Wyatt v. New England Mutual Life Insurance Company et al
REPORT AND RECOMMENDATION - The Court RECOMMENDS that 9 MOTION to Remand be DENIED. Objections to R&R due by 3/27/2017. Signed by Magistrate Judge Kimberly A. Jolson on 3/13/2017. (agm)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
Civil Action 2:17-cv-40
Chief Judge Edmund A. Sargus, Jr.
Magistrate Judge Jolson
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, et al.,
REPORT AND RECOMMENDATION
This case is before the Court on Plaintiff’s Motion to Remand. (Doc. 9). For the reasons
set forth below, the Court RECOMMENDS that the Motion to Remand be DENIED.
Plaintiff is a former dentist who asserts that she is no longer able to work in her
occupation due to Parsonage Turner Syndrome, a neurological disorder.
(Doc. 2 at ¶ 23).
Plaintiff states that her disability began in 2010 and impacts her ability to use her right arm. (Id.
at ¶ 23). Two physicians have opined that Plaintiff is unable to practice dentistry due to her
neurological disorder. (Id. at ¶ 27).
Plaintiff purchased an individual disability insurance policy (No. 191D341479001)
through New England Life Insurance Company (“New England Life”) in June 1993. (Id. at
¶ 12). New England Life sold or transferred the policy to Metropolitan Life Insurance Company
(“Metropolitan Life”), which used Paul Revere Life Insurance Company (“Paul Revere”) as an
administrator. (Id. at ¶ 13). Plaintiff filed a disability claim with Metropolitan Life on January
(Id. at ¶ 32).
According to Plaintiff, Metropolitan Life hired Unum Group
Corporation (“Unum”) to advise it concerning its obligations for Plaintiff’s claim under the
policy. (Id. at ¶ 14).
Metropolitan Life denied Plaintiff’s claim for benefits between January 2012 and April
2013, but approved and paid benefits for June 2013 through February 25, 2016. (Id. at ¶ 33).
Plaintiff asserts that on February 25, 2016, Metropolitan Life and/or Unum “made a
determination that she was not disabled and ceased payments.” (Id. at ¶ 34). On December 14,
2016, Plaintiff filed the instant Complaint against New England Life, Paul Revere, Metropolitan
Life, and Unum in the Franklin County Court of Common Pleas. Defendants removed the action
to this Court on January 12, 2017. (Doc. 1).
Plaintiff sets forth several claims, which include declaratory judgment, breach of
contract, and bad faith. (See Doc. 2). More specifically, Plaintiff seeks declaratory judgment
under Ohio Revised Code § 2721 for a determination of the rights and duties arising out of the
contracts between her and Defendants. (Id. at ¶ 37). She also “asks the court to declare that she
has met all conditions of the contract, is contractually disabled, and is entitled to monthly
benefits until she is no longer disabled pursuant to the terms of the policy issued by New
England Life Insurance, policy no. 191D241479001.” (Id. at ¶ 38).
Next, Plaintiff alleges that Defendants are in breach of contract for refusing to pay her
based on a total disability. (Id. at ¶ 40). Plaintiff states that she “is disabled and is presently
owed total disability benefits in the amount of $61,000.00 plus interest, to date (December 31,
2016) and will be owed an additional $6100.00 per month, until judgment is granted and
thereafter as long as she meets the conditions of the contract.” (Id. at ¶ 41). She also claims
entitlement to residual and recovery benefits that are calculated based on her prior earnings and
are equal to the full amount of contract benefits. (Id. at ¶ 42).
Plaintiff also alleges bad faith. (Id. at ¶ 46). Specifically, Plaintiff claims that:
Defendants’ handling and processing of and denial of Plaintiff’s disability claim
was not reasonably justified and, as such, constituted bad faith. Plaintiff further
states that Defendants’ conduct was oppressive, and was undertaken knowingly,
intentionally, willfully with malice and in disregard of Plaintiff’s rights. The
denial of Plaintiff’s claim for long term disability is not predicated upon
circumstances that furnish a reasonable justification therefore, and Defendants
acted in an arbitrary and capricious manner causing Plaintiff great emotional
(Id. at ¶¶ 46–47).
Plaintiff filed a Motion to Remand on February 2, 2017. (Doc. 9). That Motion is
now ripe for consideration. (See Doc. 13 (Opposition); Doc. 14 (Reply)).
The basis for removing a state court case to federal court “must be disclosed upon the
face of the complaint, unaided by the answer or by the petition for removal.” Gully v. First Nat’l
Bank, 299 U.S. 109, 113 (1936); see also Powell v. Wal-Mart Stores, Inc., No. 14-155-HRW,
2015 WL 2063966, at *3 (E.D. Ky. Apr. 30, 2015) (noting that “jurisdiction is determined at the
time of removal”). Thus, the Court may not consider defenses in deciding if a case may be
removed. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987); Loftis v. United Parcel
Serv., Inc., 342 F.3d 509, 515 (6th Cir. 2003). Because removing a case interferes with the state
court’s jurisdiction, removal statutes are construed narrowly. See Long v. Bando Mfg. Co. of
Am., Inc., 201 F.3d 754, 757 (6th Cir. 2000) (stating “removal statutes are to be narrowly
construed” because “they implicate federalism concerns”).
