YNR LLC Series O v. State Farm Lloyds
MEMORANDUM OPINION AND ORDER. Signed by Judge David Briones. (ar)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
YNR LLC SERIES 0,
MEMORANDUM OPINION AND ORDER
On this day, the Court considered Plaintiff YNR LLC Series 0's ("Plaintiff')
"Memorandum of Law in Support of Motion to Remand" ("Motion"), filed in the
above-captioned case on November 13, 2017.
case to state court for lack ofjurisdiction.
Therein, Plaintiff asks the Court to remand this
On November 20, 2017, Defendant State Farm
Lloyds, Inc. ("Defendant") filed its "Brief in Opposition to Plaintiffs Motion to Remand"
On November 27, 2017, Plaintiff filed its Reply.
After due consideration, the
Court denies Plaintiffs Motion for the following reasons.
This case involves a rental policy dispute in which Plaintiff is asking for
for residential use.
In February 2016, Plaintiff purchased a home in El Paso, Texas, to lease
Def 's Notice Removal Ex. A-2, at 4. At the same time, Plaintiff
purchased a rental policy from Defendant. Id.
In October 2016, Plaintiffs then-tenant
("Tenant") informed Plaintiff of issues with the home's HVAC unit. Id.
initiated a claim with Defendant under the rental policy for damage to the home, and Defendant
stated Tenant's claims were not covered under the rental policy.
Id. at 4-10.
On June 14,
2017, Tenant filed suit against Plaintiff and two other defendants for physical and mental harm
resulting from the property damage in the HVAC unit.
Def.'s Resp. Mot. Remand Ex.
1, at 3.
STATE FARM LLOYDS, INC.,
On August 30, 2017, Plaintiff filed its Original Petition ("Petition") in the 243rd
District Court in El Paso County.
In its Petition, Plaintiff claims that it purchased the rental
policy from Defendant and that it now "seeks a declaratory judgment holding [Defendant] has a
duty to defend and indemnify [Plaintiff] under the terms of the Policy, up to the applicable policy
limits." Def. 's Notice Removal Ex. A-2, at 4, 10. Plaintiff seeks declaratory judgment, breach
of contract, quantum meruit, unjust enrichment, equitable estoppel, promissory estoppel, breach
of duty of good faith and fair dealing, and violations of the Texas Insurance Code. Id. at 10-16.
Plaintiff does not specify how much it is requesting in damages and states the following:
59. The Plaintiff has suffered actual damages and/or economic damages by State
Farm's above-described acts and omissions. The Plaintiff's damages include
having to pay for the costs associated with testing the Property. Plaintiff was
further damaged by State Farm's failure to defend and/or indemnify Plaintiff in
regards to the former Tenant's claims. State Farm's unconscionable conduct also
cause [sic] Plaintiff considerable mental anguish. The Plaintiff has been further
damaged by the need to retain the undersigned law firm in order to pursue its claims
against State Farm.
60. Plaintiff seeks the value
of services and/or restitution for services provided to
Id. at 16-17.
On October 12, 2017, Defendant filed its Notice of Removal.
Therein, it claims
that this Court has jurisdiction based on diversity of citizenship ("diversity jurisdiction"). Def's.
Notice Removal ¶ 7.
On November 13, 2017, Plaintiff filed the instant Motion, which is fully
"Federal courts are courts of limited jurisdiction. They possess only that power
authorized by Constitution and statute." Kokkonen
Guardian Lfe Ins. Co. ofAm., 511 U.S.
375, 377 (1994). A district court has diversity jurisdiction when the amount in controversy
exceeds $75,000, and the claims are between citizens of different states. 28 U.S.C.
A defendant may remove a state court action to federal court based on diversity jurisdiction.
A plaintiff may challenge an improper removal by filing a motion to remand under
"On a motion to remand, the removing party bears the burden of showing that
federal jurisdiction exists and that removal was proper." Barker
Hercules Offshore, Inc., 713
F.3d 208, 212 (5th Cir. 2013) (internal quotation marks and brackets omitted). Further, "removal
statutes are to be construed strictly against removal and for remand." Eastus v. Blue Bell
Creameries, L.P., 97 F.3d 100, 106 (5th Cir. 1996).
