Manibhadra, Inc. d/b/a Days Inn Emporia v. Aspen Insurance (UK) LTD, No. 5:2014cv04112 - Document 10 (D. Kan. 2014)
Court Description: MEMORANDUM AND ORDER granting 6 Motion to Remand to State Court. Court awards the Plaintiff its costs and reasonable attorney's fees incurred as a result of the removal. Signed by U.S. District Senior Judge Sam A. Crow on 12/17/14. (msb)
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Manibhadra, Inc. d/b/a Days Inn Emporia v. Aspen Insurance (UK) LTD Doc. 10 I N THE UNI TED STATES DI STRI CT COURT FOR THE DI STRI CT OF KANSAS MANI BHADRA, I NC., Plaint iff, v. Case No. 14- 4112- SAC ASPEN I NSURANCE UK LTD, Defendant . MEMORANDUM AND ORDER This case com es before t he Court on Plaint iff’s m ot ion t o rem and. Plaint iff cont ends Defendant ’s rem oval is im proper because it was unt im ely and t he federal court lacks j urisdict ion. The Court agrees t hat it lacks j urisdict ion. Fa ct s The fact s are undisput ed. Plaint iff filed it s breach of insurance cont ract act ion in st at e court in Sept em ber of 2014. That Pet it ion seeks $19,425.00 in dam ages, plus at t orney fees pursuant t o K.S.A. §40- 256. Defendant received a copy of t he Pet it ion and Sum m ons on Oct ober 6, 2014, which was Defendant ’s first act ual not ice of t he lawsuit . Defendant filed it s Not ice of Rem oval on Novem ber 5, 2014, wit hin t he t hirt y days t hereaft er. But Plaint iff had served t he Kansas I nsurance Com m issioner wit h process in t he sam e st at e case earlier, on Oct ober 2nd. I f t he 30- day clock st art ed t icking Dockets.Justia.com on t hat dat e, Defendant ’s rem oval was unt im ely. But t he Court declines t o reach t he t im eliness issue in light of it s lack of j urisdict ion. Am ount in Cont r ove r sy To rem ove a case based on diversit y, t he defendant m ust dem onst rat e t hat all of t he prerequisit es of diversit y j urisdict ion in 28 U.S.C. § 1332 are sat isfied. See Huffm an v. Saul Holdings Lt d. Part nership, 194 F.3d 1072, 1079 ( 10t h Cir. 1999) . A defendant seeking t o rem ove a case t o a federal court m ust file in t he federal forum a not ice of rem oval “ cont aining a short and plain st at em ent of t he grounds for rem oval.” §1446( a) . A defendant ’s not ice of rem oval m ust include “ a plausible allegat ion t hat t he am ount in cont roversy exceeds t he j urisdict ional t hreshold,” but does not need t o incorporat e evidence support ing t hat allegat ion. Dart Cherokee Basin Operat ing Co. v. Owens, 574 U.S. __ , 2014 WL 7010692, ( Dec.15, 2014) slip op. at p. 7. ( Dart ) . 1 Plaint iff cont est s Defendant ’s allegat ion t hat t he am ount in cont roversy exceeds $75,000, so cont ends diversit y j urisdict ion under 28 U.S.C. § 1332( a) is lacking. Where, as here, t he plaint iff cont est s t he defendant ’s allegat ion, “ §1446( c) ( 2) ( B) inst ruct s: [ R] em oval . . . is proper on t he basis of an am ount in cont roversy assert ed” by t he defendant “ if t he dist rict court finds, by t he preponderance of t he evidence, t hat t he am ount in cont roversy exceeds” t he j urisdict ional t hreshold. 1 Alt hough Dart reversed any Tent h Circuit requirem ent t hat t he am ount in cont roversy be proved in t he not ice of rem oval it self, Plaint iff does not allege t hat t his rem oval is deficient on t hat basis. I nst ead, Plaint iff cont ends t hat Defendant ’s evident iary showing fails t o m eet it s burden t o prove t he am ount in cont roversy by a preponderance of t he evidence. 