Nordin v. The Standard Fire Insurance Company

Filing 12

Opinion and Order - The Court concludes Defendant has established this Court has diversity jurisdiction. Signed on 11/18/2022 by Judge Marco A. Hernandez. (mja)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

EVA NORDIN, an individual
Plaintiff,
v.
THE STANDARD FIRE INSURANCE
COMPANY, a foreign corporation,
Defendant.

Paul H. Krueger
Kymber R. Lattin
Paul Krueger Law Firm PC
4380 S.W. Macadam Avenue
Suite 450
Portland, OR 97239
Attorneys for Plaintiff
Peder A. Rigsby
Sean Douglas McKean
Bullivant Houser Bailey
One SW Columbia
Suite 800
Portland, OR 97204
Attorneys for Defendant

1 – OPINION & ORDER

No. 3:22-cv-00775-HZ
OPINION & ORDER

HERNÁNDEZ, District Judge:
This matter is before the Court on its own review of Defendants’ Notice of Removal (#1).
The Court concludes Defendant has established this Court has jurisdiction.
BACKGROUND
The following facts are taken from the Complaint and the parties filings related to
jurisdiction and are taken as true unless otherwise noted.
On May 3, 2021, Plaintiff Eva Nordin was insured by Defendant The Standard Fire
Insurance Company when she was involved in a motor vehicle collision. As a result of the
collision, Plaintiff sustained injuries that required her to seek medical treatment and her
physician determined that she was disabled and unable to engage in her usual occupation.
Plaintiff, therefore, made a timely demand for reimbursement for both her medical expenses and
wage loss from Defendant.
Ultimately, Plaintiff filed an action against Defendant in Multnomah County Circuit
Court asserting claims for payment of personal injury protection benefits, breach of the implied
covenant of good faith, and negligent infliction of emotional distress, and seeking damages
totaling $75,000 as well as attorney’s fees pursuant to Oregon Revised Statute § 742.061. On
May 27, 2022, Defendant removed the matter to this Court on the basis of diversity jurisdiction.
In its Notice of Removal Defendant asserted “together with attorney fees, the amount in
controversy in this matter exceeds $75,000.” Notice of Removal ECF 1 ¶ 6.
On June 21, 2022, the Court held a Rule 16 conference at which the Court noted it was
concerned that Defendant had not established this Court has jurisdiction because Plaintiff alleged
damages of exactly $75,000 and there is some question as to whether attorney fees should be

2 – OPINION & ORDER

considered when evaluating the amount in controversy. Accordingly, the Court directed the
parties to submit briefing on the issue of jurisdiction.
STANDARDS
“The district courts of the United States are courts of limited jurisdiction, defined (within
constitutional bounds) by federal statute.” Badgerow v. Walters, 142 S. Ct. 1310, 1315 (2022).
Federal courts are “limited, by Congress and by the Constitution, in the subject matter of cases
[they] may adjudicate.” Polo v. Innoventions Int'l, LLC, 833 F.3d 1193, 1196 (9th Cir. 2016). “If
at any time before final judgment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). Federal courts have “an
independent obligation to ensure subject matter jurisdiction exists,” Chavez v. JPMorgan Chase
& Co., 888 F.3d 413, 415 (9th Cir. 2018), and, therefore, a court may raise the question of
subject-matter jurisdiction sua sponte at any time during the action. Fed. R. Civ. P. 12(h)(3). See
also Polo, 833 F.3d at 1196 (“No motion, timely or otherwise, is necessary: ultimate
responsibility to ensure jurisdiction lies with the district court.”).
A defendant may remove an action to federal court only if the district court has original
jurisdiction over the matter. 28 U.S.C. § 1441(a). The court must “strictly construe the removal
statute against removal jurisdiction.” Hansen v. Grp. Health Coop., 902 F.3d 1051, 1056–57 (9th
Cir. 2018) (citing Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d
1102, 1107 (9th Cir. 2010)). “If a district court determines at any time that less than a
preponderance of the evidence supports the right of removal, it must remand the action to the
state court.” Id. The party asserting federal jurisdiction bears the burden of overcoming the
“strong presumption against removal jurisdiction.” Id. (citing Geographic Expeditions, 599 F.3d
at 1107).