Plaintiff argues that the amount in controversy in this case does not exceed $75,000
and that, therefore, the Court does not have diversity jurisdiction over it. P1.'s Mot. Admis. Pro
Hac Vice Ex. 2, at 1-2 [hereinafter Pl.'s Mot. Remand]. Specifically, Plaintiff argues that the
amount in controversy is measured by the value of the underlying claim and not the policy limit
and that Defendant's potential liability under the rental policy does not reach the jurisdictional
requirement for amount in controversy. Id. at 4-7. Defendant argues that Plaintiff's reliance on
Hartford Insurance Group v. Lou-Con Inc., 293 F.3d 908 (5th Cir. 2002) (per curiam) undermines
its argument for remand and that Plaintiff asks the Court to evaluate Tenant's claims based on
other courts' previous decisions to determine the jurisdictional amountwhich would be
improper for this Court to do. Def.'s Resp. P1.'s Mot. Remand 2-5. Furthermore, Defendant
argues that Plaintiff is asking the Court to make predictions on joint and several liability and that
Plaintiff has put forth no credible evidence to support its Motion. Id. at
The Court must first determine whether the jurisdictional amount in this case is
determined by the amount of the policy or the value of the underlying claim. "[T]he amount in
controversy, in an action for declaratory or injunctive relief, is the value of the right to be protected
or the extent of the injury to be prevented." Leininger
Leininger, 705 F.2d 727, 729 (5th Cir.
"[J]n declaratory judgment cases that involve the applicability of an insurance policy to a
particular occurrence, the jurisdictional amount in controversy is measured by the value of the
claimnot the face amount of the policy." Hartford Ins.
Grp., 293 F.3d at 911
(internal quotation marks omitted).
Like the parties in Hartford Insurance Group, Plaintiff and Defendant are not
disputing the validity of the rental policy but rather whether Defendant must cover and indemnify
Tenant's claims against Plaintiffregarding the HVAC problems in Plaintiff's home. Def. 's
Notice Removal ¶ 5; Pl.'s Mot. Remand 5; see Hartford Ins. Grp., 293 F.3d at 911 ("Hartford
seeks a judicial declaration that its policy does not extend to Lou-Con employees who sustained
asbestos-related injuries while working for Murphy Oil. It is not seeking to void the entire
insurance contract."). The Court finds that the jurisdictional amount in this case is measured by
the value of the underlying claim.
The Court must now determine whether Plaintiff included a specific amount of
damages in its Petition. If a plaintiff's complaint includes a specific amount of damages, that
amount will determine the amount in controversy for diversity jurisdiction so long as the plaintiff
claimed it in good faith. Allen
Co., 63 F.3d 1326, 1335 (SthCir. 1995).
"[W]hen a complaint does not allege a specific amount of damages, the [defendant] must prove by
a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount.
The district court must first examine the complaint to determine whether it is facially apparent that
the claims exceed the jurisdictional amount. If it is not thus apparent, the court may rely on
summary judgment-type evidence to ascertain the amount in controversy." St. Paul Reinsurance
Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) (internal quotation marks and citations
Here, it is not facially apparent from Plaintiffs Petition that its claims exceed
$75,000. Def.'s Notice Removal Ex. A-2, at 16-17. Plaintiff did not include a specific amount
of damages, so the Court must now determine whether Defendant has proven by a preponderance
of the evidence that the amount in controversy exceeds $75,000. Greenberg,
134 F.3d at 1253.
Defendant provided Tenant's lawsuit to show that the amount in controversy exceeds $75,000.1
Def. 's Resp. P1. 's Mot. Remand Ex. 1. Specifically, the lawsuit states that "Plaintiff seeks
monetary relief over $200,000.00, but not more than $1,000,000.00." Id. at 8;
Mut. Fire Ins. Co., DR-16-CV-0031-AM-VRG, 2017 WL 3274456, at *3 (W.D. Tex. Jan. 18,
2017) ("To demonstrate that the amount in controversy exceeds $75,000. .. [the defendant] points
to the allegations of[p]laintiff's amended petition, the limits of the Policy, and [p]Iaintiffs pre-suit
demand letter."); Friedrichs v. Geovera Specialty Ins. Co., No. 7:12-CV-392, 2013 WL 674021, at
*3 (S.D. Tex. Feb. 22, 2013) (holding
that the defendant met its burden because the demand letter
it provided was well over the jurisdictional threshold).
