Neilsen v. State Farm Mutual Automobile Insurance Company ( 2024 )

1 2 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 3 4 Michelle Renee Neilsen, Case No.: 2:24-cv-00802-CDS-NJK 5 Plaintiff Order Granting Motion to Remand 6 v. [ECF No. 9] 7 State Farm Mutal Automobile Insurance Company, 8 Defendant 9 10 This breach of contract action arises out of an underlying motor vehicle accident that 11 was removed from the Eighth Judicial District Court by defendant State Farm Mutual 12 Automobile Insurance Company under 28 U.S.C. §§ 1332, 1441, 1446. ECF No. 1. Plaintiff 13 Michelle Neilsen moves to remand this action back to state court, arguing that State Farm fails 14 to demonstrate an amount in controversy greater than $75,000. ECF No. 9. State Farm opposes 15 the motion, arguing that Neilsen’s prayer of $50,000 policy limits for the breach of contract 16 claim, together with the prayer for punitive damages and attorney’s fees, plausibly meets the 17 $75,000 jurisdictional requirement. ECF No. 10. The motion for remand is fully briefed. ECF No. 18 15. For the reasons set forth herein, I grant Neilsen’s motion to remand. 19 I. Legal framework 20 “A motion to remand the case on the basis of any defect other than lack of subject matter 21 jurisdiction must be made within 30 days after the filing of the notice of removal under section 22 1446(a).” 28 U.S.C. § 1447(c). A suit may be removed from state court to federal court only if the 23 federal court would have had subject matter jurisdiction over the case. See 28 U.S.C. § 1441(a); 24 Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (“Only state-court actions that originally could 25 have been filed in federal court may be removed to federal court by the defendant.”). To establish 26 subject matter jurisdiction pursuant to diversity of citizenship under § 1332(a), the party 1 asserting jurisdiction must show: (1) complete diversity of citizenship among opposing parties 2 and (2) an amount in controversy exceeding $75,000. 28 U.S.C. § 1332(a). The party seeking 3 removal bears the burden of establishing federal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 4 (9th Cir. 1992); Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 399 (9th Cir. 2010). “The removal 5 statute is strictly construed, and any doubt about the right of removal requires resolution in 6 favor of remand.” Id.; see also Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 7 2009). 8 To determine the amount in controversy, courts first look to the complaint. Generally, 9 “the sum claimed by the plaintiff controls if the claim is apparently made in good faith.” St. Paul 10 Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938) (footnote omitted). The $75,000 11 threshold is satisfied if the plaintiff claims a sum greater than the jurisdictional requirement. Id. 12 at 288–89; Pachinger v. MGM Grand Hotel–Las Vegas, Inc., 802 F.2d 362, 363 (9th Cir. 1986). 13 However, when removal jurisdiction is challenged by the plaintiff, the burden lies with the 14 defendant to show by a preponderance of the evidence that the amount in controversy 15 requirement is satisfied. Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014) 16 (“Evidence establishing the amount [in controversy] is required . . . only when the plaintiff 17 contests, or the court questions, the defendant’s allegation.”). Evidence establishing the amount 18 in controversy is required where a defendant’s assertion of the amount in controversy is 19 contested by plaintiffs. Id. at 88. “In such a case, both sides submit proof and the court decides, 20 by a preponderance of the evidence, whether the amount-in-controversy requirement has been 21 satisfied.” Id. (citing 28 U.S.C. § 1446(c)(2)(B)) (emphasis added). 22 Before calculating the amount in controversy, the court must determine whether each 23 measure of damages can be considered “summary-judgment-type evidence” that is plausible and 24 “relevant to the amount in controversy at the time of removal.” Singer v. State Farm Mut. Auto. Ins. 25 Co, 116 F.3d 373, 377 (9th Cir. 1997). Removal is proper “‘if the district court finds, by a 26 1 preponderance of the evidence, that the amount in controversy exceeds’ the jurisdictional 2 threshold.” Dart Cherokee, 574 U.S. at 88. 