Milner v. Farmers Insurance Company of Oregon, No. 2:2016cv06754 - Document 17 (E.D. La. 2016)

Court Description: ORDER & REASONS denying 11 Motion to Remand to State Court. Signed by Judge Sarah S. Vance on 12/29/2016. (mmm)
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Milner v. Farmers Insurance Company of Oregon Doc. 17 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA TONY E. MILNER CIVIL ACTION VERSUS NO. 16-6754 FARMERS INSURANCE COMPANY OF OREGON SECTION “R” (5) ORD ER AN D REASON S Before the Court is plaintiff Tony Milner’s m otion to rem and this case to state court. Because the Court finds that the jurisdictional am ount is satisfied, the Court DENIES the m otion. I. BACKGROU N D This case arises out of a J uly 3, 20 14 car accident involving plaintiff and another m otorist, Madison Pleasant. 1 At the tim e of the accident, Pleasant had in force a State Farm Mutual Autom obile Insurance Com pany (State Farm ) insurance policy that provided $ 50 ,0 0 0 in coverage. 2 Plaintiff had in force an underinsured m otorist (UM) insurance policy with defendant Farm ers Insurance Com pany of Oregon (Farm ers) valued at $ 10 0 ,0 0 0 . 3 1 2 3 R. Doc. 1-3 at 10 . R. Doc. 1-8 at 3. R. Doc. 1 at 3 ¶ 7. Dockets.Justia.com On J uly 2, 20 15, plaintiff filed suit in the Civil District Court for the Parish of Orleans against Pleasant and State Farm. 4 On April 19, 20 16, plaintiff filed a supplem ental and am ending petition naming Farmers as an additional defendant. 5 After State Farm paid plaintiff $ 50 ,0 0 0 , 6 on April 29, 20 16, plaintiff voluntarily dism issed Pleasant and State Farm with prejudice. 7 Thus, the only rem aining defendant in this case is Farm ers, and plaintiff’s only live claim s involve his Farmers UM insurance policy. Specifically, plaintiff alleges that because his dam ages exceed $ 50 ,0 0 0 , Pleasant is an underinsured m otorist, and plaintiff is entitled to proceeds under his UM insurance policy. 8 Plaintiff also seeks statutory penalties and attorney’s fees under La. R.S. § 22:1973 and 22:1892. 9 On May 20 , 20 16, Farm ers rem oved the case to this Court on the basis of diversity jurisdiction. 10 Plaintiff now m oves to rem and the action to state court. 4 5 6 7 8 9 10 R. Doc. 1-3 at 10 . Id. at 5. R. Doc. 1-8 at 3. R. Doc. 1-7. R. Doc. 1-3 at 6. Id. at 6-7. R. Doc. 1. 2 II. D ISCU SSION A. Re m o val A defendant m ay generally rem ove a civil action filed in state court if the federal court has original jurisdiction over the action. See 28 U.S.C. § 1441(a). The removing party bears the burden of showing that federal jurisdiction exists. See Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). In assessing whether rem oval is appropriate, the Court is guided by the principle, grounded in notions of com ity and the recognition that federal courts are courts of lim ited jurisdiction, that rem oval statutes should be strictly construed. See, e.g., Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720 , 723 (5th Cir. 20 0 2). Though the Court m ust rem and the case to state court if at any tim e before final judgm ent it appears that it lacks subject m atter jurisdiction, the Court’s jurisdiction is fixed as of the tim e of rem oval. See 28 U.S.C. § 1447(c); Doddy v. Oxy USA, Inc., 10 1 F.3d 448, 456 (5th Cir. 1996). B. Ju ris d ictio n al Am o u n t Under Fifth Circuit law, a rem oving defendant’s burden of showing that the am ount in controversy is sufficient to support federal jurisdiction depends on whether the plaintiff’s com plaint alleges a specific am ount of m onetary dam ages. See Allen, 63 F.3d at 1335. When the plaintiff alleges a 3 dam age figure in excess of the required am ount in controversy, “that am ount controls if m ade in good faith.” Id. (citing St. Paul Mercury Indem . Co. v. Red Cab Co., 30 3 U.S. 283, 289 (1938)). If a plaintiff pleads damages less than the jurisdictional am ount, this figure will also generally control, barring rem oval. Allen, 