Feller v. Hartford Life & Accident Ins. Co.

• Decision Date: 19 May 2010
• Docket Number: No. 1:10–cv–00005–JAJ–RAW.,1:10–cv–00005–JAJ–RAW.
• Citation: 817 F.Supp.2d 1097
• Parties: Rebecca FELLER, Plaintiff, v. HARTFORD LIFE AND ACCIDENT INSURANCE CO., Defendant.
• Court: U.S. District Court — Southern District of Iowa

817 F.Supp.2d 1097

Rebecca FELLER, Plaintiff,

v.HARTFORD LIFE AND ACCIDENT INSURANCE CO., Defendant.

No. 1:10–cv–00005–JAJ–RAW.

United States District Court, S.D. Iowa, Western Division.

May 19, 2010.

Angela L. Burmeister, Berkshire & Burmeister, Omaha, NE, for Plaintiff.

Mark A. Roberts, Jason M. Steffens, Simmons Perrine Moyer Bergman PLC, Cedar Rapids, IA, Eric Christian Tostrud, Lockridge Grindal & Nauen PLLP, Minneapolis, MN, for Defendant.

ORDER

JOHN A. JARVEY, District Judge.

This matter comes before the Court pursuant to Plaintiff Rebecca Feller's (“Feller”) Motion to Remand filed on April 21, 2010. [Dkt. No. 9.] Defendant Hartford Life and Accident Insurance Co. (“Hartford Life”) responded on May 10, 2010. [Dkt. No. 10.] On May 17, 2010, Feller replied and the Court held a hearing on the motion. [Dkt. Nos. 12 & 13.] The Court denies the motion.

I. Background and Arguments

Plaintiff Feller commenced this action against Hartford Life in the District Court for the State of Iowa, Pottawattamie County, on February 23, 2009. Feller alleged claims under Iowa law for: (1) breach of contract and (2) bad-faith denial of her claim for accidental death benefits under a policy insuring her husband. Defendant Hartford Life removed this case from Pottawattamie County on March 25, 2010. Hartford Life asserted in its notice of removal that there was complete diversity of citizenship ¹ between the parties and that Feller sought a judgment in excess of $75,000, “including insurance benefits in the amount of $50,000 under a policy of insurance issued by Hartford, interest in the amount of 12% annually, costs, and attorney's fees.” The pertinent sections of Feller's complaint state the following:

7. That Defendant owes Plaintiff payment [sic] the amount of $50,000.00.

...

10. That Defendant's denial and refusal to pay said amounts constitutes bad faith.

WHEREFORE, Plaintiff prays for a judgment against the Defendant in the amount of $50,000.00, together with interest at the rate of 12 percent (12%) per annum from May 2009 until paid in full, costs of this action, and a reasonable attorney's fees.

Feller argues that remand to state court is warranted in this case because Hartford Life cannot establish that the “amount in controversy” exceeds $75,000.² Hartford Life argues in response that the Court should deny Feller's motion because her claims for bad faith/punitive damages and attorney's fees each independently create an amount in controversy in excess of $75,000. As a matter of Iowa law, Hartford Life argues that punitive damages are recoverable in a bad faith claim, and should be considered when determining the amount in controversy. Likewise, Feller's requests for attorney's fees “reasonably may be expected to exceed $25,000.” Instead of determining attorney's fees as of the date of removal, Hartford Life asserts that the Court should consider the amount of Feller's overall likely or anticipated attorney's fees when calculating the amount in controversy. Alternatively, Hartford Life asserts that if the Court remands this matter, the Court should require Feller to stipulate that her claim is for less than $75,000, inclusive of costs, interest, and attorney's fees.

In reply, Feller asserts that Hartford Life fails to meet its burden of proving that the amount in controversy exceeds the jurisdictional requirements by a preponderance of the evidence. She states that Hartford Life's “general statements” in its brief in opposition do not establish that the jurisdictional threshold has been met. For example, she argues that the following statements by Hartford Life are insufficient to satisfy a preponderance of the evidence standard: “it is only reasonable to conclude that Plaintiff seeks an amount that would bring her aggregate claim above the jurisdictional threshold” and “Plaintiff's claims for attorney's fees in this case reasonably may be expected to exceed $25,000.” Feller contends that the “mere fact” that she could recover damages greater than $50,000 is not, by itself, complying with the amount in controversy jurisdictional threshold. Therefore, Feller asks this Court to remand this matter to state court.

II. Analysis

A defendant may remove any civil action brought in a state court to a “district court of the United States for the district and division embracing the place where such action is pending”. 28 U.S.C. § 1441(a). Federal jurisdiction is proper in a civil action where there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000. Id. § 1332. Once in federal court, a case shall be remanded back to state court “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction....” 28 U.S.C. § 1447(c), because courts must strictly construe the removal statutes. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 85 L.Ed. 1214 (1941).

