Ponchene v. Lemonade Insurance Company

• Court: District Court, W.D. Washington
• Decided: August 26, 2025
• Docket: 2:25-cv-01074
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 5 AT SEATTLE 6 ZACHARY PONCHENE, Case No. 2;25-cv-01074-TLF 7 Plaintiff, v. ORDER ON MOTION TO REMAND 8 AND ATTORNEY FEES LEMONADE INSURANCE COMPANY, 9 Defendant. 10

11 This matter comes before the Court on plaintiff Zachary Ponchene’s motion to 12 remand for lack of subject matter jurisdiction and attorney fees. Dkt. 6. 13 Pursuant to 28 U.S.C. § 636(c), Federal Rule of Civil Procedure 73, and Local 14 Rule MJR 13, the parties have consented to have this matter heard by the undersigned 15 Magistrate Judge. Dkt. 8. 16 As explained below, plaintiff’s motion to remand for lack of subject matter 17 jurisdiction and attorney fees is DENIED. 18 BACKGROUND 19 Plaintiff initially filed this lawsuit in state court on April 24, 2025, asserting claims 20 for breach of insurance contract, bad faith, and violation of the Consumer Protection Act 21 (CPA) and the Insurance Fair Conduct Act (IFCA) against defendant Lemonade 22 Insurance Company. Dkt. 1. 23 24 1 On June 10, 2025, defendant filed a notice of removal. Dkt. 1. Defendant’s notice 2 of removal stated that the removal was proper pursuant to 28 U.S.C. §§ 1332, 1441, 3 and 1446. Dkt. 1. Defendant stated this Court had original jurisdiction over the matter 4 under 28 U.S.C. §§ 1441 and 1446 because the amount in controversy exceeds the

5 sum of $75,000, and defendant and plaintiff are citizens of different states. Dkt. 1. 6 Plaintiff is a citizen of the state of Washington, and defendant is domiciled in New York, 7 with its principal business in New York. Dkt. 1. 8 On June 16, 2025, plaintiff filed this motion to remand pursuant to 28 U.S.C. § 9 1447(c) for lack of subject matter jurisdiction and failure to comply with Local Civil Rule 10 101(a). Dkt. 6. Plaintiff also requests costs and fees be awarded to him. Dkt. 6. 11 Defendant filed a response on July 2, 2025. Dkt. 11. 12 DISCUSSION 13 A. Legal Standard 14 Under 28 U.S.C. § 1441(a), a defendant may remove an action filed in state court

15 to federal court if the federal court would have original subject matter jurisdiction. 16 Pursuant to 28 U.S.C. § 1447(c), a plaintiff can move to remand to state court after 17 removal, based on jurisdictional or procedural defects in removal. See Kamm v. ITEX 18 Corp., 568 F.3d 752, 754-57 (9th Cir. 2009). If at any time before final judgment it 19 appears that the district court lacks subject matter jurisdiction, the court shall remand 20 the case. See 28 U.S.C. § 1447(c). “Federal jurisdiction must be rejected if there is any 21 doubt as to the right of removal in the first instance.” Gaus v. Miles, 980 F.2d 564, 566 22 (9th Cir. 1992) (per curiam). The party asserting federal jurisdiction has the burden of 23 proof on a motion to remand to state court. See Carrington v. City of Tacoma, Dep't of

24 1 Pub. Utilities, Light Div., 276 F. Supp. 3d 1035, 1041 (W.D. Wash. 2017); see also 2 Conrad Associates v. Hartford Accident & Indemnity Co., 994 F. Supp. 1196 (N.D. Cal. 3 1998). Because there is a strong presumption against removal jurisdiction, the 4 defendant bears the burden of proving that removal is proper by a preponderance of the

