Messier et al v. ACE American Insurance Company

Filing 20

ORDER granting Plaintiffs' 14 Motion to Remand to State Court; denying Defendant's 18 Motion to Strike Reply to Response to Motion to Remand. THIS CASE IS REMANDED TO WASHINGTON COUNTY SUPERIOR COURT. So Ordered by Judge Joseph A. DiClerico, Jr. (New Hampshire, sitting by designation) on 9/25/2013. (Duhamel, John)

UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF RHODE ISLAND

Bryan Messier, et al.
v.

Civil No. 12-cv-892-JD

Ace American Insurance Company
O R D E R
Bryan and Kimberley Messier brought suit in Rhode Island
Superior Court against Ace American Insurance Company (“Ace”)
alleging claims for breach of contract, breach of fiduciary
duties, and bad faith refusal to pay a claim under an insurance
policy under Rhode Island General Laws (“R.I. Gen. Laws”) § 9-133.

Ace removed the case to this court and the Messiers move to

remand the case to Rhode Island state court.
motion.

Ace objects to the

Ace also moves to strike the Messiers’ reply to its

objection.

Background
Bryan and Kimberley Messier owned a 1999 Bayliner 3055
Ciera, a boat used for recreational use (“Bayliner”).

At all

times relevant to this action, the Bayliner was covered by an
insurance policy issued by Ace (“Policy”).
In July 2012, the Bayliner sustained damage to its engines.
The Messiers made a claim under the Policy which Ace denied.

After Ace denied the claim, the Messiers brought this action in
Rhode Island state court, alleging three state law claims.

Ace

removed the case to this court, asserting federal question and
diversity jurisdiction.

See 28 U.S.C. § 1441.

In support of federal question jurisdiction, Ace asserted
that “since this dispute involves the interpretation of . . .
marine policy provisions, this dispute necessarily triggers
maritime commerce for the purposes of admiralty and maritime
jurisdiction.”

Not. of Rem., doc. no. 1, ¶ 8.

In support of

diversity jurisdiction, Ace asserted that “if plaintiffs are
successful in establishing bad faith against Ace, which is
denied, plaintiffs may be able to collect damages which exceed
seventy-five thousand dollars ($75,000.00), exclusive of interest
and costs.

Id. at ¶ 13.

Discussion
The Messiers move to remand the case to Rhode Island state
court, arguing that the court lacks subject matter jurisdiction
because neither federal question jurisdiction nor diversity
jurisdiction exists.

Ace objects to the motion, contending that

both federal question and diversity jurisdiction exist.

Ace

bears the burden of establishing subject matter jurisdiction.
See Amoche v. Guar. Trust Life Ins. Co., 556 F.3d 41, 48 (1st
2

Cir. 2009) (“The party invoking federal jurisdiction has the
burden of establishing that the court has subject matter
jurisdiction over the case.”).
In response to Ace’s objection to their motion to remand,
the Messiers filed a reply.

In the reply, the Messiers attached

evidence of the parties’ settlement discussions to support their
contention that the minimum jurisdictional amount of $75,000 was
not met.

Ace moves to strike the Messiers’ reply, arguing that

their citation to settlement discussions ran afoul of Federal
Rule of Evidence 408.
Ace’s argument is misplaced.

“Even though settlement offers

are inadmissible to prove liability under Rule 408 of the Federal
Rules of Evidence, they are admissible to show that the amount in
controversy for jurisdictional purposes” has not been met.
Carroll v. Stryker Corp., 658 F.3d 675, 682 n.2 (7th Cir. 2011);
see also Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n.3 (9th Cir.
2002) (“We reject the argument that Fed. R. Evid. 408 prohibits
the use of settlement offers in determining the amount in
controversy.”).

Therefore, Ace’s motion to strike the Messiers’

reply is denied.

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A.

Federal Question Jurisdiction
The Messiers concede that federal courts have original

jurisdiction over admiralty and maritime claims.
1333.

See 28 U.S.C. §

They argue, however, that because they pleaded only state

law claims, they are entitled to bring an action in state court
under the “saving to suitors” clause in § 1333.

They further

contend that an action asserting only state law claims cannot be
removed to federal court solely on the basis of admiralty or
maritime jurisdiction.
The federal admiralty and maritime jurisdiction statute
“sav[es] to suitors in all cases all other remedies to which they
are otherwise entitled.”

§ 1333(1).

