United States District Court, D. Arizona
ORDER
HONORABLE SUSAN M. BMOVICH UNITED STATES DISTRICT JUDGE.
At
issue is Defendants' Notice of Removal (Doc. 1) filed on
September 20, 2019. The Court has reviewed the Notice of
Removal and finds that Defendants have not sufficiently
established that the case exceeds the amount in controversy
required to grant the Court subject matter jurisdiction over
this matter. Accordingly, the Court issues the following
Order:
I.
BACKGROUND
Plaintiffs
Joseph and Angel Gallardo, both citizens of Arizona, suffered
water damage at their home on or about August 27, 2018.
Plaintiffs hold a homeowner's insurance policy
(“the Policy”) with Stillwater Insurance Group
(“Defendants”)[1], a California corporation with its
principle place of business in Florida. Plaintiffs claim the
alleged damage is covered under the Policy. Plaintiffs
contend the Policy covered “structure damage, damages
to flooring, walls, cabinetry, contents damages, loss of use,
additional living expenses, ‘pack out' and
‘pack back'” expenses. After the damage
rendered daily use of their home impossible, a Stillwater
claims estimator inspected Plaintiffs' residence.
Stillwater estimated the damage at $1, 877.26. Plaintiff
contested this amount as insufficient and hired a licensed
public adjuster to obtain an independent damage assessment.
Retaining the public adjuster obligated Plaintiffs to pay 30%
of all funds recovered from Defendants to the public
adjuster's office. The adjuster estimated damages to
Plaintiffs dwelling at approximately $48, 845.95 and assessed
damages to contents (including “pack out, ”
cleaning, and “pack back expenses) of $25, 822.36. On
Plaintiffs behalf, the adjuster demanded appraisal with
Stillwater, as provided for under the Policy, to resolve the
dispute. Defendants demurred, offering instead to reinspect
and reassess the property damage. They did so and made
several additional payments under the Policy. To date,
Defendants have paid out under the Policy in the following
amounts: $28, 564.74 (after subtracting a $2, 000 deductible)
for personal property damage; $21, 663.39 to supplement
repairs on covered dwelling damages; $5, 40.60 for dwelling
damage; $10, 447, 89 for additional living expenses.
Plaintiffs were required to pay $12, 432.26 to the public
adjuster.
Plaintiffs
now bring a bad faith state law claim, seeking general and
special damages, punitive damages and reasonable
attorney's fees. Plaintiffs do not specify an amount in
controversy. However, Plaintiffs did certify damages sought
in excess of the $50, 000 limit for mandatory arbitration in
Maricopa County.
II.
LEGAL STANDARD
Federal
courts may exercise jurisdiction over a case only if
jurisdiction existed over the suit as originally brought by
the plaintiff. 28 U.S.C. § 1441(a). The removing party
bears the burden of establishing federal subject matter
jurisdiction. Emrich v. Touche Ross & Co., 846
F.2d 1190, 1195 (9th Cir. 1998). However, because the
plaintiff chose a state rather than federal forum, “the
removal statute is strictly construed against removal
jurisdiction.” Id. “The strong
presumption against removal jurisdiction means that the
defendant always has the burden of establishing that removal
is proper.” Gaus v. Miles, Inc., 980
F.2d 564, 566 (9th Cir. 1992) (quotation omitted). If at any
time before final judgment it appears the district court
lacks subject matter jurisdiction over a case removed from
state court, the case must be remanded. 28 U.S.C. §
1447(c).
Jurisdiction
based on 28 U.S.C. § 1332 require complete diversity and
an amount in controversy that exceeds $75, 000. Id.
In the context of removal, the inquiry into the amount in
controversy “is not confined to the face of the
complaint.” Burk v. Medical Savings Ins. Co.,
248 F.Supp.2d 1063, 1067 (D. Ariz. 2004) (citing Valdez
v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir.
2004)). “The court may consider whether it is
‘facially apparent' from the complaint that the
amount in controversy has been met, ” and “[i]f
it is not facially apparent, the court may consider facts in
the removal petition or ‘summary-judgment-type evidence
relevant to the amount in controversy at the time of
removal.'” Plexus Worldwide LLC v. TruVision
Health LLC, No. CV-14-02093-PHX-ROS, 2014 WL 12650627,
at *2 (D. Ariz. Dec. 22, 2014) (quoting Singer v. State
Farm Mutual Automobile Ins. Co., 116 F.3d 373, 377 (9th
Cir. 1997)). Where a plaintiff's state court complaint
does not allege a specific amount of damages, the removing
defendant bears the burden of proving by a preponderance of
the evidence that the amount in controversy exceeds the
jurisdictional amount. See Sanchez v. Monumental Life
Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996).