3 – OPINION & ORDER

DISCUSSION
I.

Amount in Controversy Standards
An amount in controversy exceeding $75,000 is a prerequisite for diversity jurisdiction.

28 U.S.C. § 1332(a). “‘[F]ederal courts permit individual plaintiffs, who are the masters of their
complaints, to avoid removal to federal court, and to obtain a remand to state court, by . . . suing
for less than the jurisdictional amount.’” Gavitt v. T-Mobile USA, Inc., No. 3:20-CV-01331-BR,
2020 WL 7049087, at *3 (D. Or. Dec. 1, 2020)(quoting Standard Fire Ins. Co. v. Knowles, 568
U.S. 588, 595 (2013)). Thus, when “it is unclear from the face of the complaint whether the
amount in controversy exceeds $75,000, the removing defendant bears the burden of
establishing, by a preponderance of the evidence, that the amount in controversy exceeds the
jurisdictional threshold.” Chavez, 888 F.3d at 416 (quotation omitted). See also Matheson v.
Progressive Specialty Ins. Co., 319 F.3d 1089, 1090–91 (9th Cir. 2003)(“it is not facially evident
from the complaint that more than $75,000 is in controversy, the removing party must prove, by
a preponderance of the evidence, that the amount in controversy meets the jurisdictional
threshold.”).
“[W]hether remand is proper must be ascertained on the basis of the pleadings at the time
of removal.” Broadway Grill, Inc. v. Visa Inc., 856 F.3d 1274, 1277 (9th Cir. 2017). In addition,
when “determining the amount in controversy, the Court accepts the allegations contained in the
complaint as true and assumes the jury will return a verdict in the plaintiff's favor on every
claim.” Henry v. Cent. Freight Lines, Inc., 692 F. App'x 806, 807 (9th Cir. 2017)(citing
Campbell v. Vitran Express, Inc., 471 F. App’x 646, 648 (9th Cir. 2012)).

4 – OPINION & ORDER

II.

Analysis
Defendant concedes that Plaintiff seeks damages of exactly $75,000, in her Complaint,

but asserts the Court should consider attorney fees when determining the amount in controversy.
Plaintiff asserts attorney fees should not be considered part of the amount in controversy in this
case.
A.

Attorney fees pursuant to Oregon Revised Statute § 742.061 should be
included in the calculation of the amount in controversy for removal
jurisdiction
Plaintiff concedes that the Ninth Circuit has held when “an underlying statute

authorizes an award of attorneys' fees, either with mandatory or discretionary language, such fees
may be included in the amount in controversy.” Galt G/S v. JSS Scandinavia, 142 F.3d 1150,
1156 (9th Cir. 1998). Plaintiff asserts, however, that a careful analysis of 28 U.S.C. § 1332 in
conjunction with O.R.S. § 742.061 indicates attorney fees should not be included in the
calculation of the amount in controversy in this action. Specifically, Plaintiff notes § 1332
provides “district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs. . . .” Emphasis
added. In turn, § 742.061(1) provides:
[If] settlement is not made within six months from the date proof of loss is
filed with an insurer and an action is brought in . . . court . . . upon any
policy of insurance . . ., and the plaintiff’s recovery exceeds the amount of
any tender made by the defendant in such action, a reasonable amount to
be fixed by the court as attorney fees shall be taxed as part of the costs of
the action and any appeal brought thereon.
Emphasis added. According to Plaintiff, under the plain language of § 1332 costs are to be
excluded from the calculation of the amount in controversy, and attorney fees awarded pursuant
O.R.S. § 742.061 are done so as part of the costs of the action, therefore, attorney fees awarded
pursuant to § 742.061 should not be considered in determining the amount in controversy.

