A.H. v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 08 May 2023 |
| Docket Number | 1:22-cv-230-LG-RPM |
| Parties | A.H. and J.H. PLAINTIFFS v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, et al. DEFENDANTS |
| Court | U.S. District Court — Southern District of Mississippi |
MEMORANDUM OPINON AND ORDER GRANTING PLAINTIFFS' MOTION TO REMAND
BEFORE THE COURT is the [5] Motion to Remand filed by Plaintiffs, A.H. and J.H. The Motion to Remand is opposed by Defendant, State Farm Mutual Automobile Insurance Company (“State Farm”). After reviewing the submissions of the parties, the record in this matter, and the applicable law, the Court finds that Plaintiffs' Motion to Remand should be granted.
Plaintiffs A.H. and J.H., minors, filed this lawsuit in the Chancery Court of Jackson County, Mississippi, on July 3, 2022. (Compl., ECF No. 1-1). The lawsuit alleges that the minor Plaintiffs were involved in a motor vehicle accident which resulted in previous litigation. Plaintiffs were then represented by attorney Ralph King. (Id. ¶¶ 1-7). King “accepted a settlement on behalf of A.H. and J.H., in the amounts of $10,781.88 and $4,235.24, respectively” from State Farm. (Id. ¶ 7). Plaintiffs claim that “[t]he acceptance of these offers was never communicated to the minors nor the minors' parents,” and that “King was not authorized to accept either settlement.” (Id. ¶¶ 8-9). According to Plaintiffs, King “deposited the settlement checks from State Farm into his bank account,” after which he “never turned over any funds to the minors” and “kept the settlement money for himself.” (Id. ¶¶ 10-12). Reportedly, neither King nor State Farm ever obtained approval from the Chancery Court for these settlements. (Id. ¶ 25). Plaintiffs allege that Defendant State Farm is now liable once again for the settlement stating: “State Farm must now pay the settlements again for and on behalf of the minors.” (Id. ¶ 29). Additionally, says the Complaint, “[d]ue to their intentional and willful conduct, State Farm should pay all attorney's fees, costs, prejudgment and post judgment interest, and expenses plus punitive damages for the failure to obtain Chancery Court approval.” (Id. ¶ 30).
Defendant removed the case to this Court on August 30, 2022, citing the Court's diversity jurisdiction. (Not. Removal ¶ 7 ECF No. 1). In its removal notice, Defendant claimed: “Given the nature and extent of Petitioners' allegations regarding the underlying settlements totaling $15,017.12 as well as punitive damages, attorneys fees, and prejudgment interest, the ‘matter in controversy' clearly exceeds the $75,000 jurisdictional limit of this Court.” (Id. ¶ 10) (citing Montgomery v. First Family Fin. Servs., Inc., 239 F.Supp.2d 600, 605 (S.D.Miss. 2002)). On September 25, 2022, Plaintiffs filed their [5] First Motion to Remand, arguing that the Court lacks subject-matter jurisdiction due to a deficient amount in controversy. (Mot. Remand, ECF No. 5). Defendant [8] responded to the Motion, but Plaintiffs did not reply.
“[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the 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). Scarlott v. Nissan N. Am., Inc., 771 F.3d 883, 887 (5th Cir. 2014) (internal citations omitted).
Federal diversity jurisdiction exists “where the matter in controversy exceeds the sum or value of $75,000.00 exclusive of interest and costs and is between . . . citizens of different States.” 28 U.S.C. § 1332(a). Generally, in cases where an exact amount has been pled, “‘the sum claimed by the plaintiff controls if the claim is apparently made in good faith.'” Garcia v. Koch Oil Co. of Tex., 351 F.3d 636, 638 (5th Cir. 2003) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938)); see also Nat. Union Fire Ins. Co. of Pittsburgh v. Russell, 972 F.2d 628, 630 (5th Cir. 1992) (). However, “if a defendant can prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount, removal is proper unless the plaintiff shows that at the time of removal he was legally certain not to be able to recover that amount.” Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 n. 14 (5th Cir. 1995).
