Delong et al v. Bank of America NA et al

Filing 29

MEMORANDUM OPINION AND ORDER GRANTING MOTION TO REMAND AND DENYING WITHOUT PREJUDICE DEFENDANT BALBOA INSURANCE COMPANYS MOTION TO DISMISS. Plaintiffs' motion to remand 11 is GRANTED. Defendant Safeco Insurance Company of America's moti on to fix a date certain 19 is DENIED as MOOT. Defendant Balboa Insruance Company's motion to dismiss 15 is DENIED WITHOUT PREJUDICE. This case is REMANDED to the Circuit Court of Ohio County and DISMISSED and STRICKEN from the active docket of this court. Clerk directed to enter judgment. (cc) Signed by Senior Judge Frederick P. Stamp, Jr on 1/16/14. (cc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
BRIEANNA DELONG and
ADAM STAMPER,
husband and wife,
Plaintiffs,
v.

Civil Action No. 5:13CV158
(STAMP)

BANK OF AMERICA, N.A.,
JOHN DOE NOTE HOLDER,
SAFECO INSURANCE COMPANY
OF AMERICA and
BALBOA INSURANCE COMPANY,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO REMAND AND
DENYING WITHOUT PREJUDICE DEFENDANT
BALBOA INSURANCE COMPANY’S MOTION TO DISMISS
I.

Background

The plaintiffs commenced this action in the Circuit Court of
Ohio County, West Virginia, asserting claims against the abovenamed defendants arising out of a dispute over the placement of,
and payment of the premium for homeowners’ insurance upon the
plaintiffs’ residence.

The plaintiffs assert ten separate counts

arising out of this dispute in their complaint, including Counts IX
and X, which are respectively the plaintiffs’ counts concerning
damages and punitive damages.

Counts I, III, IV, and V are

respectively plaintiffs’ claims against Bank of America and John
Doe

Note

Holder

for

breach

of

contract,

misrepresentation, and unfair debt collection.

fraud,

negligent

Counts II and VI

are respectively plaintiffs’ claims against Bank of America for
breach of fiduciary duty and unfair and deceptive practices.
Lastly, Count VII is plaintiffs’ claim against Safeco Insurance
Company of America (“Safeco”) for breach of contract and bad faith,
and Count VIII is plaintiffs’ claim for breach of contract and bad
faith against Balboa Insurance Company (“Balboa”).
Safeco removed this action to this Court on the basis of
diversity of citizenship pursuant to 28 U.S.C. § 1332.

Safeco

contends that this Court has jurisdiction because the amount in
controversy exceeds $75,000.00, exclusive of interest and costs,
and the plaintiffs are citizens of West Virginia, while each
defendant is a citizen of a state other than West Virginia.

Both

Bank of America and Balboa filed notices of their consent to
removal.

In Bank of America’s consent to removal, it asserts that

the amount in controversy is met based on the allegations in the
plaintiffs’ complaint.

Specifically, Bank of America asserts that

the

Virginia

plaintiffs’

West

Consumer

Credit

Protection

Act

(“WVCCPA”) claims may entitle the plaintiffs to up to $83,241.18 in
damages and attorneys’ fees of up to $25,000.00 and such total may
be multiplied three to five times based on the plaintiffs’ request
for punitive damages.
The plaintiffs then filed a motion to remand this action,
arguing that the amount in controversy was not met.

First, the

plaintiffs assert that the notice of removal is completely silent

2

on the subject of value, except for a conclusory allegation that
the jurisdictional amount has been satisfied.

The plaintiffs

further contend that whether or not Bank of America’s contention
contained within its notice of consent is considered, it provides
no proof of the amount in controversy.
Safeco and Bank of America both filed responses to the
plaintiffs’ motion to remand arguing that the amount in controversy
has in fact been established.

Safeco also filed an affidavit from

an attorney licensed to practice law in the State of West Virginia,
who estimated the plaintiffs’ damages will likely exceed $75,000.00
if they are successful as to their claims and the attorneys’ fees
and costs will also likely exceed $75,000.00.

Balboa filed a

motion to dismiss the plaintiffs’ complaint, but not a response to
the motion to remand.

This Court stayed the briefing on Balboa’s

motion to dismiss pending the outcome of the plaintiffs’ motion to
remand.

See ECF No. 17.

The plaintiffs then filed a reply in

support of their motion.

Thus, the motion to remand is fully

briefed and ripe for this Court’s review.

For the reasons stated

below, this Court grants the plaintiffs’ motion for remand.
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

3

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

of

interests and costs pursuant to 28 U.S.C. § 1332(a).
The party seeking removal bears the burden of establishing
federal jurisdiction. See Mulcahey v. Columbia Organic Chems. Co.,
Inc.,

29

F.3d

148,

151

(4th

Cir.

1994).

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. Removal jurisdiction is strictly construed,
and if federal jurisdiction is doubtful, the federal court must
remand.

