Silva v. Lloyd'S
| Decision Date | 22 November 2016 |
| Docket Number | EP-16-CV-00313-DCG |
| Parties | RAFAEL SILVA and ROSA SILVA, Plaintiffs, v. ALLSTATE TEXAS LLOYD'S, Defendant. |
| Court | U.S. District Court — Western District of Texas |
On this day, the Court considered Plaintiffs Rafael Silva and Rosa Silva's ("Plaintiffs") "Opposed Motion to Remand and Brief in Support" ("Plaintiffs' Motion to Remand") (ECF No. 7), filed on September 1, 2016. Defendant Allstate Texas Lloyd's ("Defendant") filed a response ("Defendant's Response") (ECF No. 8) on September 8. Plaintiffs filed a reply ("Plaintiffs' Reply") (ECF No. 10) on September 14. Defendant filed a Sur-Reply (ECF No. 20) on November 16. Having considered the parties' arguments, in view of the applicable law, the Court DENIES Plaintiffs' Motion to Remand.
On June 23, 2016, Plaintiffs brought this action in the 346th Judicial District Court of El Paso County, Texas, asserting state law causes of action based on an insurance claim Plaintiffs made following damage to their property from a hail/wind storm.1 Notice of Removal at 1, ECF No. 1; id., Ex. B-1 ¶¶ 5.1-5.3. Defendant was served with the state court petition on July 5. Notice of Removal at 1.
Premised on diversity jurisdiction, Defendant removed this matter to federal court on August 2, 2016. Id. at 2; see also 28 U.S.C. § 1446(b) (). Plaintiffs are citizens of Texas. Notice of Removal at 2. Defendant is an association of underwriters whose individual underwriters are residents and citizens of the State of Illinois and New Jersey. Id. at 2-3.
On September 1, 2016, Plaintiffs filed a Motion to Remand arguing that the amount in controversy does not exceed $75,000, exclusive of interest and costs.2 Pls.' Mot. Also on the same day, Plaintiffs filed a "Stipulation of Damages" ("Post-Removal Stipulation") seeking to limit their recovery to under $75,000.3 See Post-Removal Stipulation.
"'Federal courts are courts of limited jurisdiction,' possessing 'only that power authorized by Constitution and statute.'" Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). "It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." Energy Mgmt. Servs., LLC v. City of Alexandria, 739 F.3d 255, 258-59 (5th Cir. 2014) (quoting Kokkonen, 511 U.S. at 377).
A defendant may remove a state-court civil action to a federal district court, if the latter has original jurisdiction. See 28 U.S.C. § 1441(a). "A federal district court may exercise original jurisdiction over any civil action that either satisfies diversity requirements or that arises under the federal constitution, statutes, or treaties—commonly referred to as 'federal question'jurisdiction." Energy Mgmt., 739 F.3d at 258-59 (citing 28 U.S.C. §§ 1331, 1332, 1369). "Thus, under § 1441, removal is proper only when the court has original jurisdiction over at least one asserted claim under either federal question or diversity jurisdiction." Id. at 259 (citing City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 165 (1997)). Diversity jurisdiction exists "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States." 28 U.S.C. § 1332(a)(1).
Once the case is removed, the district court must, however, remand, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c). The removing party bears the burden of proving by preponderance of evidence that federal jurisdiction exists. New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 327 (5th Cir. 2008) (citations omitted). Significantly, the jurisdictional facts must be judged as of the time of filing of the state court petition. White v. FCI USA, Inc., 319 F.3d 672, 674 (5th Cir. 2003) (per curiam) (citing St. Paul Reins. Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998)).
