Theriot v. Transamerica Life Ins. Co., CIVIL ACTION NO. 1:17-CV-71

• Citation: 354 F.Supp.3d 713
• Decision Date: 12 May 2017
• Docket Number: CIVIL ACTION NO. 1:17-CV-71
• Parties: Robert P. THERIOT, Plaintiff, v. TRANSAMERICA LIFE INSURANCE COMPANY, Defendant.
• Court: United States District Courts. 5th Circuit. United States District Court of Eastern District Texas

354 F.Supp.3d 713

Robert P. THERIOT, Plaintiff,

v.TRANSAMERICA LIFE INSURANCE COMPANY, Defendant.

CIVIL ACTION NO. 1:17-CV-71

United States District Court, E.D. Texas.

Signed May 12, 2017

Rodney Allen Townsend, Rodney Townsend-Attorney at Law, PC, Orange, TX, for Plaintiff.

Jason Ryan Bernhardt, Winstead PC, Houston, TX, for Defendant.

MEMORANDUM AND ORDER

MARCIA A. CRONE, UNITED STATES DISTRICT JUDGE

Pending before the court is Plaintiff Robert P. Theriot's ("Theriot") Motion to Abstain and to Remand (# 5), wherein Theriot requests the court remand this action back to state court. Having considered the pending motion, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that remand is unwarranted.

I. Background

At some point prior to January 31, 2016, Theriot underwent surgery on his foot. Due to this surgery, he required the use of a wheelchair. On January 31, 2016, Theriot fell out of his wheelchair, injuring his wound from the previous surgery. Thus, on February 1, 2016, he underwent a second surgery to repair and reattach a skin flap from the first surgery. A few days later, Theriot's home-health nurse noticed that the site had started to dehisce. Eventually, on February 12, 2016, Theriot required an above-the-knee amputation due to the infection of the wound.

At the time of his amputation, Theriot owned a group accident insurance policy issued by Defendant Transamerica Life Insurance Company ("Transamerica"), which provided benefits for accidental death and dismemberment. After his amputation, Theriot contacted Transamerica and made a claim under this policy for the loss of his leg. Transamerica denied the claim.

On January 18, 2017, Theriot filed suit in the 163rd Judicial District Court of Orange County, Texas, asserting claims arising out of Transamerica's denial of coverage. Specifically, Theriot contends that Transamerica knowingly engaged in false, misleading, deceptive, and unconscionable acts, practices, or omissions actionable under the Texas Deceptive Trade Practices Act ("DTPA") and Chapter 541 of the Texas Insurance Code (the "Insurance Code") as well as unfair claim settlement practices and misrepresentation of an insurance policy as prohibited by the Insurance Code. Additionally, Theriot asserts claims for common law fraud, negligence, negligent hiring, negligent supervision, negligent management, and breach of contract. As relief, Theriot requests actual damages in the form of payment of insurance proceeds of $40,000.00, along with statutory damages for violation of the Insurance Code, damages for mental anguish, exemplary damages, and all costs and attorney's fees.

Transamerica removed the action to this court on February 22, 2017, on the basis of diversity of citizenship. Subsequently, on March 28, 2017, Theriot filed a motion to remand, contending that Transamerica's removal was improper. Significantly, Theriot does not dispute that diversity of citizenship exists among the parties. Rather, the salient issue is whether the amount in controversy requirement has been met. Additionally, Theriot requests the court to order sanctions against Transamerica, including the reasonable costs and attorney's fees associated with Transamerica's removal and Theriot's motion to remand.

II. Analysis

A. Removal Jurisdiction

"Federal courts are courts of limited jurisdiction." Gunn v. Minton , 568 U.S. 251, 133 S.Ct. 1059, 1064, 185 L.Ed.2d 72 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ); accord Hotze v. Burwell , 784 F.3d 984, 999 (5th Cir. 2015), cert. denied , ––– U.S. ––––, 136 S.Ct. 1165, 194 L.Ed.2d 240 (2016) ; Scarlott v. Nissan N. Am., Inc. , 771 F.3d 883, 887 (5th Cir. 2014). "They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Kokkonen , 511 U.S. at 377, 114 S.Ct. 1673 (citations omitted). The court "must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum." Howery v. Allstate Ins. Co. , 243 F.3d 912, 916 (5th Cir.), cert. denied , 534 U.S. 993, 122 S.Ct. 459, 151 L.Ed.2d 377 (2001) (citing Kokkonen , 511 U.S. at 377, 114 S.Ct. 1673 ); accord Hertz Corp. v. Friend , 559 U.S. 77, 96, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010) ; Clayton v. ConocoPhillips Co. , 722 F.3d 279, 290 (5th Cir. 2013), cert. denied , 571 U.S. 1156, 134 S.Ct. 906, 187 L.Ed.2d 833 (2014). In an action that has been removed to federal court, a district court is required to remand the case to state court if, at any time before final judgment, it determines that it lacks subject matter jurisdiction. See 28 U.S.C. § 1447(c) ; Carlsbad Tech., Inc. v. HIF Bio, Inc. , 556 U.S. 635, 638, 129 S.Ct. 1862, 173 L.Ed.2d 843 (2009) ; Grupo Dataflux v. Atlas Global Grp., L.P. , 541 U.S. 567, 571, 124 S.Ct. 1920, 158 L.Ed.2d 866 (2004) ; Spear Mktg., Inc. v. BancorpSouth Bank , 791 F.3d 586, 592 (5th Cir. 2015) ; African Methodist Episcopal Church v. Lucien , 756 F.3d 788, 793 (5th Cir. 2014).