The party seeking removal and opposing remand has the burden of establishing federal subject matter jurisdiction. In re Bus. Men's Assur. Co. of Am., 992 F.2d 181, 182 (8th Cir.1993). For example, if there is a dispute about the amount in controversy, “the party invoking federal jurisdiction must prove the requisite amount by a preponderance of the evidence.” James Neff Kramper Family Farm P'ship v. IBP, Inc., 393 F.3d 828, 831 (8th Cir.2005) (citations omitted). “Generally, a complaint that alleges the jurisdictional amount in good faith will suffice to confer jurisdiction, but the complaint will be dismissed if it appear[s] to a legal certainty that the claim is really for less than the jurisdiction amount.” OnePoint Solutions, L.L.C. v. Borchert, 486 F.3d 342, 348 (8th Cir.2007) (quoting Larkin v. Brown, 41 F.3d 387, 388 (8th Cir.1994)); see also LaPree v. Prudential Fin., 385 F.Supp.2d 839, 842 (S.D.Iowa 2005). When considering a motion to remand, a court must resolve all doubts about federal jurisdiction in favor of remand. Transit Cas. Co. v. Certain Underwriters at Lloyd's of London, 119 F.3d 619, 625 (8th Cir.1997); Cent. Iowa Power Co-op. v. Midwest Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 912 (8th Cir.2009).

A. Calculating the Amount in Controversy

Courts generally look to the face of the state pleadings to determine if the amount in controversy requirement has been satisfied. See Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961). Items that may be included in the calculation of the amount in controversy include punitive damages, the value of injunctive relief, and attorney's fees. See Bell v. Preferred Life Assurance Soc'y, 320 U.S. 238, 240, 64 S.Ct. 5, 88 L.Ed. 15 (1943). Whether federal jurisdiction exists must be determined by looking at the case as of the time it was filed in state court. Wis. Dep't of Corr. v. Schacht, 524 U.S. 381, 390, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998); McLain v. Andersen Corp., 567 F.3d 956, 965 (8th Cir.2009); Core v. Sw. Bell Tel. Co., 847 F.2d 497, 498 (8th Cir.1988). Any “events occurring subsequent to removal which reduce the amount recoverable, whether beyond the plaintiff's control or the result of his volition, do not oust the district court's jurisdiction once it has attached.” St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 293, 58 S.Ct. 586, 82 L.Ed. 845 (1938); accord Kansas Pub. Employees Retirement Sys. v. Reimer & Koger Assocs., Inc., 77 F.3d 1063, 1067–68 (8th Cir.) (“The existence of this [removal] jurisdiction is determined at the time of removal, even though subsequent events may remove from the case the facts on which jurisdiction was predicated.”), cert. denied, 519 U.S. 948, 117 S.Ct. 359, 136 L.Ed.2d 250 (1996).

If, on the face of the pleadings, the complaint is not removable, a court may then “provid[e] the parties with the opportunity to satisfy the court as to the amount in controversy.” Wiemers v. Good Samaritan Soc'y, 212 F.Supp.2d 1042, 1045 (N.D.Iowa 2002) (citing Jil McCorkindale v. Am. Home Ass'n Co./A.I.C., 909 F.Supp. 646, 655 (N.D.Iowa 1995)). In deciding the amount in controversy, a court must bear in mind that

it is the amount or value of that which the complainant seeks to recover, or the sum or value of that which the defendant will lose if the complainant succeeds in his suit, that constitutes the jurisdictional sum or value of the matter in dispute, which tests the jurisdiction.

Hatridge v. Aetna Casualty & Surety Co., 415 F.2d 809, 815 (8th Cir.1969) (quoting Cowell v. City Water Supply Co., 121 F. 53, 57 (8th Cir.1903)). In terms of the burden of proof the proponent of diversity jurisdiction must prove, Eighth Circuit law ³ holds that a

district court has subject matter jurisdiction in a diversity case when a fact finder could legally conclude, from the pleadings and proof adduced to the court before trial, that the damages that the plaintiff suffered are greater than $75,000. We emphasize that [the law] does not suggest that unliquidated damages in some specific amount must be proved before trial by a preponderance of evidence. Kopp v. Kopp, 280 F.3d 883, 885 (8th Cir.2002) (emphasis added). Where plaintiff's state court complaint alleges damages less than $75,000, and defendant removes to federal court, the defendant must prove by a preponderance of evidence that plaintiff will recover at least $75,000 if successful. Wang v. Pacific Cycle, Inc., 530 F.Supp.2d 1048, 1052 (S.D.Iowa 2008); LaPree, 385 F.Supp.2d at 842 (citing Trimble v. Asarco, Inc., 232 F.3d 946, 959 (8th Cir.2000)), abrogated on other grounds by, Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) (“[T]he party invoking federal jurisdiction must prove the requisite amount by a preponderance of the evidence.”); Kopp, 280 F.3d at 885.

Here, Feller asserts damages of $50,000, well below the jurisdictional threshold of $75,000. The Court finds that her complaint is facially insufficient as to the...