NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 29 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
EDWARD STOLZ, No. 17-17214
Plaintiff-Appellant, D.C. No. 2:14-cv-02060-RFB-NJK v.
SAFECO INSURANCE COMPANY OF MEMORANDUM* AMERICA,
Defendant-Appellee.
Appeal from the United States District Court for the District of Nevada Richard F. Boulware II, District Judge, Presiding
Argued and Submitted October 25, 2019 Seattle, Washington
Before: CLIFTON, IKUTA, and BENNETT, Circuit Judges.
Edward Stolz appeals the district court’s order granting summary judgment
to Safeco Insurance Company on his Nevada law claims for breach of contract,
contractual breach of the implied covenant of good faith and fair dealing, and
tortious breach of the implied covenant of good faith and fair dealing. While this
appeal was pending, we directed the parties to submit supplemental briefs
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. addressing whether the amount-in-controversy requirement for the district court’s
subject matter jurisdiction under 28 U.S.C. § 1332(a) was met at the time this case
was removed from state court. We are satisfied the district court had subject
matter jurisdiction when this case was removed. We have jurisdiction under 28
U.S.C. § 1291 and affirm.
“We review the existence of subject matter jurisdiction de novo.” Chavez v.
JPMorgan Chase & Co., 888 F.3d 413, 415 (9th Cir. 2018). Likewise, we review
de novo a district court’s grant of summary judgment. See HS Servs., Inc. v.
Nationwide Mut. Ins. Co., 109 F.3d 642, 644 (9th Cir. 1997).
“A defendant generally may remove an action filed in state court if a federal
district court would have had original jurisdiction over the action.” Chavez, 888
F.3d at 415 (citing 28 U.S.C. § 1441(a)). Here, the district court would have had
original jurisdiction over the action because the parties do not dispute complete
diversity, and Safeco presented sufficient evidence that the amount-in-controversy
requirement was met when this case was removed. See 28 U.S.C. § 1332(a).
Stolz did not contest removal when the motion was made, and his
“concession of diversity jurisdiction below is strong evidence that the amount in
controversy exceeds $75,000.” Chavez, 888 F.3d at 416. Stolz’s “concession is
tantamount to a plaintiff expressly alleging damages in excess of the jurisdictional
amount, which we accept as the amount in controversy if done in good faith.” Id.
2 Other evidence demonstrates Stolz’s good faith belief that the controversy exceeds
$75,000: Stolz moved for summary judgment in the amount of $350,000 and made
settlement demands of $80,000 and $85,000. See Cohn v. Petsmart, Inc., 281 F.3d
837, 840 (9th Cir. 2002) (per curiam) (“A settlement letter is relevant evidence of
the amount in controversy if it appears to reflect a reasonable estimate of the
plaintiff’s claim.”).
Moreover, Stolz’s request for $300,000 in punitive damages satisfied
§ 1332(a)’s amount-in-controversy requirement. Regardless whether Stolz is
entitled to punitive damages on the merits, his allegations that Safeco
representatives responded to his claim with “a smoke screen of delay and insults”
and by attempting to “humiliate or intimidate” him put punitive damages in
controversy. See United Fire Ins. Co. v. McClelland, 780 P.2d 193, 198 (Nev.
1989) (an insurer may be liable for punitive damages if the insurer acted with
“oppression, fraud, or malice” and subjected the plaintiff to “cruel and unjust
hardship”). Accordingly, the district court would have had original jurisdiction
over this action, and removal was proper.
We affirm the district court’s grant of summary judgment for Safeco. Stolz
failed to show that he was entitled to performance by Safeco under the contract.
Under Nevada law, a contractual party’s failure to perform its material obligations
excuses the other party’s performance. See Young Elec. Sign Co. v. Fohrman, 466
3 P.2d 846, 847 (Nev. 1970).
The undisputed facts establish that Stolz did not fulfill his material
obligations under the contract because he failed to provide to Safeco the required
information about his stolen items. Further, Safeco could not have paid Stolz’s
claim without receiving further information from Stolz. After Stolz submitted his
insurance claim, Safeco sent him requests for additional information every month
from January until October of 2010. Under the insurance policy, Stolz was
required to “prepare an inventory of the loss . . . showing in detail the quantity,
description, replacement cost and age” of the items, as well as receipts and
documents to substantiate the estimated costs of the items. The insurance policy
required Stolz to submit this inventory within 60 days of Safeco’s request. Stolz
sent Safeco a list of stolen items but refused to provide certain required
information, including the estimated values, replacement costs, and age of the
items. Stolz also refused to identify whether certain items were for business or
personal use—information that is necessary to determine the policy coverage limit.
