-GMN-NJK
ORDER

Pending before the Court is the Motion to Remand, (EFC No. 9), filed by Plaintiff

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Alberto Jauregui (“Plaintiff”). Defendant Mid-Century Insurance Company (“Mid-Century”)

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filed a Response, (ECF No. 11), and Plaintiff filed a Reply, (ECF No. 13). For the reasons

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discussed below, Plaintiff’s Motion to Remand is GRANTED.

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I.

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BACKGROUND
Plaintiff originally filed his Complaint in state court alleging breach of contract and bad

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faith in violation of NRS § 686A.310 against Defendant Geico General Insurance Company

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(“Geico”) and Mid-Century (collectively “Defendants”). (Compl. ¶¶ 12–33, ECF No. 1-2). As

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to Mid-Century, Plaintiff alleges that Mid-Century failed to honor an uninsured/underinsured

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motorist (“UIM”) policy to which Plaintiff is a third party beneficiary. (Id. ¶¶ 8–10). On June

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23, 2016, Mid-Century removed the action, citing this Court’s diversity jurisdiction pursuant to

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28 U.S.C. § 1332. (Pet. for Removal ¶ 4, ECF No. 1). Specifically, Mid-Century asserts that

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Plaintiff is domiciled in Nevada and that Mid-Century is domiciled in California. (See id. ¶ 5).

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Mid-Century further states that “[i]n addition to compensatory damages . . . [i]t is clear that

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Plaintiff is seeking punitive damages in excess of $75,000.00.” (Id. ¶ 6).

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On June 28, 2016, Plaintiff filed the instant Motion to Remand. (Mot. to Remand, ECF

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No. 9). Plaintiff asserts that Mid-Century has failed to show that the amount in controversy is

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sufficient to raise subject matter jurisdiction. (Id. 1:25–28).

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II.

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LEGAL STANDARD
Federal courts are courts of limited jurisdiction, possessing only those powers granted by

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the Constitution and by statute. See United States v. Marks, 530 F.3d 799, 810 (9th Cir. 2008)

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(citation omitted). For this reason, “[i]f at any time before final judgment it appears that the

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district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C.

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§ 1447(c).

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A defendant may remove an action to federal court only if the district court has original

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jurisdiction over the matter. 28 U.S.C. § 1441(a). “Removal statutes are to be ‘strictly

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construed’ against removal jurisdiction.” Nevada v. Bank of Am. Corp., 672 F.3d 661, 667 (9th

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Cir. 2012) (quoting Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002)). The party

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asserting federal jurisdiction bears the burden of overcoming the presumption against federal

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jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

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Specifically, federal courts must reject federal jurisdiction “if there is any doubt as to the right

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of removal in the first instance.” Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992) (quoting

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Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)); see also Matheson v.

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Progressive Specialty Ins. Co., 319 F.3d 1089, 1090–91 (9th Cir. 2003) (per curiam) (noting

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that “[w]here it is not facially evident from the complaint that more than $75,000 is in

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controversy, the removing party must prove, by a preponderance of the evidence, that the

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amount in controversy meets the jurisdictional threshold”).

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District courts have subject matter jurisdiction in two instances. First, district courts

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have subject matter jurisdiction over civil actions that arise under federal law. 28 U.S.C.

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§ 1331. Second, district courts have subject matter jurisdiction over civil actions where no

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plaintiff is a citizen of the same state as a defendant and the amount in controversy exceeds

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$75,000. 28 U.S.C. § 1332(a).

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III.

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DISCUSSION
In this case, Mid-Century bases removal of this action solely on diversity of citizenship

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pursuant to 28 U.S.C. § 1332(a). Although neither party disputes that the complete diversity

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requirement is satisfied, Mid-Century has failed to show, by a preponderance of the evidence,

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that the amount in controversy exceeds $75,000.

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First, Mid-Century argues that the amount in controversy is met given Plaintiff’s
“demand for $50,000.00 in UIM benefits from [Mid-Century], which is over and above his

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demand for UIM benefits from [Plaintiff’s] own carrier, Geico.” (Resp. 6:11–14, ECF No. 11).

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However, there is no indication on the record that Plaintiff has made a policy-limits demand.

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Further, these demands are not present on the face of the Complaint. Instead, Plaintiff’s

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Complaint merely seeks compensatory damages in excess of $10,000 for each of his four

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claims, as well as an unspecified amount for punitive damages, prejudgment interest, and

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attorneys’ fees. (Compl. 9:1–20 Ex. 2, ECF No. 1-2).

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In line with the presumption against removal jurisdiction, the Ninth Circuit has held that

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a defendant’s bare assertion of the amount in controversy, devoid of any indication from the

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face of the complaint, is not enough to establish federal jurisdiction. See Matheson, 319 F.3d at

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1091. In Matheson, the complaint sought “in excess of $10,000 for economic loss, ‘in excess’

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of $10,000 for emotional distress, and ‘in excess’ of $10,000 for punitive damages.” Id.

