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Befort v. Farm Bureau Property & Casualty Insurance Co.

United States District Court, D. Arizona

November 2, 2018

Bonnie Befort, Plaintiff,
Farm Bureau Property & Casualty Insurance Company, et al., Defendants.



         Plaintiff Bonnie Befort (“Plaintiff”) initiated this action by filing a Complaint in Maricopa County Superior Court on June 25, 2018. (Doc. 1-3 at 2.)[1] On August 13, 2018, Defendant Farm Bureau Property & Casualty Insurance Company (“Defendant”) removed the action to federal court. (Doc. 1.) Pending before the Court is Plaintiff's Motion to Remand. (Doc. 14.) The Motion is fully briefed. (See Docs. 16, 20.)

         I. Background

         According to her Complaint, Plaintiff is the named insured under a homeowners' insurance policy issued by Defendant covering a residential property in Mayer, Arizona. (Doc. 1-3 at 2-3.) Plaintiff alleges that she timely reported a claim for fire and/or smoke damage, and that Defendant processed the claim as a loss covered under the homeowners' insurance policy. (Id. at 3-5.) Plaintiff alleges that Defendant unreasonably handled the claim. (See Id. at 4-8.) Plaintiff raises a breach of contract claim and a claim for breach of the covenant of good faith and fair dealing. (Id. At 8-9.) Her Complaint also seeks to compel an appraisal pursuant to A.R.S. § 12-1502. (Id. at 9-10.) Plaintiff seeks compensatory damages, including damages for mental and emotional distress, as well as punitive damages, attorneys' fees, and costs. (Id. at 11.) Plaintiff's Complaint does not demand a sum certain.

         On the same date that Plaintiff filed her Complaint, she also filed a Certificate Regarding Compulsory Arbitration (Doc. 1-4) and a Notice of Offer of Judgment (Doc. 1-7). The Certificate Regarding Compulsory Arbitration certifies that the case is not subject to compulsory arbitration as provided by the Arizona Rules of Civil Procedure. (Doc. 1-4 at 2.) The Offer of Judgment states that Plaintiff will accept judgment in her favor in the sum of $74, 000, “inclusive of all damages, all taxable court costs, all interest, and all attorneys' fees.” (Doc. 1-8 at 2-3.)

         Plaintiff served the Summons and Complaint, along with the Certificate Regarding Compulsory Arbitration and the Offer of Judgment, on Defendant's statutory agent, the Arizona Department of Insurance (“ADI”), on July 10, 2018. (Doc. 1-10 at 2; see also Doc. 1-9 at 2.) Defendant received the documents on July 13, 2018. (Doc. 1 at 2.) On August 13, 2018, Defendants removed the case to federal court pursuant to 28 U.S.C. §§ 1441 and 1446, on the basis of diversity jurisdiction under 28 U.S.C. § 1332. (Doc. 1.) Plaintiff is a citizen of Arizona. (Doc. 1 at 2; Doc. 1-3 at 1.) Defendant Farm Bureau is an Iowa corporation with its principal place of business in West Des Moines, Iowa. (Doc. 1 at 2.)

         II. Legal Standard

         A federal district court has “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)(1). A defendant may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). A notice of removal must “be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b). Although the time limit for removal is not jurisdictional, it is mandatory and a timely objection to a late notice of removal will defeat removal. See Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir. 1980) (per curiam); see also Cantrell v. Great Republic Ins. Co., 873 F.2d 1249, 1256 (9th Cir. 1989).

         Where a complaint does not specify the amount of damages sought, the defendant bears “the burden of proving, by a preponderance of the evidence, that the amount in controversy exceeds $75, 000” in order to support removal based on diversity jurisdiction. Cohn v. Petsmart, Inc., 281 F.3d 837, 839 (9th Cir. 2002) (per curiam); see also 28 U.S.C. § 1446(c)(2); Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007). A defendant must offer more than “conclusory allegations” in order to meet this burden of proof. Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997). The amount in controversy for purposes of diversity jurisdiction “is determined from the pleadings as they exist at the time a petition for removal is filed.” Eagle v. Am. Tel. & Tel. Co., 769 F.2d 541, 545 (9th Cir. 1985).

         There is a “strong presumption” against removal, and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam). “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

         III. Discussion

         In her Motion to Remand, Plaintiff argues that Defendant's Notice of Removal is untimely because it was filed more than 30 days after Defendant was served with the Summons and Complaint. (Doc. 14 at 3-5.) Plaintiff also argues that this Court lacks diversity jurisdiction because the amount in controversy is less than $75, 000. (Id. at 5-9.)

         A. Timeliness of Removal

          Under Arizona law, the exclusive method for Plaintiff to serve Defendant was through the ADI. See A.R.S. § 20-221(B); see also Phoenix of Hartford, Inc. v. HarmonyRests., Inc., 560 P.2d 441, 442-43 (Ariz. App. 1977). The parties dispute whether the 30-day time limit for removal began to run when Plaintiff served a copy of the Summons and Complaint on the ADI, ...

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