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Weigen v. American Family Mutual Insurance Co. SI

United States District Court, D. Arizona

October 24, 2018

Jon Weigen, Plaintiff,
American Family Mutual Insurance Company SI, et al., Defendants.


          Honorable Jacqueline M. Rateau United States Magistrate Judge

         Pending before the Court is a Motion to Remand (Doc. 6) filed by Plaintiff Jon Weigen. Defendant American Family Mutual Insurance Company, S.I. (“American Family”), filed a response (Doc. 9) and Plaintiff filed a reply (Doc. 14). In accordance with 28 U.S.C. § 636(b)(1) and Rules 72.1 and 72.2 of the Local Rules of Civil Procedure, this matter was referred to the Magistrate Judge for report and recommendation. For the reasons explained herein, the Magistrate Judge recommends that the District Court deny the motion.[1]

         I. Background

         Plaintiff Weigen is a resident of the state of Arizona. (American Family's Notice of Removal to United States District Ct. [hereafter “Notice of Removal”], Ex. 1, Complaint, ¶ 1.) American Family is a Wisconsin corporation with its principal place of business in Madison, Wisconsin. (Notice of Removal, ¶ 1(b).) During the time period relevant to the Complaint, Plaintiff held an American Family insurance policy which covered his motor vehicles. (Id., ¶6.) His coverage included $100, 000.00 per person and $300, 000.00 per occurrence of uninsured and underinsured motorist benefits (“UM/UIM”). (Id., ¶¶ 6-7.)

         On October 19, 2015, Plaintiff was driving his 2015 Ford pickup in Phoenix, Arizona, when he was involved in an automobile accident with another vehicle owned and operated by Alena Statler. (Id., ¶¶ 6 & 10.) Statler maintained insurance on her vehicle with Legacy Insurance with liability limits of $15, 000.00 per person. (Id., ¶ 15-16.) In January 2018, Plaintiff settled his claim against Statler for the Legacy Insurance policy limit of $15, 000.00. (Id., ¶16.) Pursuant to the provisions of his American Family policy, Plaintiff then made a claim for UM/UIM benefits and, on January 11, 2018, submitted his demand for payment of the UIM policy limits of $100, 000.00. (Id., 17.) After Plaintiff submitted additional documentation of his injuries, American Family denied Plaintiff's UIM claim and stated that Plaintiff had been adequately compensated by the $15, 000.00 paid by Legacy Insurance on Statler's behalf. (Id., ¶ 20 & 22.)

         On August 15, 2018, Plaintiff filed the present action in state court against American Family, alleging breach of contract and bad faith claims. (Notice of Removal, Ex. 1, Complaint.) On September 19, 2018, American Family removed the case to this Court. (Notice of Removal, Doc. 1.)

         II. Discussion

         A. Legal Standard

         Removal jurisdiction under 28 U.S.C. § 1441(a) gives federal district courts original jurisdiction over “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” Federal district courts have jurisdiction over civil actions “where the matter in controversy exceeds the sum or value of $75, 000” and where the matter is between “citizens of different States.” 28 U.S.C. § 1332. Remand is a proper remedy if the federal court lacks subject matter jurisdiction, or if a case is otherwise improperly removed. 28 U.S.C. § 1447.

         Removing defendants bear the burden of proving by a preponderance of the evidence that the amount in controversy meets the jurisdictional threshold. See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004); Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (“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. Where doubt regarding the right to removal exists, a case should be remanded to state court.”) (footnotes omitted); see also Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir.1997) (“Where the complaint does not demand a dollar amount, the removing defendant bears the burden of proving by a preponderance of evidence that the amount in controversy exceeds [the jurisdictional minimum].”). “If it is unclear what amount of damages the plaintiff has sought . . . then the defendant bears the burden of actually proving the facts to support jurisdiction, including the jurisdictional amount.” Gaus v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir.1992).

         B. American Family has met its burden as to the amount in controversy.

         In the Motion to Remand, Plaintiff contends that American Family has not met its burden of showing that the amount in controversy is greater than $75, 000. In response, American Family notes that in the Complaint, Plaintiff alleges that, on January 11, 2018, he “submitted his UIM demand letter claim to American Family, demanding the policy limits of $100, 000.00.” See Notice of Removal, Ex. 1, Complaint, ¶ 17. Additionally, attached to the response is a copy of the demand letter in which Plaintiff alleges that “this case has a settlement value in excess of $115, 000.00, ” and indicates his willingness to settle the matter for the policy limit of $100, 000.00. Response, Ex. 1, p. 5. Rather than disavow the demand, Plaintiff argues that Federal Rule of Evidence 408(a) prevents the Court from considering the settlement demand and states that “although it is likely American Family can demonstrate that the claim exceeds $75, 000 ‘exclusive of interests and costs,' American Family has not yet done so in accordance with the statutory rule and the Ninth Circuit's established precedent.” The Court disagrees.

         Rule 408(a) prohibits the use of statements made in settlement discussions when used to prove liability. See Fed. R. Evid. 408(a). American Family is not attempting to use the settlement demand letter for that purpose. Moreover, the Ninth Circuit has held that a “settlement letter is relevant evidence of the amount in controversy if it appears to reflect a reasonable estimate of the plaintiff's claim.” Cohn v. Petsmart, Inc., 281 F.3d 873, 840 (9th Cir. 2001); see also Del Real v. Healthsouth Corp., 171 F.Supp.2d 1041, 1043 (D.Ariz. 2001) (“[M]any courts have ruled that even if initial pleadings in a case do not support the amount in controversy requirement for diversity jurisdiction, defendants may use a variety of documents, including a written settlement demand, as ‘other paper,' to determine if the case is removable.”) (citing sources). Here, Plaintiff does not argue that his case is worth less than $100, 000.00 he demanded. Rather, he asserts that while his case is likely worth more than $75, 000.00, American Family has not carried its burden to prove that the amount in controversy exceeds $75, 000. Plaintiff's willingness to settle this case for $100, 000.00 is strong evidence that he considers the case to be worth more than this amount. Plaintiff has left this evidence unrebutted and Defendant has therefore established by a preponderance of the evidence that the case meets the amount in controversy requirements for removal under 28 U.S.C. §§ 1441(a) and 1332(a).

         C. American Family has established that the ...

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