Lutz v. Protective Life Ins. Co., 03-81181-CIV.
| Decision Date | 14 June 2004 |
| Docket Number | No. 03-81181-CIV.,03-81181-CIV. |
| Citation | 328 F.Supp.2d 1350 |
| Parties | Mark LUTZ, Plaintiff, v. PROTECTIVE LIFE INSURANCE CO., Defendant. |
| Court | U.S. District Court — Southern District of Florida |
Richard Mark Benrubi, Liggio Benrubi & Williams, West Palm Beach, FL, for plaintiff.
June G. Hoffman, Edward Joy Briscoe, Fowler White Burnett, Miami, FL, Rik S. Tozzi, W. Michael Atchison, Anthony C. Harlow, Alfred H. Perkins, Starnes & Atchison, Birmingham, AL, for defendant.
ORDER GRANTING PLAINTIFF'S MOTION FOR REMAND
THIS CAUSE comes upon Plaintiff's Motion for Remand [DE 14], filed March 2, 2004. Defendant filed its Response [DE 28] on April 23, 2004, and Plaintiff replied [DE 34] on May 25, 2004. This matter is now ripe for adjudication.
Plaintiff originally filed this action in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County against Defendant Protective Life Insurance Co., a health insurance company that issued a group health insurance policy to a "dry trust" known as the American Association of Employed Persons Trust (AAEPT). This policy was marketed and sold to Plaintiff and other potential members of the putative class.1
In March of 1992, Plaintiff purchased the aforementioned policy from Defendant. While the initial premium was only $68.00, the subsequent premiums were increased to the following amounts:
December 2000: 378.82
June 2001: 471.28
November 2001: 702.48
December 2002: 875.84
August 2003: 1,122.76
Plaintiff asserts that Defendant improperly discriminated against the class members by assessing premium rates based upon claims history and health status. Count I of the Complaint alleges a breach of contract claim, and Count II is an action for declaratory relief pursuant to Chapter 86 of the Florida Statutes. Plaintiff specifically claims that this action is not subject to the provisions of the Employment Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq.
Defendant subsequently filed a Notice of Removal [DE 1] on December 30, 2003, claiming that the Court possesses jurisdiction under both 28 U.S.C. § 1331 (federal question) and § 1332 (diversity). However, Defendant only suggests that the Court "may" have jurisdiction under § 1331, and neither party addresses § 1331 in their pleadings. Instead, both parties rely solely on § 1332. As such, this Court will look only to § 1332 in assessing whether it possesses jurisdiction in this cause. Both parties agree that complete diversity exists. The remaining question for this Court is whether the amount in controversy exceeds $75,000.
Federal courts have the power to exercise jurisdiction over "any civil action brought in a state court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). A civil case filed in state court may be removed by the defendant to federal court if the case could have been brought originally in federal court. 28 U.S.C.A. § 1441(b). District courts have original jurisdiction over civil actions where the matter in controversy exceeds $75,000 and the parties are citizens of different states. 28 U.S.C. § 1332.
Removal statutes are narrowly construed in favor of remand. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). The removing party bears the burden of establishing jurisdiction. See Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996). This Court "must remand to state court any case that was removed improvidently or without necessary jurisdiction." See Campos v. Sociedad Aeronautica De Medellin Consolidada, S.A., 882 F.Supp. 1056, 1057 (S.D.Fla.1994). "Where there is any doubt concerning jurisdiction of the federal court on removal, the case should be remanded." Id. (citing Woods v. Firestone Tire & Rubber Co., 560 F.Supp. 588, 590 (S.D.Fla.1983)).
As previously stated, the parties agree that complete diversity exists. Thus, the question remaining for this Court is whether the amount in controversy exceeds the mandatory $75,000. Defendant asserts that the amount in controversy is satisfied on three separately sufficient grounds: 1) the Plaintiff's individual claim exceeds $75,000; 2) the individual claims of unnamed class members exceed $75,000; and 3) the claims for injunctive and declaratory relief must be aggregated, and their value exceeds $75,000. The Court will discuss each of these assertions in turn.
