United States District Court, D. Arizona
James A. Teilborg Senior United States District Judge
Pending before the Court is Plaintiff Michael Manone (“Plaintiff”)’s Motion to Amend Complaint and Motion to Remand. (Doc. 72). Plaintiff requests leave to file a Fourth Amended Complaint (“FAC”), which reflects the severance of this case from other related cases, revises the allegations to reflect only the issues specific to Plaintiff, and removes the underinsurance claim. (Id. at 1). Defendant consents to Plaintiff’s Motion to Amend but disputes that this case should be remanded. (Doc. 73). The Court now rules on the motion.
This case arises out of the Yarnell Hill Fire that occurred during the summer of 2013. (Doc. 72 at 2). The Yarnell Hill Fire destroyed the home of Robert Kramer, who, after reporting his loss to Defendant, received a portion of the insurance policy benefits allegedly owed to him. (Id.) During the pendency of his claim, Mr. Kramer purportedly assigned his insurance claim to Plaintiff. (Doc. 73 at 2).
Plaintiff’s proposed FAC removes an underinsurance claim but maintains Count 1 for “Breach of Contract” and Count 2 for “Breach of the Covenant of Good Faith and Fair Dealing/Bad Faith.” (Doc. 72-1 at 2-3). Plaintiff argues that after removing the underinsurance claim, the amount in controversy of this case no longer meets the threshold for subject matter jurisdiction based on diversity. (Doc. 72 at 1-2).
II. Motion to Amend
Federal Rule of Civil Procedure (“Rule”) 15 allows a party to amend a pleading with leave of court or by written consent of the adverse party. Fed.R.Civ.P. 15(a). Additionally, Rule 15 states that a court should “freely” give leave to amend “when justice so requires.” Id. at 15(a)(2). Here, Plaintiff requests leave to file his FAC, a request that Defendant does not oppose. See (Doc. 73 at 3). Therefore, the Court will grant Plaintiff leave to file his FAC.
III. Motion to Remand
Plaintiff also requests that the Court remand this case to state court. (Doc. 72 at 4). Plaintiff rests his Motion to Remand solely on the basis that the amount in controversy no longer exceeds the jurisdictional minimum for federal diversity cases. (Id. at 1-2). In response, Defendant argues that the jurisdictional amount is still satisfied thereby making remand improper. (Doc. 73 at 5).
A. Legal Standard
On January 6, 2015, this case was removed to federal court pursuant to 28 U.S.C. § 1441. See (Docs. 1, 60). However, “[i]f at any time . . . it appears that the district court lacks subject matter jurisdiction, the case [must] be remanded.” 28 U.S.C. § 1447(c).
The United States Code specifies the requirements for federal subject matter jurisdiction based on diversity. Namely, “[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different States.” 28 U.S.C. § 1332(a). The amount in controversy for diversity jurisdiction purposes is measured by the direct pecuniary value of the subject matter of the litigation. See Thomson v. Gaskill, 315 U.S. 442, 447 (1942); Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333, 347 (1977). Notably, the proponent of the federal court’s jurisdiction bears the burden of establishing subject matter jurisdiction by a preponderance of the evidence. Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 683 (9th Cir. 2006).
The parties do not dispute that the diversity of citizenship requirement for federal subject matter jurisdiction based on § 1332(a) has been satisfied. See (Docs. 72 at 3; 73 at 3). Because Plaintiff is a citizen of Arizona and Defendant is incorporated in Iowa, see (Docs. 1-1 at 3; 72-1 at 1), the Court finds that ...