Koester v. State Farm Ins. Co.
| Decision Date | 22 October 2012 |
| Docket Number | Case Number: 7:12-cv-02528-JEO |
| Parties | ANTHONY KOESTER and LAURIE KOESTER, Plaintiffs, v. STATE FARM INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Alabama |
In this action originally filed in state court, Anthony and Laurie Koester ("Plaintiffs") assert that Defendant State Farm Fire and Casualty Company1 ("State Farm") is liable under Alabama law on the theory that its denial of Plaintiffs' homeowners insurance claim for damage to the roof of their residence was in violation of the policy and in bad faith. (Doc.2 1-2 ("Complaint" or "Compl.")). State Farm removed the action, invoking this court's diversity jurisdiction. (Doc. 1 ("Notice of Removal" or "NOR")). Plaintiffs have now filed a motion seeking remand, contending that jurisdiction is lacking, as well as an award of costs and attorney fees pursuant to 28 U.S.C. § 1447(c). (Doc. 5). State Farm has filed a response in opposition. (Doc. 6). Upon consideration, the court3 concludes that the action is due to be remanded to state court but that Plaintiffs' motion for attorney fees is due to be denied.
Through legal counsel, Plaintiffs filed this action in the Circuit Court of Tuscaloosa County on June 20, 2012. (Compl.) The material allegations of their pleading are these: Plaintiffs' owned a home in Northport, Alabama, which was insured under a homeowner's policy issued by State Farm. (Id. ¶¶ 5-6). In April 2009, Plaintiffs reported damage to the roof of their home to State Farm. (Id. ¶ 7). That same month, a State Farm agent examined the premises with a roofer, at which time the agent told Plaintiffs that the damage was cosmetic and did not meet the policy deductible. (Id. ¶ 8). In January 2010, Plaintiffs reported water leaks in the front bedroom to State Farm, which sent an adjuster to investigate the claim. (Id. ¶¶ 9-10). The adjuster inspected the home and delivered an estimate for the damages, which included a partial repair of the roof. (Compl. ¶ 11). In June 2011, Plaintiffs submitted a "supplemental claim for damages" to State Farm, signed by the contractor who performed the repair work. (Id. ¶ 12). State Farm sent another adjuster to evaluate the "supplemental claim," but State Farm denied it. (Id. ¶¶ 13-14).
Based on the foregoing allegations, Plaintiffs assert in Count I that State Farm is liable under Alabama law for breach of the insurance contract. (Id. ¶¶ 16-17). In Count II, Plaintiffs aver that State Farm further committed the state-law tort of bad faith, both because State Farm had "no debatable reason" for denying the claim (id. ¶ 19) and because State Farm "failed to properly investigate" the claim. (Id. ¶ 20). On each Count, Plaintiffs "demand judgment against Defendant State Farm for damages, plus interest and costs, in an amount to be determined by a jury." (Compl., Ad Damnum Clauses following ¶¶ 17, 21).
On July 24, 2012, State Farm timely removed the action to this court, founding jurisdiction upon 28 U.S.C. § 1332. (NOR ¶¶ 3, 5). Under that statute, a federal district court may hear a civilaction (1) that is between citizens of different states and (2) where the matter in controversy exceeds $75,000, exclusive of interest and costs. See Wachovia Bank v. Schmidt, 546 U.S. 303, 306 (2006); Strawbridge v. Curtiss, 3 Cranch 267, 7 U.S. 267 (1806), overruled on other grounds, Louisville, Cincinnati & Charleston R.R. Co. v. Letson, 2 How. 497, 43 U.S. 497, 555 (1844); see also U. S. Const. Art. III, § 2. There is no dispute that the parties are completely diverse4 . To show the amount in controversy, State Farm attaches materials indicating that that the subject policy (Doc. 1-1 ("Policy")) has dwelling coverage limits of $143,360, and that State Farm made "partial payment of the claim referred to in Plaintiffs' Complaint" in amounts totaling $30,938.54 between February 2010 and May 2011. (NOR ¶ 6(2)5 ; see also Doc. 1-3, Affidavit of Eddie Travelstead). Subtracting the latter from the former, State Farm calculates that $112,421.46 remains in benefits potentially available under the policy. (NOR ¶ 6(2)). Based on that circumstance, State Farm argues, "along with Plaintiffs' claim for punitive damages pursuant to the bad faith claim, the jurisdictional amount in controversy is satisfied." (Id.)
