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Nunnery v. 21st Century Centennial Insurance Co.

United States District Court, M.D. Louisiana

November 15, 2018

CARDELL NUNNERY
v.
21ST CENTURY CENTENNIAL INSURANCE COMPANY

          NOTICE

          ERIN WILDER-DOOMES UNITED STATES MAGISTRATE JUDGE.

         Please take notice that the attached Magistrate Judge's Report has been filed with the Clerk of the U.S. District Court.

         In accordance with 28 U.S.C. § 636(b)(1), you have 14 days after being served with the attached report to file written objections to the proposed findings of fact, conclusions of law, and recommendations set forth therein. Failure to file written objections to the proposed findings, conclusions and recommendations within 14 days after being served will bar you, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Court.

         ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.

         REPORT AND RECOMMENDATION

         Before the Court is a Motion to Remand[1] filed by plaintiff, Cardell Nunnery (“Plaintiff”). The Motion is opposed by defendant, 21st Century Centennial Insurance Company (“Defendant”).[2]For the following reasons, the undersigned RECOMMENDS[3] that the Motion to Remand[4] be DENIED. In the event this recommendation is adopted, the undersigned further RECOMMENDS that the matter be referred for a scheduling conference.[5]

         I. Background

         On or about February 22, 2018, Plaintiff filed a Petition for Damages for Personal Injuries, Bad Faith, Attorney Fees, Interest and Costs (the “Petition”) in state district court against Defendant for damages for personal injuries stemming from a February 23, 2016 motor vehicle accident.[6] Plaintiff seeks damages for “continued medical treatment and medical expenses, ” “physical pain and suffering, mental anguish pain and suffering, loss of enjoyment of life, the potential for permanent disability, loss of future earnings, and earnings capacity and other damages . . . .”[7] In addition to these damages, Plaintiff alleges that Defendant, which “provided Uninsured/Underinsured Motorist and Medical Payment coverage”[8] was “arbitrary and capricious” in adjusting his claim and “acted in bad faith in denying and/or under-evaluating Plaintiff's claim” such that Plaintiff is entitled to penalties and attorney fees.[9]

         On April 10, 2018, Defendant removed this action pursuant to 28 U.S.C. § 1332.[10]Defendant asserts that there is complete diversity of citizenship because Plaintiff is a citizen of Louisiana and Defendant is a citizen of Delaware and Pennsylvania.[11] With respect to the amount in controversy, Defendant asserts that the policy at issue has a $100, 000 limit, that Defendant previously tendered $47, 406.20 leaving $52, 593.80 remaining under Defendant's policy, and that prior to removal, Plaintiff demanded Defendant tender the remaining policy limits on three separate occasions.[12] Defendant also points out that the Plaintiff claims in his Petition that Defendant's actions in handling his claim were arbitrary and capricious and that Plaintiff demands penalties and attorneys' fees as allowed under Louisiana law.[13] In light of Plaintiff's multiple policy limits demands and Plaintiff's request for bad faith damages and attorney fees, Plaintiff contends that the amount in controversy in this matter exceeds the jurisdictional threshold of $75, 000, exclusive of interest and costs.

         On April 19, 2018, Plaintiff filed a Motion to Remand, asserting that the amount in controversy requirement is not satisfied.[14] In support of remand Plaintiff submits a Stipulation (the “Stipulation”) dated April 19, 2018 and signed by Plaintiff's counsel providing that Plaintiff “hereby agrees to waive and release any claims in excess of $75, 000 against” Defendant and “agrees not to execute on any judgment rendered in excess of $75, 000, exclusive of interest and costs” against Defendant.[15] Plaintiff argues that submission of the post-removal Stipulation establishes that the amount in controversy requirement is not satisfied.[16]

         In opposition, Defendant maintains the matter was properly removed because diversity jurisdiction existed at the time of removal.[17] Although Defendant concedes that it is not facially apparent from the Petition that Plaintiff's claims exceed $75, 000, Defendant argues that its Notice of Removal establishes that the amount in controversy requirement is satisfied.[18] For the same reasons stated in the Notice of Removal, Defendant maintains that at the time of removal, the amount in controversy exceeded $75, 000. Defendant further asserts that Plaintiff's post-removal unilateral Stipulation does not divest this Court of diversity jurisdiction, and that neither the Plaintiff's Stipulation nor the Motion to Remand establish to a “legal certainty” that the amount in controversy does not exceed $75, 000.[19]