5 – OPINION & ORDER

The Ninth Circuit has not addressed whether attorney fees authorized pursuant to
§ 742.061 should be included in the calculation of the amount in controversy. In Julber v.
Premera Blue Cross, No. 6:17-CV-00790-AA, 2017 WL 3425179 (D. Or. Aug. 8, 2017),
however, the district court concluded these fees should be included. The Julber court relied on
the Supreme Court’s decision in Missouri State Life Insurance Company et al. v. Jones, 290 U.S.
199 (1933), in reaching that conclusion. In Missouri State the Court considered whether to
include attorney fees in the calculation of the amount in controversy under the removal statute
when the fees were authorized pursuant to a Missouri state statute that provided attorney fees
were “to be taxed up as a part of the costs therein and collected as other costs are or may be by
law collected.” 290 U.S. at 200-01. The Court noted it had previously held “a statute which
allowed attorneys' fees to be taxed as part of the costs created a liability enforceable by proper
judgment in a federal court; that the mere declaration of the state statute could not alter the true
nature of the obligation.” Id. at 202. The Court concluded the attorney fees requested by the
plaintiff “became part of the matter put in controversy by the complaint, and not mere ‘costs'
excluded from the reckoning by the jurisdictional and removal statutes,” accordingly they should
be included in the calculation of the amount in controversy. Id.
Like the fee provision in Missouri State, O.R.S. § 742.061 creates a liability
enforceable by a judgment in federal court and, therefore, the “mere declaration” in O.R.S.
§ 742.061 that fees are taxed as part of the costs of an action does not “alter the true nature of the
obligation.” 290 U.S. at 202. This Court, therefore, agrees with Julber that fees pursuant to
§ 742.061 may be included in the calculation of the amount in controversy for removal purposes.
Plaintiff also asserts that even though § 742.061 creates the right to attorney fees,
Defendant has not established by a preponderance of the evidence that Plaintiff has satisfied the

6 – OPINION & ORDER

requirements of § 742.061 that would entitle her to attorney fees and, therefore, the Court should
not include attorney fees in its calculation of the amount in controversy in this case. As noted,
the Ninth Circuit has held when “determining the amount in controversy, the Court accepts the
allegations contained in the complaint as true and assumes the jury will return a verdict in the
plaintiff's favor on every claim.” Henry, 692 F. App'x at 807 (citation omitted). Plaintiff alleges
in her Complaint that she submitted a “timely demand for the satisfaction of her claim for
damages,” she “substantiated [her] claims for insurance benefits,” and Defendant failed to make
an offer of settlement within six months from the date of proof. Compl. ¶¶ 10, 20. These
allegations, taken as true and assuming a verdict in Plaintiff’s favor, are sufficient to establish a
right to attorney fees for purposes of removal jurisdiction.
Plaintiff also contends even if the facts taken as true are sufficient, Defendant
denied those portions of Plaintiff’s Complaint in its Answer, and, therefore, Plaintiff’s
entitlement to fees is “far from certain.” Pl.’s Memo. ECF 11 at 4. The Ninth Circuit has made
clear, however, that the “existence of a valid defense to the claim does not eliminate federal
jurisdiction.” Geographic Expeditions, 599 F.3d at 1108. The court explained:
just because a defendant might have a valid defense that will reduce
recovery to below the jurisdictional amount does not mean the defendant
will ultimately prevail on that defense. Further, if a district court had to
evaluate every possible defense that could reduce recovery below the
jurisdictional amount the district court would essentially have to decide
the merits of the case before it could determine if it had subject matter
jurisdiction.
Id. See also Arias v. Residence Inn by Marriott, 936 F.3d 920, 928 (9th Cir. 2019)(“the strength
of any defenses indicates the likelihood of the plaintiff prevailing; it is irrelevant to determining
the amount that is at stake in the litigation. Arias's argument “conflat[es] the amount in
controversy with the amount of damages ultimately recoverable.”)(emphasis in original)). The

7 – OPINION & ORDER

Court, therefore, does not consider the existence of a possible defense to Plaintiff’s claims when
considering whether to include attorney fees in the calculation of the amount in controversy.
The Court concludes pursuant to Missouri State and Geographic Expeditions that
attorney fees requested by Plaintiff pursuant to § 742.061 “became part of the matter put in
controversy by the complaint, and [are] not mere ‘costs' excluded from the reckoning by the
jurisdictional and removal statutes,” and, therefore, those attorney fees should be considered in
the calculation of the amount in controversy in this case.
B.