3 II. Analysis 4 Neilsen asserts that this action should be remanded to state court because defendants 5 cannot meet their burden establishing that the amount in controversy in this action exceeds 6 $75,000. ECF No. 9 at 3. I agree. While the removal petition asserts that the amount in 7 controversy threshold requirement is met, that assertion is mere speculation based on 8 conclusory allegations that the attorney’s fees sought by plaintiff “could be significant” and 9 punitive damages in other actions should be given “serious consideration” in calculating 10 whether the amount in controversy requirement is met. ECF No. 1 at 6–7. Counsel’s assertion 11 that attorney’s fees could be significant, or that punitive damages awarded in other actions 12 should be considered, does not constitute the sort of summary judgment like evidence the court 13 can consider in resolving this motion. See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 14 2004) (noting that in determining the amount in controversy, courts examine not only the facts 15 alleged in the complaint—which are assumed true for purposes of calculating the amount in 16 controversy—but also “summary judgment type evidence relevant to the amount in controversy 17 at the time of removal”). 18 As relevant here, in the complaint, Neilsen prays for: (1) general damages in excess of 19 $15,000; (2) special damages to be determined at the time of trial; (3) consequential damages, 20 including attorney’s fees; (4) expectation damages for denied policy benefits in excess of 21 $15,000; (5) punitive damages in excess of $15,000; (6) reasonable attorney’s fees and costs of 22 suit; and (7) interest at the statutory rate. Compl., ECF No. 1-1 at 16. This prayer for relief makes 23 it facially unclear if the amount in controversy is greater than $75,000. At best, aggregating the 24 prayer for general, expectation, and punitive damages, the face of the complaint shows that 25 Neilsen is seeking $45,000 in relief. Even considering State Farm’s argument that Neilsen is 26 1|| seeking $50,000 for the breach of contract claim,! that only brings the prayer for relief to $65,000. And State Farm’s argument that this court should consider potential, significant 3]| punitive damages or attorney’s fees is insufficient to demonstrate the $75,000 threshold. 4|| Removal “cannot be based simply upon conclusory allegations.” Singer, 116 F.3d at 377 (quoting Allen v. RéH Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). And the term “significant” cannot 6|| serve as a replacement for the “summary-judgment-type evidence” required for this court to 7|| resolve motions for remand. See Woolsey v. State Farm Gen. Ins. Co., 672 F. Supp. 3d 1018, 1025 (C.D. 8] Cal. 2023). 9 While Neilsen also failed to provide evidence regarding the amount in controversy, the burden lies with the defendant. State Farm should have, but failed to “prove, by a preponderance of the evidence, that the amount in controversy [satisfied] the jurisdictional threshold.” Matheson 12|| v. Progressive Specialty Ins. Co., 319 F.3d, 1089, 1090 (9th Cir. 2003); see also Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403-04 (9th Cir. 1996). Consequently, I grant Neilsen’s motion to remand 14]| this action to state court. Conclusion 16 IT IS HEREBY ORDERED that Neilsen’s motion to remand [ECF No. 9] is GRANTED. 17 The Clerk of Court is directed to REMAND this case to the Eighth Judicial District Court, Clark County, Nevada, Case No. A-24-888866-C, Peparement 7 and to close this case. 19 Dated: July 10, 2024 20 ( ! + Cristin Silva United States District Judge 22 ‘ 23 24. |J_"_—_—— ‘Plaintiff asserts that she is entitled to payment of the full limits for insurance motorist coverage under 25] her policy which amount[s] to $50,000.00 per person.” See ECF No. 10 at 4-5. > To arrive at this figure, the court substitutes the breach damages of $50,000 for the prayers of an excess of $15,000 for general damages and an excess of $15,000 for expectation damages and adds to it the putative damages prayer of $15,000.