United States District Court, N.D. California
October 17, 2005.
ARLINE BUTTERFIELD, Plaintiff.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
The opinion of the court was delivered by: SAUNDRA ARMSTRONG, District Judge
This matter comes before the Court on Defendant's Notice of
Removal pursuant to 28 U.S.C. § 1332 [Docket No. 1]. The Court
has examined the Notice of Removal and all attachments thereto
and has determined that removal was improper. See Martinez v.
Westin St. Francis LMT, Partnership, 2002 WL 240022 (N.D. Cal.
2002) (citing Galt G/S v. Hapag-Lloyd AG, 60 F.3d 1370, 1373
(9th Cir. 1995)). Accordingly, the Court REMANDS the
above-captioned action to the Superior Court of the State of
California, County of Alameda.
A. Factual Background
On or about January 2000, in consideration of the payment of a
semi-annual premium paid by Plaintiff Arline Butterfield
("Butterfield" or "Plaintiff"), Defendant State Farm Mutual
Automobile Insurance Company ("State Farm" or "Defendant")
executed and delivered to Plaintiff Policy No. D0325-89-05A (the
"Policy"), which insured Plaintiff against losses resulting from
automobile accidents caused by uninsured motorists in the amount
of $30,000 per individual and $60,000 per occurrence. See
Compl. at ¶ 5. On the occurrence of a loss caused by an uninsured
motorist, State Farm promised to pay Plaintiff up to $30,000.
See id. The Policy was in effect as of January 17, 2000. Id. On January 17, 2000, Plaintiff was struck by an uninsured
motorist. See id. at ¶ 6. Plaintiff subsequently demanded
payment from State Farm in the amount of $30,000, and advised
State Farm that the damages resulting from the incident had a
value in excess of $30,000. Id. at ¶ 7. On October 21, 2001,
State Farm rejected Plaintiff's demand and offered $10,000 to
settle Plaintiff's claim. Id. at ¶ 8. State Farm advised
Plaintiff that if she did not accept the $10,000 offer, State
Farm would require Plaintiff to submit to a medical evaluation by
a doctor chosen by State Farm. Id.
On October 30, 2001, Plaintiff's counsel rejected in writing
the $10,000 offer from State Farm and advised State Farm that
Plaintiff would submit to a medical evaluation by a doctor of
State Farm's choosing. Id. at ¶ 9. Over the next five months,
State Farm worked with Plaintiff to obtain the required medical
evaluation. Id. at ¶ 10.
On April 19, 2002, State Farm repeated its $10,000 settlement
offer and apparently sent Plaintiff a check for $10,000. Id. at
¶¶ 10, 13. Plaintiff rejected the settlement offer and demanded
arbitration of her dispute. Id. at ¶ 10. State Farm
subsequently referred the matter to its counsel. Id. at ¶ 11.
Counsel for State Farm agreed to mediate the claim. Id.
On November 1, 2002, Plaintiff and State Farm attended a
mediation. Id. At the mediation, State Farm again offered
$10,000 to settle the claim and Plaintiff refused. Id.
On July 2, 2003, Plaintiff and State Farm participated in an
arbitration of Plaintiff's claim. Id. at ¶ 13. On July 10,
2003, the arbitrator, William W. Haskell, Esq., issued a decision
determining that the total amount that Plaintiff was entitled to
recover as a result of her collision with the uninsured motorist
was $56,000 in damages, which was, in fact, in excess of the
available uninsured motorists insurance benefits to which
Plaintiff was entitled to receive from State Farm. Id. at ¶¶
13, 22. On July 21, 2003, State Farm issued Plaintiff a check in
the amount of $20,000, representing the remaining balance of the
$30,000 owed to Plaintiff under the Policy. Id. at ¶ 13.
B. Procedural Background
On February 25, 2005, Plaintiff filed a complaint for breach
and tortious breach of insurance contract for actual and punitive
damages ("Complaint") against defendant State Farm in the
Superior Court for the State of California, in and for the County
of Alameda. Plaintiff's Complaint alleges the following causes of
action: (1) Breach of Contract; and (2) Tortious Breach of
Insurance Contract and Breach of the Duty of Good Faith and Fair Dealing. In the
Complaint, Plaintiff alleges that State Farm "failed and refused
to pay plaintiff the full amount of the damages to which
plaintiff . . . was entitled under the policy in violation of
their contractual obligations." Id. at ¶ 15. Plaintiff also
contends that State Farm's breach of contract forced her to have
to unnecessarily pursue arbitration, "resulting in delay of
receipt of benefit and the incurring of additional necessary
costs and fees in the amounts of $1,892.10 in costs and $1,333.34
in fees." Plaintiff alleges that she was damaged in the amounts
of "$1,892.10 in costs and $1,333.34 in fees . . . [and] the
amount of interest lost of the sum of $30,000 during the period
of time that defendant . . . failed to adequately, fairly, and
promptly investigate, evaluate and settle plaintiff's claim."
