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Martha Scalzo v. Allied Property and Casualty Insurance Company

July 11, 2011

MARTHA SCALZO,
PLAINTIFF,
v.
ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY, A CORPORATION AND DOES 1 THROUGH 10,
DEFENDANTS.



The opinion of the court was delivered by: Gary S. Austin United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS REGARDING MOTION TO REMAND (Document 10)

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

On March 8, 2011, Plaintiff Martha Scalzo filed a complaint in the Madera County Superior Court, asserting the following causes of action: breach of contract, breach of implied covenant of good faith and fair dealing, and intentional misrepresentation. In addition to general damages and the recovery of attorneys fees and costs, Plaintiff sought an award of punitive damages. Generally speaking, Plaintiff alleges that Defendant Allied Property and Casualty Insurance Company, Inc. breached a policy of insurance between the parties following damages sustained at Plaintiff's home in Madera, California, caused by a rain storm that occurred on May 23, 2010. (See Doc. 1, Ex. A.)

On April 15, 2011, Defendant filed a Notice of Removal with this Court. More specifically, Defendant removed the action from state court on the basis of diversity. (Doc. 1.)

On April 22, 2011, Defendant filed an answer to the complaint. (Doc. 8.)

On June 9, 2011, Plaintiff filed a Motion to Remand for Lack of Subject Matter Jurisdiction. (Docs. 10-12.) Thereafter, on June 24, 2011, Defendant opposed the motion to remand. (Doc. 15.) On July 1, 2011, Plaintiff filed a reply. (Doc. 16.)

On July 5, 2011, this Court determined the matter was suitable for decision without oral argument pursuant to Local Rule 230(g).*fn1 The hearing scheduled for July 8, 2011, was vacated and the matter was deemed submitted for written findings. (Doc. 17.)

LEGAL STANDARD

Title 28 of the United States Code section 1441(a) provides that a defendant may remove "any civil action brought in a State court of which the district courts . . . have original jurisdiction . . .." Removal is proper when a case originally filed in state court presents a federal question or where there is diversity of citizenship among the parties and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 1332(a).

Section 1447(c) provides that "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." "The removal statute is strictly construed against removal jurisdiction [and] [t]he defendant bears the burden of establishing that removal is proper." Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083 (9th Cir. 2009). The Ninth Circuit has held that "[w]here doubt regarding the right to removal exists, a case should be remanded to state court." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

A motion to remand is the proper procedure for challenging removal. Babasa v. LensCrafters, Inc., 498 F.3d 972, 974 (9th Cir. 2007). When reviewing a motion to remand, a district court must analyze jurisdiction "on the basis of the pleadings filed at the time of removal without reference to subsequent amendments." Sparta Surgical Corp. v. Nat'l Ass'n of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998) (citation omitted). If a defendant has improperly removed a case over which the district court lacks subject matter jurisdiction, the district court shall remand the case to the state court. 28 U.S.C. § 1447(c); see also Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006) (noting that a district court resolves all ambiguity in favor of remand). However, a district court lacks discretion to remand a case to the state court if the case was properly removed. Carpenters S. Cal. Admin. Corp. v. Majestic Hous., 743 F.2d 1341, 1343 (9th Cir. 1984); see also Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 356, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988).

Where the parties in an action are citizens of different states, a district court "shall have original jurisdiction . . . where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a). This amount includes claims for general and special damages (excluding costs and interests), attorneys fees if recoverable by statute or contract, and punitive damages, if recoverable as a matter of law. Conrad Assocs. v. Hartford Accident & Indem. Co., 994 F.Supp. 1196, 1198 (N.D. Cal. 1998). The amount in controversy is "determined at the time the action commences, and a federal court is not divested of jurisdiction . . . if the amount in controversy subsequently drops below the minimum jurisdictional level." Hill v. Blind Industries and Services of Maryland, 179 F.3d 754, 757 (9th Cir. 1999).

Where the complaint does not specify the amount sought as damages, the removing party must prove by a preponderance of the evidence that the amount in controversy meets the jurisdictional threshold. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007); Abrego v. The Dow Chemical Co., 443 F.3d 676, 683 (9th Cir. 2006); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996).

DISCUSSION

Plaintiff seeks remand to state court, asserting that Defendant has not met its burden of establishing that removal was proper. More particularly, Plaintiff argues that Defendant has failed to establish that the amount in controversy exceeds $75,000. (Doc. 10 at 2-5.) Additionally, Plaintiff argues that Defendant has failed to prove diversity of citizenship. (Doc. 10 at 5-7.) Defendant opposes the motion, contending the amount of ...


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