The requirements for federal jurisdiction based on diversity of citizenship are set forth in
28 U.S.C. § 1332(a). Diversity is satisfied if no plaintiff and no defendant are citizens of the
same state, and the amount in controversy is $75,000 or greater. See 3LI Consultant Grp. V.
Catholic Health Partners, No. 1:15-cv-455, 2016 WL 246202, at *1 (S.D. Ohio Jan. 21, 2016).
The amount in controversy generally does not include interest, costs, or attorney’s fees. See 28
U.S.C. § 1332(a); see, e.g., Torres v. State Farm Mut. Auto. Ins. Co., 478 F. Supp. 2d 924, 927–
28 (E.D. Mich. Mar. 14, 2007). However, punitive damages may be included in the calculation.
Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 572 (6th Cir. 2001). More specifically,
unless it is a “legal certainty” that punitive damages cannot be recovered, the Court must
consider such damages when examining the jurisdictional amount. Id. (citing Holley Equip.
Corp. v. Credit Alliance Corp., 821 F.2d 1531, 1535 (11th Cir. 1987)).
Whether Plaintiff will prevail on her claims is irrelevant for the purposes of determining
the amount in controversy. See Garza v. Bettcher Indus., Inc., 752 F. Supp. 753, 763 (E.D.
Mich. 1990). It is sufficient if a fair reading of the Complaint demonstrates that, if Plaintiff is
successful, it is more likely than not that her damages will exceed the required amount. Id.
Finally, Defendants bear the burden of proving they have satisfied amount-in-controversy
requirement by a preponderance of the evidence. Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868,
871 (6th Cir. 2000).
Plaintiff argues that remand is warranted because her claim at the time of removal was
for $61,000 in benefits, which is below the $75,000 required for removal based on diversity
jurisdiction. (Doc. 9 at 3). However, Plaintiff seeks in excess of $25,000 for her declaratory
judgment claim, in excess of $25,000 for her breach of contract claim, and in excess of $25,000
for her bad faith claim. (Doc. 2 at 9–10). Thus, federal jurisdiction based on diversity of
citizenship arguably is satisfied based on the plain language of the Complaint. (See id.).
Plaintiff argues to the contrary, asserting that the amount in controversy is only the
aggregate value of past benefits wrongfully withheld. (Doc. 9 at 4). Even accepting that
proposition as true, see Francis v. Madison Nat. Life Ins. Co., No. 09-12345, 2009 WL 2390579,
at *3 (E.D. Mich. July 31, 2009), Plaintiff’s argument disregards the critical fact that the
Complaint contains a claim “of exemplary or punitive damages” for bad faith. (Doc. 2 at 10).
Ohio law allows for punitive damages against insurers that act in bad faith. Pollack v. State
Farm Mut. Auto. Ins. Co., No. 2:11-cv-581, 2011 WL 5075815, at *2 (S.D. Ohio Oct. 26, 2011).
Indeed, under § 2315.21(D)(2)(a) of the Ohio Revised Code, “a court may award punitive
damages up to two times the amount of compensatory damages awarded.”
Id.; Molek v.
Nusseibeh, No. 2015CA00085, 2015 WL 9393955, at *6 (Ohio Ct. App. Dec. 21, 2015). “It is
not uncommon” for punitive damages to greatly exceed compensatory damages. Conrad v.
McDonald’s Corp., No. 2:15-cv-3127, 2016 WL 1638889, at *4 (S.D. Ohio Apr. 26, 2016)
Thus, even limiting Plaintiff’s compensatory damages to $61,000, it is more likely than
not that her punitive damages would bring her award to $75,000 or greater. See id. Stated
differently, if Plaintiff is successful on her claims, she could be awarded damages far greater
than the jurisdictional requirement. See, e.g., Millhon v. Unum Life Ins. Co. of Am., No. 2:08-cv652, 2009 WL 2431252, at *3 (S.D. Ohio Aug. 5, 2009).
Because a fair reading of the
Complaint demonstrates by a preponderance of the evidence that the amount in controversy for
federal diversity jurisdiction is satisfied, Defendants have satisfied their burden to show that the
amount in controversy exceeds $75,000.
For the reasons set forth above, the Court RECOMMENDS that Plaintiff’s Motion to
Remand be DENIED. (Doc. 9).
Procedure on Objections
If any party objects to this Report and Recommendation, that party may, within fourteen
days of this Report, file and serve on all parties written objections to those specific proposed
findings or recommendations to which objection is made, together with supporting authority for
the objection(s). A judge of this Court shall make a de novo determination of those portions of
the report or specified proposed findings or recommendations to which objection is made. Upon
proper objections, a judge of this Court may accept, reject, or modify, in whole or in part, the
findings or recommendations made herein, may receive further evidence or may recommit this
matter to the magistrate judge with instructions. 28 U.S.C. § 636(b)(1).
The parties are specifically advised that failure to object to the Report and
Recommendation will result in a waiver of the right to have the district judge review the Report
and Recommendation de novo, and also operates as a waiver of the right to appeal the decision of
the District Court adopting the Report and Recommendation. See Thomas v. Arn, 474 U.S. 140
(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).
IT IS SO ORDERED.
Date: March 13, 2017
/s/ Kimberly A. Jolson
KIMBERLY A. JOLSON
UNITED STATES MAGISTRATE JUDGE
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