2 Dart , slip op. at p. 6. “ Evidence est ablishing t he am ount is required by § 1446( c) ( 2) ( B) only when t he plaint iff cont est s, or t he court quest ions, t he defendant ’s allegat ion.” Dart , slip op. at p. 7. The Suprem e Court recent ly clarified t he procedure when t he plaint iff challenges t he defendant ’s assert ion of t he am ount in cont roversy. I n such a case, bot h sides subm it proof and t he court decides, by a preponderance of t he evidence, whet her t he am ount - in- cont roversy requirem ent has been sat isfied. As t he House Judiciary Com m it t ee Report on t he JVCA observed: “ [ D] efendant s do not need t o prove t o a legal cert aint y t hat t he am ount in cont roversy requirem ent has been m et . Rat her, defendant s m ay sim ply allege or assert t hat t he j urisdict ional t hreshold has been m et . Discovery m ay be t aken wit h regard t o t hat quest ion. I n case of a disput e, t he dist rict court m ust m ake findings of j urisdict ional fact t o which t he preponderance st andard applies.” H. R. Rep. No. 112–10, p. 16 ( 2011) . Dart , at p. 6. I n t hat respect , Dart does not change est ablished Tent h Circuit law. “ The am ount in cont roversy is ordinarily det erm ined by t he allegat ions of t he com plaint , or, where t hey are not disposit ive, by t he allegat ions in t he not ice of rem oval.” Laughlin v. Km art Corp., 50 F.3d 871, 873 ( 10t h Cir. 1995) . When t hat am ount is challenged, t he part y alleging federal j urisdict ion has t he burden t o prove by a preponderance of t he evidence, fact s sufficient t o est ablish “ t hat t he am ount in cont roversy m ay exceed $75,000.” McPhail v. Deere & Co., 529 F.3d 947, 953 ( 10t h Cir. 2008) ; See Mart in v. Franklin Capit al Corp., 251 F.3d 1284, 1290 ( 10t h Cir. 2001) . Where “ a st at e court com plaint does not ident ify a specific am ount t hat t he plaint iff seeks t o 3 recover,” a “ defendant m ust affirm at ively est ablish j urisdict ion by proving j urisdict ional fact s t hat [ m ake] it possible t hat [ in excess of] $75,000 [ is] in play.” McPhail, 529 F.3d at 955. Fact s est ablishing t he am ount in cont roversy for purposes of rem oval m ay be proved in various ways, including: by cont ent ions, int errogat ories or adm issions in st at e court ; by calculat ion from t he com plaint 's allegat ions[ ; ] by reference t o t he plaint iff's inform al est im at es or set t lem ent dem ands[ ; ] or by int roducing evidence, in t he form of affidavit s from t he defendant 's em ployees or expert s, about how m uch it would cost t o sat isfy t he plaint iff's dem ands. McPhail, 529 F.3d at 954 ( 10t h Cir. 2008) ( quot ing Meridian Securit y I ns. Co. v. Sadowski, 441 F.3d 536, 541- 42 ( 7t h Cir. 2006) ) . The defendant is t hus ent it led t o present it s own est im at e of t he st akes and is not bound by t he plaint iff's est im at e in t he com plaint . Pla in t iff’s Pe t it ion/ D e fe n da n t ’s Evide n ce Defendant ’s Not ice of Rem oval assert s t hat t he am ount in cont roversy exceeds $75,000.00. Dk. 1, p. 1. But Plaint iff’s Pet it ion seeks only $19,425.00 in dam ages, plus at t orney fees pursuant t o K.S.A. §40- 256. Defendant ’s sole evident iary basis for alleging t hat t he am ount in cont roversy exceeds $75,000.00 is a dem and let t er t hat Plaint iff’s counsel sent prior t o suit , which st at es in relevant part : Your client ’s failure t o pay t he claim under t he insurance policy allows for t he recovery of at t orney fees and expenses incurred in order t o com pel t he insurance com pany’s paym ent pursuant t o K.S.A. 40- 256. The at t orney fees and cost s will easily exceed t he dam ages m y client has incurred should t his m at t er proceed t o lit igat ion. 4 Dk. 1, Exh. B, p. 4. See K.S.A. § 40- 256 ( perm it t ing at t orney’s fee where j udgm ent is rendered against an insurance com pany which refuses wit hout j ust cause t o pay t he full am ount of t he insured loss) . Defendant t hus seeks t o prove t he am ount in cont roversy by reference t o t he plaint iff's inform al est im at es or set t lem ent dem ands – an appropriat e m eans of proof. See McPhail, 529 F.3d at 954. But at t orney fees “ easily exceeding” t he am ount of $19,425.00 ( t he dam ages plaint iff seeks) could range from $19,426.00 t o $55,000 wit hout reaching t he j urisdict ional m inim um . Defendant has not shown t hat a recovery of at t orneys’ fees in t he am ount of $55,575.00 - m ore t han t wice t he am ount of dam ages - is reasonably possible in t his breach of cont ract case. And m ere speculat ion does not suffice. See Tafoya v. Am erican Fam ily Mut . I ns. Co., 2009 WL 211661, 2 ( D.Colo. 2009) ( “ [ T] he m ere fact t hat at t orney's fees m ight be awarded