Dawsey v. The Travelers Indemnity Company, No. 3:2015cv05188 - Document 31 (W.D. Wash. 2015)
Court Description: ORDER denying 20 Plaintiff's Motion to Remand; signed by Judge Ronald B. Leighton.(DN)
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Dawsey v. The Travelers Indemnity Company 1 Doc. 31 HONORABLE RONALD B. LEIGHTON 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 8 9 DANIEL DAWSEY, individually and as the representative of all persons similarly situated, 10 CASE NO. 3:15-cv-05188-RBL ORDER DENYING MOTION FOR REMAND Plaintiff, 11 [DKT. #20] v. 12 13 THE TRAVELERS INDEMNITY COMPANY, 14 Defendant. 15 THIS MATTER is before the Court on Plaintiff Dawsey’s Motion to Remand [Dkt. #20] 16 this case to Pierce County Superior Court. Dawsey claims that his proposed class action against 17 the Travelers Indemnity Company does not meet the Class Action Fairness Act’s $5 million 18 jurisdictional threshold. 19 In April 2014, Dawsey was involved in an auto accident while insured by Travelers. 20 According to Dawsey, the vehicle was repaired to industry standards but still had remaining 21 “tangible physical damage.” (See Complaint ¶1.8.) Dawsey claims his vehicle was worth less 22 after it was repaired than it was before the accident, and that he suffered compensable 23 “diminished value” loss under his auto insurance policy with Travelers. Id. 24 ORDER DENYING MOTION FOR REMAND - 1 Dockets.Justia.com 1 Dawsey filed a putative class action in Washington State Superior Court, alleging that 2 Travelers failed to inform and pay its automobile policyholders for the diminished value under 3 its Uninsured Motorist Property Damage policy coverage. Dawsey claims that Travelers’ failure 4 to pay for the loss is a breach of the insurance contract, and that Travelers’ conduct violates the 5 Washington Consumer Protection Act, RCW 19.86. Travelers removed under CAFA [28 U.S.C. 6 §1332(d), 1446, and 1443], claiming that Dawsey’s claims meet CAFA’s $5 million “amount in 7 controversy” requirement. 8 Dawsey seeks remand, arguing that Travelers cannot establish that his claims meet the $5 9 million jurisdictional threshold. He claims that he seeks only limited relief on behalf of 900 10 class members, and that the average loss per member is only $1,460. He estimates that the 11 compensatory damages total only $1,314,000. His total estimate is based on compensatory 12 damages, attorney’s fees, and the costs of the suit. 13 Dawsey also included a demand for statutory attorney fees (totaling $200) under RCW 14 4.84.015 and for “reasonable attorney’s fees” under RCW 19.86.090. (See Dkt. #20 p.11). See 15 Complaint ¶7.1). Dawsey alleges that fees and costs will not exceed $777,012. Dawsey expands 16 this estimate, assuming that Travelers will pay its lawyers on an hourly basis, the fees will reach 17 millions and “therefore requir[es] matching work from Plaintiff’s counsel” that is worth at most 18 $1,365,657. (See Dkt. #20 pg. 13). Therefore, Dawsey claims that the “plausible amount in 19 controversy” would total, at most, $2,679,570. Dawsey emphasizes that, although he asserts a 20 claim under the CPA, he has not alleged a claim for treble damages. 21 Travelers argues that this case belongs in this Court because it meets the $5 million dollar 22 benchmark. Travelers argues that Dawsey’s claim under the CPA has put treble damages “in 23 24 [DKT. #20] - 2 1 play” and argues that those damages and a reasonable attorney’s fee alone exceed the $5 million 2 threshold. 3 I. DISCUSSION 4 A. Removal Standard in CAFA Cases 5 CAFA requires that the aggregate amount in controversy exceed $5,000,000 for the entire 6 putative class, exclusive of interest and cost. 28 U.S.C. §1332(d)(2). There is no presumption 7 against removal for cases removed under CAFA. See Dart Cherokee Basin Operating Co., LLC 8 v. Owens, 135 S. Ct. 547, 550 (2014). (“No antiremoval presumption attends cases invoking 9 CAFA, a statute Congress enacted to facilitate adjudication of certain class actions in federal 10 court.”) In CAFA cases, The removing defendant, Travelers, retains the obligation to 11 demonstrate by a preponderance of the evidence that the jurisdictional amount in controversy is 12 met in order to sustain its removal in the face of a motion to remand. See Johnston v. United 13 Services Automobile Association, No. 14-5660-RJB (W.D. Wa 11/10/14). (“The removing 14 defendant must prove by a preponderance of the evidence that the amount in controversy meets 15 the jurisdictional requirement”). Id. at 683. 