63 F.3d at 1335. “Thus, in the typical diversity case, the plaintiff is the m aster of his complaint.” Id. Here, however, plaintiff filed his com plaint in Louisiana state court, and Louisiana law ordinarily does not perm it plaintiffs to plead a specific am ount of m onetary dam ages. See La. Code Civ. Proc. art. 893(A)(1) (“No specific m onetary am ount of dam ages shall be included in the allegations or prayer for relief of any original, amended, or incidental dem and.”). When, as here, a plaintiff has alleged an indeterm inate am ount of dam ages, the Fifth Circuit requires the rem oving defendant to prove by a preponderance of the evidence that the am ount in controversy exceeds $ 75,0 0 0 . See Sim on v. W alMart Stores, 193 F.3d 848, 850 (5th Cir. 1999); Allen, 63 F.3d at 1335; De Aguilar v. Boeing Co., 47 F.3d 140 4, 1412 (5th Cir. 1995). A defendant satisfies this burden either by showing that it is facially apparent that the plaintiff’s claim s exceed the jurisdictional am ount or by setting forth the facts in dispute that support finding that the jurisdictional am ount is satisfied. Allen, 63 F.3d at 1335. Where the “facially apparent” test is not met, it is 4 appropriate for the Court to consider sum m ary-judgm ent-type evidence relevant to the amount in controversy as of the tim e of rem oval. Allen, 63 F.3d at 1336. If the defendant meets its burden of showing the requisite am ount in controversy, the plaintiff can defeat rem oval only by establishing with legal certainty that the claim s are for less than $ 75,0 0 0 . De Aguilar, 47 F.3d at 1412. In De Aguilar, the Fifth Circuit stated that absent a statute lim iting recovery, “litigants who want to prevent rem oval m ust file a binding stipulation or affidavit w ith their com plaints; once a defendant has removed the case, St. Paul m akes later filings irrelevant.” Id. (quoting In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992)) (em phasis added). The general principle is that plaintiffs will have to show that they are bound irrevocably by their state pleadings. Id. at 1412 n.10 . Because Louisiana plaintiffs are not lim ited to recovery of the dam ages requested in their pleadings, a plaintiff m ust affirm atively renounce the right to accept $ 75,0 0 0 for his prerem oval state court pleadings in stipulations sufficient to bind him . See La. Code. Civ. Proc. art. 862 (“[A] final judgm ent shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not dem anded such relief in his pleadings.”); Sterns v. Scottsdale Ins. Co., No. 0 9-6449, 20 10 WL 2733771, at *3 (E.D. La. J uly 8, 20 10 ) (stating that for 5 pre-rem oval stipulations to be binding, Louisiana plaintiffs m ust affirm atively renounce the right to accept a judgm ent in excess of $ 75,0 0 0 ); Levith v. State Farm Fire & Cas. Co., No. 0 6-2785, 20 0 6 WL 294790 5, at *2 (E.D. La. Oct. 11, 20 0 6) (same). Plaintiff here did not file a stipulation with his petition. Post-rem oval affidavits or stipulations m ay be considered only in lim ited circum stances. If the am ount in controversy is ambiguous at the tim e of rem oval, the Court m ay consider a post-rem oval stipulation, but only to determ ine the am ount in controversy as of the date of rem oval. Gebbia v. W al-Mart Stores, Inc., 233 F.3d 880 , 883 (5th Cir. 20 0 0 ); see also Associacion Nacional de Pescadores v. Dow Quim ica de Colom bia S.A., 988 F.2d 559, 565 (5th Cir. 1993) (stating that when the affidavit clarifies a petition that left the jurisdictional question am biguous, the court m ay consider the affidavit in determ ining whether remand is proper), abrogated on other grounds, Marathon Oil Co. v. A.G. Ruhrgas, 145 F.3d 211 (5th Cir. 1998). When, on the other hand, the am ount in controversy is clear from the face of the com plaint, post-rem oval stipulations purporting to reduce the am ount of dam ages plaintiffs seek cannot deprive the Court of jurisdiction. Gebbia, 233 F.3d at 883. 