The Court will treat Tenant's lawsuit as the equivalent of a demand letter and finds
that Defendant has met its burden in providing summary judgment-type evidence to show that the
amount in controversy exceeds $75,000. See Friedrichs, 2013 WL 674021, at *3 ("At the outset,
Defendant also provided letters from the Department of the Army indicating medical costs Tenant and her children
sustained while on Plaintiffs property. Plaintiff, in its Reply, argues that the amount of damages calculated from
these letters is disingenuous. P1. 's Reply Mot. Remand 3-4. The Court finds that Tenant's lawsuit is enough
evidence to meet the jurisdictional threshold, so it will not consider the validity of the letters Defendant submitted
from the Department of the Army.
the Court notes that [the demand letter and estimate] independently and unambiguously supports
an amount in controversy that satisfies the jurisdictional threshold."); Greenberg, 134 F.3d at
1254-55 (finding the demand letters to be sufficient evidence establishing the jurisdictional
Plaintiff can still effectuate a remand to state court if it shows that, as a matter of
law, it is certain its recovery will not reach the jurisdictional minimum. Martinez v. BAC Home
Loans Sen'icing, LP, 777 F. Supp. 2d 1039, 1044 (W.D. Tex. 2010). The legal certainty must
exist at the time the complaint was filed. De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir.
1995), cert. denied, 516 U.S. 865 (1995); In re 1994 Exxon Chem. Fire, 558 F.3d at 387 (5th Cir.
2009). A plaintiff can establish the legal certainty that his recovery will be below the threshold by
filing a binding stipulation with his complaint that he will not recover an amount above the
threshold. Standard Fire Ins. Co.
Knowles, 133 S. Ct. 1345, 1350 (2013); see also Martinez,
777 F. Supp. 2d at 1044-45 (allowing a court to also consider a post-removal stipulation in certain
Plaintiff has provided no evidence to this effect. Plaintiff did not file a binding
stipulation or affidavit pre-removal or post-removal. Knowles, 133 S. Ct. at 1350; Martinez, 777
F. Supp. 2d at 1044-45.
The only evidence Plaintiff provides regarding damages below the
jurisdictional limit is its arguments in its Motion2 that Texas courts disfavor landlord-tenant
lawsuits, Tenant has a significant burden to prove her case, and that her damages are limited under
the Texas Property Code (but not stating what that limit is). PL's Mot. Remand 5-7. However,
Citing to one unpublished case from the Southern District of Texas, Plaintiffalso argues that Tenant's lawsuit names
three defendants, including Plaintiff, and that Defendant must show that Plaintiff is individually liable for
P1. 's Mot. Remand 6; P1. 's Reply Mot. Remand 3. Defendant states, in its Response,
that Plaintiff ignores Texas's
joint and several liability theory. Def. 's Resp. P1. 's Mot. Remand 4-5; see also Jewell v. Grain Dealers Mut. Ins.
290 F.2d 11, 13 (5th Cir. 1961) ("Claims against two or more defendants can be aggregated for the
attaining the jurisdictional amount, as a general proposition, if they are jointly liable to the plaintiff").
as a matter of law, these arguments are not evidence that show recovery will not
Martinez, 777 F.
Supp. 2d at 1044.
This Court will not estimate what
the damages could be in state court and finds that Plaintiff has not carried its burden.
The Court has diversity jurisdiction to hear this case because Defendant carried its
burden in showing that the amount in controversy exceeds $75,000. A plaintiff may avoid
court by showing, as a matter of law, that its recovery will not exceed $75,000. Plaintiff has failed
to do so here. Therefore, the Court will deny Plaintiffs Motion.
Accordingly, IT IS HEREBY ORDERED that Plaintiff YNR LLC Series
"Memorandum of Law in Support of Motion to Remand" is DENIED.
IT IS FURTHER ORDERED that the Parties file a discovery plan and a
proposed scheduling order by December 20, 2017.
SIGNED this 6th day of December 2017.
UNftED STATES DISTRICT JUDGE
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