Castaneda v. Travelers Lloyds of Texas Insurance Company
REPORT AND RECOMMENDATIONS re 4 Motion to Remand to State Court filed by Jorge Castaneda. Signed by Judge Mark Lane. (jk)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
TRAVELERS LLOYDS OF TEXAS
REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE LEE YEAKEL
UNITED STATES DISTRICT JUDGE
Before the Court are the Notice of Removal [Dkt. #1] filed by Defendant, Travelers
Lloyds of Texas Insurance Company (“Travelers” or “Defendant), the Motion to Remand [Dkt.
#4] filed by Plaintiff, Jorge Castaneda (“Castaneda” or “Plaintiff”), and the Response in
Opposition [Dkt. #5] filed by Defendant.
The Motions were referred by United States District Judge Lee Yeakel to the undersigned
for a Report and Recommendation as to the merits pursuant to 28 U.S.C. § 636(b), Rule 72 of the
Federal Rules of Civil Procedure, and Rule 1(d) of Appendix C of the Local Rules of the United
States District Court for the Western District of Texas. After reviewing the pleadings, the
relevant case law, as well as the entire case file, the undersigned issues the following Report and
Recommendation to the District Court.
On February 23, 2015, Castaneda sued Travelers in Texas state court, alleging breach of
contract, fraud, and violations of various Texas statutes relating to insurance claims handling and
consumer protection. Notice of Removal [Dkt. #1], Exhibit A. Travelers was served with
process on March 6, 2015. Id. at ¶ 2. On April 6, 2015, Travelers timely removed the case to
this court, alleging subject matter jurisdiction based on diversity of citizenship. Id.; see also 28
U.S.C. § 1446(b); 28 U.S.C. § 1332(a).
In its Notice of Removal, Travelers asserted its members are all citizens of the State of
Connecticut. Id. at ¶ 4; see Royal Ins. Co. v. Quinn-L Capital Corp., 3 F.3d 877, 882-883 (5th
Cir. 1993) (the citizenship of an unincorporated association, such as a Lloyds plan, is determined
by the citizenship of its members.) Castaneda is a citizen of Texas. Notice of Removal [Dkt. #1]
at ¶ 3. Travelers further asserted the amount in controversy exceeds $75,000, exclusive of
interests and costs. Id. at ¶¶ 5, 6. In support of this allegation, Travelers cited language in
Plaintiff’s Original Petition invoking Texas Rule of Civil Procedure 169, which provides
expedited procedures for “suits in which all claimants . . . affirmatively plead that they seek only
monetary relief aggregating $100,000 or less, including damages of any kind, penalties, costs,
expenses, pre-judgment interest, and attorney fees.” Id. at ¶ 5. Travelers contends this language
“support[s] the award of $100,000 in damages.” Id.
Plaintiff seeks to remand on the basis that Travelers has failed to establish the amount in
controversy exceeds $75,000 as required by 28 U.S.C. § 1332(a). Mot. Remand [Dkt. #4] at ¶8.
Travelers has responded by pointing out that Plaintiff has requested treble damages and punitive
exemplary damages. Resp. [Dkt. #5] at ¶ 4 (citing Pf’s Orig. Pet. at ¶¶ 58c, 58e, 58f). Plaintiff’s
Original Petition also seeks attorneys’ fees at $450 per hour. Id. (citing Pf’s Orig. Pet. at ¶ 58e).
Additionally and in the alternative, Travelers has put into evidence a cost of repair estimate
produced by the Plaintiff in the amount of $75,576.22. Resp. [Dkt. #5] Ex. A at 10. 1 Plaintiff has
Travelers has also provided evidence concerning the conduct of Plaintiff’s counsel in an unrelated hail
damage case that is allegedly factually similar to this one. Resp. [Dkt. #5] Ex. B, Ex. C. The undersigned does not
provided no reply to Travelers’ Response, nor provided any evidence to establish the complaint
is for less than $75,000. See generally Mot. Remand [Dkt. #4].
II. STANDARD OF REVIEW
“Diversity jurisdiction under 28 U.S.C. § 1332 only exists where the parties are citizens
of different states and the amount in controversy exceeds $ 75,000.” White v. FCI USA, Inc., 319
F.3d 672, 674-675 (5th Cir. 2003). The amount in controversy should be determined at the time
of filing. Id. (citing St. Paul Reinsurance Co. Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir.
