Elliott et al v. AAA Insurance
Filing
11
MEMORANDUM OPINION AND ORDER DENYING PLAINTIFFS' 6 MOTION TO REMAND AND LIFTING THE STAY OF THE BRIEFING OF DEFENDANT'S MOTION TO DISMISS. The plaintiffs shall have until January 26, 2016 to file a response to the motion to dismiss. The defendant shall have until February 2, 2016 to file a reply. Signed by Senior Judge Frederick P. Stamp, Jr. on 1/12/16. (copy to counsel via CM/ECF)(lmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
GLENN F. ELLIOTT and
VIVIAN E. ELLIOTT,
his wife,
Plaintiffs,
v.
Civil Action No. 5:15CV146
(STAMP)
AAA INSURANCE,
Defendant.
MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO REMAND
AND LIFTING THE STAY OF THE BRIEFING
OF DEFENDANT’S MOTION TO DISMISS
I.
Background
The plaintiffs initially filed this civil action in the
Circuit Court of Marshall County, West Virginia.
According
to
their
complaint,
the
ECF No. 1 Ex. 1.
plaintiffs
underinsured motorist policy from the defendant.
purchased
an
Later, in 2011,
plaintiff Glenn F. Elliott was involved in a serious car accident.
The insurance carrier for the tortfeasor involved in that car
accident paid its limits of liability coverage. The payment by the
tortfeasor’s insurance carrier was allegedly inadequate as to
making the plaintiffs whole.
Therefore, they filed an action in
state court against the defendant, who is their insurer.
plaintiffs
allege
that
the
defendant
throughout the state court action.
harassed
the
The
plaintiffs
That action ultimately settled
prior to trial. However, the plaintiffs claim that a dispute arose
as to the release language of the settlement.
More specifically,
the plaintiffs claim that the defendant sought a release of all
claims
that
could
be
potentially
brought
against
it.
The
plaintiffs believe that the defendant’s insistence on such a
release violates West Virginia law.
Therefore, they seek not only
enforcement of the settlement agreement, but also seek compensatory
damages under what appears to be claims pursuant to the West
Virginia Unfair Trade Practices Act (“UTPA”) and Hayseeds, Inc. v.
State Farm Fire & Cas., 352 S.E.2d 73 (W. Va. 1986).1
The defendant then removed this civil action. ECF No. 1. The
defendant filed a motion to dismiss, or in the alternative, motion
to stay.
ECF No. 2.
This Court scheduled a status and scheduling
conference as to the defendant’s motion.
ECF No. 4.
After
entering that order but before the conference, the plaintiffs filed
a motion to remand, to which the defendant responded.
and 7.
The plaintiffs did not file a reply.
ECF Nos. 6
This Court heard from
both parties as to the pending motions at the status and scheduling
conference. Based on the record before it, this Court ordered that
1
The plaintiffs’ complaint states in relevant part the
following:
“[The defendant] . . . violated the West Virginia
Unfair Trade Practices Act and the regulations adopted thereunder
in the following respects . . . .” ECF No. 1 Ex. 1. Further, as
to the Hayseeds claim, the complaint states that the plaintiffs
request “an Evidentiary Hearing to determine the amount and scope
of damages, interest, and attorney’s fees necessary to compensate
them.” Id.
2
the briefing schedule of the motion to dismiss be stayed until this
Court ruled on the plaintiffs’ motion to remand.
ECF No. 10.
At issue now is the plaintiffs’ motion to remand.
For the
reasons set forth below, the plaintiffs’ motion to remand is DENIED
and the stay on the briefing of the defendant’s motion to dismiss
is LIFTED.
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,
interests and costs pursuant to 28 U.S.C. § 1332(a).
exclusive
of
However, if
federal jurisdiction arises only by virtue of the parties’ diverse
citizenship, such an action “shall be removable only if none of the
. . . defendants is a citizen of the State in which such action is
brought.”
Tomlin
v.
Office
of
Law
Enforcement
Tech.
Commercialization, Inc., 5:07CV42, 2007 WL 1376030, at *1 (N.D. W.
Va. May 7, 2007).
The party seeking removal bears the burden of
establishing federal jurisdiction.
See In re Blackwater Security
Consulting, LLC, 460 F.3d 576, 583 (4th Cir. 2006); Mulcahey v.
Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir.
3
1994).
Removal jurisdiction is strictly construed, and if federal
jurisdiction is doubtful, the federal court must remand.
Hartley
v. CSX Transp., Inc., 187 F.3d 422 (4th Cir. 1999); Mulcahey, 29
F.3d at 151.
Further, the court is limited to a consideration of facts on
the record at the time of removal.
See Lowrey v. Alabama Power
Co., 483 F.3d 1184, 1213–15 (11th Cir. 2007) (“In assessing whether
removal was proper . . . the district court has before it only the
limited universe of evidence available when the motion to remand is
filed.”); O’Brien v. Quicken Loans, Inc., 5:10CV110, 2011 WL
2551163 (N.D. W. Va. June 27, 2011);
Marshall v. Kimble, No.
