Chapman v. Metropolitan Life

• Court: District Court, D. New Hampshire
• Decided: June 6, 1996
• Docket: CV-96-128-M
• Status: Published

Opinion

Chapman v . Metropolitan Life CV-96-128-M 06/06/96 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Conrad Chapman, Plaintiff v. Civil N o . 96-128-M Metropolitan Life Insurance Company, Defendant

O R D E R

Plaintiff originally filed this case in the New Hampshire

Superior Court. Defendant then removed it to this court based on

an assertion of diversity jurisdiction. Pending before the court

is plaintiff's motion to remand to state court based on the

absence of diversity jurisdiction. Specifically, plaintiff

claims that the matter in controversy does not exceed the sum or

value of $50,000, exclusive of interest and costs, as required by

28 U.S.C. §1332(a).

The burden of establishing federal jurisdiction rests with

the party invoking i t , in this case the defendant. University of

Rhode Island v . A.W. Chesterton Co., 2 F.3d 1200, 1213 (1st Cir.

1993). The strong presumption against removal jurisdiction also

places on defendant the burden of establishing that removal is proper. Gaus v . Miles, Inc., 980 F.2d 5 6 4 , 566 (9th Cir. 1992).

Usually, a removing defendant's burden is satisfied as to the

amount in controversy requirement i f , in the state court

pleadings, the plaintiff claimed a sum greater than the federal

jurisdictional amount. But, "[i]f it is unclear what amount of

damages the plaintiff has sought . . . then the defendant bears

the burden of actually proving the facts to support jurisdiction,

including the jurisdictional amount." Id., at 566-67 (emphasis

in original) (citations omitted). In this case, plaintiff's

state court writ merely claims damages "in an amount within the

jurisdictional limits of [the Superior] court." Moreover, in his

motion to remand, plaintiff specifically denies that the amount

at issue exceeds $50,000.

Defendant has clearly failed to satisfy its "burden of

setting forth, in the removal petition itself, the underlying

facts supporting its assertion that the amount in controversy

exceeds $50,000." Id., at 567 (emphasis in original) (citing

Garza v . Bettcher Indus., Inc., 752 F. Supp. 753, 763 (E.D. Mich.

1990) (holding that defendant's bald recitation that "the amount

in controversy exceeds $50,000," without identifying any specific

factual allegations or provisions in the complaint which might

2 support that proposition, should provoke sua sponte remand)). In

this case, too, defendant's removal petition merely asserts that

the amount in controversy exceeds $50,000, with no reference to

any facts or factual allegations that might support the

assertion. Accordingly, defendant has failed to meet it's burden

of establishing jurisdiction and showing that removal was proper.

Even considering the assertions in defendant's brief objection to remand (document n o . 8 ) and its pending motion to dismiss (document n o . 5 ) , I still conclude that the requisite jurisdictional amount has not been established. Parenthetically, the court notes that, contrary to defendant's assertions, the "legal certainty" test is not applicable in determining removal jurisdiction based on the amount in controversy aspect of diversity jurisdiction. See, e.g., Gaus, supra.

The deficiencies in defendant's proof can by briefly

summarized as follows. While defendant points to the fact that

plaintiff is suing for breach of a contract to pay insurance

benefits while he remains disabled, and that the full amount

payable under the policy would equal $60,000 if plaintiff

remained disabled for the ten year period covered by the policy,

3 there is no assertion that plaintiff's condition (whatever it is)

is likely keep him disabled for ten years. Even more

significantly, defendant nowhere asserts that the present

(discounted) value of all future disability payments under the

policy exceeds $50,000. Realistically, given any reasonable

assumption regarding projected interest rates, the present value

of the maximum policy benefit is far less than $50,000. Thus,

there is both uncertainty and contingency associated with

plaintiff's recovery of future benefits, and even if plaintiff is

assumed to be claiming a present right to all potential future

benefit payments, defendant has failed to demonstrate that the

present value of those benefits exceeds $50,000. See, e.g.,

Sarnoff v . American Home Products Corp., 798 F.2d 1075, 1078 (7th

Cir. 1986) (present value of future installments determines the

amount in controversy).

As to plaintiff's claim for "enhanced compensatory damages,"

the amount claimed is not known, plaintiff says he is not

claiming damages in excess of $50,000, and, in any event, under

New Hampshire law plaintiff cannot recover enhanced compensatory

damages for breach of contract. DCPB, Inc. v . City of Lebanon,

957 F.2d 913 (1st Cir. 1992). Similarly, plaintiff's attorney's

4 fee claim is not based upon a contractual or statutory right (at

least no such assertion is made), but rather appears to be based

on the common law doctrine described in Harkeem v . Adams, 117

N.H. 687 (1977). Even if plaintiff is presumed to be entitled to

recover under that doctrine if his allegations are taken as true

(a doubtful proposition), there is nothing in this record from

which a reasonable fee could be fairly estimated. Accordingly,

there is no way to determine whether a combination of the present

value of disability benefits plus attorney's fees might meet the

amount in controversy threshhold.

Defendant has failed to meet its burden of establishing the

requisite amount in controversy to support diversity jurisdiction

and showing that removal was proper. Accordingly, plaintiff's

motion for remand (document n o . 6 ) is hereby granted. This case

shall be remanded to the New Hampshire Superior Court

(Hillsborough North).

SO ORDERED.

Steven J. McAuliffe United States District Judge June 6, 1996 cc: Brian C . Shaughnessy, Esq. William D. Pandolph, Esq.