6 III. D ISCU SSION Farm ers has asserted federal jurisdiction based on diversity of citizenship. See 28 U.S.C. § 1332. Diversity jurisdiction exists only when the parties are citizens of different states, and the am ount in controversy exceeds $ 75,0 0 0 . W hite v. FCI USA, Inc., 319 F.3d 672, 674 (5th Cir. 20 0 3). Because the parties agree that they are citizens of different states, the Court need consider only whether the amount in controversy requirem ent is met. A. Po licy Lim its Plaintiff’s lawsuit seeks to recover payments under an insurance policy. When a plaintiff seeks such a recovery, the am ount in controversy is governed by the lesser of the value of the claim under the policy or the value of the policy lim it. Hartford Ins. Grp. v. Lou– Con Inc., 293 F.3d 90 8, 911 (5th Cir. 20 0 2) (noting that “when a claim exceeds the policy lim its, the policy lim its, rather than the larger value of the claim , determ ine the am ount in controversy”); Mercier v. Allstate Ins. Co., No. 0 6-9861, 20 0 7 WL 210 786, at *2 (E.D. La. J an. 17, 20 0 7) (“In a claim based on recovery under an insurance policy, it is the value of the claim , not the value of the underlying policy, that determines the am ount in controversy, unless the value of the claim exceeds the value of the policy.”); see also 14AA Fed. Prac. & Proc. J uris. § 3710 (4th ed.) (“[I]f the claim exceeds the policy lim its, the m axim um 7 lim it of the insurer’s liability under the policy for the particular claim is the m easure for determ ining whether the statutorily required am ount in controversy is satisfied.”). Here, plaintiff’s policy lim its Farm ers’ m axim um liability to $ 10 0 ,0 0 0 . 11 The policy, however, includes a clause that reduces the lim it of Farm ers’ liability by the am ount of any other insurance coverage available to plaintiff arising out of the accident. 12 Since plaintiff has received $ 50 ,0 0 0 from State Farm, the terms of the policy would reduce Farm ers’ m axim um liability from $ 10 0 ,0 0 0 to $ 50 ,0 0 0 . Plaintiff and defendant dispute whether the law of Oregon (where the contract was signed) or Louisiana controls the enforceability of the liability reduction clause. Plaintiff contends, and defendant does not dispute, that if Louisiana law governs, the clause is void. Plaintiff alleges that defendant concedes that it owes plaintiff at least $ 50 ,0 0 0 , 13 so because the choice-oflaw issue places $ 50 ,0 0 0 in question, plaintiff argues that the am ount in controversy is only $ 50 ,0 0 0 . See Freeland v. Liberty Mutual Ins. Co., 632 F.3d 250 (6th Cir. 20 11). 11 12 13 R. Doc. 11-2 at 2. Id. R. Doc. 11-1 at 4. 8 Contrary to plaintiff’s allegations, defendant argues that it concedes no liability. It contends that the m aximum contribution that plaintiff’s claim can m ake towards the amount in controversy is either $ 50 ,0 0 0 or $ 10 0 ,0 0 0 , depending on the enforceability of the liability reduction clause. 14 See Pay ne v. State Farm Mut. Auto. Ins. Co., 266 F.2d 63, 66 (5th Cir. 1959) (holding that jurisdictional am ount was controlled by the m axim um value of insurance policy and not the am ount of alleged dam ages); W heeler v. Farm ers Ins. Exch., No. 13-0 951, 20 13 WL 44320 97, at *2 (W.D. La. Aug. 16, 20 13), aff’d, No. 13-0 951, 20 14 WL 280 356 (W.D. La. J an. 22, 20 14) (holding that jurisdictional am ount was controlled by the extent of UM insurer’s potential liability to plaintiff, not including the am ount of plaintiff’s recovery against underinsured m otorist). 15 Defendant also points out that plaintiff has not filed a post-rem oval stipulation stating that the total value in controversy does not exceed $ 75,0 0 0 . 16 Given that defendant does not concede liability, if the lim it of the policy is $ 10 0 ,0 0 0 , then the am ount in controversy requirem ent is clearly met. As explained below, because the 14 R. Doc. 12 at 10 -11. Though the Court recognizes that a division of the Western District of Louisiana reached the opposite result in Briley v . State Farm , No. 10 -1350 , 20 12 WL 219431 (W.D. La. J an 23, 20 12), it finds the result in W heeler m ore persuasive. 