McCorkindale v. American Home Assur. Co./AIC
| Decision Date | 30 November 1995 |
| Docket Number | No. C 95-4108.,C 95-4108. |
| Citation | 909 F. Supp. 646 |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | Jil McCORKINDALE, Plaintiff, v. AMERICAN HOME ASSURANCE COMPANY/A.I.C., Defendants. |
Al Sturgeon, Sioux City, Iowa, for Plaintiff Jil McCorkindale.
John Werner of Grefe & Sidney, P.L.C., Des Moines, Iowa, for Defendants American Home Assurance Company and A.I.C. Claims Services, Inc.
TABLE OF CONTENTS
I. INTRODUCTION AND BACKGROUND ................................................ 647
II. LEGAL ANALYSIS ............................................................ 649
A. Removal Jurisdiction ................................................... 649
1. Principles of removal jurisdiction .................................. 650
2. Standards and procedures for determining removal jurisdiction ....... 650
a. Effect of the proffered amendment ................................ 650
b. The proper test in the circumstances presented ................... 652
c. Process for determining amount in controversy on removal ......... 653
3. Application of standards and procedures ............................. 655
a. Amount in controversy on the face of the complaint ............... 655
b. Looking beyond the complaint ..................................... 656
B. Motion To Hold In Abeyance ............................................. 657
III. CONCLUSION ............................................................... 657
Defendants in this lawsuit, which was originally filed in state court, removed the action to federal court on the ground of diversity jurisdiction and promptly moved to hold the action in abeyance pending completion of proceedings before the Iowa Industrial Commissioner. The plaintiff, however, has moved to remand the action to state court, asserting that her complaint does not meet the jurisdictional minimum amount in controversy for federal diversity jurisdiction. She has also moved for leave to amend her complaint to assert, inter alia, that her damages are less than $50,000, but that motion for leave to amend is currently pending before one of the magistrate judges of this district. Therefore, this court must first determine whether plaintiff's assertion that her complaint does not meet the jurisdictional minimum amount in controversy for federal diversity jurisdiction to attach requires remand of this matter to state court. Only if remand is not appropriate will the court reach the defendants' motion to hold this action in abeyance.
Plaintiff Jil McCorkindale filed her petition in this matter in the Iowa District Court for Woodbury County on September 26, 1995. The defendant was named as American Home Assurance Company/A.I.C. Defendants, in their Notice of Removal, filed October 18, 1995, state that American Home Assurance Company "is a corporation, authorized to do business in the State of Iowa,"1 but that A.I.C. is a separate corporation that has "changed its name to A.I.G. Claim Services, Inc., and is a Delaware Corporation with its principal place of business in New York City."2
McCorkindale's petition alleges that the defendants were the carriers of workers compensation insurance for her employer, Heartland Hotel Partners II in Sioux City, Iowa, and that they acted in bad faith in denying payment of her claim for workers compensation benefits as the result of an injury suffered May 4, 1995. McCorkindale identifies her damages caused by defendants' conduct as including "exacerbation of physical injuries, pain and suffering, unnecessary and unreasonable delay in obtaining health care to alleviate pain and improve and diminish physical impairment, actual economic loss, severe mental and emotional distress, and damage to her reputation in the community." However, the petition does not identify the nature or extent of McCorkindale's injuries. The petition does allege that acts and omissions of the defendants were "intentional, wanton and willful, and exhibiting a complete reckless disregard for her rights under the Workers' Compensation statutes," such that she is entitled to punitive damages. McCorkindale's prayer for relief is for damages "in an amount that will fairly and reasonably compensate her for her actual and general damages, and for punitive damages in an amount that will adequately punish Defendant and deter Defendant and others from any further conduct as described," and such other relief as the court deems appropriate. However, because Iowa law prohibits such pleadings,3 the complaint makes no claim for damages in a specific amount, nor are there any allegations or itemizations of the amount of any specific or concrete items of damages, such as economic loss or medical expenses.
On October 18, 1995, defendants filed a Notice of Removal removing this action to this federal court. In that Notice of Removal, defendants assert that "the amount in controversy in the above entitled action exclusive of interest and costs, exceeds $50,000." Defendants further assert that "this Court has original jurisdiction of the above-entitled action pursuant to 28 U.S.C. § 1332(a) and the action may, therefore, be removed to this court pursuant to 28 U.S.C. § 1441(a)." Defendants filed their answer to the complaint in federal court concurrently with their Notice of Removal. Also on October 18, 1995, defendants moved to hold this action in abeyance on the ground that in Reedy v. White Consol. Indus., Inc., 503 N.W.2d 601, 602-03 (Iowa 1993), the Iowa Supreme Court concluded that courts considering claims of bad faith failure to pay workers compensation benefits not yet exhausted in proceedings in front of the Industrial Commissioner should use their discretionary abstention powers to delay further proceedings until after the Industrial Commissioner's proceedings have been completed.
On October 31, 1995, McCorkindale responded to these actions by the defendants. First, McCorkindale resisted the motion to hold in abeyance, apparently on the ground that it would further delay and deny her the rights and benefits to which she is entitled under the workers compensation laws of this state. McCorkindale also filed a motion for leave to amend her complaint to identify the defendants properly as two separate entities. Although leave for such an amendment was not specifically requested in her motion, the proffered amended complaint restates McCorkindale's prayer as a request for damages "totaling together less than $50,000.00, along with judgment interest as provided by law, and the costs of this action," as well as such other relief as the court might deem appropriate. The court will take no position in this order on disposition of plaintiff's motion for leave to amend, as that matter is pending before a magistrate judge of this district and, in any event, is in no way dispositive of the remand and abeyance issues. Finally, also on October 18, 1995, McCorkindale moved to remand this matter to state court on the ground that plaintiff does not seek, and the complaint does not state, sufficient damages to meet the jurisdictional amount in controversy for this court's proper exercise of diversity or removal jurisdiction. McCorkindale therefore seeks remand of this action pursuant to 28 U.S.C. § 1447(a).
The court's analysis of the motions pending before it will begin with the motion to remand this action to state court. Only if this court can properly exercise diversity jurisdiction over this case, and hence removal jurisdiction, should it address any other matter.4
The grounds and procedures for removal of a state court proceeding to federal court and for remand to state court are stated in three statutes, 28 U.S.C. §§ 1441, 1446, and 1447. See, e.g., Liberty Mutual Ins. Co. v. Ward Trucking Corp., 48 F.3d 742, 745 (3d Cir.1995) (). The statute identifying removable actions, 28 U.S.C. § 1441, states in pertinent part:
(a) Except as otherwise expressly provided by Act of Congress, any 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) (emphasis added).
The procedure for removal is stated in 28 U.S.C. § 1446, which provides in pertinent part:
(b) The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
28 U.S.C. § 1446(b). After filing, a matter that was not initially removable may become removable, and the statute provides for that eventuality as follows:
If the case stated in the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 diversity of this title more than 1 year after...
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