Coleman v. Wicker, Civil Action No. 2:11-00558

• Decision Date: 30 March 2012
• Docket Number: Civil Action No. 2:11-00558
• Court: U.S. District Court — Southern District of West Virginia
• Parties: TERRY L. COLEMAN and PATRICIA COLEMAN, his wife, Plaintiffs, v. TOMMY WICKER and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Defendants.

TERRY L. COLEMAN and PATRICIA COLEMAN, his wife, Plaintiffs, v. TOMMY WICKER and STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY, an Illinois corporation, Defendants.

Civil Action No. 2:11-00558

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF WEST VIRGINIA AT CHARLESTON

Dated: March 30, 2012

MEMORANDUM OPINION AND ORDER

Pending is plaintiffs' Terry L. and Patricia Coleman's motion to remand filed August 30, 2011.

I.

Mr. and Mrs. Coleman, and defendant Tommy Wicker, are West Virginia citizens. Defendant State Farm Mutual Automobile Insurance Company ("State Farm") is an Illinois citizen. On July 30, 2009, Mr. Coleman was operating a vehicle owned by Lesley Waskey, the Colemans' daughter. The Waskey vehicle was struck from behind by Mr. Wicker, who was driving a truck at the time.

On July 8, 2011, the Colemans instituted an action in the Circuit Court of Mingo County. Mr. Coleman alleges that he "will or may sustain in the future" certain temporary and permanent personal injuries, pain and suffering, emotional distress, medical expenses, and loss of enjoyment of life. (Compl. at 3). In keeping with the 2008 enactment by the legislature that "no specific dollar amount or figure relating to damages being sought may be included in the complaint" no amount for damages is specified in the complaint. W. Va. Code § 55-7-25.

In Count One, Mr. Coleman alleges a negligence claim against Mr. Wicker. In Count Two, Ms. Coleman alleges a loss of consortium against Mr. Wicker. Both of those claims appear to have been settled, in part, with Mr. Wicker's insurance carrier, GEICO, for the $20,000 policy limits prior to this action having been instituted. The residue of those two claims continue in this action, which seeks, in part, contractual underinsurance coverage benefits under two separate State Farm policies described below.

The Colemans were insured under State Farm policy 2247- 265-48E, which has a per person underinsured limit of $100,000 ("Coleman policy"). Ms. Waskey's State Farm policy ("Waskey policy"), the number of which is not reflected in the record, contained the same underinsured limit of $100,000 per person asfound in the Coleman policy. The Colemans submitted an underinsured motorist claim to State Farm under both the Coleman and Waskey policies for the combined underinsured limits of $200,000.

Count Three alleges that State Farm, during the adjustment of the Coleman underinsured coverage claim, acted in bad faith and violated a number of provisions found in the West Virginia Unfair Trade Practices Act ("WVUTPA"). The claim is of the first-party genre arising out of the $200,000 in underinsurance coverage sought under the Coleman and Waskey policies.

The allegations giving rise to the extracontractual claim found in Count Three are that State Farm, inter alia, (1) failed to make a good faith offer to promptly settle the claim, (2) failed to make a reasonable investigation of the claim, waiting until near the running of the limitations period before seeking additional medical records, and (3) failed to promptly provide a reasonable explanation of the basis in the insurance policy supporting its failure to make a reasonable settlement offer. The Colemans seek a separate award of compensatory damages for the Count Three extracontractual claim, along with a punitive damages request.

On August 17, 2011, State Farm removed pursuant to 28 U.S.C. § 1332(a)(1). The two-page notice of removal is short on details concerning the amount in controversy. It alleges only that "this is a civil action wherein the matter in controversy exceeds the sum of Seventy-Five Thousand Dollars ($75,000.00)" and that plaintiffs "seek[] underinsured motor vehicle coverage under a State Farm policy together with extracontractual damages, including punitive damages." (Not. of Remov. at 2). State Farm also asserts as follows: "Defendant, Tommy Wicker is an underinsured motorist and, as such, a nominal party pursuant to Kidd v. Gilfilen, 170 F.Supp.2d 649 (S.D. W.Va. 2001)." (Not. of Remov. at 2).

