Robert Wayne Ives v. Allstate Northbrook Indemnity Company

• Court: District Court, C.D. California
• Decided: December 1, 2020
• Docket: 2:20-cv-02505
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Case No. 2:20-CV-02505-AB-AGR 11 ROBERT WAYNE IVES,

12 ORDER DENYING PLAINTIFF’S MOTION TO REMAND 13 Plaintiff,

14 v.

15 ALLSTATE INSURANCE 16 COMPANY, et al.,

17 Defendants. 18

20 Before the Court is Robert Wayne Ives’ (“Plaintiff”) Motion to Remand this 21 proceeding to the Superior Court of California, Los Angeles County (“Motion to 22 Remand,” Dkt. No. 28). Allstate Northbrook Indemnity Company (“Defendant”) filed 23 an Opposition (“Opp’n,” Dkt. No. 32) and Plaintiff filed a Reply. (“Reply,” Dkt. No. 24 33). The Court deemed this matter appropriate for decision without oral arguments 25 and vacated the hearing set for Friday, November 13, 2020 and took this matter under 26 submission. For the reasons explained below, the Court DENIES the Motion to 27 Remand. 28 1

2 I. BACKGROUND

3 This is an action arising from Defendant’s alleged bad faith for refusal to

4 properly and timely pay uninsured motorist benefits under Plaintiff’s policy. (Dkt. 5 No. 1-1, Exh. A, at ¶ 1). Plaintiff filed his complaint in the Los Angeles Superior 6 Court on February 5, 2020. (Dkt. No. 1-1). Defendant thereafter filed its answer on 7 March 13, 2020. (Dkt. No. 1-3). On March 16, 2020, after receiving two pre- 8 litigation settlement demands in the amount of $249,999, Defendant filed a Notice of 9 Removal from the Los Angeles Superior Court. (Dkt. No. 1). On August 10, 2020, 10 the parties engaged in arbitration and settled Plaintiff’s uninsured motorist claim. 11 (Dkt. No. 22). On October 15, 2020 Plaintiff filed a Motion to Remand this case back 12 to the Superior Court, (Dkt. No. 28), and Defendant filed its Opposition to Plaintiff’s 13 Motion on October 23, 2020. (Dkt. No. 32). Finally, Plaintiff filed his Reply to 14 Defendant’s Opposition on October 30, 2020. (Dkt. No. 33). 15 II. LEGAL STANDARD 16 Under 28 U.S.C. § 1441(a), a civil action may be removed to the district court 17 where the action is pending if the district court has original jurisdiction over the 18 action. Under 28 U.S.C. § 1332, a district court has original jurisdiction of a civil 19 action where the matter in controversy exceeds the sum or value of $75,000, exclusive 20 of interest and costs, and the dispute is between “citizens of different states.” Section 21 1332 requires complete diversity, i.e., that “the citizenship of each plaintiff is diverse 22 from the citizenship of each defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 67–68 23 (1996). “Where a plaintiff's complaint does not specify the amount of damages being 24 sought, the removing defendant bears the burden of demonstrating by a 25 preponderance of the evidence that the amount in controversy requirement is satisfied. 26 Kenneth Rothschild Tr. v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 993, 1001 27 (C.D. Cal. 2002) (emphasis added). Further, as explained by the Ninth Circuit, “the 28 amount-in-controversy inquiry in the removal context is not confined to the face of the 1 complaint.” Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004).

