PRISTINE POOLS, LLC et al v. HARTFORD FIRE INSURANCE COMPANY et al

Filing 17

MEMORANDUM OPINION Following consideration of Plaintiffs' Complaint (ECF No. 1-2), Hartford's Notice of Removal (ECF No. 1), Plaintiffs' Motion for Remand (ECF No. 9), the respective briefs and responses (ECF Nos. 10, 12, 13, and 16), and for the reasons stated, Plaintiffs' Motion for Remand will be granted. A separate order will follow. Signed by Judge Marilyn J. Horan on 10/25/2024. (bjl)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
PITTSBURGH
PRISTINE POOLS, LLC, JONATHAN
MEHALIC,
Plaintiffs,
vs.
HARTFORD FIRE INSURANCE
COMPANY, HARTFORD CASUALTY
INSURANCE COMPANY,

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2:24-CV-01230-MJH

Defendants,
OPINION
Plaintiffs, Pristine Pools, LLC and Jonathan Mehalic, bring the within action against
Defendants, Hartford Fire Insurance Company and Hartford Casualty Insurance Company, for
Breach of Contract under an insurance policy for an alleged refusal to defend Plaintiffs in an
underlying property damage action. Hartford removed this case from the Court of Common Pleas
of Allegheny County (ECF No. 1). Plaintiffs now move for remand (ECF No. 9), and said
motion is now ripe for decision.
Following consideration of Plaintiffs’ Complaint (ECF No. 1-2), Hartford’s Notice of
Removal (ECF No. 1), Plaintiffs’ Motion for Remand (ECF No. 9), the respective briefs and
responses (ECF Nos. 10, 12, 13, and 16), and for the following reasons, Plaintiffs’ Motion for
Remand will be granted.
I.

Background
Plaintiffs filed this action in Pennsylvania state court alleging Hartford’s breach of an

insurance contract by refusing to defend Plaintiffs in an underlying civil lawsuit for property
damage claims. (ECF No. 1-2). The ad damnum clause of the Plaintiffs’ Complaint against

Hartford seeks judgment “not to exceed $75,000.” Id. Hartford removed this action asserting
diversity jurisdiction pursuant to 28 U.S.C. § 1332, and asserted that the “Plaintiffs and
Defendants are citizens of different states and the amount in controversy is in excess of
$75,000.00.” (ECF No. 1 at ¶ 10).
Plaintiffs now move for remand because the jurisdictional threshold amount-incontroversy does not exceed $75,000. Plaintiffs also move for an award of fees and costs
pursuant to 28 U.S.C. § 1447(c) for improper removal.
II.

Relevant Standard
Section 1441 of Title 28, United States Code, controls the removal of a case to federal

court. Generally, a defendant may remove a case if the federal court has original jurisdiction over
the action. See 28 U.S.C. § 1441(a). However, “removal statutes are to be strictly construed
against removal and all doubts should be resolved in favor of remand.” Boyer v. Snap-On Tools
Corp., 913 F.2d 108, 111 (3d Cir. 1990) (quoting Steel Valley Auth. v. Union Switch & Signal
Div., 809 F.2d 1006, 1010 (3d Cir. 1987)). A plaintiff may challenge removal and move to
remand the case for lack of subject matter jurisdiction at any point before a final judgement is
entered. 28 U.S.C. § 1447(c). It is the defendant's burden to demonstrate that removal was
proper. Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 219 (3d Cir. 2005). If the district court
indeed lacks jurisdiction, the case is remanded to the state court from which it was removed. 28
U.S.C. § 1447(c).
III.

Discussion
A. Remand
Plaintiffs maintain that Hartford cannot meet its burden of demonstrating that the

amount-in-controversy requirement for diversity jurisdiction is satisfied. Plaintiffs assert that

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their Complaint expressly alleged that the sole item of damages, for which they seek recovery,
was the cost of defending the underlying property damage case against them, and they explicitly
aver that the cost of defense was not expected to exceed $75,000.
Hartford contends that Pennsylvania state court ad damnum clauses are not binding or
determinative on the amount-in-controversy in federal court. Further, Hartford argues that under
Pennsylvania law, the duty to defend and duty to indemnify are related and intertwined and as
such they cannot be bifurcated for the purposes of the amount-in-controversy. Therefore,
Hartford asserts that, because Plaintiffs are being sued in the underlying action for an amount
well in excess of $75,000 for allegedly constructing a defective pool, the amount owed for
indemnification would exceed the jurisdictional amount for diversity jurisdiction. Plaintiffs
respond that their Complaint makes no claim for indemnification, and that it is a non-issue in this
case.
The plaintiff, as master of the complaint, may make a genuine choice to limit the relief
sought. A more apt analogy would be a plaintiff, who decides to limit his or her damages claim
to an amount below the amount-in-controversy threshold in order to avoid removal based on
diversity jurisdiction, which is a long-accepted practice. DiAnoia’s Eatery, LLC v. Motorists
Mut. Ins. Co., 10 F.4th 192, 204 (3d Cir. 2021) (citing St. Paul Mercury Indem. Co. v. Red Cab
Co., 303 U.S. 283, 294, 58 S.Ct. 586, 82 L.Ed. 845 (1938) (“If [the plaintiff] does not desire to
try his case in the federal court he may resort to the expedient of suing for less than the
jurisdictional amount, and though he would be justly entitled to more, the defendant cannot
remove.”).
Here, Plaintiffs have unequivocally pleaded that their claim for breach of contract lies
solely in allegations regarding a failure to defend. While indemnification might be a component

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in these circumstances, said issue is not part of Plaintiffs’ breach of contract claim. Further,
Plaintiffs Complaint plainly asserts that the damages for breach of contract for an alleged failure
to defend do not exceed $75,000. Plaintiffs are the masters of their Complaint, and Hartford
cannot manufacture a jurisdictional amount in excess of the jurisdictional limit required to
support diversity jurisdiction. Therefore, the Court cannot confer subject matter jurisdiction in
this case, where it is plainly evident that Plaintiffs’ have consciously chosen to claim damages
below the jurisdictional amount of $75,000.
Accordingly, Plaintiffs’ Motion for Remand will be granted.
B. Fee Request
“[C]ourts may award attorney's fees under § 1447(c) only where the removing party
lacked an objectively reasonable basis for seeking removal.” Martin v. Franklin Cap. Corp., 546
U.S. 132, 141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). District courts exercise discretion in light
of the objectives of § 1447(c)—to discourage the use of removals as a means of prolonging
litigation and imposing costs on the plaintiff while generally allowing litigants the right of
removal. Id. at 140-41, 126 S.Ct. 704.
Upon careful consideration of the relevant filings, Hartford had an objective reasonable
basis to seek removal. Accordingly, no award of fees or costs is warranted.
A separate order will follow.
DATED this 25th day of October, 2024.
BY THE COURT:

MARILYN J. HORAN
United States District Judge

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