Wildman v. Wolf

• Decision Date: 24 August 2016
• Docket Number: CIVIL NO. 16-00332 HG-KSC
• Parties: JOSEPH L. WILDMAN, Plaintiff, v. MATTHEW WOLF; EMPIRE FIRE AND MARINE INSURANCE COMPANY, Defendants.
• Court: U.S. District Court — District of Hawaii

JOSEPH L. WILDMAN, Plaintiff, v. MATTHEW WOLF; EMPIRE FIRE AND MARINE INSURANCE COMPANY, Defendants.

CIVIL NO. 16-00332 HG-KSC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

August 24, 2016

FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFF'S MOTION TO REMAND CASE TO FIRST CIRCUIT COURT, STATE OF HAWAII AND FOR ATTORNEY'S FEES AND COSTS

Before the Court is Plaintiff Joseph Wildman's ("Plaintiff") Motion to Remand Case to First Circuit Court, State of Hawaii and for Attorney's Fees and Costs ("Motion"), filed July 7, 2016. Defendant Empire Fire and Marine Insurance Company ("Defendant") filed an Opposition on August 10, 2016. Plaintiff filed a Reply on August 12, 2016.

The Court finds this matter suitable for disposition without a hearing pursuant to Rule 7.2(d) of the Local Rules of Practice for the U.S. District Court for the District of Hawaii ("Local Rules"). After careful consideration of the parties' submissions and the applicable law, the Court HEREBY RECOMMENDS that the Motion be GRANTED IN PART AND DENIED IN PART for the reasons set forth below.

BACKGROUND

Plaintiff filed his Complaint on June 1, 2016, in the Circuit Court of the First Circuit, State of Hawaii. Plaintiff alleges negligence, defamation, libel per se, and reputational harm. He prays for general, special, and punitive damages in an amount to be proven at trial.

On June 22, 2016, Defendant removed the action to this Court. The present Motion followed.

DISCUSSION

Defendant removed the instant case pursuant to 28 U.S.C. §§ 1441 and 1332. Notice of Removal ("Notice") at ¶ 5. Section 1441 provides, in pertinent part:

(a) Generally.--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 beremoved 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.

(b) Removal based on diversity of citizenship.--(1) In determining whether a civil action is removable on the basis of the jurisdiction under section 1332(a) of this title, the citizenship of defendants sued under fictitious names shall be disregarded.

(2) A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

28 U.S.C. § 1441 (a), (b). Section 1441 is strictly construed against removal and courts resolve any doubts about the propriety of removal in favor of remanding the case to state court. See Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006). The party seeking to remove the case bears the burden of establishing the existence of federal jurisdiction. See California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 2004), cert. denied, 544 U.S. 974 (2005). "[J]urisdiction must be analyzed on thebasis of the pleadings filed at the time of removal without reference to subsequent amendments." Sparta Surgical Corp. v. Nat'l Ass'n of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998); Spencer v. United States Dist. Court for the N. Dist. of Cal., 393 F.3d 867, 871 (9th Cir. 2004) ("Challenges to removal jurisdiction require an inquiry into the circumstances at the time the notice of removal is filed.").

A. Diversity of Citizenship

Defendant removed the case based on diversity jurisdiction because it is a Nebraska corporation with its principal place of business in Illinois, Defendant Matthew Wolf is a citizen of Nebraska, Plaintiff is a citizen of Hawaii, and the amount in controversy exceeds $75,000. Notice at ¶¶ 3-4. Plaintiff contends that Defendant has not met its burden of establishing that the amount in controversy exceeds $75,000. Plaintiff has offered to stipulate that he does not seek and will not recover damages in excess of $74,999.

Federal district courts have original jurisdiction over cases where the amount in controversyexceeds $75,000, exclusive of interest and costs, and where the matter in controversy is between citizens of different states. 28 U.S.C. § 1332(a)(1). A defendant may remove such an action to federal court provided that no defendant is a citizen of the same state in which the action was brought. See 28 U.S.C. § 1441(b). Currently at issue is whether the amount in controversy exceeds $75,000.

1. Citizenship

The parties do not dispute the complete diversity of the parties and it appears, based on the Notice, that Plaintiff and Defendants are citizens of different states, and Defendants are not citizens of the State of Hawaii.