“[T]he defendant must set forth facts supporting the
assertion that the amount in controversy exceeds the
statutory minimum.” Int'l Tech. Coatings, Inc.
v. Trover, No. 2:12-CV-01007-JAT, 2012 WL 2301382, at *3
(D. Ariz. June 18, 2012). But, “[c]onclusory
allegations as to the amount in controversy are
insufficient.” Matheson v. Progressive Specialty
Ins. Co., 319 F.3d 1089, 1090-91 (9th Cir. 2003).
For
purposes of calculating the amount in controversy, in
addition to considering a plaintiff's potential
compensatory damages, a court may consider a plaintiff's
potential punitive damages and the potential award of
attorneys' fees. See Chabner v. United of Omaha Life
Ins. Co., 225 F.3d 1042, 1046 n. 3 (9th Cir.
2000) (punitive damages); Galt G/S v. JSS
Scandinavia, 142 F.3d 1150, 1155-56 (9th Cir. 1998)
(attorneys' fees).
III.
DISCUSSION
Plaintiffs
complaint specifies no amount in controversy. Thus, it is not
facially apparent that, here, the amount in controversy
exceeds $75, 000. Accordingly, Defendants carry the burden to
prove by preponderance of the evidence that the amount in
controversy requirement is met. Defendants argue that the
amount in controversy requirement is more likely than not
satisfied because (1) Plaintiffs filed a certified of
compulsory arbitration in state court indicating the value of
the claim exceeds $50, 000; (2) Plaintiffs have allegedly
advised Defendants that they are “strongly
opposed” to resolve the case for anything less than
$75, 000; and (3) the damages resultant of a successful bad
faith claim entitles Plaintiffs to “substantial amounts
for special and general damages, punitive damages,
attorney's fees and costs, and fees associated with their
retention of a public adjuster.” (Doc. 1). However,
Defendants argument is not support by citation to specific
facts, case law, or summary judgment type evidence.
Defendants
first argument has some merit. Defendants correctly identify
that a certification that the amount in controversy exceeds
$50, 000 may be included in calculating the total amount in
controversy. See Welsh v. New Hampshire Ins. Co.,
843 F.Supp.2d 1006, 1010-11 (D. Ariz. 2012). However, a
district court has discretion to accept the Plaintiffs formal
judicial admission. Singer, 116 F.3d at 376-77
(supporting a district judge's discretion where
“[i]n the absence of any conflicting evidence, the
plaintiff's admission established by preponderance”
that the amount in controversy was exceeded). The arbitration
certificate demonstrates the amount in controversy is at
least $50, 000. Standing alone, it does no more. See
Welsch v. New Hampshire Ins. Co., 843 F.Supp.2d 1006,
1009-10 (D. Ariz. 2012) (finding the arbitration certificate
“does not prove that damages will exceed $75, 000).
Defendants
second argument falls far short of meeting the required
burden on proof. While some courts have considered a
plaintiff's refusal to stipulate that damages sought are
less than the amount in controversy as persuasive evidence in
finding that jurisdiction was proper, no such situation is
present here.[2] Here, Plaintiffs have not refused a
specific offer to stipulate that they seek no more than $75,
000. Plaintiffs also have not refused to state the amount in
controversy sought. See Gordon v. Allstate Ins. Co.,
2010 WL 1949164, at *2 (D. Ariz. May 13, 2010)
(“Plaintiffs . . . are under no such obligation to
announce, on their own accord, the amount in
controversy.”). Defendants presentation of
undocumented, self-serving communications indicating that
Plaintiffs are “strongly opposed” to settling for
less than the amount in controversy does not convince this
Court.
Defendants
conclusory position that the “substantial
amounts” of damages sought by Plaintiffs exceeds the
amount in controversy is similarly unpersuasive. Defendants
fail to cite to any evidence regarding the amount of likely
compensatory damages, punitive damages, and award of
attorneys' fees. Without such evidence, the Court cannot
assume that the total amount in controversy far exceeds the
$50, 000 admitted by Plaintiffs. Regarding possible
compensatory damages, the highest damage estimate to in
Plaintiffs complaint was approximately $48, 845.95 of damage
to the contents of the home and an additional $25, 822.36 in
“pack back” expenses. (Doc. 1, Exh. 3 at 24).
Tentatively, [3] this would place the payment sought by
Plaintiffs under the Policy at $74, 668.31.[4] However, as
Plaintiffs themselves point out, Defendants ...