On August 30, 2011, the Colemans moved to remand. They assert that State Farm has not satisfied its burden of proof respecting the $75,000 jurisdictional minimum. They additionally note State Farm previously offered to settle the case for approximately $33,000, a counteroffer that the Colemans rejected outright.¹

State Farm responds that, in July 2011, the Colemans' lawyer demanded $200,000 to settle the case. State Farm also points out the "panoply of available damages," which it asserts to include "compensatory damages for the delay in settlement, attorney's fees (presumed to be one-third of the plaintiff's compensatory and punitive damages award) and punitive damages for the alleged unfair claims handling." (Resp. to Remand Mot. at 5).

II.

The court is vested with original jurisdiction of all actions between citizens of different states when the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1). The statuteestablishing diversity jurisdiction is to be strictly construed. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Healy v. Ratta, 292 U.S. 263, 270 (1934); Schlumberger Indus., Inc. v. Nat'l Surety Corp., 36 F.3d 1274, 1284 (4th Cir.1994). The party seeking removal bears the burden of establishing federal jurisdiction and, if challenged, also bears the burden of proving that federal jurisdiction was properly invoked. Mulcahey v. Columbia Organic Chem. Co., 29 F.3d 148, 151 (4th Cir. 1994).

In a case that is filed initially in federal court, a district court has original jurisdiction if the requisite diversity of citizenship exists unless it "appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). A different test applies in removal situations. A defendant who removes a case from state court in which the damages sought are unspecified, asserting the existence of diversity jurisdiction, must prove by a preponderance of the evidence that the matter in controversy exceeds the jurisdictional amount of $75,000. See, e.g., Roe v. Michelin North America, Inc., 613 F.3d 1058, 1061 (11th Cir. 2010); Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009); Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007); Everett v.Verizon Wireless, Inc., 460 F.3d 818, 829 (6th Cir. 2006); Andrews v. E.I. Du Pont De Nemours and Co., 447 F.3d 510, 515 (7th Cir. 2006); Garcia v. Koch Oil Co. of Texas Inc., 351 F.3d 636, 638-39 (5th Cir. 2003); Landmark Corp. v. Apogee Coal Co., 945 F. Supp. 932 (S.D. W. Va. 1996); see also 14C Charles A. Wright et al., Federal Practice and Procedure § 3725.1 (4th ed. elec. 2011) ("The prevailing standard . . . has become that the defendant prove 'by a preponderance of evidence' that the amount involved in the litigation exceeds the statutory jurisdictional threshold.").

A court often considers the entire record and makes an independent evaluation of whether the amount in controversy has been satisfied. Weddington v. Ford Motor Credit Co., 59 F. Supp.2d 578, 584 (S.D. W. Va. 1999); Mullins v. Harry's Mobile Home, Inc., 861 F. Supp. 22, 23 (S.D. W. Va. 1994). It has been stated as follows:

Important items of proof would be the type and extent of the plaintiff's injuries, . . . and the possible damages recoverable therefore, including punitive damages if appropriate. . . . The defendant may also present evidence of any settlement demands made by the plaintiff prior to removal . . . . although the weight to be given such demands is a matter of dispute among courts.

Watterson v. GMRI, Inc., 14 F. Supp.2d 844, 850 (S.D. W. Va. 1997); Werwinski v. Ford Motor Co., 286 F.3d 661, 666 (3rd Cir. 2002)("The court must measure the amount 'not . . . by the low endof an open-ended claim, but rather by a reasonable reading of the value of the rights being litigated.'") (quoting Angus v. Shiley Inc., 989 F.2d 142, 146 (3d Cir. 1993)); United Food & Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden Square, Inc., 30 F.3d 298, 305 (2nd Cir. 1994) ("Where the pleadings themselves are inconclusive as to the amount in controversy, however, federal courts may look outside those pleadings to other evidence in the record.") (citing Land v. Dollar, 330 U.S. 731, 735 & n.4 (1947)).

The potential recovery on Counts One, Two, and Three could be quite significant. See Marshall v. Saseen, 192 W.Va. 94, 100, 450 S.E.2d 791, 797 ...