Anderson v. Liberty Mutual Insurance Company

[1] WO [6] IN THE UNITED STATES DISTRICT COURT [7] FOR THE DISTRICT OF ARIZONA [9] Tammy Anderson, et al., No. CV-20-00612-PHX-JJT [10] Plaintiffs, ORDER [11] v. [12] Liberty Mutual Insurance Company, [13] Defendant. [15] At issue is Plaintiffs’ Motion to Remand (Doc. 10, Mot.), to which Defendant filed [16] a Response (Doc. 13, Resp.) and Plaintiffs filed a Reply (Doc. 14, Reply). [17] I. BACKGROUND [18] On November 15, 2017, Plaintiffs Tammy Anderson and Bridget Ott were in a [19] motor vehicle accident with an uninsured motorist, and Plaintiffs sustained injuries in the [20] accident. Ms. Anderson carried uninsured motorist insurance with an entity of Defendant [21] Liberty Mutual Insurance Company. (See Resp. at 1 n.1, naming LM General Insurance [22] Company as the proper defendant.) Ms. Anderson incurred $8,461.60 in medical bills, and [23] Ms. Ott incurred $9,579.00 in medical bills. Defendant offered each Plaintiff just over [24] $1,000 less than their claimed medical bills to settle the uninsured motorist claims. [25] Plaintiffs filed suit against Defendant in state court, alleging breach of contract and [26] bad faith for failing to offer reasonable compensation under the uninsured motorist policy. [27] Plaintiffs seek compensatory damages, special damages, and attorneys’ fees. In state court, [28] Plaintiffs certified that the case was not eligible for arbitration because the amount in [1] controversy exceeds $50,000. Defendant’s counsel then requested that Plaintiffs’ counsel [2] stipulate to seek less than $75,000 as damages in this matter, and Plaintiffs’ counsel [3] declined to so stipulate. As a result, Defendant removed the case to this Court, alleging that [4] the amount in controversy exceeds $75,000 and thus meets the threshold for diversity [5] jurisdiction under 28 U.S.C. § 1332 . Plaintiffs disagree and now ask the Court to remand [6] the case to state court. [7] II. LEGAL STANDARD [8] Federal courts may exercise removal jurisdiction over a case only if subject matter [9] jurisdiction exists. 28 U.S.C. § 1441 (a); Valdez v. Allstate Ins. Co., 372 F.3d 1115 , 1116 [10] (9th Cir. 2004). The removing party bears the burden of providing a signed notice of [11] removal that contains a short and plain statement of the grounds for removal. 28 U.S.C. [12] § 1446(a). [13] Federal courts have diversity jurisdiction over actions between citizens of different [14] states where the amount in controversy exceeds $75,000, exclusive of interest and costs. [15] 28 U.S.C. § 1332 (a). The Supreme Court has concluded that, under § 1446(a), “a [16] defendant’s notice of removal need include only a plausible allegation that the amount in [17] controversy exceeds the jurisdictional threshold.” Dart Cherokee Basin Operating Co. v. [18] Owens, 135 S. Ct. 547, 554 (2014). “Evidence establishing the amount is required by [19] § 1446(c)(2)(B) only when the plaintiff contests, or the court questions, the defendant’s [20] allegation.” Id. [21] When a defendant’s assertion of the amount in controversy is challenged, then “both [22] sides submit proof and the court decides, by a preponderance of the evidence, whether the [23] amount-in-controversy requirement has been satisfied.” Dart Cherokee Basin, 135 S. Ct. 24 at 554. The Ninth Circuit Court of Appeals has noted that the Supreme Court did not decide [25] the procedure for each side to submit proof, leaving district courts to set such procedure. [26] See Ibarra v. Manheim Inv., 775 F.3d 1193 , 1199–1200 (9th Cir. 2015) (citing Dart [27] Cherokee Basin, 135 S. Ct. at 554 ). “[E]vidence may be direct or circumstantial,” and “a [28] damages assessment may require a chain of reasoning that includes assumptions.” Id. at [1] 1199. “When this is so, those assumptions cannot be pulled from thin air but need some [2] reasonable ground underlying them.” Id. Courts may consider evidence of jury awards or [3] judgments in similarly situated cases to make an amount in controversy determination. [4] Ansley v. Metro. Life Ins. Co., 215 F.R.D. 575 , 578 & n.4 (D. Ariz. 2003). [5] III. ANALYSIS [6] The Court must begin with the parties’ positions that Plaintiffs incurred around [7] $18,000 in medical bills as a result of the accident, and Defendant offered around $15,500 [8] to settle Plaintiffs’ uninsured motorist claim. Defendant thus has the burden to show that, [9] if they prevail, Plaintiffs’ likely damages