Defendant has established attorney fees in this matter exceed $.01
As noted, Plaintiff alleges damages of $75,000. In order to satisfy the amount in

controversy requirement, therefore, Defendant must prove only one penny in attorney fees is “at
stake” in the litigation. See 28 U.S.C. § 1332(a)(“The district courts shall have original
jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of
$75,000 “)(emphasis added). See also Chavez, 888 F.3d at 417 (“The amount in controversy is
not a prospective assessment of [a] defendant's liability. Rather, it is the “amount at stake in the
underlying litigation.”)(quotation omitted)); Finley v. Nat'l Gen. Auto Home & Health Ins., No.
22-CV-03313-DMR, 2022 WL 5213400, at *3 (N.D. Cal. Sept. 19, 2022), report and
recommendation adopted, No. 22-CV-03313-HSG, 2022 WL 5225823 (N.D. Cal. Oct. 5,
2022)(“The court notes that the amount in controversy must exceed $75,000, i.e., be greater than
or equal to $75,000.01.”)(citing Freeland v. Liberty Mut. Fire Ins. Co., 632 F.3d 250, 252-53
(6th Cir. 2011)); Am. Family Connect Prop. & Cas. Ins. Co. v. Walton, 2021 WL 1931488, *2
(D. Nev. May 13, 2021)(“ the amount in controversy is exactly $75,000, ‘one penny short’ of the
jurisdictional requirement”) (quoting Freeland, 632 F.3d at 252-53).

8 – OPINION & ORDER

Outside the context of the Class Action Fairness Act (CAFA) the Ninth Circuit has held
the amount in controversy, including the amount of attorney fees, must be assessed at the time of
removal.1 See, e.g., Chavez, 888 F.3d at 417 (“we consider damages that are claimed at the time
the case is removed” in the calculation of the amount in controversy). In Chavez the Ninth
Circuit explained how to determine when an amount is “at stake” with the following example:
“If a plaintiff claims at the time of removal that her termination caused her to lose future wages,
and if the law entitles her to recoup those future wages if she prevails, then there is no question
that future wages are “at stake” in the litigation, whatever the likelihood that she will actually
recover them.” Id. Here Plaintiff claimed a right to attorney fees at the time or removal and the
law entitles her to recoup attorney fees if she prevails, accordingly, attorney fees were “at stake”
at the time Defendant removed the matter to this Court. In addition, the Court has no trouble
concluding that at least $.01 in attorney fees was “at stake” at the time the case was removed.
The Court, therefore, concludes Defendant has established the amount in controversy exceeds
$75,000 and that this Court has jurisdiction.

Defendant cites Fritsch v. Swift Transp. Co. of Ariz., 899 F.3d 785 (9th Cir. 2018) for the
proposition that the Court should consider fees accrued after removal in the calculation of the
amount in controversy. Fritsch, however, was a case brought pursuant to CAFA and the Ninth
Circuit has made clear that “no antiremoval presumption attends cases invoking CAFA,” and,
therefore, certain “principles apply [solely] in CAFA removal cases” including that “when a
statute . . . provides for the recovery of attorneys’ fees, prospective attorneys’ fees must be
included in the assessment of the amount in controversy.” Arias v. Residence Inn by Marriott,
936 F.3d 920, 921 (9th Cir. 2019). This is not a CAFA case and, therefore, Fritsch is not
applicable.
1

9 – OPINION & ORDER

CONCLUSION
The Court concludes Defendant has established this Court has diversity jurisdiction.
IT IS SO ORDERED.

DATED:_______________________.
November 18, 2022

______________________________
MARCO A. HERNÁNDEZ
United States District Judge

10 – OPINION & ORDER