United States District Court, D. Arizona
Jana M. O'Barr, et al., Plaintiffs,
v.
IDS Property Casualty Insurance Company, Defendant.
ORDER
Honorable Steven P. Logan United States District Judge
Plaintiffs
Jana M. O'Barr and Brian A. O'Barr (together, the
“Plaintiffs”) initiated this action against IDS
Property Casualty Insurance Company (the
“Defendant”) in the Maricopa County Superior
Court. (Doc. 1-3) The Defendant removed the case to this
Court on January 2, 2019 based on diversity jurisdiction.
(Doc. 1) Plaintiffs now move for remand to the Maricopa
County Superior Court. (Doc. 9)
Federal
courts may exercise removal jurisdiction over a case only if
subject-matter jurisdiction exists. 28 U.S.C. § 1441(a);
Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116
(9th Cir. 2004). The removing party bears the burden of
establishing subject-matter jurisdiction as a basis for
removal. Emrich v. Touche Ross & Co., 846 F.2d
1190, 1195 (9th Cir. 1988). To satisfy this burden under 28
U.S.C. § 1441, the removing party must demonstrate that
either diversity or federal question jurisdiction existed at
the time of removal. Hunter v. Philip Morris USA,
582 F.3d 1039, 1042 (9th Cir. 2009). For diversity cases, the
amount in controversy must exceed $75, 000. 28 U.S.C. §
1332(a). There is a “strong presumption against removal
jurisdiction, ” which “must be rejected if there
is any doubt as to the right of removal in the first
instance.” Geographic Expeditions, Inc. v. Estate
of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1107 (9th Cir.
2010).
The
Supreme Court has concluded that, under 28 U.S.C. §
1446(a), “a defendant's notice of removal need
include only a plausible allegation that the amount in
controversy exceeds the jurisdictional threshold.”
Dart Cherokee Basin Operating Co. v. Owens, 135
S.Ct. 547, 554 (2014); Hoarau v. Safeco Ins. Co. of
Am., 2017 WL 3328078, at 1 (D. Ariz. Aug. 4, 2017). When
a defendant's assertion of the amount in controversy is
challenged, then both sides submit evidence on the issue, and
the Court decides, by a preponderance of the evidence,
whether the amount-in-controversy requirement has been
satisfied. Dart Cherokee Basin, 135 S.Ct. at 554
(stating “Evidence establishing the amount is required
by 28 U.S.C. § 1446(c)(2)(B) only when the plaintiff
contests, or the court questions, the defendant's
allegation.”). “[E]vidence may be direct or
circumstantial, ” and “a damages assessment may
require a chain of reasoning that includes
assumptions.” Ibarra v. Manheim Investments,
Inc., 775 F.3d 1193, 1199 (9th Cir. 2015). “When
this is so, those assumptions cannot be pulled from thin air
but need some reasonable ground underlying them.”
Id. Courts may consider evidence of jury awards or
judgments in similarly situated cases to make an amount in
controversy determination. Ansley v. Metro. Life Ins.
Co., 215 F.R.D. 757, 578 & n.4 (D. Ariz. 2003).
The
Plaintiffs argue that this case must be remanded to the
Maricopa County Superior Court because the case does not
involve the amount in controversy necessary to satisfy
diversity jurisdiction. 28 U.S.C. § 1332(a).
Specifically, the Plaintiffs argue that coverage under the
insurance policy at issue is limited to $50, 000, and the
Defendant has not provided sufficient evidence to show that
the amount in controversy exceeds $75, 000. (Doc. 9 at 2,
3-5) In response, the Defendant argues that “Plaintiffs
have alleged in their complaint that their ‘damages
likely place them in Tier 3,' that is, that the damages
likely exceed $300, 000.” (Doc. 11 at 3) The Defendant
argues that this indication is sufficient to establish the
amount in controversy for diversity jurisdiction. (Doc. 11 at
3)
First,
the Court notes that the Defendant's representation that
the Plaintiffs alleged that their damages are in excess of
$300, 000 in the complaint is factually incorrect. In the
civil cover sheet completed upon the filing of the complaint,
the Plaintiffs indicated that this case falls under
“Tier 2” of Rule 26.2 of the Rules of Civil
Procedure for the Superior Courts of Arizona. (Doc. 1-3 at 3)
Under Rule 26.2, cases may be assigned to tiers based on
certain characteristics of the case, such as complexity and
the amount of anticipated discovery, or the sum of the relief
sought in the complaint. Ariz. R. Civ. P. 26.2(c). Rule
26.2(c)(3)(B) states “Tier 2. Actions claiming more
than $50, 000 and less than $300, 000 in damages are
permitted standard discovery as described for Tier 2.”
Ariz. R. Civ. P. 26.2(c)(3)(B). In refuting the
Defendant's argument, the Court finds that the Plaintiffs
never made the allegation that their damages were likely to
exceed $75, 000 in the complaint.
Next,
the Defendant attempts to argue that awards in similar cases
have exceeded $75, 000; however, the Defendant's argument
is incomplete. (Doc. 11 at 3-4) In support of this argument,
the Defendant provides the Court with a letter sent from
Plaintiffs' counsel in which Plaintiffs' counsel
cites to a case labeled “Federici v. IDS” in
which a jury awarded the plaintiff in that case $35, 000 in
economic damages and $300, 000 in bad faith damages. (Doc.
11-1 at 13) However, at no point in the letter does
Plaintiffs' counsel assert that the damages awarded in
the “Federici” case are analogous to those being
sought in the present case. Therefore, the Defendant's
argument on this basis must fail, and the Court finds that
the Defendant has failed to establish by a preponderance of
the evidence that the amount in controversy exceeds $75, 000.
Accordingly,
IT IS ORDERED that Plaintiffs' Motion
for Remand (Doc. 9) is granted; and
IT
IS FURTHER ORDERED that the Clerk of Court shall
remand this action to the Maricopa County ...