Gardner v. Erie Ins. Co.
| Decision Date | 04 November 2022 |
| Docket Number | Civil Action 22-1977 (RC) |
| Parties | WENDELL GARDNER, et al., Plaintiffs, v. ERIE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Columbia |
Plaintiffs Wendell Gardner and Darlene Mathis (“the Gardners”) filed suit against Defendant Erie Insurance Company (“Erie”) to compel appraisal, and alternatively, declaratory judgment and compensatory damages in a dispute over the appropriate compensation owed to them after sustaining sewer damage to their home. The parties agree that the damage was covered by an Erie insurance policy but disagree as to how much, if anything, the Gardners are still owed. Erie removed the suit from D.C. Superior Court to this Court and now moves to dismiss the Gardners' suit for failure to state a claim. Erie argues that the policy's limitations provision prevents the Gardners from bringing suit against them nearly three years after the initial loss. The Gardners move to remand the case to D.C Superior Court and argue that Erie has failed to meet its burden to prove a sufficient amount in controversy.
Because the Court finds that Erie has proven by a preponderance of the evidence that the amount in controversy is greater than $75,000 and that this Court therefore has subject matter jurisdiction, the Court will deny the Gardners' motion to remand. Additionally, the Court finds that the limitations provision in the insurance policy precludes this suit, and that Erie has not waived it nor is estopped from asserting the limitations provision as an affirmative defense. Therefore, the Court will grant Erie's motion to dismiss.
On June 19, 2019, the Gardners suffered from an accidental water and sewer incident that flooded their Washington, D.C. home and led to extensive property damage to both their home and personal property located in their basement. See Compl. ¶ 5, ECF No. 1-1. It is undisputed that the Gardners held an ErieSecure Home Insurance Policy (the “Policy”) with Erie at the time of the loss, and that Erie provided payments totaling $929,296.04 to the Gardners for the damage. See Compl. ¶ 3; Notice of Removal at 2, ECF No. 1; Ex. B to Notice of Removal, pdf pp. 27-50, ECF No. 1-2 (Policy). But the Gardners allege that Erie “severely underpaid the claim” and are unsatisfied with the cleaning efforts completed by Erie's vendors on water-damaged personal property. Compl. ¶ 5; see also Pls.' Mem. in Support of Mot. to Remand at 3-4, ECF No. 10-1.
The Gardners brought suit against Erie in D.C. Superior Court on June 17, 2022, seeking to compel appraisal, and alternatively seeking the appointment of an umpire, declaratory judgment, and additional relief including compensatory damages to be determined by an appraiser. See Compl. at 1, 5-6. Erie timely removed to this Court. See Notice of Removal ¶ 2. Shortly thereafter, Erie filed a Rule 12(b)(6) motion to dismiss for failure to state a claim. See Mot. to Dismiss at 1, ECF No. 5. Erie relies on a limitations provision under the Policy which states that Policy at 13; see also Mot. to Dismiss at 1.[1] The Gardners then filed a motion to remand, arguing that this Court does not have subject matter jurisdiction over this diversity case because the suit does not meet the amount in controversy requirement. See Mot. to Remand at 1-3, ECF No. 10; 28 U.S.C. § 1332(a). The motions are ripe for decision.
“A civil action filed in state court may only be removed to a United States district court if the case could originally have been brought in federal court.” Nat'l Consumers League v. Flowers Bakeries, LLC., 36 F.Supp.3d 26, 30 (D.D.C. 2014) (citing 28 U.S.C. § 1441(a)). The party opposing the motion to remand “bears the burden of establishing that subject matter jurisdiction exists in federal court.” Id. (internal quotation marks omitted) (quoting RWN Dev. Grp., LLC v. Travelers Indem. Co. of Conn., 540 F.Supp.2d 83, 86 (D.D.C. 2008)). In a diversity case, federal district courts have original jurisdiction if the amount in controversy exceeds $75,000, exclusive of interest and costs, and the action is between citizens of different states. 28 U.S.C. § 1332(a).