Where, as here, the plaintiff fails to allege a specific amount of damages in the complaint,
the burden falls on the party invoking federal jurisdiction to establish the amount in controversy
by a preponderance of the evidence. White, 319 F.3d at 674. The Supreme Court recently
clarified that a removing defendant “may simply allege or assert that the jurisdictional threshold
has been met” in a Notice of Removal. Dart Cherokee Basin Operating Co., LLC v. Owens, ___
U.S. ____, 135 S. Ct. 547, 553-54 (2014).
Then, if a plaintiff contests the defendant’s
allegations, “both sides submit proof and the court decides, by a preponderance of the evidence,
whether the amount-in-controversy requirement has been satisfied.”
Id. (citing 28 U.S.C.
First, the court should examine the allegations in the complaint to determine if it is
“facially apparent” that the claims exceed the jurisdictional amount. Allen v. R & H Oil & Gas
Co., 63 F.3d 1326, 1335 (5th Cir. 1995). If it is not facially apparent from the complaint, the
court may examine “summary-judgment like evidence relevant to the amount in controversy at
consider this evidence relevant to the amount in controversy in this case at the time of filing, and therefore finds it
is of no weight in the evaluation of Plaintiff’s Motion to Remand [Dkt. #4].
the time of removal,” and make its determination from that evidence. Id. “[O]nce a defendant is
able to show that the amount in controversy exceeds the jurisdictional amount, removal is proper,
provided plaintiff has not shown that it is legally certain that his recovery will not exceed the
amount stated.” De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir. 1995).
In the instant case, Defendant affirmatively alleged the amount in controversy exceeded
$75,000 and pointed out that Plaintiff’s jurisdictional pleadings asserted damages less than or
equal to $100,000. This is enough to satisfy Defendant’s initial burden under Dart Cherokee
Basin Operating Co, ____ U.S. at ____, 135 S. Ct. at 553-54. In response to Plaintiff’s Motion
to Remand, Defendant pointed to specific claims in the state court petition that make it “facially
apparent” the amount in controversy is likely to exceed $75,000: Plaintiff’s requests for treble
damages, exemplary damages, and attorney’s fees at a rate of $450 per hour. These allegations
are sufficient to allow the Court to find, by a preponderance of the evidence, that the amount in
controversy exceeds $75,000. Allen, 63 F.3d at 1335. Additionally and in the alternative,
Defendants have produced evidence of an estimate provided by Plaintiff, asserting the damage to
his home that should be covered under his insurance policy exceeds $75,000. This estimate is
sufficient to establish, by a preponderance of the evidence, that the complaint exceeds the
jurisdictional amount. Id. Plaintiff has challenged the adequacy of Defendant’s Notice of
Removal but “has not shown that it is legally certain that his recovery will not exceed the amount
stated.” De Aguilar, 47 F.3d at 1412. Therefore, removal is proper and this court’s diversity
jurisdiction has been established. Id.
For the reasons outlined above, the undersigned RECOMMENDS Plaintiff’s Motion to
Remand [Dkt. #4] be DENIED.
The parties may file objections to this Report and Recommendation. A party filing
objections must specifically identify those findings or recommendations to which objections are
being made. The District Court need not consider frivolous, conclusive, or general objections.
See Battles v. United States Parole Comm’n, 834 F.2d 419, 421 (5th Cir. 1987).
A party’s failure to file written objections to the proposed findings and recommendations
contained in this Report within fourteen (14) days after the party is served with a copy of the
Report shall bar that party from de novo review by the District Court of the proposed findings
and recommendations in the Report and, except upon grounds of plain error, shall bar the party
from appellate review of unobjected-to proposed factual findings and legal conclusions accepted
by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53, 106
S. Ct. 466, 472-74 (1985); Douglass v. United Services Automobile Ass’n, 79 F.3d 1415 (5th Cir.
To the extent that a party has not been served by the Clerk with this Report &
Recommendation electronically, pursuant to the CM/ECF procedures of this District, the Clerk is
ORDERED to mail such party a copy of this Report and Recommendation by certified mail,
return receipt requested.
SIGNED June 4, 2015
UNITED STATES MAGISTRATE JUDGE
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