         II. Law and Analysis

         A. Removal Standard

         A defendant may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.”[20] When original jurisdiction is based on diversity of citizenship, the cause of action must be between “citizens of different States” and the amount in controversy must exceed the “sum or value of $75, 000, exclusive of interest and costs.”[21] Subject matter jurisdiction must exist at the time of removal to federal court, based on the facts and allegations contained in the complaint.[22] In removed actions, diversity of citizenship must exist both at the time of filing in state court and at the time of removal to federal court.[23] The removal statute, 28 U.S.C. § 1441, is strictly construed and any doubt as to the propriety of removal should be resolved in favor of remand.[24] The removing party has the burden of proving federal diversity jurisdiction.[25] Remand is proper if at any time the court lacks subject matter jurisdiction.[26]

         B. 21st Century Centennial Insurance Company has shown by a preponderance of evidence that the amount in controversy exceeds $75, 000

         Louisiana law prohibits plaintiffs from specifying a monetary amount of damages in their state court petitions.[27] When a plaintiff has not alleged a specific amount of damages, a removing defendant bears the burden of proving by a preponderance of the evidence that the amount in controversy exceeds $75, 000.[28] The defendant may make the requisite showing in either of two ways: (1) by demonstrating that it is facially apparent that the claims are likely above $75, 000, or (2) by setting forth the facts in controversy - preferably in the removal petition, but sometimes by affidavit - that support a finding of the requisite amount.[29]

         Whatever the manner of proof, the jurisdictional facts that support removal must be judged at the time of removal.[30] If at the time of removal it is facially apparent from the petition that the amount in controversy exceeds $75, 000, post-removal affidavits, stipulations and amendments reducing the amount do not deprive the court of jurisdiction.[31] However, post-removal affidavits may be considered in determining the amount in controversy if the basis for jurisdiction is ambiguous at the time of removal.[32] If the defendant can produce evidence sufficient to show by a preponderance that the amount in controversy exceeds the jurisdictional threshold, the plaintiff can defeat diversity jurisdiction only by showing to a “legal certainty” that the amount in controversy does not exceed $75, 000.[33]

         “Courts have routinely held that pleading general categories of damages, such as ‘pain and suffering, disability, lost wages, loss of earning capacity, medical expenses, etc.,' without any indication of the amount of the damages sought, does not provide sufficient information for the removing defendant to meet his burden of proving that the amount in controversy is satisfied under the ‘facially apparent' test.”[34] In the Petition, Plaintiff seeks penalties and attorney fees as well as damages for continued medical treatments and medical expenses, physical pain and suffering, mental anguish pain and suffering, loss of enjoyment of life, the potential for permanent disability, loss of future earnings capacity.[35] There is no indication in the Petition regarding the amount of these damages, and the Petition does not allege Plaintiff's specific injures. “When, as in the instant case, the petition is vague regarding the types of injuries incurred and any future problems resulting from the incident, ‘the court must conclude that it was not ‘facially apparent' that the amount of damages would exceed $75, 000.'”[36] Because it is not facially apparent that the amount in controversy exceeds the jurisdictional threshold, Defendant must establish, by a preponderance, that the amount in controversy likely exceeds $75, 000. Defendant argues that Plaintiff's pre-removal demands for the remaining policy limits, in conjunction with Plaintiff's assertion that he is entitled to penalties and attorney fees, is sufficient to meet its burden. The undersigned agrees.

         In support of its Notice of Removal, Defendant submitted multiple communications from Plaintiff's counsel demanding that Defendant tender the remaining policy limits for injuries sustained because of the underlying accident.[37] Plaintiff does not contradict Defendant's assertion in the Notice of Removal that policy limits are $100, 000 or that Defendant previously tendered $47, 406.20, leaving $52, 593.80 remaining.[38] Accordingly, the undersigned considers Plaintiff's multiple demands for the remaining policy limits to be demands for approximately $52, 593.80.

