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Giordano v. Park Avenue Life Insurance Co.

April 7, 2009

JOHN G. GIORDANO, PLAINTIFF,
v.
PARK AVENUE LIFE INSURANCE COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: S. James Otero United States District Judge

ORDER REMANDING CASE TO STATE COURT [Docket Nos. 1, 9]

Defendant Park Avenue Life Insurance Company ("PALIC") removed this case to federal court from the Superior Court of the State of California for the County of Santa Barbara, alleging diversity of citizenship as the basis of federal subject matter jurisdiction. Because PALIC has failed to meet its burden to show that the amount in controversy exceeds the jurisdictional minimum, the action is REMANDED to the Superior Court of the State of California for the County of Santa Barbara.

I. BACKGROUND

Plaintiff John G. Giordano ("Giordano") was the beneficiary on his wife's life insurance policy issued by PALIC (the "Policy"). (Verified Compl. ¶¶ 1, 6.) The Policy provided that PALIC would pay Giordano an accidental death benefit if his wife died from "accidental bodily injury." (Verified Compl. ¶ 9.)

On March 3, 2007, Giordano's wife "accidentally slipped and fell," sustaining a right hip fracture. (Verified Compl. ¶ 13.) She was immediately transported to the hospital where she died on March 17, 2007. (Verified Compl. ¶¶ 13--14.)

On November 7, 2007, Giordano submitted a claim for benefits under the Policy. (Verified Compl. ¶ 16.) Despite numerous communications with PALIC, PALIC has not paid Giordano any benefits under the Policy. (See Verified Compl. ¶¶ 17--47.) Giordano alleges that PALIC's disrespectful treatment, particularly the falsehoods contained in PALIC's letters to him, has caused emotional distress, shock, anxiety, and sleeplessness. (Verified Compl. ¶¶ 32, 37, 47.)

On January 16, 2009, Giordano filed this suit against PALIC in the Superior Court of the State of California for the County of Santa Barbara, alleging causes of action under California state law for (1) breach of insurance contract, (2) breach of the covenant of good faith and fair dealing, and (3) intentional acts causing emotional distress. (See generally Verified Compl.) Giordano seeks as damages the benefits due to him under the Policy, "attorney[s'] fees incurred . . . in obtaining policy benefits," emotional distress damages, and punitive damages, along with prejudgment interest and the costs of suit. (See Verified Compl. Prayer.) On February 27, 2009, PALIC removed to this Court on the basis of diversity jurisdiction and on March 13, 2009, filed an Amended Notice of Removal on the same grounds. (See Notice Removal Civil Action ¶ 4; Am. Notice Removal Civil Action ¶ 4.)

II. DISCUSSION

Under 28 U.S.C. § 1441, the removal statute, an action is removable to federal court only if it might have been brought there originally. See 28 U.S.C. § 1441(a). The removal statute is "strictly construe[d] . . . against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal citations omitted). "[S]trict construction is especially warranted in diversity cases, where concerns of comity mandate that state courts be allowed to decide state cases." McAnally Enters., Inc. v. McAnally, 107 F. Supp. 2d 1223, 1226 (C.D. Cal. 2000) (citing Hom v. Serv. Merch. Co., 727 F. Supp. 1343, 1345 (N.D. Cal. 1990)) (internal quotation omitted). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal . . . ." Gaus, 980 F.2d at 566 (internal citation omitted). "Th[is] 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (internal citations omitted).

For a removal based on diversity jurisdiction, the removing party has the burden of showing that "the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs." 28 U.S.C. § 1332(a). If it is not facially evident from the complaint that more than $75,000 is in controversy, the removing party must prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional threshold. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004) (citing Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403--04 (9th Cir. 1996)). The removing party cannot rely on a statement that on its "information and belief" the amount in controversy exceeds the jurisdictional amount. Id. Rather, to discharge its burden, the removing party must provide evidence establishing that it "is more likely than not" that the amount in controversy exceeds $75,000. Id.

The amount in controversy includes claims for general and special damages but excludes interest and costs. See Conrad Assocs. v. Hartford Accident & Indem. Co., 994 F. Supp. 1196, 1198--99 (N.D. Cal. 1998) (internal citations omitted); Miller v. Mich. Millers Ins. Co., No. C-96-4480 MHP, 1997 WL 136242, at *3 (N.D. Cal. Mar. 12, 1997). In the Complaint, Giordano seeks as damages the benefits due to him under the Policy, "attorney[s'] fees incurred . . . in obtaining policy benefits," emotional distress damages, and punitive damages, along with pre-judgment interest and the costs of suit. (See Verified Compl. Prayer.) Because Giordano specifies only that his attorneys' fees as of filing the Complaint were $15,320 and the benefits owed under the Policy are "as little as $9,423.05," seeking damages for various other unspecified amounts, it is not "facially evident" from the Complaint that more than $75,000 is in controversy. See Valdez, 372 F.3d at 1117 (internal citations omitted); Miller, 1997 WL 136242, at *2 (internal citations omitted); Compl. ¶¶ 42--44, 47, 52, 60--61, 65--67, Prayer. Thus, PALIC "must prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional threshold." See Valdez, 372 F.3d at 1117 (internal citations omitted). PALIC, however, has not met this burden.

A. Benefits Under the Policy

As an initial matter, Giordano seeks the unpaid benefits under the Policy. (See Verified Compl. ¶ 52.) In its Amended Notice of Removal, PALIC claims that Giordano "pleads the amount of benefits payable under the contract in the alternative as $49,000 and $9,423." (Am. Notice Removal Civil Action ¶ 13 (internal citations omitted).) Based on the Court's review of the Complaint, however, this is not an accurate statement. Rather, the Complaint alleges that a PALIC "representative stated that the Policy's value was $49,000" and in reliance on this representation, Giordano retained counsel to investigate his right to the Policy benefits. (Verified Compl. ¶¶ 42--43.) Giordano then alleges that "[i]n fact, the . . . Policy has a schedule of declining 'Maximum Benefit[,'] which provides [Giordano] a death benefit of as little as $9,423.05." (Verified Compl. ¶ 44 (emphasis added).) As such, Giordano never alleges that the benefits that PALIC owes to him under the Policy are $49,000. Instead, he alleges only that PALIC represented this higher figure to him but that the actual benefit owed is ...


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