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However, the complaint did not specify how much “in excess” the plaintiff was seeking. Id.

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Accordingly, the Ninth Circuit held that this assertion alone was insufficient to find that the

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defendant “made the required showing of the amount in controversy.” Id.

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The request for relief contained in Plaintiff’s Complaint closely mirrors that found in
Matheson. Id. In Matheson, the plaintiff asked for at least $30,000, well below the

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jurisdictional amount. Id. Similarly, Plaintiff seeks at least $40,000. Additionally, as in

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Matheson, Plaintiff does not specify how much in excess of $40,000 he is seeking. Therefore,

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Mid-Century’s bare assertions are insufficient to find that Mid-Century made the required

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showing of the amount in controversy.

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Second, Mid-Century argues that “while [Plaintiff] asserts the amount in controversy is

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not met, he will not stipulate to the same.” (Resp. 2:10–11). This argument is also

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unpersuasive. Mid-Century fails to provide any legal authority that attributes any significance

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to Plaintiff’s decision not to stipulate that the amount in controversy does not exceed $75,000.

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In fact, many district courts within this circuit have declined to consider a refusal to stipulate to

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damages below the jurisdictional amount when determining whether the amount in controversy

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requirement is met. See, e.g., Soriano v. USAA Ins. Agency, Inc., No. 3:09-cv-00661-RCJ-

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RAM, 2010 WL 2609045 (D. Nev. June 24, 2010); Conrad Assocs. v. Hartford Accident &

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Indem. Co., 994 F. Supp. 1196, 1199 (N.D. Cal. 1998).

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Third, Mid-Century further asserts that the punitive damages sought by Plaintiff “may

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[w]ell [e]xceed [t]he [j]urisdictional [l]imit” by themselves. (Resp. 6:16–22). In support of this

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contention, Mid-Century lists five cases in which punitive damage awards exceeded $75,000.

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See, e.g., Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (l991); Banker’s Life & Cas. Co. v.

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Crewnshaw, 486 U.S. 71 (1988); Woodward v. Newcourt Commercial Fin. Corp., 60 F. Supp.

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2d 530 (D.S.C. 1999).

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While Mid-Century is correct that the Court can, in some instances, consider a potential

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award of punitive damages within the amount in controversy, “it is not enough to tell the Court

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that [p]laintiffs seek punitive damages, [d]efendant must come forward with evidence showing

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the likely award if [p]laintiffs were to succeed in obtaining punitive damages.” Wilson v. Union

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Sec. Life Ins. Co., 250 F. Supp. 2d 1260, 1264 (D. Idaho 2003); see also Burk v. Med. Sav. Ins.

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Co., 348 F. Supp. 2d 1063, 1069 (D. Ariz. 2004). Furthermore, the Court cannot consider

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awards issued in other actions unless Mid-Century points to specific commonalities which raise

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an inference that a similar award is possible in the instant case. See, e.g., Conrad Assocs., 994

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F. Supp. at 1201. Mid-Century makes no attempt to illuminate factual similarities which raise

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an inference that a jury might award a similar amount of punitive damages in this case. In

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addition, all but one of the punitive damage awards were awarded by juries outside of Nevada.

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Mid-Century likewise fails to satisfy its evidentiary burden as to the single Nevada jury

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award it cites, Tracey v. American Family Insurance, Co., No. 2:09-cv-1257-GMN-PAL, 2010

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WL 5477751, at *1 (D. Nev. Dec. 30, 2010). Mid-Century notes that the plaintiffs in both the

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present action and in Tracey allege violations of NRS § 686A.310 based on UIM policies. (See

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Resp. 8:19–20); Tracey, 2010 WL 5477751, at *1. Mid-Century provides no additional factual

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parallels between the two cases. In Tracey, the Court held that the “[p]laintiff provided

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sufficient evidence at trial that it was forced to litigate the matter because [d]efendant failed to

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timely pay the policy limits.” Tracey, 2010 WL 5477751, at *6. Mid-Century does not explain

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the similarities between the circumstances in this case and the evidence presented in Tracey

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that was persuasive to that jury. Without a comparison of the injuries or the conduct of the

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insurers in each case, Mid-Century has provided no basis for the Court to conclude that an

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award for Plaintiff’s NRS § 686A.310 claim could be comparable to the award in Tracey.

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For the reasons discussed above, Mid-Century has failed to carry its burden of proving

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

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Accordingly, this Court lacks subject matter jurisdiction under 28 U.S.C. § 1332 and the case

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must be remanded to state court.

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IV.

CONCLUSION
IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand, (ECF No. 9), is

GRANTED.
IT IS FURTHER ORDERED that this case be REMANDED to the Eighth Judicial

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District Court for the State of Nevada, County of Clark.

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DATED this _____ day of October, 2016.

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___________________________________
Gloria M. Navarro, Chief Judge
United States District Judge

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