5 evidence. See Conrad, 994 F. Supp. at 1198. 6 B. Amount in Controversy 7 Pursuant to 28 U.S.C. § § 1441(a) and 1332, the district court has diversity 8 jurisdiction over civil actions where the amount in controversy exceeds $75,000, 9 excluding interest and costs, and the parties are citizens of different states. Federal 10 subject matter jurisdiction under 28 U.S.C. § 1332 requires complete diversity of state 11 citizenship between the plaintiff and all the defendants. Lincoln Prop. Co. v. Roche, 546 12 U.S. 81, 82 (2005) 13 There is no dispute that the parties in this case are completely diverse. See Dkt. 14 6. Thus, the only remaining issue before the Court is whether the amount in controversy

15 exceeds $75,000. 16 If the complaint does not specify an amount of damages, a defendant’s notice of 17 removal that plausibly alleges the amount in controversy exceeds $75,000 will be 18 accepted. See Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 19 (2014). If the plaintiff contests the defendant’s allegations, the court must determine 20 whether the amount in controversy requirement is met by a preponderance of the 21 evidence. Id. at 88. In making this determination the court considers “’summary- 22 judgment type evidence relevant to the amount in controversy at the time of removal’” 23 presented by both sides. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089,

24 1 1090 (9th Cir. 2003) (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 2 377 (9th Cir. 1997)). The amount in controversy may include not only actual damages 3 but also statutorily authorized treble damages and attorney fees when the plaintiff 4 requests treble damages under the CPA and IFCA. See Chabner v. United of Omaha

5 Life Ins. Co., 225 F.3d 1042, 1046 (9th Cir. 2000). 6 In the complaint, plaintiff seeks: (1) award of all damages sustained by plaintiff; 7 (2) award of plaintiff’s attorney fees and costs, including Olympic Steamship1; (3) award 8 of all damages under RCW 19.86; and (4) award of damages under the IFCA. Dkt. 1. 9 Because plaintiff does not allege an exact dollar amount of damages, it is not 10 facially apparent from the complaint that the jurisdictional amount in controversy is met. 11 Therefore, defendant must prove the amount in controversy exceeds $75,000 by a 12 preponderance of the evidence. Since plaintiff seeks damages under both IFCA and 13 CPA, defendant calculates the amount in controversy based on the potential treble 14 damages available under these statutes. Dkt. 11.

15 The Court agrees with the defendant’s contention that plaintiff’s request for treble 16 damages and attorney fees under IFCA and CPA increases the amount in controversy 17 beyond $75,000. 18 The IFCA provides a private cause of action for a first-party claimant who has 19 been unreasonably denied insurance coverage and authorizes both treble damages and 20

1 The Court notes that attorney fees are generally not recoverable in Washington absent contractual 21 statutory, or equitable authorization. See McGreevy v. Or. Mut. Ins. Co., 128 Wash.2d 26 n.8 (1995). Yet under the Olympic Steamship doctrine, attorney fees are recoverable when an insured is compelled to 22 litigate to obtain the full benefit of coverage. See Olympic S.S. v. Centennial Insurance Co.,117 Wash.2d 37, 53 (1991). Here, plaintiff alleges that defendant’s refusal to pay benefits under the policy forced 23 plaintiff to commence litigation to secure coverage, bringing this case within the scope of Olympic Steamship. And, plaintiff seeks attorney fees under the IFCA, RCW 48.30.015, and the CPA, RCW 24 19.86.090, both of which provide statutory authorization for reasonable attorney fees. 1 an award of attorney fees. See RCW 48.30.015(1)-(3). Under IFCA, treble damages 2 may be awarded in “an amount not to exceed three times the actual damages,” see 3 RCW 48.30.015(2). Under the CPA, treble damages may be awarded up to $25,000 per 4 violation, see RCW 19.86.090. Here, plaintiff seeks $10,000 in actual damages under

5 the relevant policy and expressly requests treble damages under both IFCA and CPA. 6 Applying these statutes to plaintiff’s alleged damages, plaintiff can seek treble damages 7 up to $30,000 under IFCA (three times the actual damages) and up to $25,000 under 8 CPA (maximum CPA violation fee). The treble damages under IFCA and CPA plus the 9 $10,000 in actual damages results in approximately $65,000 at issue, even before 10 accounting for attorney fees. 11 In addition to the treble damages, defendant argues that if plaintiff prevails, the 12 plaintiff will be entitled to attorney fees under Washington common law. Defendant 13 contends plaintiff’s future attorney fees should be factored into the amount in 14 controversy and, if they are factored in, plaintiff’s claim exceeds $75,000.