2 III. DISCUSSION

3 Plaintiff seeks an order remanding this action back to state court arguing that

4 Defendant has not established that the amount in controversy is greater than $75,000, 5 as required for this Court to have subject-matter jurisdiction. (Dkt. No. 28, at 1:26– 6 2:4). Plaintiff alleges that Defendant merely speculates about the amount in 7 controversy and fails to meet the evidentiary burden required to support removal. 8 (Dkt. No. 28, at 2:2–4). The parties do not dispute their diversity of citizenship—they 9 agree Plaintiff is a citizen of California and Defendant is a citizen of Illinois. (Dkt. 10 No. 1, at ¶ 9). However, when the parties engaged in arbitration, Plaintiff’s uninsured 11 motorist claim was settled. (Dkt. No. 22, at ¶ 3). The only issue before the Court is 12 whether Defendant has shown, by a preponderance of the evidence, that the amount in 13 controversy at the time of removal—not at the time Plaintiff made a motion to 14 remand—exceeded $75,000. See Rea v. Michaels Stores Inc., 742 F.3d 1234, 1237 15 (9th Cir. 2014) (“The general rule is that the amount in controversy is determined 16 from the pleadings as they exist at the time a petition for removal is filed.”); Sparta 17 Surgical Corp. v. Nat'l Ass'n of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 18 1998) (stating that jurisdiction must be analyzed on the basis of the pleadings filed at 19 the time of removal without reference to subsequent amendments). 20 A. Defendant Meets the Preponderance of the Evidence Standard 21 Required to Prove The Amount In Controversy. 22 “Where it is not facially evident from the complaint that more than $75,000 is 23 in controversy, the removing party must prove, by a preponderance of the evidence, 24 that the amount in controversy meets the jurisdictional threshold.” Matheson v. 25 Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). In removing this 26 case to federal court, Defendant used Plaintiff’s $249,999 settlement demand as the 27 basis for establishing the amount in controversy. (Dkt. No. 1-1). Plaintiff made this 28 settlement demand prior to the start of litigation and several more times subsequently, 1 including after Defendant removed the case. (Dkt. No. 1, at 1:6–16). Defendant

2 relied on the settlement demand, not the remedy Plaintiff sought, because the

3 Complaint did not allege a definite amount—Plaintiff instead simply stated that

4 damages exceed $25,000. (Dkt. No. 28, at 8:10–12). Defendant appropriately relies 5 on the settlement demand because courts in this jurisdiction and in the Ninth Circuit 6 have stated that a settlement demand can be relevant evidence of the amount in 7 controversy so long as it appears to reflect a reasonable estimate of the plaintiff’s 8 claim. Briest v. Knot Standard LLC, No. CV2002519CJCPVCX, 2020 WL 2572457, 9 at *2 (C.D. Cal. May 20, 2020); see also Cohn v. Petsmart, Inc., 281 F.3d 837, 840 10 (9th Cir. 2002) (allowing a case to stay in federal court based on plaintiff’s $100,000 11 settlement demand). 12 And, while Plaintiff did not initially challenge this Court’s jurisdiction, Plaintiff 13 now argues that Defendant has not exceeded the jurisdictional threshold to a “legal 14 certainty,” and that remand is thus warranted. (Dkt. No. 28 at 8:15–23). Plaintiff 15 relies on the amount in controversy standard set forth in Lowdermilk v. U.S. Bank 16 National Association, 479 F.3d 994 (9th Cir. 2007); however, the Court notes that this 17 case has been overruled as it pertains to a defendant’s burden. (Dkt. No. 28, at 7:13– 18 20). See Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013) 19 (“Our reasoning there for imposing on defendants the burden to prove the amount in 20 controversy to a legal certainty, rather than the ordinary preponderance of the 21 evidence standard, is clearly irreconcilable with the Supreme Court’s reasoning in 22 Standard Fire. As a result, we hold that Lowdermilk has been effectively overruled, 23 and that the proper burden of proof imposed upon a defendant to establish the amount 24 in controversy is the preponderance of the evidence standard.”). Thus, Defendant is 25 required to show the amount in controversy at the time of the removal exceeds 26 $75,000 only by a preponderance of the evidence. 27 In addition to citing to the $249,999 settlement demand for a showing of 28 amount in controversy, Defendant also shows by a preponderance of the evidence that 1 the other damages Plaintiff seeks will amount to more than $75,000. (Dkt. No. 32, at

2 ¶ 20). Defendant compares the emotional distress damages, punitive damages, and