16 Though the burden remains with Travelers, it is not daunting. Under this standard, a 17 removing defendant is not obligated to completely “research, state, and prove the plaintiff’s 18 claims for damages.” Korn v. Polo Ralph Lauren Corp., F. Supp. 2d 1199, 1204-05 (E.D. Cal. 19 2008) (citing McCraw v. Lyons, 863 F.Supp. 430, 434 (W.D.Ky.1994)). The appropriate 20 measure of the amount in controversy must be based on reasonable assumption. “A removing 21 defendant is not required to go so far as to prove Plaintiff's case for him by proving the actual 22 rates of violation.” Tajonar v. Echosphere, L.L.C., No. 14CV2732-LAB RBB, 2015 WL 23 4064642, at 3 (S.D. Cal. July 2, 2015). The Court reaches its conclusion and “[has] sufficient 24 [DKT. #20] - 3 1 confidence, based on Plaintiff’s own allegations, facts presented by [defendant], and assumptions 2 it believes are reasonable, that it is more likely than not that the amount in controversy in this 3 case exceeds $5 million.” Waller v. Hewlett-Packard Co., No. 11CV0454-LAB RBB, 2011 WL 4 8601207, at *3 (S.D. Cal. May 10, 2011). 5 B. Amount in Controversy 6 The issue in this case is whether Dawsey is correct in alleging that the amount for 7 compensatory damages is determined by the amount of $1,460 per claim, and whether treble 8 damages ought to be included in determining the amount in controversy in this case. 9 10 1. Compensatory Damages Dawsey and Travelers allege competing compensatory damages claims. Travelers’ direct 11 knowledge of its company’s rates and policies inform its calculation of higher compensatory 12 damages. Dawsey’s lower average of $1,460 per claim is based purely on other suits that 13 Dawsey’s counsel is familiar with regarding other insurance carriers in Washington, which 14 allege the same damages estimate. Travelers claims that because they insure vehicles that are 15 newer and more valuable than the rest of the industry, the amount of compensatory damages will 16 be materially higher than Dawsey has argued. Travelers claims that because of the type of 17 vehicle they insure, the average value of Travelers vehicles is about 18% higher than the rest of 18 the industry. (See Wilson Decl. ¶3-4, Dkt. #3). Travelers claims that because the per-claim 19 damages should range from $1,460 to $1,723 (an 18% increase from $1,460), the amount of 20 compensatory damages in controversy is $1,550,700. 21 The Court agrees that Travelers has established that a larger number is in controversy, 22 based on Travelers’ direct knowledge that their company insures newer cars. Therefore, the 23 24 [DKT. #20] - 4 1 Court will use Travelers’ 18% increase calculation. The amount of compensatory damages at 2 issue is $1,550,700. 3 4 2. Treble Damages Dawsey argues primarily that he does not seek treble damages in this case. Dawsey relies 5 on this Court’s reasoning in a prior (and he claims, substantially similar) case that “a removing 6 defendant can’t make the plaintiff’s claim for him; as a master of the case, the plaintiff may limit 7 his claims (either substantial or financial) to keep the amount in controversy below the 8 threshold.” Turk v. USAA, 2015 U.S. Dist. LEXIS 33715 at 10-11. In Turk, however, the 9 plaintiff asserted only a breach of contract claim—not a CPA claim. 10 Unlike Turk, Dawsey has asserted a CPA claim. This is a critical and dispositive 11 difference between the two cases. Dawsey has put treble damages at issue, and a reasonable 12 estimate of those damages must be included in the amount in controversy calculus. RCW 13 19.86.090. Three times $1,550,700 is $4,652,100. This is the amount of damages put “in play” 14 by Dawsey’s complaint. 15 16 3. Attorney’s Fees The third element in the amount in controversy calculation is attorney’s fees. Dawsey 17 seeks statutory attorney’s fees, as well as attorney’s fees for breach of contract and for his CPA 18 claim. He concedes that even at the lodestar rate, his fees are likely to exceed $750,000. Adding 19 Dawsey’s estimate to the $4,652,100 exceeds the 5 million threshold. This circuit has also 20 established 25% of the common fund as a benchmark award for attorney’s fees. (Citing Hanlon 21 v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998)). 25% of the compensatory damages also 22 makes the amount in controversy exceed $5 million. 23 24 [DKT. #20] - 5 1 Using either approach, the inclusion of attorney’s fees will succeed in placing the amount 2 in controversy in this case at over $5 million. 3 Therefore amount in controversy meets the $5 million threshold in this case for this Court 4 to have jurisdiction. 5 6 7 Dawsey’s Motion to Remand [Dkt. #20] is DENIED. IT IS SO ORDERED. Dated this 16th day of July, 2015. A 8 9 Ronald B. Leighton United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 [DKT. #20] - 6
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