Id.

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

4

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

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, No. 5:05CV127, 2006 WL 839512 at *3 (N.D. W. Va. Mar.
28, 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”).
Here, in its notice of removal, Safeco failed to include any
evidence

or

make

any

allegations

in

its

notice

of

removal

concerning the amount in controversy, besides the general bare
assertion that the plaintiffs’ claims exceed $75,000.00. Thus, the
notice of removal alone is not sufficient to establish the amount
in controversy.

In Safeco’s response to the plaintiffs’ motion to

remand, Safeco argues that a common sense reading of the amended

5

complaint demonstrates the requisite amount in controversy.

In

making this argument, Safeco likens this case to that of Etchison
v. Westfield Ins., No. 5:05CV132, 2006 WL 2796658 (N.D. W. Va.
Sept. 26, 2006).

In Etchison, the plaintiff asserted claims under

the West Virginia Unfair Trade Practices Act (“WVUTPA”) and sought
attorneys’ fees, punitive damages, and compensatory damages.

This

Court found that based on the damages sought, common sense suggests
that

an

award

conceivable.

in

excess

of

the

amount

in

controversy

was

Safeco asserts that the same finding should be made

here based on the damages sought, the claims asserted, and the fact
that the punitive damages award would be substantial due to the
corporate defendants involved.
First, this Court notes that Safeco failed to also include in
its recitation of the facts in Etchison that this Court also had
specific

evidence

of

the

damages

sought

by

the

plaintiff.

Specifically, the defendant in Etchison provided this Court with
two separate demand requests from the plaintiff.
first demanded $3 million in damages.
reduced the demand to $70,000.00.

The plaintiff

Thereafter, the plaintiff

Accordingly, when this Court

found that common sense suggests that based on the damages sought,
an award in excess of $75,000.00 was conceivable, this Court did
not make this finding based merely on the general damages demand
and

general

violations

claimed

in

the

plaintiff’s

complaint.

Instead, this Court had specific evidence that the damages sought

6

may exceed $75,000.00 based on the plaintiff’s initial demand of $3
million.

Thus, Etchison is not as similar to the current case as

Safeco purports it to be.

This Court finds that a common sense

reading of the complaint alone is not sufficient for this Court to
find that Safeco has established the amount in controversy exceeds
$75,000.00.

The

plaintiffs

in

this

case

only

make

general

allegations concerning the possible violations of law committed by
Safeco. The monetary value of these violations is unclear from the
face of the complaint.
Second, this Court finds that the possibility of punitive
damages

remains

too

speculative

at

this

early

stage

in

the

litigation to establish that the amount in controversy is in excess
of $75,000.00.

This Court recognizes that punitive damages may be

considered if they are recoverable. Watterson v. GMRI, Inc., 14 F.
Supp. 844, 851 (S.D. W. Va. 1997). Further, the financial position
of the defendants are relevant to a determination of punitive
damages. Garnes v. Fleming Landfill, Inc., 413 S.E.2d 897, 909 (W.
Va. 1991).

Here, however, Safeco has not demonstrated that

punitive damages are probable and it has failed to provide a
supportable estimate of what the amount of punitive damages would
be if assessed.

The mere likelihood of punitive damages, without

more, does not give rise to federal jurisdiction.

Landmark Corp.

v. Apogee Coal Co., 945 F. Supp. 932, 938 (S.D. W. Va. 1996).
While the defendants may be “substantial corporate defendants,”

7

this alone cannot establish the requisite amount in controversy.
Further,

as

stated

above,

Safeco

has

failed

to

establish

a

supportable approximation of the possible compensatory damages.
Punitive

damages

are

compensatory damages.

to

bear

a

reasonable

relationship

to

Alkire v. First Nat. Bank of Parsons, 475

S.E.2d 122, 130 n.10 (W. Va. 1996).

Thus, because this Court does

not have a supportable figure for compensatory damages, it cannot
estimate or begin to consider what the possible punitive damages
may be in this case.
Safeco also asserts that to put the damages at issue into
perspective, this Court should consider the damages awarded in AIG
Domestic Claims, Inc. v. Hess Oil Co., 751 S.E.2d 31 (W. Va. 2013).
AIG involved a case in which the plaintiff, an oil distribution
company, brought an unfair trade practices action against its
insurer after the insurer denied the plaintiff coverage for an
environmental remediation claim.

751 S.E.2d 31.

The jury awarded

the plaintiff $5 million in compensatory damages and $53 million in
punitive damages. Id. at 36. The court later reduced the punitive
damages award to $25 million.

Id.

This Court may consider the

amount of damages awarded in other similar cases when determining
whether the damages in this case would be in excess of the amount
in controversy.

Watterson, 14 F. Supp. 2d at 850.

AIG, however,

is not a similar case to the one at issue, as it dealt with a
$252,000.00 insurance claim involving environmental remediation.