Plaintiffs have filed a motion to remand (Doc. 5), accompanied by a supporting brief (Doc. 5-1), arguing that State Farm has failed to show the requisite amount in controversy. Plaintiffs do not challenge State Farm's calculations with regard to the limits of the available coverage under their policy. Plaintiffs instead emphasize that State Farm has failed to support that Plaintiffs are seeking policy limits or that the amount of their contested "supplemental claim" exceeds $75,000. Rather, Plaintiffs offer an affidavit from Laurie Koester averring that the amount of such claim submittedand denied by State Farm was $12,834.80. (See Doc. 5-1 at p. 7; Doc. 5-3, ¶¶ 3-4). Plaintiffs further argue that State Farm cannot make up the difference between that amount and the jurisdictional threshold simply by pointing out that Plaintiffs might recover punitive damages on the bad faith claim. Plaintiffs also seek an award of attorney fees pursuant to 28 U.S.C. § 1447(c).
State Farm has filed a response in opposition to Plaintiffs' motion. (Doc. 6). State Farm does not contest Plaintiffs' contention that their "supplemental claim" submitted to State Farm was $12,834.80. State Farm appears to argue, however, that the $30,938.54 in benefits it paid to Plaintiffs under the policy prior to suit being filed is also due to be considered as part of the amount in controversy. (See id. at p. 7 & n.2). State Farm adds that the court, using its "judicial experience and common sense," can discern that the jurisdictional amount is met based upon the availability of additional damages for emotional distress and punitive damages. (Id. at p. 10-12). State Farm also highlights that Plaintiffs have not stipulated in their motion or in an affidavit that they are not seeking more than $75,000. (Id. at p. 9 n. 3). Finally, State Farm argues that Plaintiffs' application for attorney fees under § 1447(c) is due to be denied because the removal was valid, or, in the alternative, because State Farm acted in "good faith" and had "an objective, reasonable, and fact-based foundation for its removal." (Id. at p. 13).
Defendants generally may remove a civil action filed in a state court if the action could have been brought in federal court. 28 U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). To effect such a removal, defendants are required to file a notice of removal containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings,and orders served in the action. 28 U.S.C. § 1446(a); Roe v. Michelin N. Amer., Inc., 613 F.3d 1058, 1060 (11th Cir. 2010). After a case is removed, however, if the district court determines at any time before entry of final judgment that it lacks subject matter jurisdiction, the case must be remanded to state court. 28 U.S.C. § 1447(c); Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 638-39 (2009). Further, City of Vestavia Hills v. General Fidelity Ins. Co., 676 F.3d 1310, 1313 (11th Cir. 2012) (quoting University of S. Ala. v. American Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999)); see also Miedema v. Maytag Corp., 450 F.3d 1322, 1328-29 (11th Cir. 2006).
The removing party bears the burden of proof regarding the existence of federal subject-matter jurisdiction. Vestavia Hills, 676 F.3d at 1313 n. 1 (citing Connecticut State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1343 (11th Cir. 2009)); see also Miedema v. Maytag Corp., 450 F.3d 1322, 1328 (11th Cir. 2006). State Farm removed the instant action based upon the alleged existence of jurisdiction under § 1332(a). There is no dispute that the parties are completely diverse; the only jurisdictional question, rather, is whether the amount-in-controversy is also met. Where, as here, a plaintiff makes an unspecified demand for damages in state court, a removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional requirement. 28 U.S.C. § 1446(c)(2)(B); see also Roe, 613 F.3d at 1061; Tapscott v. MS Dealer Service Corp., 77 F.3d 1353, 1357 (11th Cir. 1996), abrogated on other grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000). Of course, that standard does not imply that "a removing defendant is ... required to prove the amount in controversy beyond all doubt or tobanish all uncertainty about it." Pretka, 608 F.3d at 754. However, a "conclusory allegation in the notice of removal that the jurisdictional amount is satisfied, without setting forth the underlying facts supporting such an assertion, is insufficient to meet the defendant's burden." Williams v. Best Buy Co., 269 F.3d 1316, 1319-20 (11th Cir. 2001). The jurisdictional inquiry focuses on how much is in controversy at the time of removal. Pretka, 608 F.3d at 751. The plaintiffs' likelihood of success on the merits is "largely irrelevant" to the jurisdictional inquiry because the pertinent question is what is "in controversy in the case, not how much the plaintiffs are ultimately likely to recover." Pretka, 608 F.3d at 751 ().
In some cases, "it may be 'facially apparent' from the pleading itself that the amount in controversy exceeds the jurisdictional minimum, even 'when the complaint does...
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