3 attorneys’ fees Plaintiff seeks in this case to relief sought in similar uninsured motorist

4 bad faith cases. (Dkt. No. 32, at 10:27–13:4). In response, Plaintiff argues that, here, 5 Defendant provides speculative and uncertain estimates for the amount in controversy. 6 (Dkt. No. 28, at 8:7–9:10). The Supreme Court has held that the party seeking 7 removal “need include only a plausible allegation that the amount in controversy 8 exceeds the jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. 9 Owens, 574 U.S. 81, 89 (2014). By presenting case law supporting its argument that 10 damages in similar uninsured motorist bad faith claims significantly exceed $75,000, 11 Defendant has done more than merely “speculate.” Defendant has made plausible 12 allegations that the damages here will exceed $75,000. Therefore, whether through 13 Plaintiff’s $249,999 settlement demand, or through the emotional distress damages, 14 punitive damages, and attorneys’ fees, or through a combination of both, Defendant 15 has shown by a preponderance of the evidence that the amount in controversy 16 requirement is met. 17 B. Events Subsequent to Removal Do Not Alter the Previously 18 Determined Amount In Controversy. 19 To the Court, it seems as though the crux of Plaintiff’s argument is that because 20 the uninsured motorist claim was settled in arbitration, this Court no longer has 21 jurisdiction. Specifically, Plaintiff does not dispute making the $249,999 settlement 22 demand, but contends that since the claim on which the demand rests (uninsured 23 motorist) was recently settled, the amount in controversy no longer meets the required 24 threshold. (Dkt. No. 33, at 2:19–22). 25 However, Plaintiff is mistaken in this argument. The United States Supreme 26 Court has long held that “events occurring subsequent to removal which reduce the 27 amount recoverable . . . do not oust the district court’s jurisdiction once it has 28 attached.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 293 (1938). 1 | Courts throughout the Ninth Circuit have applied this principle, and this Court is 2 | therefore inclined to apply it as well. See Hill v. Blind Indus. & Servs. of Maryland, 3 | 179 F.3d 754, 757 (9th Cir. 1999) (“A federal court is not divested of jurisdiction... 4 | if the amount in controversy subsequently drops below the minimum jurisdictional 5 | level.”); In re HP Inkjet Printer Litig., No. C 05-3580JF(PVT), 2009 WL 282051, at 6 | *2 (N.D. Cal. Feb. 5, 2009) (“For example, changes in the amount in controversy after 7 | the complaint has been removed would not subject a lawsuit to be remanded to state 8 | court.’”); Barefield v. HSBC Holdings PLC, 356 F. Supp. 3d 977, 986 (E.D. Cal. 2018) 9 | (‘The Court is persuaded that the dismissal of claims bringing the total amount in 10 | controversy below $75,000 did not dissolve the Court's original jurisdiction over the 11 | suit.”). Therefore, up against Plaintiff's argument that this Court has lost jurisdiction, 12 | the case law prevails. 13 Further, even if Plaintiff were to make amendments to their complaint, this 14 | Court would still maintain proper jurisdiction. See Williams v. Costco Wholesale 15 | Corp., 471 F.3d 975, 976 (9th Cir. 2006) (“Post-removal amendments to the pleadings 16 | cannot affect whether a case is removable, because the propriety of removal is 17 | determined solely on the basis of the pleadings filed in state court.”). Therefore, 18 | Plaintiff’s arguments are not persuasive or legally grounded. 19 In summary, Defendant has more than met its burden of showing by a 20 || preponderance of the evidence that the amount in controversy at the time of removal 21 | met this Court’s jurisdiction threshold of $75,000. 22 | IV. CONCLUSION 23 For the foregoing reasons, the Court DENIES Plaintiff's Motion to Remand 24 | (Dkt. No. 32). 9 I 25 || Dated: December 1, 2020 () . HONORABLE ANDRE BIROTTE JR. UNITED STATES DISTRICT COURT JUDGE

28 6.