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Reyes v. Family Security Insurance Co.

United States District Court, E.D. Louisiana

December 18, 2019


         SECTION “F”



         Before the Court is the plaintiffs' motion to remand. For the reasons that follow, the motion is DENIED.


         This dispute arises from an insurer's payment of a fire-loss claim under a homeowner's policy. Dissatisfied with the amount paid, the insureds sued the insurer in state court. The insurer removed the case five months later. The insureds now move to remand, raising one issue: whether the insurer timely removed the case.

         Manuel and Tiffany Reyes owned a Metairie, Louisiana home insured under a Family Security homeowner's policy. The policy limit was $850, 000; it included $500, 000 in dwelling coverage, $50, 000 in other-structures coverage, $250, 000 in personal- property coverage, and $50, 000 in loss-of-use coverage. The policy covered, among other risks, loss caused by fire.

         In summer 2018, a fire damaged the home. The Reyeses reported the damage to Family Security, which sent an adjuster to estimate the loss. The adjuster said the fire caused $360, 000 in damage under the policy's dwelling coverage. Family Security paid $290, 000 under that coverage but nothing under the personal-property coverage.

         In spring 2019, the Reyeses exchanged emails with Family Security's adjuster, offering “additional support” for their alleged losses under the personal-property coverage. No. further payment followed.

         So, on June 6, 2019, the Reyeses sued Family Security in state court. They alleged claims for breach of contract, intentional infliction of emotional distress, and bad-faith and negligent claims adjusting. They said Family Security “failed to tender sufficient payment” under the policy, including “fail[ing] to pay any proceeds due” under the personal-property coverage. They sought “property damages in the amount of [the] homeowner's policy limits, ” plus penalties and other damages. But they did not demand a specific sum or say that their damages exceeded the federal jurisdictional minimum. Compare La. Code Civ. Proc. art. 893(A)(1) (generally prohibiting a prayer for a specific amount of money damages) with Chapman v. Powermatic, Inc., 969 F.2d 160, 163 (5th Cir. 1992) (holding that a plaintiff who wants the 30-day removal clock to begin to run from the defendant's receipt of the initial pleading must place in the initial pleading a “specific allegation” that damages exceed the federal jurisdictional minimum). Family Security was served with a copy of the petition on June 24, 2019.

         On August 5, 2019, Family Security sent the Reyeses a single request for admission: Admit that “the amount in controversy does not exceed” the jurisdictional minimum. Family Security also moved the state court to reduce the time for the Reyeses to respond. The state court granted the motion and ordered the Reyeses to respond by August 20, 2019. They failed to do so.

         Under Louisiana discovery rules, “[a]ny matter admitted” is “conclusively established unless the court on motion permits withdrawal or amendment of the admission.” La. Code Civ. Proc. art. 1468. Because the Reyeses failed to timely respond to Family Security's request for admission, the request was deemed admitted, and it was “conclusively established, ” as of August 20, 2019, that the federal jurisdictional minimum was not met. Id.

         But Family Security sought further assurance. To block the Reyeses from later claiming the case was worth more than $75, 000, Family Security moved the state court for an order deeming the request admitted. The state court set a November 4, 2019 hearing on the motion; the Reyeses' counsel did not appear for the hearing or respond to the motion. The state court nonetheless continued the hearing to November 18, 2019.

         On November 12, 2019, the Reyeses filed a brief opposing Family Security's motion. It confirmed that the Reyeses sought damages exceeding the federal jurisdictional minimum:

Clearly, if Plaintiffs allege $850, 000 in damages and they were only paid $289, 396.37, Plaintiffs never vacated their position that the amount of their alleged losses and damages in the Petition for Damages exceeds the sum or value of $75, 000, exclusive of interest and costs.

         On November 18, 2019, for reasons unknown -- and despite the Reyeses' counsel's failure to timely respond to the motion or appear for the original hearing -- the state court denied Family Security's motion. The state court thus withdrew the jurisdictional facts that had been deemed admitted by operation of Louisiana Code of Civil Procedure Article 1468 more than two months earlier. So, as of November 18, 2019, it was no longer “conclusively established” that the amount in controversy was not met. For the first time since August 20, 2019, removal became a possibility. Family Security acted promptly.

         Two weeks later, on December 2, 2019, Family Security removed the case on the basis of diversity. See 28 U.S.C. §§ 1332(a)(1), 1441(a). Family Security said, in its notice of removal, that (1) the petition did not “set forth” a claim satisfying the jurisdictional minimum, and (2) it could not have “ascertained” the amount in controversy until November 12, 2019. See 28 U.S.C. § 1446(b). That is when it received an “other paper” allegedly establishing the amount in controversy: the Reyses' brief in opposition to Family Security's motion to have the request for admission deemed admitted. See 28 U.S.C. § 1446(b)(3).

         Now, the Reyeses move to remand on the ground that removal was untimely. They say the 30-day removal period began to run on June 24, 2019, the date Family Security was served with a copy of the petition. Alternatively, they say Family Security had five “reasons” to “recognize” the amount in controversy was met more than 30 days before the December 2, 2019 removal. Family Security rejoins that removal was timely because it was ...

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