“Where the complaint does not assert a particular amount in controversy . . . ‘the notice of removal may assert the amount in controversy.'” M3 USA Corp. v. Haunert, No. 20-cv-3784, 2021 WL 1894847, at *1 (citing 28 U.S.C. § 1446(c)(2)(A)). If the plaintiff challenges the amount in controversy asserted by the defendant, “both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 88 (2014); see also Sloan v. Soul Circus, Inc., No. 15-cv-1389, 2015 WL 9272838, at *5 (D.D.C. Dec. 18, 2015) (). An affidavit can constitute sufficient proof that the amount in controversy is above or below $75,000 by preponderance of the evidence. See, e.g., Apton v. Volkswagen Grp. of Am., Inc., 233 F.Supp.3d 4, 13 (D.D.C. 2017).
Federal Rule of Civil Procedure 8 requires that a complaint contain “a short and plain statement of the claim” sufficient to give the defendant fair notice of the claim and the grounds upon which it rests. Fed.R.Civ.P. 8(a)(2); accord Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements,” are therefore insufficient to withstand a motion to dismiss. Id. A court need not accept a plaintiff's legal conclusions as true, see id., nor must a court presume the veracity of legal conclusions that are couched as factual allegations, see Twombly, 550 U.S. at 555. However, a court considering a motion to dismiss must accept the complaint's factual allegations as true. See, e.g., Lucas v. District of Columbia, 214 F.Supp.3d 1, 5 (D.D.C. 2016). Moreover, the court must “draw all reasonable inferences” in favor of the plaintiff. DC2NY, Inc. v. Acad. Express, LLC, 485 F.Supp.3d 113, 118 (D.D.C. 2020).
When ruling on a 12(b)(6) motion to dismiss, “the court must not rely on facts outside of the pleadings,” Maniaci v. Georgetown Univ., 510 F.Supp.2d 50, 59 (D.D.C. 2007), which means the Court may consider “the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, or documents upon which the plaintiff's complaint necessarily relies even if the document is produced not by the plaintiff in the complaint but by the defendant in a motion to dismiss,” Hinton v. Corrs. Corp. of Am., 624 F.Supp.2d 45, 46 (D.D.C. 2009) (internal quotation marks omitted) (citation omitted).
The Gardners move to remand for lack of subject matter jurisdiction on the basis that the amount in controversy is less than $75,000. Because the Gardners did not list the amount of damages sought in their complaint, Erie has the opportunity to show that the amount in controversy is above $75,000. See M3 USA Corp., 2021 WL 1894847, at *1. Here, Erie provided an affidavit which affirmed that the Gardners have submitted 19 additional inventories for a total of $97,867 worth of personal property including clothing, pet products, and shoes that are either missing or they feel were insufficiently cleaned. See Aff. of Jack A. Schenzel (“Schenzel Aff.”) ¶ 3, ECF No. 14-1. The affidavit also states that these claims are “over and above what Erie already paid.” Id.
The Gardners argue that because they are seeking equitable relief in the form of compelling appraisal, there is no way to know how much is in controversy. Mot. to Remand at 3. But that is simply not the case. “In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation.” M3 USA Corp., 2021 WL 1894847, at *2 ). Here, the Gardners' complaint seeks “[a]ppraisal,” “[d]eclaratory judgment,” and “[a]dditional relief.” Compl. at 1. The personal property inventories that the Gardners submitted to Erie show that they claim nearly $100,000 for personal property damage “over and above what Erie already paid.” Schenzel Aff. ¶ 3. Thus, regardless of whether this amount is styled in the form of equitable relief or otherwise, it is “common sense” that the amount in controversy in this case satisfies the $75,000 threshold. M3 USA Corp., 2021 WL 1894847, at *1.
Erie has therefore proven, in the absence of contradicting evidence, that it is more likely than not that the amount in controversy is greater than $75,000. The Gardners' motion to remand is therefore denied.
Erie moves to dismiss under Rule 12(b)(6) on the ground that the limitations provision in the Policy bars the current suit. Mot. to Dismiss at 1. While the Gardners did not attach the...
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