Norman et al v. Erie Insurance Property & Casualty Company
Filing
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MEMORANDUM OPINION AND ORDER: Granting 5 Plaintiffs' Motion to Remand; Denying Without Prejudice 6 Plaintiffs' Motion to Dismiss; and Remanding civil action to Circuit Court of Marshall Co., WV. Clerk directed to enter judgment pursuant to FRCP 58. Signed by Senior Judge Frederick P. Stamp, Jr on 5/7/13. (copy to Clerk, Circuit Court of Marshall Co., WV)(soa)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
GREGORY J. NORMAN and
MARSHA M. NORMAN,
his wife,
Plaintiffs,
v.
Civil Action No. 5:13CV21
(STAMP)
ERIE INSURANCE PROPERTY
& CASUALTY COMPANY,
Defendant.
MEMORANDUM OPINION AND ORDER
GRANTING PLAINTIFFS’ MOTION TO REMAND,
DENYING WITHOUT PREJUDICE
PLAINTIFFS’ MOTION TO DISMISS AND
REMANDING CIVIL ACTION TO THE CIRCUIT COURT
OF MARSHALL COUNTY, WEST VIRGINIA
I.
Background
The above-styled civil action was filed in the Circuit Court
of Marshall County, West Virginia.
The complaint asserts claims
for breach of contract and bad faith denial of insurance coverage
resulting from a dispute regarding insurance proceeds allegedly
owed from the plaintiffs’ homeowner’s insurance policy with the
defendant following storm damage to the plaintiffs’ property.
The
defendant filed a number of counterclaims seeking a declaratory
judgment stating that the defendant has fulfilled its contractual
obligations and that no further coverage is owed to the plaintiffs.
The defendant removed this case to this Court on the basis of
diversity jurisdiction, claiming that the parties are citizens of
different states and that the amount in controversy in the case
exceeds
$75,000.00,
exclusive
of
interest
and
costs.
The
plaintiffs then filed a motion to remand, which claims that
diversity jurisdiction is lacking because the defendant has failed
to
demonstrate
that
the
amount
in
jurisdictional amount of $75,000.00.
controversy
exceeds
the
The plaintiffs also filed a
motion to dismiss the defendant’s counterclaims.
The parties have
fully briefed both of these motions, and they are now ripe for the
consideration of this Court.
For the reasons that follow, this
Court will grant the plaintiffs’ motion to remand and thus, finding
that it lacks subject matter jurisdiction to consider the merits of
the case, will deny the plaintiffs’ motion to dismiss.
II.
Applicable Law
A defendant may remove a case from state court to federal
court in instances where the federal court is able to exercise
original jurisdiction over the matter.
28 U.S.C. § 1441.
Federal
courts have original jurisdiction over primarily two types of
cases: (1) those involving federal questions under 28 U.S.C.
§ 1331, and (2) those involving citizens of different states where
the
amount
in
controversy
exceeds
$75,000.00,
exclusive
interests and costs pursuant to 28 U.S.C. § 1332(a).
seeking
removal
jurisdiction.
bears
the
burden
of
establishing
of
The party
federal
See Mulcahey v. Columbia Organic Chems. Co., Inc.,
29 F.3d 148, 151 (4th Cir. 1994). Removal jurisdiction is strictly
construed, and if federal jurisdiction is doubtful, the federal
court must remand.
Id.
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Although courts strictly construe the statute granting removal
jurisdiction, Doe v. Allied Signal, Inc., 985 F.2d 908, 911 (7th
Cir. 1993), the court is not required “to leave common sense
behind” when determining the amount in controversy.
Mullens v.
Harry’s Mobile Homes, 861 F. Supp. 22, 24 (S.D. W. Va. 1994).
When
the amount in controversy is not apparent on the face of the
plaintiff’s complaint, the federal court must attempt to ascertain
the amount in controversy by considering the plaintiff’s cause of
action as alleged in the complaint and any amendments thereto, the
notice of removal filed with a federal court, and other relevant
materials in the record.
14C Charles Allen Wright & Arthur R.
Miller, Federal Practice and Procedure § 3725 at 73 (3d ed. 1998).
However, the court is limited to examining only evidence that was
available at the moment the petition for removal was filed.
Chase
v. Shop ‘N Save Warehouse Foods, 110 F.3d 424, 428 (7th Cir. 1997).
III.
Discussion
In their motion to remand, the plaintiffs assert that this
action must be remanded to state court because the defendant has
failed to prove that the amount in controversy in this case is in
excess of $75,000.00, exclusive of interest and costs.
The burden
of establishing that the amount in controversy exceeds $75,000.00
rests with the party seeking removal.
Mulcahey, 29 F.3d at 151.
This Court has consistently applied the “preponderance of evidence”
standard to determine whether a defendant has met its burden of
proving the amount in controversy.
