Elliker v. Contractors Bonding & Insurance Company
Filing
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ORDER denying 5 Motion to Remand to State Court. Signed by Chief Judge Robert C. Jones on 2/27/13. (Copies have been distributed pursuant to the NEF - JC)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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CARRIE L. ELLIKER,
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Plaintiff,
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vs.
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CONTRACTORS BONDING AND
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INSURANCE COMPANY, a foreign corporation; )
ABC Corporations I-X, inclusive; Black and
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White Companies; and Does I-X, inclusive
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3:12-cv-00438-RCJ-WGC
ORDER
Defendant.
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This case arises out of an insurance company’s failure to satisfactorily pay Underinsured
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Motorist benefits owing the Plaintiff. Pending before the Court is a Motion to Remand (ECF No.
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5). For the reasons given herein, the Court denies the motion.
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I.
FACTS AND PROCEDURAL HISTORY
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Plaintiff Carrie L Elliker (“Elliker”), is a Nevada resident who was involved in an
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automobile accident in which a third party struck her vehicle in violation of the law. The vehicle
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was a 2007 GMC Yukon insured under a policy of insurance of the Defendants. Plaintiff notified
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Defendants of a potential claim for Underinsured Motorist benefits
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II.
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LEGAL STANDARDS
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Federal district courts have jurisdiction over removed state court actions in cases where
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they would have had original jurisdiction. 28 U.S.C. § 1441(a). Federal courts have original
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“diversity” jurisdiction in cases where the parties are completely diverse and the amount in
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controversy exceeds $75,000. § 1332(a). In original jurisdiction cases, a bare claim for more
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than $75,000 is sufficient to satisfy the jurisdictional amount, unless it appears “legally certain”
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that the amount in dispute is less. E.g., Geographic Expeditions, Inc. v. Estate of Lhotka ex rel.
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Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010). However, in removal cases:
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where a plaintiff’s state court complaint does not specify a particular amount of
damages, the removing defendant bears the burden of establishing, by a
preponderance of the evidence, that the amount in controversy exceeds $[75,000].
Under this burden, the defendant must provide evidence establishing that it is “more
likely than not” that the amount in controversy exceeds that amount.
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Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). Where a complaint is
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unclear as to the total amount of damages sought, but alleges only upper or lower limits or types
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of damages, a district court is free in its preponderance-of-the-evidence analysis to make
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estimations of the amount of damages that could be obtained consistent with the vague wording
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of the complaint. See Guglielmino v. McKee Foods Corp., 506 F.3d 696, 700–01 (9th Cir. 2007).
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III.
ANALYSIS
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Here, Plaintiff alleges in the Complaint only that damages under each claim exceed
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$10,000. This is not because Plaintiff claims only slightly more than $10,000, but rather because
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Nevada’s pleading rules require a statement to this effect in order to invoke the general
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jurisdiction of the state district court and avoid the special jurisdiction of the justice court. But
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Plaintiff in reality seeks much higher damages. Defendant has adduced charts containing a
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summary of the costs of Plaintiff’s defense, totaling over $100,000. (See Overview, ECF No. 12-
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4, at 6). Moreover, the amounts are supported by invoices from Arnold & Porter LLP to
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Opticomp, listing $48,321.25 of legal services rendered in April 2010, (see Invoice, May 17,
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2010, ECF No. 12-4, at 11), $12,771.25 of legal services rendered in May 2010, (see Invoice,
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June 16, 2010, ECF No. 12-4, at 17), and a total bill of $61,112.22 due as of June 14, 2010, (see
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Statement, June 14, 2010, ECF No. 12-4, at 23). An additional $6091.25 of legal services were
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rendered in June 2010, (see Invoice, July 20, 2010, ECF No. 12-4, at 24), and $11,247.50 of legal
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services were rendered in July 2010, (see Invoice, Aug. 17, 2010, ECF No. 12-4, at 30).
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Professional fees and expenses from another firm were billed to Opticomp for services rendered
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in May 2010 in a total amount of $25,601.77. (See Invoice, June 7, 2010, ECF No. 12-4, at 37).
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This totals approximately $104,000. Therefore, even if Defendant’s own admission that enough
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of this has been paid to reduce compensatory damages sought to approximately $69,000—and
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neither party adduces such evidence—the amount in controversy almost certainly still exceeds
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$75,000 when punitive damages totaling even a small fraction of the compensatory damages are
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considered. Plaintiff argues that Defendant has failed to prove punitive damages with any
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evidence. But Plaintiff’s own prayer for punitive damages is enough if the amount it could
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receive would bring the case within the Court’s jurisdiction. A defendant need not provide
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evidence of its own bad faith in order to prove jurisdiction, which is what Plaintiff seems to
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demand. Defendant has shown by a preponderance of the evidence that the amount in
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controversy exceeds $75,000, because presuming liability for the punitive damages Plaintiff has
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requested, those damages more likely than not exceed $6000.
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At oral argument, Plaintiff argued that compensatory damages were not in fact accruing
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and that no exemplary cases indicated what level of punitive damages were available here. But
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even assuming compensatory damages are not accruing, significant punitive damages are
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available based on an insurer’s bad faith. For example, in Albert H. Wohlers & Co. v. Bartgis,
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969 P.2d 949 (Nev. 1998), the Nevada Supreme Court approved punitive damages against an
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insurer of $3.75 million based on compensatory damages of less than $300,000. Id. at 952, 962
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(reducing a jury award of $7.5 million). The Court has also approved punitive damages of $5
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million based on compensatory damages of $410, 000 in a bad faith insurance case. Republic Ins
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Co. v. Hires, 810 P.2d 790, 792–93 (Nev. 1991) (reducing a jury award of $22.5 million).
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Plaintiff here could easily obtain punitive damages of over $6000 based on compensatory
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damages of over $69,000. Although the cases cited did not involve “director and officer” or
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“D&O” insurance policies, the punitive damages awards in those cases were based on the same
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species of bad behavior that the Defendant in the present case allegedly engaged in: the willful
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failure of an insurer to honor a policy. It is therefore clear that significant punitive damages may
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be available in this case if the Defendant is liable for bad faith.
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CONCLUSION
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IT IS HEREBY ORDERED that the Motion to Remand (ECF No. 7) isis DENIED.
(ECF No. 5) DENIED.
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IT IS SO ORDERED.
Dated this 18th day of of February, 2013.
27th day April, 2011.
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ROBERT C. JONES
United States District Judge
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