5:10CV127, 2011 WL 43034, at *3 (N.D. W. Va. Jan. 6, 2011) (“The
defendant’s removal cannot be based on speculation; rather, it must
be based on facts as they exist at the time of removal.”);
Fahnestock v. Cunningham, 5:10CV89, 2011 WL 1831596, at *2 (N.D. W.
Va. May 12, 2011) (“The amount in controversy is determined by
considering the judgment that would be entered if the plaintiff
prevailed on the merits of his case as it stands at the time of
removal.”)
(internal
citations
omitted).
Regarding
punitive
damages, the mere likelihood of punitive damages, without more,
does not give rise to federal jurisdiction.
Cunningham, 2011 WL
1831596, at *2 (citing Landmark Corp. v. Apogee Coal Company, 945
F. Supp. 932 (S.D. W. Va. 1996)).
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III.
Discussion
The plaintiffs are West Virginia residents.
The defendant is
a foreign corporation which is both incorporated in and maintains
its principal place of business in Michigan.
Therefore, the only
issue in dispute is whether the amount in controversy amount is
satisfied.
The plaintiffs believe, if they prevail, that the defendant
will pay only $70,000.00 under the settlement agreement.
More
specifically, they argue that either (1) the plaintiffs “will be
asked to sign a release of only the underinsured Motorist claim,”
or (2) the plaintiffs “will be asked to sign a broader, illegal
release
of
all
claims,
insurance company.”
including
ECF No. 6.
direct
claims
against
the
As a result of either occurrence,
the plaintiffs argue that the defendant will ultimately pay only
$70,000.00.
to
“have
a
In this case, the plaintiffs argue that they now seek
judge
make
a
determination
regarding
the
extra-
contractual claims that AAA seeks to have dismissed and the manner
in which AAA conducted itself during settlement negotiations[.]”
ECF No. 6. Because those issues “do not have a distinct calculable
monetary value,” the plaintiffs contend that the defendant failed
to satisfy its burden.
In
response,
the
defendant
contends
that
the
amount
requirement is satisfied.
The defendant points out that the
plaintiffs
that
not
only
admit
5
their
settlement
amounts
to
$70,000.00, but that they also seek an award of attorney’s fees,
compensatory damages, costs, and punitive damages.
Further, the
plaintiffs appear to assert violations of the UTPA and an action
for damages under Hayseeds, Inc. v. State Farm Fire & Cas., 352
S.E.2d 73 (W. Va. 1986).
In light of the plaintiffs’ request for
relief, the defendant argues that the damages could clearly exceed
$75,000.00 if the plaintiffs prevail in this civil action.
As stated earlier, the amount in controversy requirement
cannot be based on speculation or “what ifs” that may occur.
Rather, the court is limited to a consideration of facts on the
record at the time of removal.
See Lowrey, 483 F.3d at 1213–15.
Moreover, “[t]he amount in controversy is determined by considering
the judgment that would be entered if the plaintiff prevailed on
the merits of his case as it stands at the time of removal.”
Cunningham, 2011 WL 1831596, at *2.
Because the parties contest
the amount in controversy, the defendant must show that the amount
requirement is satisfied under a “preponderance of the evidence”
standard.
Dart Cherokee Basin Operating Company, LLC, et al. v.
Owens, 135 S. Ct. 547, 553-54 (2014). Under the preponderance of
the evidence standard, the amount in controversy requirement is
clearly satisfied.
The parties do not dispute that, at the very
least, the settlement agreement involves the payment of $70,000.00.
The plaintiffs seek to have this Court enforce that payment.
Furthermore, the plaintiffs clearly assert claims under the UTPA
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and Hayseeds.
In particular, plaintiffs seek compensatory damages
under the UTPA.
Moreover, should they prevail under the Hayseeds
action, the plaintiffs would obtain attorney’s fees in the amount
of “one-third of the face amount of the policy, unless the policy
is either extremely small or enormously large.”
S.E.2d at 80.
Hayseeds, 352
When viewed as if the plaintiffs prevailed, it is
clear that the amount in controversy is met.
Therefore, under the
preponderance of the evidence standard, the amount in controversy
requirement is satisfied.
Thus, the plaintiffs’ motion to remand
must be DENIED.
IV.
Conclusion
For the reasons set forth above, the plaintiffs’ motion to
remand (ECF No. 6) is DENIED.
schedule
of
the
Further, the stay as to the briefing
defendant’s
motion
to
dismiss
is
LIFTED.
Accordingly, the plaintiffs shall have until January 26, 2016 to
file a response to the motion to dismiss (ECF No. 2).
The
defendant shall have until February 2, 2016 to file a reply.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
January 12, 2016
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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