8

751 S.E.2d at 36.

The plaintiffs’ insurance claim in this action

is for $2,500.00 and involves damage to a residence, which this
Court believes is vastly different from a six figure claim for
environmental remediation.

Further, while Safeco cites AIG partly

for the proposition that the punitive damages in this case may be
substantial, this Court notes that the district court in AIG
questioned whether the evidence rose to the necessary level of
actual malice so as to allow such an award.

Id. at 43.

The West

Virginia Supreme Court, however, did not reach this issue, as it
reversed the jury’s verdict and ordered a new trial for other
reasons.

Id.

Therefore, this Court does not find it proper to

compare this case to the case at issue as its factual background is
vastly different and further, the jury’s verdict was ultimately
reversed.
Lastly, in responding to the plaintiffs’ motion to remand,
Safeco submitted an affidavit from Ancil G. Ramey, an attorney
licensed to practice in West Virginia.

Mr. Ramey represents that

he has been involved in dozens of banking and insurance cases
involving claims under the WVCCPA and WVUTPA, and alleging breach
of contract, breach of the covenant of good faith and fair dealing,
and first-party bad faith claims.

Mr. Ramey states that after

reviewing the complaint in this matter, it is his opinion that if
the plaintiffs prevail on all of their claims, the award will more
likely than not exceed $75,000.00.

9

Mr. Ramey then proceeds to

outline the plaintiffs’ claims and assess their value.

Assuming

without deciding that it is even proper to consider such an
affidavit,

this

Court

finds

that

the

affidavit

is

overly

speculative. It is based only on approximations of what plaintiffs
may possibly be entitled to based on the allegations presented in
the complaint. These approximations do not satisfy Safeco’s burden
of showing by a preponderance of the evidence that the plaintiffs’
damages are in excess of $75,000.00.
Bank

of

America

also

plaintiffs’ motion to remand.
plaintiffs

have

explicitly

statutes under the WVCCPA.

responded

in

opposition

to

the

Bank of America alleges that the
delineated

at

least

13

different

Thus, Bank of America asserts that the

plaintiffs are alleging at least 13 violations of the WVCCPA. This
Court does not read the cited portions of the plaintiffs’ complaint
to allege 13 different violations. Instead, this Court reads those
cited portions of the plaintiffs’ complaint that involve the
various provisions of the WVCCPA as asserting that Bank of America
is

subject

to

those

delineated

provisions

based

on

Bank

of

America’s status as a debt collector, not that a violation exists
concerning each provision.

Further, as the plaintiffs indicate, a

single act, which violates multiple provisions of the WVCCPA, is
only subject to a single penalty.

Sturm v. Providian National

Bank, 242 B.R. 599 (S.D. W. Va. 1999).

As to how many acts that

the plaintiffs assert violated these provisions, the plaintiffs

10

only allege that Bank of America’s conduct constitutes “one or more
violations.”

ECF No. 1 Ex. 1 *15.

Thus, based on the complaint

alone, this Court finds that it cannot at this time determine how
many violations the plaintiffs are actually asserting against Bank
of America so as to allow this Court to even begin estimating the
compensatory damages at issue.

Further, as stated above, this

Court cannot estimate the total punitive damages award available
when it cannot begin to estimate the compensatory damages at issue.
Therefore, this Court must remand this action to the state court,
as

it

finds

that

neither

Safeco

nor

Bank

of

America

have

established by a preponderance of the evidence that the amount in
controversy in this matter will exceed $75,000.00.1
IV.

Conclusion

For the reasons stated above, the plaintiffs’ motion to remand
(ECF No. 11) is GRANTED, defendant Safeco Insurance Company of
America’s motion to fix a date certain2 (ECF No. 19) is DENIED AS

1

Nothing, however, prevents the defendants from filing a
second notice of removal upon receipt of an amended complaint or
some “other paper” from which it may first be ascertained that the
case is one which has become removable. 28 U.S.C. § 1446(b). Of
course, this case may not be removed on the basis of diversity more
than one year after commencement of the action. Id.
2

Prior to filing its response to the plaintiffs’ motion to
remand, Safeco filed a motion to fix a date certain concerning the
deadline for submission of opposition briefs.
As this Court
considered such opposition briefs in the above ruling and the
plaintiffs did not object to the timeliness of such filings, this
Court need not address whether such briefs were in fact timely
filed.
11

MOOT, and defendant Balboa Insurance Company’s motion to dismiss
(ECF No. 15) is DENIED WITHOUT PREJUDICE to being raised in state
court, if appropriate.

Accordingly, it is ORDERED that this case

be REMANDED to the Circuit Court of Ohio County, West Virginia. It
is further ORDERED that this case be DISMISSED and STRICKEN from
the active docket of this Court.
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 Ohio County.

Pursuant to Federal Rule of

Civil Procedure 58, the Clerk is DIRECTED to enter judgment on this
matter.
DATED:

January 16, 2014

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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