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Sley v. USAA Casualty Insurance Co.

United States District Court, N.D. California, San Jose Division

May 16, 2017

DAVID SLEY, Plaintiff,
v.
USAA CASUALTY INSURANCE COMPANY, Defendant.

          ORDER GRANTING PLAINTIFF'S MOTION FOR REMAND Re: Dkt. No. 9

          HOWARD R. LLOYD United States Magistrate Judge

         This lawsuit arises out of a one-car accident in which plaintiff David Sley says his new Toyota 4 Runner sustained substantial damage that would have been covered under his automobile insurance policy with defendant USAA Casualty Insurance Company (USAA).[1] Plaintiff claims that when he bought the vehicle, he asked USAA to increase his coverage, but USAA failed to do so. And, Sley says that although he timely notified USAA of the incident, defendant refused to pay insurance benefits under the policy. The key dispute, according to plaintiff, is whether he, in fact, increased his insurance coverage before the accident occurred.

         Plaintiff filed his complaint in the Santa Clara County Superior Court, asserting five claims for relief: breach of contract, breach of the covenant of good faith and fair dealing, negligence, reformation of contract, and declaratory relief. On the civil cover sheet, he checked the box indicating that this is an “Unlimited” civil matter, meaning that the amount he demands exceeds $25, 000. Although the complaint states that Sley seeks general and special damages, punitive damages, and attorney's fees, it does not specify the amounts sought.

         USAA removed the matter here, asserting diversity jurisdiction, 28 U.S.C. § 1332. Sley moves for an order remanding this case to the state court. There is no dispute that the parties are of diverse citizenship. The only issue is whether USAA has met its burden of establishing that the amount in controversy exceeds the $75, 000 jurisdictional threshold.

         All parties have expressly consented that all proceedings in this matter may be heard and finally adjudicated by the undersigned. 28 U.S.C. § 636(c); Fed.R.Civ.P. 73. Upon consideration of the moving and responding papers, the court grants plaintiff's motion.

         LEGAL STANDARD

         Removal to federal court is proper where the federal court would have original subject matter jurisdiction over the complaint. 28 U.S.C. § 1441. The removal statutes are strictly construed against removal and place the burden on the defendant to demonstrate that removal is proper. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)).

         Federal district courts have diversity jurisdiction over civil actions in which the matter in controversy exceeds the sum or value of $75, 000 (exclusive of interest and costs) and is between citizens of different states. 28 U.S.C. § 1332. “The amount in controversy, for purposes of diversity jurisdiction, is the total ‘amount at stake in the underlying litigation.'” Sasso v. Noble Utah Long Beach, LLC, No. CV 14-09154-AB (AJWx), 2015 WL 898468, at *2 (C.D. Cal., Mar. 3, 2015) (citing Theis Research, Inc. v. Brown & Bain, 400 F.3d 659, 662 (9th Cir. 2005)). “[I]n assessing the amount in controversy, a court must assume that the allegations of the complaint are true and assume that a jury will return a verdict for the plaintiff on all claims made in the complaint.” Id. (citations omitted).

         USAA has the burden of proving, by a preponderance of the evidence, that the amount in controversy exceeds $75, 000. Cohn v. Petsmart, Inc., 281 F.3d 837, 839 (9th Cir. 2002) (citing Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)). In determining whether defendant has met its burden, “[t]he district court may consider whether it is ‘facially apparent' from the complaint that the jurisdictional amount is in controversy.” Singer v. State Farm Mutual Auto. Ins., 116 F.3d 373, 377 (9th Cir. 1997) (citation omitted). Where, as here, the complaint does not specify damages, the court may examine the facts of the removal petition, as well as summary-judgment-type evidence submitted by the parties. Id.

         DISCUSSION

         A. Plaintiff's Post-Removal Stipulation

         Following removal, Sley offered to stipulate that he will not seek more than $75, 000, including punitive damages and attorney's fees. Plaintiff correctly notes that courts within the Ninth Circuit have remanded actions on the condition that a plaintiff stipulates to seeking less than the jurisdictional minimum. See Patel v. Nike Retail Services, Inc., 58 F.Supp.3d 1032, 1038-39 (N.D. Cal. 2014) (citing cases); see also Conrad Associates v. Hartford Accident & Indemnity Co., 994 F.Supp. 1996, 1199 (N.D. Cal. 1998) (noting that “[s]ome cases have remanded an action to state court after the plaintiff voluntarily stipulated that he would not seek damages above the jurisdictional amount, ” but concluding that a plaintiff could not be coerced into making such a stipulation.) Nevertheless, the Supreme Court has long stated that post-removal stipulations cannot oust the district court of jurisdiction:

And though, as here, the plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount, this does not deprive the district court of jurisdiction. Thus events occurring subsequent to removal which reduce the amount recoverable, whether beyond the plaintiff's control or the result of his volition, do not oust the district court's jurisdiction once it has attached.

St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 292 (1938). Accordingly, this court gives plaintiff's proffered ...


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