Id. at ¶ 16.
On April 25, 2005, Defendant filed its answer to the Complaint.
Also on April 25, 2005, Defendant filed the instant Notice of
Removal, thereby removing the action to this Court.
The federal removal statute, 28 U.S.C. § 1441, provides that
"any civil action brought in a State court . . . may be removed
by the defendant or the defendants" to federal court on the basis
of federal question or diversity jurisdiction. 28 U.S.C. 1441(a);
Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th Cir. 1977).
The removal statute is to be strictly construed against removal
and any doubt is resolved in favor of remand. Duncan v.
Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996). The burden of
establishing jurisdiction rests with the party effecting the
removal. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th
Cir. 1988) (citations omitted). The Court must determine whether
removal was proper by "looking to the complaint at the time the
removal petition was filed." Chesler/Perlmutter Prods. v.
Fireworks Entm't, Inc., 177 F. Supp. 2d 1050, 1058 (C.D. Cal.
2001) (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062,
1065 (9th Cir. 1979)). The United States Supreme Court has
explained that "if the case is not then removable it cannot be
made removable by any statement in the petition for removal or in
subsequent pleadings by the defendant." Great N. Ry. v.
Alexander, 246 U.S. 276, 281 (1918).
In order to remove on the basis of diversity jurisdiction, the
parties must be from different states and the amount in
controversy must exceed $75,000. 28 U.S.C. § 1332. The
jurisdictional amount is normally met if the plaintiff claims a sum greater than the
jurisdictional minimum. Gaus v. Miles Inc., 980 F.2d 564, 566
(9th Cir. 1992). If, however, the allegations of a complaint
filed in state court do not conclusively demonstrate that the
amount in controversy exceeds the jurisdictional minimum, the
removing party must demonstrate by a preponderance of the
evidence that the jurisdictional minimum has been met. See
Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.
1996). "Federal jurisdiction must be rejected if there is any
doubt as to the right of removal in the first instance." Gaus,
980 F.2d at 566; see also Matheson v. Progressive Speciality
Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). A district court
should consider facts presented in the removal petition or any
"summary-judgement-type evidence relevant to the amount in
controversy at the time of removal." Matheson,
319 F.3d at 1090. "Conclusory allegations as to the amount in controversy are
insufficient." Id. at 1090-91.
A district court may sua sponte raise the issue of subject
matter jurisdiction and may remand a case if, after examining the
notice of removal, it determines that removal of the case to
federal court was not proper. See Martinez v. Westin St. Francis
LMT, Partnership, 2002 WL 240022 at *1(citing Galt G/S,
60 F.3d at 1373).
Here, Defendant's Notice of Removal does not include any
underlying facts that support its assertion that the amount in
controversy exceeds $75,000. In fact, in order to establish the
existence of diversity jurisdiction, State Farm relies solely
upon its own conclusion that the "amount in controversy includes
plaintiff's alleged contract damages `well in excess of' $30,000,
[an] arbitration award in the amount of $56,000, arbitration fees
and costs in excess of $1,800, attorneys' fees and costs, [and]
general and punitive damages." See Not. of Removal at ¶ 4. Thus
State Farm attempts to suggest, in the Notice of Removal, that
Plaintiff is requesting damages in excess of $87,800. This
conclusion is completely erroneous and is based upon a gross
misrepresentation of not only the nature of the Complaint itself,
but also the allegations contained in the Complaint. The
Complaint plainly states that Plaintiff is only seeking damages
relating to State Farm's allegedly unreasonable delay in the
payment of the $30,000 in insurance proceeds. Nowhere in the
Complaint does Plaintiff even suggest that she is entitled to
recover $30,000 from State Farm again; in fact, she concedes
that this amount has already been paid. See Compl. at ¶ 28.
Further, it is clear that the arbitration award of $56,000 is
mentioned in the Complaint only because it is Plaintiff's proof that she was, in
fact, entitled to recover the full $30,000 in insurance proceeds.
Further, Plaintiff's prayer for relief explicitly states that the
amount in controversy is "$1,892.10 in costs and $1,333.34 in
fees . . . [plus] interest [at] the legal rate on the sum of
$20,000 [and] interest . . . on the sum of $20,000" during the
period of "time that defendant . . . failed to adequately,
fairly, and promptly investigate, evaluate and settle plaintiff's
claim." Id. at ¶¶ 16, 30. The total sum of this amount falls
considerably short of the $75,000 jurisdictional minimum.
IT IS HEREBY ORDERED THAT the above-captioned matter is
REMANDED to the Superior Court of the State of California, County
of Alameda. All matters calendared in this action are VACATED.
The Clerk shall close the file and terminate any pending matters.
IT IS SO ORDERED.
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