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Bradshaw Home Medical Equipment, LLC v. Hospice Family Care

United States District Court, Ninth Circuit

December 2, 2013

Bradshaw Home Medical Equipment, L.L.C., Plaintiffs,
v.
Hospice Family Care, et al., Defendants.

ORDER

PAUL G. ROSENBLATT, District Judge.

Before the Court is Plaintiff's motion to remand. (Doc. 12.) Defendant opposes the motion. (Doc. 14.) For the reasons set forth herein, the motion is denied.

BACKGROUND

Plaintiff Bradshaw Home Medical Equipment filed a complaint in Yavapai County Superior Court on August 14, 2013, alleging breach of contract and breach of the implied covenant of good faith and fair dealing. (Doc. 1, Ex. A.) Defendant removed the case on September 4, 2013, and filed an answer on September 11, 2013. (Doc. 1, 6.) The case was assigned to this court on September 19, 2013.

Plaintiff's claims arise out of a Health Care Services Agreement, effective February 1, 2013, between Plaintiff and National HME.[1] Defendant informed Plaintiff in May 2013 that it was terminating the Agreement.

Plaintiff alleges that Defendant breached the contract by failing to make timely payments, failing to honor the exclusivity provision of the Agreement, and by wrongfully terminating the Agreement. The complaint seeks judgment for the balance due on past invoices, amounts accruing in lost revenue, and interest, late fees, and attorneys fees.

Defendant removed the action based on diversity jurisdiction pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. (Doc. 1.) Defendant alleges that this is an action involving a controversy between citizens of different states and that the amount in controversy exceeds $75, 000. ( Id. )

DISCUSSION

A defendant may remove a case from state court to federal court if the case could have originally been filed in federal court. 28 U.S.C. § 1441(a). "The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000... and is between... citizens of different States." 28 U.S.C. § 1332(a)(1). The removing party bears the burden of establishing diversity and the amount in controversy by a preponderance of the evidence. Hertz Corp. v. Friend, 559 U.S. 77, 96 (2010). The party must support its jurisdictional allegations by "competent proof." Id. at 96-97. Courts "strictly construe the removal statute against removal jurisdiction" and must reject removal "if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

In opposing removal and seeking remand to state court, Plaintiff contends that Defendant fails to meet its burden of proof on both the amount in controversy and the diversity of the parties. The Court disagrees.

1. Amount in controversy

Courts decide whether the amount in controversy requirement has been met by first considering whether the amount is "facially apparent" from the complaint. Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 690 (9th Cir. 2006) (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). "Where it is not facially evident from the complaint that more than $75, 000 is in controversy, the removing party must prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional threshold." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003); see Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007) (explaining that when the complaint does not allege a specific amount of damages, the party seeking removal bears the burden of persuasion that it is "more likely than not" that the amount in controversy exceeds the jurisdictional amount). If the removing party's "allegations of jurisdictional facts are challenged..., he must support them by competent proof." Gaus, 980 F.2d at 567.

For purposes of calculating the amount in controversy, a court may consider, in addition to potential compensatory damages, a plaintiff's potential punitive damages and attorneys' fees. See Ansley v. Metropolitan Life Ins. Co., 215 F.R.D. 575, 577 (D.Ariz. 2003) (citing Chabner v. United of Omaha Life Ins. Co., 225 F.3d 1042, 1046 n.3 (9th Cir. 2000), and Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1155-56 (9th Cir. 1998)).

Plaintiff seeks compensatory damages, punitive damages, and attorneys' fees. Because the jurisdictional amount is not facially evident from the complaint, Defendant must prove ...


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