         Defendant also points out that Plaintiff is seeking penalties and attorney fees under La. R.S. § 22:1892 and La. R.S. § 22:1973, based on Plaintiff's allegation that Defendant, “has arbitrarily, capriciously, and without any justifiable cause or excuse failed to tender a sufficient amount of its uninsured/underinsured motorist liability insurance.”[39] La. R.S. § 22:1892 states that if an insurer fails to pay a claim within 30 days of receiving satisfactory proof of loss, and that failure is found to be arbitrary, capricious or without probable cause, the insurer shall be subject to a penalty of 50% of the amount found to be due under the insurance contract, as well as reasonable attorney's fees and costs.[40] La. R.S. § 22:1973 provides that if an insurer fails to pay a claim within 60 days of satisfactory proof of loss and that failure is arbitrary, capricious or without probable cause, the insurer shall be subject to a penalty of two times the damages sustained or five thousand dollars, whichever is greater, as a result of the insured's breach of its duty of good faith.[41] “[A] plaintiff cannot recover penalties under both La. R.S. § 22:1973 and 22:1892 for the same conduct; rather, a plaintiff recovers the higher penalty.”[42]

         “The Court considers allegations seeking recovery for bad faith penalties and fees for the purpose of determining whether the amount in controversy requirement is satisfied.”[43] Plaintiff has asserted multiple times that he is entitled to $52, 593.80 remaining under the policy. Under La. R.S. § 22:1892, if Plaintiff recovers the limits of Defendant's UM coverage, Plaintiff may also recover a penalty of $26, 296.90.[44] Although Plaintiff's settlement demands for the remaining policy limits (which based on Defendant's uncontroverted assertion represent $52, 593.80) were for less than $75, 000, when those demands are considered in conjunction with Plaintiff's claim for penalties (which under § 22:1892 could be $26, 296.90), the amount in controversy totals $78, 890.70 even without considering Plaintiff's request for attorney fees. Therefore, Defendant has shown by a preponderance of the evidence that the amount in controversy at the time of removal met the jurisdictional threshold of $75, 000.

         C. Plaintiff has not shown to a legal certainty that the amount in controversy does not exceed $75, 000

         Because Defendant has shown by a preponderance that the amount in controversy was met at the time of removal, Plaintiff can defeat diversity jurisdiction only by showing to a “legal certainty” that the amount in controversy does not exceed $75, 000.[45] Plaintiff has not pointed to a state law that limits his recovery to an amount below the federal jurisdictional threshold, nor did Plaintiff submit with his state court Petition a binding stipulation or affidavit stating that he is not seeking damages in excess of the federal jurisdictional amount.[46] Plaintiff also chose not to file a reply memorandum addressing Defendant's assertion that the amount in controversy actually exceeds the federal jurisdictional amount. Instead, Plaintiff submitted a Stipulation with his Motion to Remand, executed post-removal, that states Plaintiff, “hereby agrees that his claim in this matter does not exceed $75, 000, exclusive of interest and costs. Further, Plaintiff hereby agrees to waive and release any claims in excess of $75, 000 . . .” and “. . . agrees not to execute on any judgment rendered in excess of $75, 000 . . . .”[47]

         The Fifth Circuit has endorsed a narrow situation in which a unilateral post-removal stipulation can clarify that the amount in controversy is not satisfied where the following three elements have been met: “(1) the complaint did not specify an amount of damages, and it is not otherwise facially apparent that the damages sought or incurred are likely above [the jurisdictional threshold]; (2) the defendants offered only a conclusory statement in their notice of removal that was not based on direct knowledge about the plaintiffs' claims; and (3) the plaintiffs timely contested removal with a sworn, unrebutted affidavit indicating that the requisite amount in controversy was not present.”[48] However, “a plaintiff may not defeat removal by subsequently changing his damage request, because post-removal events cannot deprive a court of jurisdiction once it has attached.”[49]

         Assuming that the first and third requirements set out in ANPAC are present, the narrow exception recognized in ANPAC and reaffirmed in Gebbia does not apply in this case. Here, Defendant provided more than “a conclusory statement” in the Notice of Removal regarding the amount in controversy. Defendant alleged that the amount in controversy is met based upon Plaintiff's multiple demands that Defendant tender the policy limits of Defendant's UM policy, and Plaintiff's request for penalties and attorney's fees.[50] Defendant's allegations are more than a mere conclusory statement, without any elaboration, that the amount in controversy exceeds the federal ...


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