3
When no specific amount of
damages is set forth in the complaint, the defendant bears the
burden of proving that the claim meets the requisite jurisdictional
amount.
Mullins, 861 F. Supp. at 23.
In such circumstances, the
Court may consider the entire record before it and may conduct its
own
independent
inquiry
to
determine
whether
the
controversy satisfies the jurisdictional minimum.
amount
in
Id.
After carefully reviewing the complaint and the parties’
memoranda,
this
Court
concludes
that
the
defendant
has
not
satisfied its burden of proof and that the value of the plaintiffs’
claims may exceed $75,000.00.
The plaintiffs’ complaint does not
make a total damages demand, but does allege that the insurance
proceeds owed for the property damage to the plaintiffs’ home
directly resulting from the storm in question is $23,985.00.
Unspecified damages requested in the complaint include damages for
ongoing damage to their home as a result of the damages not being
immediately remedied, loss of food resulting from power outage,
emotional
distress,
mental
anguish,
inconvenience,
annoyance,
humiliation, embarrassment and aggravation, as well as punitive
damages and attorneys’ fees.
The defendant asserts that the
specifically delineated property damage demand coupled with the
other damages claims, many of which seek compensation both for past
and future injuries, make it “clear that the claimed damages are
sufficient to exceed the jurisdictional threshold.”
ECF No. 8 *4.
The defendant also notes that the dwelling coverage under the
plaintiffs’
homeowner’s
policy
4
is
$236,500.00,
and
if
the
plaintiffs were to prevail “on their breach of contract claim,”
their attorneys’ fees claim “would be a presumptive 1/3 of the
disputed amount.”
Id.
Finally, the defendant points to the
plaintiffs’ request for punitive damages, and asserts that this
claim
further
raises
the
potential
value
of
the
plaintiffs’
complaint.
However,
this
Court
finds
that
these
assertions
by
the
defendant, insofar as they go beyond the stated actual property
damage to the plaintiffs’ property as a result of the relevant
storm, amount to nothing more than speculation.
As this Court has
noted a number of times, removal cannot be based upon speculation
and “bare allegation[s] that the amount in controversy exceeds
$75,000.”
See Asbury-Casto v. Glaxosmithkline, Inc., 352 F. Supp.
2d 729, 731 (N.D. W. Va., 2005); and Haynes v. Heightland, 2006
U.S. Dist. LEXIS 19194 *3 (N.D. W. Va. 2006).
With regard to
claims for which the plaintiffs make no specific damages demand, a
removing defendant must present actual evidence that the amount in
controversy is exceeded; simple conjecture will not suffice.
See
Bartnikowski v. NVR, Inc., 307 F. App’x 730, 737 (4th Cir. 2009)
(unpublished) (Finding that amount in controversy not shown when
defendant “has put forth no evidence of its own to support [the
claimed amount in controversy, but] rather, has only presented a
conjectural argument”).
The defendant’s arguments fail to meet
this burden.
5
The
only
actual
evidence
of
the
amount
in
controversy
presented by the defendant beyond the $23,985.00 in actual property
damage delineated in the complaint, is the defendant’s assertion
that
the
plaintiffs’
$236,500.00.
relevant
insurance
policy
limits
are
However, this evidence is insufficient to show that
the entirety of the plaintiffs’ policy limits are in controversy in
this case.
Rather, the actual amount in controversy in this case
can only be measured by the value of the actual damages claimed in
the complaint.
See Toler v. State Farm Mut. Auto. Ins. Co., 25 F.
App’x 141, 143 (4th Cir. 2001) (unpublished) (“A court should not
. . . automatically equate the value of [the plaintiff’s] claims
with the policy limits of the coverage.”
Rather, the court should
examine the “‘value of the object of the litigation.’” (quoting
Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333,
347 (1977)).
Here, there is no assertion that the entirety of the
plaintiffs’ policy limits are sought and, as such, this Court can
only examine the value of the plaintiffs’ claims, not of their
policy.
Accordingly, for the reasons noted above, this Court finds
that the defendant has failed to satisfy its burden of showing,
through a preponderance of actual evidence of the same, that the
amount in controversy in this case is above $75,000.00. This Court
thus lacks subject matter jurisdiction, and must remand this case
to the Circuit Court of Marshall County.
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IV.
Conclusion
For the reasons stated above, the plaintiffs’ motion to remand
is GRANTED.
As this Court lacks subject matter jurisdiction, the
plaintiffs’ motion to dismiss is DENIED WITHOUT PREJUDICE subject
to refiling in state court, should the plaintiffs choose to do so.
This matter is hereby REMANDED to the Circuit Court of Marshall
County, West Virginia.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein and to the Clerk of
the Circuit Court of Marshall County, West Virginia.
Pursuant to
Federal Rule of Civil Procedure 58, the Clerk is DIRECTED to enter
judgment on this matter.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
May 7, 2013
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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