In their [5] Motion, Plaintiffs argue that the amount of controversy is lacking in this matter. The Complaint states a claim for $15,017.12, but Plaintiffs add to this demand “attorney's fees, costs, prejudgment and postjudgment interest, and expenses plus punitive damages for the failure to obtain Chancery Court approval.” (Compl. ¶ 30, ECF No. 1-1). Still, Plaintiffs claim:
This case value is less than $75,000.00. As this Court can see, the amount in controversy is $15,017.12, per the plaintiffs' Complaint. Even if the Chancery Court were to award three times the damages (as a punitive measure), this will still put the case at a $45,051.36 value, not including attorney fees. If we estimate attorney fees to be approximately $10,000.00, we are still at a $55,051.36 total value. Of course, this is assuming the Chancery Court even awards attorney fees or some sort of punitive measure. This is far below the minimum threshold to invoke federal jurisdiction. See 28 U.S.C. §1446.
(Mem. Supp. Pls.' Mot. Remand ¶ 11, ECF No. 6).
Put otherwise, Plaintiffs argue that the “object of the litigation” is less than $75,000.00. (Id. ¶¶ 20-27) (citing Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347 (1977) (). Further, Plaintiffs attach an Affidavit of the mother of the minor children, who “stipulate[s] that the total damages, including costs, expenses, and/or attorney's fees is an amount not to exceed $74,500.00.” (Aff., at 1, ECF No. 6-1). Plaintiffs “further stipulate that the total damages, including costs, expenses, and/or attorney's fees is an amount not to exceed $74,500.00 and the plaintiffs agree to be bound to this amount.” (Id.).
Plaintiffs describe their injuries as soft tissue and state that they recovered only a few weeks after the incident with some physical therapy but no serious medical treatment. (Id.).
“[T]he federal courts permit individual plaintiffs, who are the masters of their complaints, to avoid removal to federal court, and to obtain a remand to state court, by stipulating to amounts at issue that fall below the federal jurisdictional requirement.” Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 595 (2013) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 294 (1938)); see also Durbois v. Deutsche Bank Nat'l Trust Co., 37 F.4th 1053, 1060-61 (5th Cir. 2022) ( case based on a stipulation which was attached to the plaintiff's state court petition). However, post-removal affidavits are treated somewhat differently, because “once the district court's jurisdiction is established, subsequent events that reduce the amount in controversy to less than $75,000 generally do not divest the court of diversity jurisdiction.” Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000). Thus, “[w]hile post-removal affidavits may be considered in determining the amount in controversy at the time of removal, such affidavits may be considered only if the basis for jurisdiction is ambiguous at the time of removal.” Webb v. Walmart Inc., No. 1:18CV397-LG-RHW, 2019 WL 576006, at *2 (S.D.Miss. Feb. 12, 2019) (). However, “if it is facially apparent from the petition that the amount in controversy exceeds $75,000 at the time of removal, post-removal affidavits, stipulations, and amendments reducing the amount do not deprive the district court of jurisdiction.” Gebbia, 233 F.3d at 883.
Here, the Court first finds that the Complaint leaves the amount in controversy ambiguous. The Court begins with the underlying sum demanded by Plaintiffs, namely the money allegedly stolen by former counsel. Specifically, the Complaint alleges that Plaintiffs' former lawyer misappropriated settlement funds and demands that Defendant “pay the settlements again for and on behalf of the minors.” (Compl. ¶ 29, ECF No. 1-1). The settlement figure is said to be $15,017.12 (Id. ¶ 7), which is well below the jurisdictional requisite.
Notably Plaintiffs add that “[d]ue to their intentional and willful conduct, State Farm should pay all attorney's fees, costs, prejudgment and postjudgment interest, and expenses plus punitive damages for the failure to obtain Chancery Court approval.” (Id. ¶ 30). However, this request still does not unambiguously lift the amount in controversy above the jurisdictional threshold. See ASR Nationwide, LLC v. Begay, No. 5:10CV194-DCB-JMR, 2011 WL 2183318, at *3 (S.D.Miss. June 6, 2011) (...
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