16 R. Doc. 12 at 6. 9 15 Court finds that the am ount in controversy requirement is m et regardless of whether the clause is enforced, the Court does not address the choice-of-law issue. B. Statu to ry Pe n altie s an d Atto rn e y’s Fe e s In addition to a claim for UM insurance proceeds, plaintiff seeks statutory penalties and attorney’s fees under La. R.S. § 22:1973 and 22:1892. 17 Under these circum stances, the Court is to consider these claims in assessing the amount in controversy. See, e.g., Manguno, 276 F.3d at 72324 (including claim for attorney’s fees in calculating the am ount in controversy); St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250 , 1253 (5th Cir. 1998) (“[I]n addition to policy lim its and potential attorney’s fees, item s to be considered in ascertaining the am ount in controversy when the insurer could be liable for those sums under state law are inter alia penalties, statutory dam ages, and punitive dam ages—not just interest or costs.”); Henderson v. Allstate Fire and Casualty Insurance Com pany , 154 F. Supp. 3d 428, 433 (E.D. La. 20 15). 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. Calogero v. Safew ay Ins. Co., 753 So.2d 170 , 174 (La. 20 0 0 ); see also Riley 17 R. Doc. 1-3 at 6-7. 10 v. S. Fid. Ins. Co., No. 11-1482, 20 11 WL 3567515, at *4 (E.D. La. Aug. 12, 20 11). Section 22:1973 provides that an insurer that breaches its “duty to adjust claim s fairly and prom ptly and to m ake a reasonable effort to settle claim s” is subject to penalties “in an am ount not to exceed two tim es the dam ages sustained or five thousand dollars, whichever is greater.” La. R.S. § 22:1973. The plaintiff, however, m ust show proof of actual dam ages arising from the breach to recover any m ore than $ 5,0 0 0 . See Hannover Corp. of Am erica v. State Farm Mutual Auto. Ins. Co., 67 F.3d 70 , 76 (5th Cir. 1995). Plaintiff does not allege in his petition an am ount or type of dam ages, if any, that he sustained from Farmers’ breach. And Farmers provides no evidence to show that plaintiff could recover more than $ 5,0 0 0 for dam ages arising from its alleged breach of contract. Under Section 22:1892, the insurer is subject to a penalty, “in addition to the am ount of the loss, of fifty percent dam ages on the am ount found to be due from the insurer to the insured, or one thousand dollars, whichever is greater,” whenever it arbitrarily, capriciously, or without probable cause fails to pay within 30 days of satisfactory proof of loss. La. R.S. § 22:1898. The penalty that could be imposed against Farmers under this provision is $ 25,0 0 0 at a m inim um , and at m ost, $ 50 ,0 0 0 , depending on the amount due under the terms of the policy. Even assum ing that the liability reduction 11 applies, the contribution that this penalty m akes towards the am ount in controversy is $ 25,0 0 0 . Therefore, the policy itself plus the penalties under La. R.S. § 22:1898 brings the amount in controversy to exactly $ 75,0 0 0 . La. R.S. § 22:1898 also allows for recovery of “reasonable attorney fees and costs.” Id. Plaintiff’s amended petition against Farm ers seeks these costs and fees. 18 Though plaintiff has not subm itted evidence as to his attorney’s fees or costs, it is safe to assume that they are at least .0 1¢. Therefore, the am ount in controversy from the policy and the penalties and attorney’s fees and costs pursuant to La. R.S. § 1898 is at least $ 75,0 0 0 .0 1. Because it is facially apparent that the am ount in controversy is greater than $ 75.0 0 0 , defendant has carried its burden. IV. CON CLU SION For the foregoing reasons, the Court DENIES plaintiff’s m otion to rem and. 29th New Orleans, Louisiana, this _ _ _ _ _ day of Decem ber, 20 16. _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 18 Id. at 7. 12