Defendant's first contention is that Plaintiff's consequential damages alone total at least $22,811.32, which represents the amount in premiums Plaintiff has paid in excess of $68 since December 2000.2 In arriving at this number, Defendant assumes that it could not legally increase the premiums whatsoever from the initial premium of $68. However, Plaintiff does not dispute that Defendant was entitled to increase the premiums over time equally based upon normal rating factors. Instead, Plaintiff seeks damages only for the component of the total premium increase that is attributable to individual health status-related factors. See Complaint, at ¶¶ 14, 16c, 18, 27, 28c. Plaintiff does not state that the entire premium increase was improper, but only that it was improper to increase the premiums based upon "claims history/health status." Id. at ¶ 14. As such, Plaintiff's alleged consequential damages total an amount smaller than that alleged by Defendant; yet Defendant, who carries the burden of establishing jurisdiction, does not indicate what that amount might be.
Defendant also asserts that the value of Plaintiff's claim includes the value of the entire insurance coverage under the policy. Thus, Defendant contends that, because Plaintiff is entitled to receive up to $2,000,000 in benefits for medical claims under the plan, the $2,000,000 should be considered when determining the amount in controversy. However, the cases Defendant cites in support of this proposition are inapposite. In each of the cases, the validity of the insurance policy itself was at issue, while here Plaintiff's claims involve the excess amount of premiums charged. See, e.g., Guardian Life Ins. Co. of Am. v. Muniz, 101 F.3d 93, 94 (11th Cir.1996) (). Plaintiff is not seeking enforcement nor questioning the validity of the policy itself.
If anything, the cases cited by Defendant support Plaintiff's position that the face value of the policy cannot be taken into consideration in this case. For example, in Muniz, the Eleventh Circuit noted that the face value of the policy in that situation was the amount that measured the loss the plaintiffs would suffer if the policies were not cancelled. Id. However, Plaintiff is clearly seeking only those sums it has been charged in excess of the proper premium amount, and thus the proper measure is what Plaintiff will suffer if these consequential damages are not awarded. As already stated, this amount is somewhere under the $22,811.32 alleged by Defendant.
Such a conclusion is echoed in the other cases cited by Defendant. In In re Minn. Mut. Life Ins. Co. Sales Practices Litig., the Eighth Circuit considered the face value of an insurance policy for diversity purposes because it was the face value of the policy that the company would have had to pay had the Appellants prevailed on their claims. 346 F.3d 830, 835 (8th Cir.2003). That court also mentioned that the value of future benefits is considered "where the validity of the policy is at issue." Id. (quoting Mass. Cas., Ins. Co. v. Harmon, 88 F.3d 415, 416 (6th Cir.1996)). However, Plaintiff is not attacking the validity of the policy, nor will Plaintiff be awarded the face value of the policy if he prevails on his claims. Thus, the present situation cannot be compared to that in Minnesota Mutual. See also Hawkins v. Aid Ass'n for Lutherans, 338 F.3d 801, 805 (7th Cir.2003) (); Harmon, 88 F.3d at 416-17 (); In re Prudential Ins. Co. of Am. Sales Practices Litig., 962 F.Supp. 450, 503 (D.N.J.1997) ().
These cases demonstrate that the face value of the policy is taken into consideration when the validity of the policy is at issue, and not in situations, as here, where it is not. On the other hand, a comparable situation is found in Wilson v. Mass. Mut. Life Ins. Co. 1999 WL 33456150 . In Wilson, the plaintiff's claims involved alleged overcharges and did not concern the validity of the policy. Id. at *2. As such, the court did not look to the face value of the policy in determining the amount in controversy. Id. The court noted that the plaintiff had referred to the policy in his complaint only to demonstrate the need for injunctive relief. Id. Likewise Plaintiff is seeking only those funds he has been overcharged by Defendant, and he refers to the policy simply because he must in order to demonstrate his cause. Thus, this Court concludes that the face value of Plaintiff's policy cannot be considered in the computation of the amount in controversy.
Finally, Defendant argues that the value of attorney's fees in this cause meets the amount in...
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