When considering a motion to remand, "[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper." Barker v. Hercules Offshore Inc. , 713 F.3d 208, 212 (5th Cir. 2013) (quoting Manguno v. Prudential Prop. & Cas. Ins. Co. , 276 F.3d 720, 723 (5th Cir. 2002) ); accord African Methodist Episcopal Church , 756 F.3d at 793 ; Mumfrey v. CVS Pharmacy, Inc. , 719 F.3d 392, 397 (5th Cir. 2013) ; see 13E CHARLES A. WRIGHT & ARTHUR R. MILLER , FEDERAL PRACTICE AND PROCEDURE § 3602.1 (3d ed. 2013). "This extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute." Roth v. Kiewit Offshore Servs., Ltd. , 625 F.Supp.2d 376, 382 (S.D. Tex. 2008) (quoting Albonetti v. GAF Corp. Chem. Grp. , 520 F.Supp. 825, 827 (S.D. Tex. 1981) ); accord Fort Worth & W. R.R. Co. v. Stevenson , No. 3:15-CV-0906-B, 2015 WL 3867906, at *1 (N.D. Tex. June 22, 2015) ; Crossroads of Tex., L.L.C. v. Great-West Life & Annuity Ins. Co. , 467 F.Supp.2d 705, 708 (S.D. Tex. 2006). "Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant." Caterpillar Inc. v. Williams , 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing 28 U.S.C. § 1441(a) ); see Mumfrey , 719 F.3d at 397.

"The removal statute ties the propriety of removal to the original jurisdiction of the federal district courts." Frank v. Bear Stearns & Co. , 128 F.3d 919, 922 (5th Cir. 1997) ; see 28 U.S.C. § 1441(a) ; Camsoft Data Sys., Inc. v. S. Elec. Supply, Inc. , 756 F.3d 327, 333 (5th Cir. 2014) ; Barker , 713 F.3d at 228. Because removal raises significant federalism concerns, the removal statutes are strictly and narrowly construed, with any doubt resolved against removal and in favor of remand. Shamrock Oil & Gas Corp. v. Sheets , 313 U.S. 100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941) ; African Methodist Episcopal Church , 756 F.3d at 793 ; Barker , 713 F.3d at 212. In short, any "doubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction." Vantage Drilling Co. v. Hsin-Chi Su , 741 F.3d 535, 537 (5th Cir. 2014) (quoting Acuna v. Brown & Root Inc. , 200 F.3d 335, 339 (5th Cir.), cert. denied , 530 U.S. 1229, 120 S.Ct. 2658, 147 L.Ed.2d 273 (2000) ); accord African Methodist Episcopal Church , 756 F.3d at 793 ; Barker , 713 F.3d at 212.

B. Diversity Jurisdiction

Federal courts have subject matter jurisdiction and are authorized to entertain causes of action only where a question of federal law is involved or where there is diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, exclusive of interest and costs. 28 U.S.C. §§ 1331, 1332 ; Arbaugh v. Y&H Corp. , 546 U.S. 500, 513, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) ; Lincoln Prop. Co. v. Roche , 546 U.S. 81, 89, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005) ; Exxon Mobil Corp. v. Allapattah Servs., Inc. , 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) ; Energy Mgmt. Servs., LLC v. City of Alexandria , 739 F.3d 255, 258-59 (5th Cir. 2014). In order to determine whether jurisdiction is present in a removed action, the claims set forth in the state court petition are considered as of the date of removal. Standard Fire Ins. Co. v. Knowles , 568 U.S. 588, 133 S.Ct. 1345, 1349, 185 L.Ed.2d 439 (2013) ; Wis. Dep't of Corr. v. Schacht , 524 U.S. 381, 391, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998) ; Campbell v. Stone Ins., Inc. , 509 F.3d 665, 669 n.2 (5th Cir. 2007) ; McGowin v. ManPower Int'l, Inc. , 363 F.3d 556, 558 n.1 (5th Cir. 2004). In removed cases where, as here, there is no suggestion that a federal question is involved, subject matter jurisdiction exists only if there is complete diversity among the parties and the amount in controversy exceeds $75,000.00. See 28 U.S.C. § 1332 ; Lincoln Prop. Co. , 546 U.S. at 89, 126 S.Ct. 606 ; Exxon Mobil Corp. , 545 U.S. at 552, 125 S.Ct. 2611 ; Caterpillar Inc. v. Lewis , 519 U.S. 61, 68, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996).

The state court petition is usually consulted to determine the amount in controversy, and the sum claimed by the plaintiff controls if the claim is apparently made in good faith. Dart Cherokee Basin Operating Co., LLC v. Owens , ––– U.S. ––––, 135 S.Ct. 547, 553, 190 L.Ed.2d 495 (2014) ; Danial v. Daniels , 162 F. App'x 288, 290 (5th Cir.) (citing St. Paul Mercury Indem. Co. v. Red Cab Co. , 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938) ), cert. denied , 549 U.S. 820, 127 S.Ct. 123, 166 L.Ed.2d 35 (2006) ; Manguno , 276 F.3d at 723 (citing St. Paul Reinsurance Co. v. Greenberg , 134 F.3d 1250, 1253 (5th Cir. 1998) ). Texas law requires plaintiffs to plead for damages that fall within certain ranges. TEX. R. CIV. P. 47 ; Mumfrey , ...