Stolz’s failure to provide the required information excused Safeco’s
performance, and summary judgment in favor of Safeco was therefore appropriate
on Stolz’s claim for breach of contract. See Fohrman, 466 P.2d at 847. Likewise,
summary judgment was appropriate on Stolz’s claims for contractual and tortious
breach of covenant, because Safeco’s refusal to compensate Stolz was neither
4 unreasonable nor “without proper cause.” Pemberton v. Farmers Ins. Exch., 858
P.2d 380, 382, 384 (Nev. 1993).1
AFFIRMED.
1 Safeco’s Corrected Motion to Supplement the Record (Dkt. 53) is GRANTED. Safeco’s Motion to Supplement the Record (Dkt. 51) is DENIED AS MOOT. Safeco’s Motion to File Oversized Brief (Dkt. 50) is GRANTED.
5 FILED Stolz v. Safeco Ins. Co., No. 17-17214 NOV 29 2019 MOLLY C. DWYER, CLERK BENNETT, Circuit Judge, dissenting: U.S. COURT OF APPEALS
I respectfully dissent because the district court did not have subject matter
jurisdiction over this case when it was removed from state court under 28 U.S.C. §
1441(a). “Federal jurisdiction must be rejected if there is any doubt as to the right
of removal in the first instance,” including whether the amount-in-controversy
requirement in a diversity action was met at the time of removal. See Gaus v.
Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
Where, as here, it is not facially evident from the complaint that the
controversy involves more than $75,000, the removing defendant “bears the
Free access — add to your briefcase to read the full text and ask questions with AI
NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 29 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
EDWARD STOLZ, No. 17-17214
Plaintiff-Appellant, D.C. No. 2:14-cv-02060-RFB-NJK v.
SAFECO INSURANCE COMPANY OF MEMORANDUM* AMERICA,
Defendant-Appellee.
Appeal from the United States District Court for the District of Nevada Richard F. Boulware II, District Judge, Presiding
Argued and Submitted October 25, 2019 Seattle, Washington
Before: CLIFTON, IKUTA, and BENNETT, Circuit Judges.
Edward Stolz appeals the district court’s order granting summary judgment
to Safeco Insurance Company on his Nevada law claims for breach of contract,
contractual breach of the implied covenant of good faith and fair dealing, and
tortious breach of the implied covenant of good faith and fair dealing. While this
appeal was pending, we directed the parties to submit supplemental briefs
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. addressing whether the amount-in-controversy requirement for the district court’s
subject matter jurisdiction under 28 U.S.C. § 1332(a) was met at the time this case
was removed from state court. We are satisfied the district court had subject
matter jurisdiction when this case was removed. We have jurisdiction under 28
U.S.C. § 1291 and affirm.
“We review the existence of subject matter jurisdiction de novo.” Chavez v.
JPMorgan Chase & Co., 888 F.3d 413, 415 (9th Cir. 2018). Likewise, we review
de novo a district court’s grant of summary judgment. See HS Servs., Inc. v.
Nationwide Mut. Ins. Co., 109 F.3d 642, 644 (9th Cir. 1997).
“A defendant generally may remove an action filed in state court if a federal
district court would have had original jurisdiction over the action.” Chavez, 888
F.3d at 415 (citing 28 U.S.C. § 1441(a)). Here, the district court would have had
original jurisdiction over the action because the parties do not dispute complete
diversity, and Safeco presented sufficient evidence that the amount-in-controversy
requirement was met when this case was removed. See 28 U.S.C. § 1332(a).
Stolz did not contest removal when the motion was made, and his
“concession of diversity jurisdiction below is strong evidence that the amount in
controversy exceeds $75,000.” Chavez, 888 F.3d at 416. Stolz’s “concession is
tantamount to a plaintiff expressly alleging damages in excess of the jurisdictional
amount, which we accept as the amount in controversy if done in good faith.” Id.
2 Other evidence demonstrates Stolz’s good faith belief that the controversy exceeds
$75,000: Stolz moved for summary judgment in the amount of $350,000 and made
settlement demands of $80,000 and $85,000. See Cohn v. Petsmart, Inc., 281 F.3d
837, 840 (9th Cir. 2002) (per curiam) (“A settlement letter is relevant evidence of
the amount in controversy if it appears to reflect a reasonable estimate of the
plaintiff’s claim.”).
Moreover, Stolz’s request for $300,000 in punitive damages satisfied
§ 1332(a)’s amount-in-controversy requirement. Regardless whether Stolz is
entitled to punitive damages on the merits, his allegations that Safeco
representatives responded to his claim with “a smoke screen of delay and insults”
and by attempting to “humiliate or intimidate” him put punitive damages in
controversy. See United Fire Ins. Co. v. McClelland, 780 P.2d 193, 198 (Nev.
1989) (an insurer may be liable for punitive damages if the insurer acted with
“oppression, fraud, or malice” and subjected the plaintiff to “cruel and unjust
hardship”). Accordingly, the district court would have had original jurisdiction
over this action, and removal was proper.
We affirm the district court’s grant of summary judgment for Safeco. Stolz
failed to show that he was entitled to performance by Safeco under the contract.