Unless a state law

“frustrates a fundamental tenet of admiralty law,” Ellenwood v.
Exxon Shipping Co., 984 F.2d 1270, 1279 (1st Cir. 1993), the
“savings to suitors clause” preserves state court jurisdiction
over admiralty and maritime claims brought under state statutory
or common law, Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438,
445 (2001).

In other words, a plaintiff asserting state law

claims is free to sue in state court rather than federal court,
even if he could (but did not) seek a remedy under admiralty or
maritime law.

See Danca v. Private Health Care Sys., 185 F.3d 1,

4 (1st Cir. 1999) (citing Caterpillar Inc. v. Williams, 482 U.S.

4

386, 392 (1987)); see also Rafter v. Stevenson, 680 F. Supp. 2d
275, 278 (D. Me. 2010).
Once a plaintiff asserts state law claims in state court, a
defendant may remove a case to federal court based on federal
question jurisdiction only if the plaintiff pleaded a cause of
action based on federal law, a claim “arising under the
Constitution, laws, or treaties of the United States.”

28 U.S.C.

§ 1331; see also § 1441; Vaden v. Discover Bank, 556 U.S. 49, 60
(2009).

“The Supreme Court has noted that the ‘historic option

of a maritime suitor pursuing common-law remedies to select his
forum,’ which is the object of the savings clause, ‘would be
taken away by an expanded view of § 1331, since savings-clause
actions would then be freely removable under § 1441.’”

Okl. ex

rel. Edmondson v. Magnolia Marine Trans. Co., 359 F.3d 1237, 1241
(10th Cir. 2004) (quoting Romero v. Int’l Terminal Operating Co.,
358 U.S. 354, 371-72 (1959)).

In other words, “[a]dmiralty and

maritime cases fall within a federal court’s original
jurisdiction, see 28 U.S.C. § 1333(1), but they do not ‘aris[e]
under’ the Constitution, laws or treaties of the United States
for purposes of 28 U.S.C. § 1331 or removal under 28 U.S.C. §
1441(b).”

Rafter, 680 F. Supp. 2d at 278 n.3.

Thus, “[c]ourts

have consistently interpreted the ‘saving clause’ to preclude
removal of maritime actions brought in state court and invoking a
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state law remedy, provided there is no independent federal basis
for removal.”

In re Chimenti, 79 F.3d 534, 537 (6th Cir. 1996);

see also U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 390
(3d Cir. 2002); Servis v. Hiller Sys., Inc., 54 F.3d 203, 206-07
(4th Cir. 1995).
The Messiers brought three state law claims in state court.
In its notice of removal and its objection to the motion to
remand, Ace asserts that federal question jurisdiction is present
based on admiralty and maritime jurisdiction, as the case
involves the interpretation of an insurance policy for a boat.
As discussed above, however, even if admiralty or maritime
jurisdiction exists in this case, that is not a sufficient basis
for removal.

Ace does not assert any other basis for removal

based on federal question jurisdiction.

Therefore, the court

does not have subject matter jurisdiction based on a federal
question under § 1441(a).

B.

Diversity Jurisdiction
Ace also contends that the case was properly removed based

on diversity jurisdiction.

The Messiers argue that the amount in

controversy does not exceed $75,000, the minimum amount in
controversy necessary for diversity jurisdiction.

Ace concedes

that if the Messiers were successful, their compensatory damages
6

would be less than $75,000.1

Ace contends, however, that under

R.I. Gen. Laws § 9-1-33, the Messiers could be entitled to
punitive damages.2

Ace further argues that because of its strong

financial condition, any award of punitive damages is likely to
be in excess of $50,000 and would bring the total amount in
controversy to above the $75,000 threshold.
“When Defendant invokes diversity jurisdiction but the
complaint is silent regarding the sum sought as damages,
Defendant is permitted to assert the amount in controversy in its
notice of removal.”

Robson v. Capitol Pizza Huts, Inc., 2012 WL

2861017, at *3 (D. Me. July 11, 2012).

The court, however, must

find “by [a] preponderance of the evidence, that the amount in
controversy exceeds the amount specified in section 1332(a).”

28

U.S.C. § 1446(c)(2)(B); see also Providence Piers, LLC v. SMM New
England, Inc., 2013 WL 178183, at *3 (D.R.I. Jan. 16, 2013).

