United States District Court, D. Arizona
Honorable John J. Tuchi United States District Judge.
issue is Plaintiff's Motion to Remand (Doc. 9, Mot.), to
which Defendant GEICO Casualty Company (“GEICO”)
filed a Response (Doc. 10, Resp.) and Plaintiff filed a Reply
(Doc. 12, Reply). For the reasons that follow, the Court
grants Plaintiff's Motion and remands the case back to
had an automobile insurance policy with GEICO. After
Plaintiff sustained damage to his car, GEICO recommended
Plaintiff get the repairs done by Defendant Gerber Group,
Inc. (“Gerber”), GEICO's preferred shop.
(Doc. 1 Ex. A, Compl. ¶ 8.) Plaintiff alleges that both
GEICO and Gerber guaranteed the work would be free from
defects in materials and workmanship. (Compl. ¶ 9 &
Ex. A.) Shortly after the repairs were done, Plaintiff states
that while he was driving, the front wheel stopped responding
and became detached from the vehicle. His car was towed from
Sedona to Gerber's shop in Tempe, where it presently
remains. Plaintiff asserts that despite its guarantee, GEICO
has tried to deny coverage for the repairs, and that Gerber
is attempting to charge Plaintiff for the cost of towing
after promising to tow the vehicle free of charge. (Compl.
¶¶ 24-26, 35.)
originally filed this case in Maricopa County Superior Court.
(Mot. at 1.) He alleges claims of breach of contract and
breach of the duty of good faith and fair dealing, and seeks
a “just and reasonable amount” of actual damages,
general damages, punitive damages, and attorneys' fees.
(Compl. at 7, 8.) GEICO timely removed the action under
28 U.S.C. § 1441, asserting diversity of citizenship as
the basis for federal subject matter jurisdiction. (Doc. 1
¶ 4.) Plaintiff then filed the present Motion to Remand.
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). Federal courts have diversity jurisdiction
over actions between citizens of different states where the
amount in controversy exceeds $75, 000, exclusive of interest
and costs. 28 U.S.C. § 1332(a). The Supreme Court has
concluded that, under § 1446(a), a “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). “Evidence
establishing the amount is required by § 1446(c)(2)(B)
only when the plaintiff contests, or the court questions, the
defendant's allegation.” Id.
“[D]iversity jurisdiction is determined at the time the
action commences, and a federal court is not divested of
jurisdiction . . . if the amount in controversy subsequently
drops below the minimum jurisdictional level.” Hill
v. Blind Indus. & Servs of Md., 179 F.3d 754, 757
(9th Cir. 1999).
defendant's assertion of the amount in controversy is
challenged, then “both sides submit proof 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; Sanchez
v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th
Cir.1996) (“[T]he defendant must provide evidence
establishing that it is ‘more likely than not' that
the amount in controversy exceeds that amount.”).
Ninth Circuit has noted that the Supreme Court did not decide
the procedure for each side to submit proof, leaving district
courts to set such procedure. See Ibarra v. Manheim
Inv., 775 F.3d 1193, 1199-1200 (9th Cir. 2015) (citing
Dart Cherokee Basin, 135 S.Ct. at 554).
“[E]vidence may be direct or circumstantial, ”
and “a damages assessment may require a chain of
reasoning that includes assumptions.” Id. at
1199. “When this is so, those assumptions cannot be
pulled from thin air but need some reasonable ground
underlying them.” Id. In making an amount in
controversy determination, courts may consider, inter
alia, evidence of jury awards or judgments in similarly
situated cases, settlement letters, affidavits, and
declarations. See, e.g., Cohn v. Petsmart,
Inc., 281 F.3d 837, 840 (9th Cir. 2002); Ansley v.
Metro. Life Ins. Co., 215 F.R.D. 575, 578 & n.4 (D.
Court notes at the outset that GEICO's notice of removal
conclusorily alleges only that “Plaintiff will seek an
amount that exceeds the sum or value of $75, 000.”
(Doc. 1 ¶ 4.) However, because evidence in the Response
is treated as an amendment to the notice of removal, the
Court will consider it in determining whether the
requirements for diversity jurisdiction are
satisfied. Cohn, 281 F.3d at 840 n.1. GEICO
argues that the types of damages sought (including contract,
tort, and punitive damages, as well as attorneys' fees),
together with Plaintiff's state court filings, settlement
demand, and refusal to stipulate that damages are less than
$75, 000, make “clear that the Court has
jurisdiction.” (Resp. at 4.) The Court will address
each proposed basis in turn.
maintains that the underlying dispute-the breach of contract
claim- concerns a “relatively small amount of
money” which he is confident is less than $10, 000.
(Mot. at 3, 10.) Plaintiff alleges that the issue plaguing
his car is a broken control arm, which was also what prompted
Plaintiff's first repair job with Gerber. He attached to
the Motion the invoice from Gerber for the first repair,
which lists the cost of the control arm as $289.36. (Mot. Ex.
C.) Plaintiff acknowledges there will be labor costs, as
well. Plaintiff also got an estimate from his current
insurance company, Metlife, which projected the total repair
cost-including “additional damage as a result of the
control arm failure”-to be $3, 744. (Mot. at 3 &
Ex. D.) Finally, Plaintiff asserts that Gerber refuses to
turn over the car to Plaintiff until he pays the towing bill,
which Plaintiff “has not seen, but was told at one time
was $1, 200.” (Mot. at 3.)
Response failed to contest or even discuss any of the above
figures. Indeed, GEICO never provided any estimate of what it
thinks Plaintiff's damages- contract or otherwise-might
be. Yet, GEICO is in a better position to provide the
estimate for the repair and towing, which is the heart of
this dispute, as Gerber is its preferred shop and GEICO
covered the first repair of Plaintiff's car. Accordingly,
the Court will accept Plaintiff's ...