2. Amount in Controversy

Plaintiff disputes Defendant's contention that the amount in controversy exceeds $75,000. To start, the Court considers "whether it is 'facially apparent' from the complaint that the jurisdictional amount is in controversy." Lowdermilk v. U.S. Bank Nat'l Ass'n, 479F.3d 994, 998 (9th Cir. 2007) (quotations and citations omitted). When "it is not facially evident from the complaint that more than $75,000 is in controversy," a defendant must prove, by a preponderance of the evidence, that the amount in controversy exceeds $75,000. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). In other words, a defendant must prove that it is "more likely than not" that the amount in controversy exceeds $75,000. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). This "burden is not 'daunting,' as courts recognize that under this standard, a removing defendant is not obligated to 'research, state, and prove the plaintiff's claims for damages.'" Korn v. Polo Ralph Lauren Corp., 536 F. Supp. 2d 1199, 1204-05 (E.D. Cal. 2008) (quoting McCraw v. Lyons, 863 F. Supp. 430, 434 (W.D. Ky. 1994)).

By contrast, when a state court complaint affirmatively alleges that the amount in controversy is less than the jurisdictional threshold, the partyseeking removal must prove with legal certainty that the amount in controversy exceeds the jurisdictional threshold. Lowdermilk, 479 F.3d at 998-99;¹ Guglielmino v. McKee Foods Corp., 506 F.3d 696, 698 (9th Cir. 2007). The Ninth Circuit endorses "the Fifth Circuit's practice of considering facts presented in the removal petition as well as any 'summary-judgement-type evidence relevant to the amount in controversy at the time of removal.'" Matheson, 319 F.3d at 1090; Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th Cir. 2005). Conclusory allegations regarding the amount in controversy are insufficient. Matheson, 319 F.3d at 1090-91.

When assessing "the amount in controversy, a court must assume that the allegations of the complaint are true and that a jury will return a verdict for theplaintiff on all claims made in the complaint." Korn, 536 F. Supp. 2d at 1205 (citing Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 993, 1001 (C.D. Cal. 2002)). It is the amount placed "in controversy" by a plaintiff's complaint that is the ultimate inquiry, not what a defendant will actually owe. Id. (citing Rippee v. Boston Market Corp., 408 F. Supp. 2d 982, 986 (S.D. Cal. 2005)).

Here, the Complaint does not seek a specific amount of damages. Plaintiff requests general, special, and punitive damages, as well as attorneys' fees and costs. Notice, Ex. A. Therefore, Defendant must prove, by a preponderance of the evidence, that the amount in controversy exceeds $75,000. Guglielmino, 506 F.3d at 701.

Defendant has failed to prove that it is more likely than not that the amount in controversy exceeds $75,000. The only evidence offered by Defendant is the conclusory allegation in its Notice of Removal that "the amount in controversy exceeds $75,000.00,exclusive of interests and costs." Notice at ¶ 5. This allegation is insufficient to carry Defendant's burden.² Absent a sufficient showing that the amount in controversy exceeds $75,000, the Court finds that jurisdiction is lacking. Because any doubts about the propriety of removal must be resolved in favor of remanding the case to state court, the Court recommends that the district court remand the case to the First Circuit Court.

This recommendation is further bolstered by Plaintiff's willingness to stipulate to seek and/or recover damages that do not exceed $74,999. Defendant argues that Plaintiff's post-removal offer neitherchanges the amount in controversy at the time of removal nor establishes that Plaintiff was actually seeking less than $75,000, exclusive of interest and costs, at any time before the action was removed. Although Defendant is correct that the relevant inquiry is the amount in controversy at the time of removal, cases can be and have been remanded after a plaintiff disclaims damages in excess of $75,000.³

In Lovell v. State Farm Insurance Cos., Civil No. 12-00455 JMS/BMK, 2013 WL 210106, at *2 (D. Haw. Jan. 17, 2013), for example, the district court adopted the findings and recommendation to remand because the plaintiffs represented that they would not seek a total recovery of more than $74,999. The district court reasoned that 1) great deference is given to counsel's representations about the amount in controversy because they are officers of the court and subject to Rule 11 sanctions; 2) the plaintiffs would be precluded fromseeking a greater award under the doctrine of judicial estoppel; and 3) the defendant failed to rebut the plaintiffs' representation as to the amount in controversy and failed to establish that the amount in controversy exceeded $75,000. Id.

Defendant contends that Lovell is contrary to Haskell v. State Farm Mutual Automobile Insurance Co., 187 F. Supp. 2d 1241 (D. Haw. 2002), because Lovell considered a post-removal representation. The Court disagrees. Haskell is distinguishable, it does not stand for the proposition that a court may never consider a plaintiff's post-removal...