1

The Messiers did not allege an amount of damages in their
complaint.
2

R.I. Gen. Laws § 9-1-33 provides in relevant part: “[A]n
insured under any insurance policy . . . may bring an action
against the insurer issuing the policy when it is alleged the
insurer wrongfully and in bad faith refused to pay or settle a
claim made pursuant to the provisions of the policy . . . . In
any action brought pursuant to this section, an insured may also
make claim for compensatory damages, punitive damages, and
reasonable attorney fees.”
7

“Where the punitive . . . damages claim makes up the bulk of
the asserted amount in controversy, a heightened degree of
scrutiny and healthy skepticism is appropriate.”

Jimenez v.

Verdecchia, 2000 WL 1752803, at *2 (D.N.H. Nov. 22, 2000).
“[A]ny doubts in the evidence should be construed in favor of
remand.”

Mut. Real Estate Holdings, LLC v. Houston Cas. Co.,

2010 WL 3608043, at *3 (D.N.H. Sept. 13, 2010); see also St. Paul
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938) (“The
intent of Congress drastically to restrict federal jurisdiction
in controversies between citizens of different states has always
been rigorously enforced by the courts.”).
In making the preponderance of the evidence determination, a
court “need look to the notice of removal and any other materials
submitted by the” parties.

Evans v. Yum Brands, Inc., 326 F.

Supp. 2d 214, 220 (D.N.H. 2004).

Thus, despite the early stage

in the proceedings, the court can consider “summary-judgmenttype” evidence in determining whether the amount in controversy
exceeds $75,000.

Id. (internal citation omitted).

Although the Messiers represent in their motion to remand
that they have “incurred damages totaling between $42,000 and
$45,000,” Ace represents in its objection that the Messiers “seek
the recovery of compensatory damages in the total amount of
$28,687.95.”

Ace attaches a letter from the Messiers’ counsel to
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support that assertion.

In their reply, the Messiers attached

correspondence between the parties’ counsel discussing the
Messiers’ claim for “$20,000 to $25,000” in damages and a
discussion of settlement for approximately $15,000.
Without any evidentiary support for its assertion that
punitive damages were likely to be greater than $50,000 or
otherwise push the amount in controversy above the $75,000
threshold, Ace has not carried its burden of showing by a
preponderance of the evidence that the amount in controversy
exceeds $75,000.

See Del Vecchio v. Conseco, Inc., 230 F.3d 974,

979 (7th Cir. 2000); Burk v. Med. Sav. Ins. Co., 348 F. Supp. 2d
1063, 1070 (D. Ariz. 2004) (“Defendant has established only that
Plaintiffs seek punitive damages and that such damages are
available as a matter of law.

This is insufficient to establish

that it is more likely than not that a potential punitive damage
award will increase the amount in controversy above $75,000.”),
abrogated on other grounds by Dukes v. Twin City Fire Ins. Co.,
2010 WL 94109 (D. Ariz. Jan. 6, 2010).

This is especially true

here given the small claim for compensatory damages, as the Rhode
Island Supreme court has reduced punitive damages awards when
they greatly exceed the award of compensatory damages.

See,

e.g., Minutelli v. Boranian, 668 A.2d 317, 319 (R.I. 1995)
(reducing punitive damages of $50,000 to $10,000 because $50,000
9

was excessive in light of compensatory damages amounting to only
$20,000).
Accordingly, the court lacks subject matter jurisdiction and
the case will be remanded to the Washington County Superior
Court.

See 28 U.S.C. § 1447(c).3

Conclusion
For the foregoing reasons, the plaintiffs’ motion to remand
(document no. 14) is granted.

The defendant’s motion to strike

(document no. 18) is denied.
The case is remanded to Washington County Superior Court.
SO ORDERED.

____________________________
Joseph A. DiClerico, Jr.
United States District Judge
(Sitting by designation.)
September 25, 2013
cc:

Melody A. Alger, Esquire
Stephen J. Brouillard, Esquire
David Y. Loh, Esquire
Theresa L. Sousa, Esquire
3

The Messiers argue in their reply that they should be
awarded attorney fees incurred in moving to remand. Although the
court “may require payment of just costs and any actual expenses,
including attorney fees, incurred as a result of the removal,” 28
U.S.C. § 1447, “[t]his court ordinarily does not consider
arguments raised for the first time in a reply memorandum and
sees no reason to do so here,” Contour Design, Inc. v. Chance
Mold Steel Co., Ltd., 2011 WL 1564612, at *6 (D.N.H. Apr. 25,
2011) (internal citation omitted).
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