for pain and suffering, loss of income, and [10] attorneys’ fees will bring the damages amount above the jurisdictional threshold of [11] $75,000. [12] In response to Plaintiffs’ challenge to the Court’s jurisdiction, Defendant makes four [13] arguments to substantiate the amount-in-controversy allegation in its Notice of Removal. [14] First, Defendant contends that Plaintiffs’ designation of the case as Tier 2 in state court [15] means that the amount of compensatory damages in controversy exceeds $50,000—the [16] Tier 2 minimum—without any consideration of attorneys’ fees. While Plaintiffs’ state [17] court designation is some evidence of the amount in controversy, its principal effect is to [18] preclude Plaintiffs from now arguing that the amount of compensatory damages in [19] controversy is less than $50,000. The Court can only take that evidence as far as it goes— [20] $50,000. [21] Defendant next contends that Plaintiffs’ refusal to agree to seek less than $75,000 [22] in this matter is evidence that the amount in controversy is more. While the fact that [23] Plaintiffs took no position as to Defendant’s offer certainly does not help Plaintiffs’ cause, [24] it is also not strong evidence—particularly by itself—that the amount in controversy [25] exceeds $75,000 either. [26] Defendant also argues that an attorneys’ fees award will bring the amount in [27] controversy over the threshold. But Defendant provides no estimate of a potential fees [28] award—conservative or otherwise—for the Court to consider. That is, even presuming a [1] starting point of $50,000 based on Plaintiffs’ state court designation of the case, Defendant [2] does not substantiate an attorneys’ fees award of more than $25,000 by anything other than [3] inference and conjecture, and thus this evidence, such as it is, is of the pulled-from-thin-air [4] variety. See, e.g., Welsh v. N.H. Ins. Co., 843 F. Supp. 2d 1006 (D. Ariz. 2012). [5] Finally, Defendant provides a list of cases it argues are similarly situated in which [6] juries awarded more than $75,000 in damages. The Court must agree with Plaintiffs that [7] Defendant has failed to demonstrate that these cases are analogous to the present one. The [8] citation Defendant provided to Williamson v. Safety National Casualty Corporation, 2016 9 WL 7049112 (Ariz. Super. Ct. Oct. 14, 2016), is simply a $1,000,000 jury verdict for a bad [10] faith claim without any background facts. The two personal injury cases Defendant cites [11] were set in entirely different contexts. In Yollin v. City of Glendale, 191 P.3d 1040 (Ariz. [12] Ct. App. 2008), the court resolved whether the amount of damages the plaintiff claimed in [13] his notice of claim to a municipality met the sum-certain requirement. In Acuna v. Kroack, [14] 128 P.3d 221 (Ariz. Ct. App. 2006), the court considered the propriety of a jury verdict in [15] a negligence action in favor of a plaintiff who suffered a serious and debilitating injury in [16] a car accident. The balance of the cases cited by Defendant, to the extent they are in the [17] insurance bad faith context, involved property claims. None of the cases are reliable [18] evidence of the amount in controversy in the present matter. [19] In sum, Defendant has not demonstrated with sufficient evidence that the amount in [20] controversy in this matter is anything more than $50,000, and that amount comes solely [21] from Plaintiffs’ state court certification and not other evidence. Because Defendant has not [22] shown by a preponderance of evidence that the amount in controversy exceeds the [23] jurisdictional threshold, the Court must remand this case to state court. See 28 U.S.C. [24] § 1447(c). However, the Court does not find Defendant’s Notice of Removal to be so [25] unreasonable as to merit an award of attorneys’ fees to Plaintiffs for their preparation of [26] the Motion to Remand. [28] ! IT IS THEREFORE ORDERED granting in part Plaintiffs’ Motion to Remand 2 (Doc. 10). This case is to be remanded to state court, but Plaintiffs’ request for attorneys’ fees is denied. 4 IT IS FURTHER ORDERED vacating the Rule 16 Scheduling Conference set for > August 27, 2020, at 10:00 a.m. (Docs. 17, 18). 6 IT IS FURTHER ORDERED directing the Clerk of Court to remand this action to Maricopa County Superior Court as soon as is practicable and close this matter. 9 Dated this 18th day of August, 2020. 14 10 wefeholee— ll Unifgd State#District Judge [28] _5-