t o t he Plaint iffs does not est ablish t hat t he fees claim ed … would exceed $ 75,000. Given t hat t he case is in it s infancy, one would have t o engage in sheer speculat ion t o det erm ine t he am ount of fees t hat m ight ult im at ely be awarded on t he present record.” ) Defendant has not t endered an affidavit from it s own expert as t o t he probable cost s of lit igat ion and am ount of at t orney's fees t hat could reasonably be expect ed t o be awarded in a breach of insurance cont ract case of t his t ype t hat is lit igat ed t o j udgm ent . See McPhail, 529 F.3d at 954. Nor 5 has Defendant proffered any ot her evidence sufficient t o m eet it s burden. Perm it t ing discovery or furt her evident iary subm issions would t hus be fut ile. Accordingly, Defendant fails t o show by a preponderance of t he evidence t hat t he j urisdict ional am ount is plausibly m et . See Khalil v. Dwyer Group, I nc., 2011 WL 6140531, 2 ( D.Kan. 2011) ( rem anding where Defendant s offered no evidence indicat ing t he m onet ary value of any of Plaint iff's claim s, including at t orneys’ fees) ; Havens Prot ect ed " C" Clam ps, I nc. v. Pilkingt on PLC, 2000 WL 382027, 5 ( D.Kan. 2000) ( rem anding because “ [ A] lt hough t he court can cert ainly expect t hat t he am ount of at t orneys' fees … will bring t he value … closer t o t he $75,000 j urisdict ional t hreshold, absent any fact s t o indicat e what t he value of at t orneys' fees … m ay be, t he court sim ply cannot assum e t hat t he sum will be sufficient t o sat isfy t he j urisdict ional am ount .” ) Com pare Dudley- Bart on v. Service Corp. I nt ern., 2011 WL 1321955 ( D.Colo. 2011) ( rem anding where Defendant s offered no evidence or est im at es for t he am ount of fees, since t he Court “ cannot be left t o speculat e as t o pot ent ial dam ages, fees, or cost s when no evidence is before it .” ) wit h Dant inne v. Abbot t Laborat ories, I nc., 2009 WL 2843274 ( D.Colo. 2009) ( denying m ot ion t o rem and where Defendant “ offered a reasonable, conservat ive est im at e of t he possible fees, w hich plaint iff [ did] not disclaim ” ) . Because t he Court lacks original j urisdict ion, rem oval was im proper and t his case m ust be rem anded t o st at e court . See 28 U.S.C. § 1441( a) . 6 Cost s Plaint iff request s an award of at t orneys’ fees and cost s incurred as a result of rem oval, pursuant t o 28 USA § 1447( c) , cont ending Defendant lacked obj ect ively reasonable grounds t o believe t hat rem oval was proper. That st at ut e perm it s t he Court t o assess cost s in it s discret ion, st at ing: An order rem anding t he case m ay require paym ent of j ust cost s and any act ual expenses, including at t orney fees, incurred as a result of t he rem oval. 28 U.S.C. § 1447( c) . “ No showing of bad fait h is necessary t o j ust ify t he award,” Topeka Housing Aut horit y v. Johnson, 404 F.3d 1245, 1248 ( 10t h Cir. 2005) , only “ a showing t hat t he rem oval was im proper ab init io.” Baby C v. Price, 138 Fed.Appx. 81, 84 ( 10t h Cir. 2005) , quot ing Suder v. Blue Circle, I nc., 116 F.3d 1351, 1352 ( 10t h Cir. 1997) . “ The decision whet her t o award at t orney fees is discret ionary.” Noel v. Pizza Hut , I nc., 1991 WL 192117, at * 3 ( D.Kan. 1991) . The Court agrees t hat t his case was im provident ly rem oved and finds t hat Defendant failed t o raise an arguable quest ion regarding t he am ount in cont roversy. Accordingly, in t he exercise of it s discret ion, t he Court awards t he Plaint iff it s cost s and reasonable at t orney's fees incurred as a result of t he rem oval. The part ies shall confer about t he am ount of Plaint iff’s cost s and reasonable at t orney’s fees and in t he event no agreem ent can be reached, 7 shall not ify t he Court . The Court shall ret ain j urisdict ion as necessary t o resolve t he m at t er of cost s and fees. I T I S THEREFORE ORDERED t hat Plaint iff’s m ot ion t o rem and is grant ed. Dat ed t his 17t h day of Decem ber, 2014, at Topeka, Kansas. s/ Sam A. Crow Sam A. Crow, U.S. Dist rict Senior Judge 8
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