15 Attorneys’ fees awarded under fee-shifting statutes or contracts are included in 16 calculating the amount in controversy. See Fritsch v. Swift Transp. Co. of Arizona, LLC, 17 889 F.3d 785, 794 (9th Cir. 2018) (“a court must include future attorneys’ fees 18 recoverable by statute or contract when assessing whether the amount in controversy 19 requirement is met.”); see also, Kido as trustee for Kido v. Transamerica Life Ins. Co., 20 No. C19-1858-JCC, 2020 WL 428978 (W.D. Wash. Jan. 28, 2020) (“The amount in 21 controversy may include not just actual damages, but also statutorily authorized treble 22 damages and attorney fees.”) (citing Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1156 23 (9th Cir. 1998)).

24 1 The Court will, therefore, look at attorney’s fees in calculating the amount of 2 plaintiff’s damages. 3 According to the plaintiff’s declaration, plaintiff’s counsel expended 5 hours 4 preparing for instant motion; plaintiff’s counsel’s hourly rate for 2025 is $500 per hour.

5 Dkt. 7, Declaration of Leah S. Snyder, at 2. Adding $2,500 in current attorney fees to 6 the estimated $65,000 in treble damages results in a total amount in controversy of 7 approximately $67,500. Additional damages remain to be considered, including 8 potential attorney’s fees and expert fees. Thus, under these circumstances, defendant’s 9 reliance on plaintiff’s complaint to approximate that the amount in controversy exceeded 10 $75,000 was not unreasonable. See Bender v. USAA Gen. Indem. Co., No. C22-1765- 11 JCC, 2023 WL 2326910 (W.D. Wash. Mar. 2, 2023). (holding that where the plaintiff 12 sought treble damages under IFCA and CPA placing the amount in controversy at 13 approximately $70,000, the addition of potential future attorney fees reasonably 14 supported a finding that the amount in controversy exceeded $75,000).

15 Considering plaintiff’s requests for treble damages under IFCA and CPA along 16 with potential statutory attorney fees, the Court concludes defendant sufficiently 17 demonstrated that the amount in controversy likely exceeds the $75,000 jurisdictional 18 threshold. 19 Plaintiff contends that the trebling numbers defendant relies on are inflated to 20 push the amount in controversy closer to the jurisdictional threshold. Where a complaint 21 expressly seeks treble damages under IFCA and CPA, courts generally include the 22 trebled amount in calculating the amount in controversy. See Chabner v. United of 23 Omaha Life Ins. Co., 225 F.3d 1042, 1046 (9th Cir. 2000) (allowing calculation of treble

24 1 damages authorized by state statute when determining the amount in controversy). 2 Because plaintiff explicitly requests treble damages under both statutes, those 3 enhanced damages are properly factored into the amount in controversy calculation. 4 Defendant has met its burden of showing by a preponderance of evidence that

5 the amount in controversy exceeds $75,000. The Court has jurisdiction over this matter 6 by diversity jurisdiction and plaintiff’s motion to remand is DENIED. 7 C. Attorney’s Fees 8 Plaintiff seeks an award of attorney's fees pursuant to 28 U.S.C. 1447(c). “Absent 9 unusual circumstances, courts may award attorney’s fees under § 1447(c) only where 10 the removing party lacked an objectively reasonable basis for seeking removal.” Martin 11 v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). Here, it was not objectively 12 unreasonable for the defendant to seek removal. Defendant has proven, by a 13 preponderance of the evidence, that removal is proper. 14 Therefore, plaintiff’s request for an award of fees, costs, and expenses pursuant

15 28 U.S.C. § 1447(c) is DENIED. 16 17 Dated this 26th day of August, 2025. 18 A

19 Theresa L. Fricke United States Magistrate Judge 20