Crouch v. Nationwide General Insurance Company

Filing 11

MEMORANDUM AND ORDER denying 6 Opposed MOTION to Remand (Signed by Judge Keith P Ellison) Parties notified.(arrivera, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PAMELA CROUCH,
Plaintiff,
VS.
NATIONWIDE GENERAL INSURANCE
COMPANY
Defendant.

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May 05, 2017
David J. Bradley, Clerk

CIVIL ACTION NO. 4:17-CV-634

MEMORANDUM AND ORDER
Pending before the Court is Plaintiff’s Motion to Abstain and Remand (Doc. No. 6).
After considering the Motion, the response thereto, and all applicable law, the Court determines
that the Motion should be denied.
I.

BACKGROUND
This dispute arises out of an insurance claim filed by Plaintiff Pamela Crouch for

property damage. See Original Pet. (Doc. No. 1-1.) On January 25, 2017, Plaintiff filed suit in
state court against Defendant Nationwide General Insurance Company, alleging breach of
contract, breach of the duty of good faith and fair dealing, common law fraud, and violations of
the Texas Insurance Code and the Texas Deceptive Trade Practices Act. Original Pet. ¶¶ 27-44.
On February 28, 2017, Defendant removed the case to federal court on the basis of diversity
jurisdiction. (Doc. No. 1.) Plaintiff now moves to remand the case to state court. (Doc. No. 6.)
II.

LEGAL STANDARD
Federal district courts have original jurisdiction over civil matters in which the amount in

controversy exceeds $75,000, exclusive of interest and costs, and the parties are citizens of
different states. 28 U.S.C. § 1332(a)(1). If such a matter is brought in state court, the defendant
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may remove the case to federal court. 28 U.S.C. § 1441(a). The removing party bears the burden
of establishing that federal jurisdiction exists. De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th
Cir. 1995).
For a federal court to decline jurisdiction based on the amount in controversy, “[i]t must
appear to a legal certainty that the claim is really for less than the jurisdictional amount.” St. Paul
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). The court relies on the amount of
damages claimed by the plaintiff, so long as that claim is apparently made in good faith. Id. at
288. If the plaintiff does not allege a specific amount of damages, the removing defendant must
prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. De
Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993).
III.

ANALYSIS
The parties do not dispute that complete diversity exists; the only dispute is over the

amount in controversy. (Doc. No. 6 at 2.) In this case, there is no need to look beyond the face of
the Original Petition, since it establishes an amount in controversy over $75,000.
The Original Petition alleges $26,825.92 1 in actual damage to Plaintiff’s property.
Original Pet. ¶ 15. However, the Original Petition also contains a request for treble damages
under Texas Insurance Code § 541.152(b). 2 Id. ¶ 52. Treble damages on $26,825.92 results in an
amount in controversy over $80,000, even before other damages are calculated.
If, as Plaintiff urges, her $2,651 3 deductible is subtracted from the $26,825.92 claimed in

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Plaintiff’s Motion for Remand inaccurately states that Plaintiff’s estimated actual damage is
$26,692.95. (Doc. No. 6 at 4.) The Court relies on the damage estimate in the Original Petition.
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This statute allows for treble damages if the defendant knowingly committed the act
complained of.
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Plaintiff’s Motion for Remand inaccurately states that Plaintiff’s deductible is $2,561. (Doc.
No. 6 at 4.) The Court relies on the $2,651 figure based on documentation provided by
Defendant. See Doc. No. 9-2.
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the Original Petition, then a full recovery including treble damages would only amount to
$72,524.76. However, even in this scenario, the total amount in controversy exceeds $75,000. In
addition to actual damages, Plaintiff seeks the 18 percent statutory penalty provided under Texas
Insurance Code § 542.060(a). 4 Id. ¶ 53. The parties disagree about the dollar amount of the
statutory penalty. (Doc. No. 6 at 5; Doc. No. 9 at 7.) Even Plaintiff’s lower figure of $2,843.35,
however, pushes the amount in controversy over $75,000. In addition, Plaintiff seeks attorney’s
fees and “all punitive, additional, and exemplary damages,” ensuring an amount in controversy
comfortably over the jurisdictional threshold. Original Pet. at 13.
In short, based on the Original Petition, there is no way to arrive at an amount in
controversy under $75,000. As such, the Court may not decline jurisdiction based on the amount
in controversy.
IV.

CONCLUSION
For the reasons set forth above, the Court finds that Plaintiff’s Motion to Abstain and

Remand (Doc. No. 6) is DENIED.
IT IS SO ORDERED.
Signed this 5th day of May, 2017.

HON. KEITH P. ELLISON
UNITED STATES DISTRICT JUDGE
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Although calculation of the amount in controversy generally excludes interest, courts have
found that the penalty imposed under § 542.060(a) should be counted. See Watson v. Provident
Life & Accident Ins. Co., 3:08-CV-2065-G(BD), 2009 WL 1437823, at *4-5 (N.D. Tex. May 22,
2009) (noting that the predecessor statute to § 542.060(a) referred to the penalty as “damages,”
and that the addition of the word “interest” was not meant to make a substantive change to the
statute). Because the parties do not dispute that the § 542.060(a) penalty should be counted, and
given this precedent, the Court will count the § 542.060(a) in calculating the amount in
controversy.
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