When removal is premised upon diversity jurisdiction and the parties' dispute whether the amount in controversy exceeds $75,000, see 28 U.S.C. § 1332(a), courts must determine the amount in controversy in light of "the claims in the state court petition as they existed at the time of removal." Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (citation omitted). In general, the amount in controversy is determined by the amount sought on the face of the state court petition, so long as the claim is made in good faith. Greenberg, 134 F.3d at 1253; De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). Where state law prevents a plaintiff from alleging a specific amount of damages in the complaint, a defendant must demonstrate by a preponderance of the evidence that the amount in controversy exceeds$75,000. See Garcia v. Koch Oil Co. of Tex. Inc., 351 F.3d 636, 638-39 (5th Cir. 2003); Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 882-83 (5th Cir. 2000); De Aguilar, 47 F.3d at 1410-11. Greenberg, 134 F.3d at 1253 (footnotes omitted); see also Garcia, 351 F.3d at 639 (). Courts have considered pre-suit demand letters as such evidence in determining whether defendants have met the preponderance burden. See Hartford Ins. Grp. v. Lou-Con Inc., 293 F.3d 908, 910-12 (5th Cir. 2002) (per curiam); Greenberg, 134 F.3d at 1254-55; Wilson v. Berlin, 20 F.3d 644, 651 n.8 (5th Cir. 1994); Molina v. Wal-Mart Stores Tex., L.P., 535 F. Supp. 2d 805, 808 (W.D. Tex. 2008) (citations omitted).
If a defendant meets their burden, removal is proper, unless a plaintiff can show with "legal certainty" that the claims alleged are for less than $75,000. De Aguilar, 47 F.3d at 1412 (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)). A plaintiff may do so by pointing to a state law that prevents recovery in excess of the damages sought in the state court petition or by "fil[ing] a binding stipulation or affidavit with their complaints." Id. (quoting In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992) (per curiam)). However, post-removal events reducing the amount in controversy generally do not deprive the court of jurisdiction. Gebbia, 233 F.3d at 883 (5th Cir. 2000) (collecting sources).
Finally, "[a]ny ambiguities are construed against removal because the removal statute should be strictly construed in favor of remand." Manguno, 276 F.3d at 723 (citation omitted).This is so because, "[a]s 'the effect of removal is to deprive the state court of an action properly before it, removal raises significant federalism concerns.'" Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007) (citation omitted). The federal courts "must not trespass upon the judicial 'turf of the state courts." B., Inc. v. Miller Brewing Co., 663 F.2d 545, 554 (5th Cir. Unit A Dec. 1981).
Plaintiffs argue that the amount in controversy does not exceed $75,000 because the face of the state court petition unambiguously stated that they sought "only monetary relief aggregating less than $75,000[.00], including damages of any kind, penalties, court costs, expenses, prejudgment interest, and attorney fees." Pls.' Mot. at 3 (quoting Notice of Removal, Ex. B-1 ¶ 1.1). In the alternative, they claim that if the state court petition was ambiguous, the Post-Removal Stipulation provides "legal certainty" that the amount in controversy is less than $75,000 because it "irrevocably limits the amount of recovery in the instant case" to $74,999.99. Id. at 4. Consequently, they contend that this Court lacks subject matter jurisdiction over this action. Id. at 5.
Defendant counters that the sum set forth in the state court petition should not control because it violates Texas Rule of Civil Procedure 47 ("Rule 47"), constituting bad faith. Def.'s Resp. at 2-3. Defendant argues that the state court petition is "not ambiguous," but rather Plaintiffs' assertion that they sought "monetary relief of less than $75,000.00" is "a clear attempt to avoid federal jurisdiction." Id. at 3-4. Defendant maintains that Plaintiffs' statement concerning damages conflicts with the pre-suit demand letter and other statements in the state court petition, and "ignores" the damage model. Id. at 4. Specifically, Defendant asserts that thestate court petition and demand letter sought 18% interest, treble damages, compensatory damages for emotional stress "as may be found," pre- and post-suit attorneys' fees, pre- and post-judgment interest, court costs, the right to seek additional damages, and punitive and exemplary damages. Id. Defendant explains that, because Texas law does not prevent a court or jury from awarding a higher amount than what is stated in the pleadings, there is no certainty in the amount stated in the state court petition. Id. Finally, Defendant urges the Court not to consider the Post-Removal Stipulation because it was not filed with the state court petition. Id. at 5-6. Defendant concludes that this Court has subject matter jurisdiction. Id. at 6.
In their Reply, Plaintiffs dispute whether the contents of the state court petition and demand letter are sufficient to establish the amount in controversy. Pls.' Reply at 5-7. They aver that the damages-limiting statement in the state court petition that they sought recovery of ...
To continue reading
Request your trial