Under Nevada law, a contractual party’s failure to perform its material obligations
excuses the other party’s performance. See Young Elec. Sign Co. v. Fohrman, 466
3 P.2d 846, 847 (Nev. 1970).
The undisputed facts establish that Stolz did not fulfill his material
obligations under the contract because he failed to provide to Safeco the required
information about his stolen items. Further, Safeco could not have paid Stolz’s
claim without receiving further information from Stolz. After Stolz submitted his
insurance claim, Safeco sent him requests for additional information every month
from January until October of 2010. Under the insurance policy, Stolz was
required to “prepare an inventory of the loss . . . showing in detail the quantity,
description, replacement cost and age” of the items, as well as receipts and
documents to substantiate the estimated costs of the items. The insurance policy
required Stolz to submit this inventory within 60 days of Safeco’s request. Stolz
sent Safeco a list of stolen items but refused to provide certain required
information, including the estimated values, replacement costs, and age of the
items. Stolz also refused to identify whether certain items were for business or
personal use—information that is necessary to determine the policy coverage limit.
Stolz’s failure to provide the required information excused Safeco’s
performance, and summary judgment in favor of Safeco was therefore appropriate
on Stolz’s claim for breach of contract. See Fohrman, 466 P.2d at 847. Likewise,
summary judgment was appropriate on Stolz’s claims for contractual and tortious
breach of covenant, because Safeco’s refusal to compensate Stolz was neither
4 unreasonable nor “without proper cause.” Pemberton v. Farmers Ins. Exch., 858
P.2d 380, 382, 384 (Nev. 1993).1
AFFIRMED.
1 Safeco’s Corrected Motion to Supplement the Record (Dkt. 53) is GRANTED. Safeco’s Motion to Supplement the Record (Dkt. 51) is DENIED AS MOOT. Safeco’s Motion to File Oversized Brief (Dkt. 50) is GRANTED.
5 FILED Stolz v. Safeco Ins. Co., No. 17-17214 NOV 29 2019 MOLLY C. DWYER, CLERK BENNETT, Circuit Judge, dissenting: U.S. COURT OF APPEALS
I respectfully dissent because the district court did not have subject matter
jurisdiction over this case when it was removed from state court under 28 U.S.C. §
1441(a). “Federal jurisdiction must be rejected if there is any doubt as to the right
of removal in the first instance,” including whether the amount-in-controversy
requirement in a diversity action was met at the time of removal. See Gaus v.
Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
Where, as here, it is not facially evident from the complaint that the
controversy involves more than $75,000, the removing defendant “bears the
burden of actually proving the facts to support jurisdiction, including the
jurisdictional amount.” Id. at 567. Safeco has not proven, by a preponderance of
the evidence, that the amount in controversy exceeded $75,000 “at the time of
removal.” See Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090
(9th Cir. 2003) (citation omitted).
Safeco’s evidence is insufficient to prove that more than $75,000 was in
controversy. First, Safeco contends that Stolz’s failure to object to removal and
request for summary judgment in the amount of $350,000 (including $50,000 in
compensatory damages and $300,00 in punitive damages) are “admissions” that
the amount in controversy was met. While these are relevant considerations,
1 “litigants cannot stipulate to subject matter jurisdiction where it does not otherwise
exist.” Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 416 (9th Cir. 2018).
Stolz’s request for $350,000 is not “supported by the plausibility of the
admission.” Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir.
1997). The bulk of Stolz’s request for judgment is $300,000 in punitive damages,
which are implausible in this case. See United Fire Ins. Co. v. McClelland, 780
P.2d 193, 198 (Nev. 1989) (holding that to impose punitive damages, Nevada law
requires an insurer to act with “oppression, fraud or malice”); Matheson, 319 F.3d
at 1091 (“[U]nder the circumstances it is not clear that punitive damages
significantly in excess of the $10,000 floor mentioned in the complaint are at
stake.”). Second, Safeco points to Stolz’s settlement offers of $80,000 and
$85,000 to show that the amount in controversy exceeded $75,000. The only
evidence of these settlement offers is an affidavit filed by Safeco’s attorney, and
the amount of the settlement offers is not corroborated by any other evidence in the
record. Cf. Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002). Further, the
affidavit does not indicate when these settlement offers were made, and there is no
evidence that they existed at the time of removal. Third, Safeco asserts that a hotel
incident report stated that $500,000.00 worth of items were stolen. This number is
approximately ten times greater than every other estimate in the record, and on oral
2 argument, Safeco’s counsel did not deny that this number likely represents a
typographical error.
Because the amount-in-controversy requirement was not met when this case
was removed to federal court, federal jurisdiction should be rejected. I would
remand the case to the district court with instructions to remand to the state court.
See Gaus, 980 F.2d at 567. Were I to reach the merits, I would agree with the
majority that the district court’s grant of summary judgment should be affirmed.