Vanderloo v. Allstate Northbrook Indemnity Company

Opinion

1 2 6 7 EVAN VANDERLOO, Case No. 23-cv-04964-BLF

8 Plaintiff, ORDER DENYING MOTION TO 9 v. REMAND

10 ALLSTATE NORTHBROOK [Re: ECF No. 13] INDEMNITY COMPANY, 11 Defendant. 12 13 Plaintiff Evan Vanderloo filed this suit against Defendant Allstate Northbrook Indemnity 14 Company (“Allstate”) in Santa Clara County Superior Court, asserting state law claims relating to 15 injuries sustained in a car accident. Allstate removed the case to federal district court based on 16 diversity jurisdiction. See ECF No. 1 (“Not. of Removal”) ¶ 1. 17 Mr. Vanderloo moves to remand the case to state court, arguing that the notice of removal 18 was untimely because it was filed more than thirty days after service of the summons and 19 complaint. ECF No. 13 (“Mot.”); ECF No. 17 (“Reply”). Mr. Vanderloo does not dispute the 20 existence of diversity jurisdiction; the motion to remand is based solely on procedural grounds. 21 Id. Allstate contends that removal was timely because the complaint does not disclose that the 22 amount in controversy exceeds $75,000 and the notice of removal was filed within thirty days 23 after Allstate obtained a Statement of Damages showing that the amount in controversy exceeds 24 $75,000. ECF No. 14 (“Opp.”). 25 The Court finds the motion appropriate for disposition without oral argument, and hereby 26 VACATES the hearing scheduled for April 11, 2024. See Civ. L.R. 7-1(b). For the reasons 27 described below, Plaintiff’s motion to remand is DENIED. 2 Plaintiff Evan Vanderloo was a passenger in his friend’s car when he was injured in a car 3 accident. ECF No. 13, Ex. A (“Compl.”) ¶¶ 2, 4. After the accident, Mr. Vanderloo made a claim 4 against the at-fault driver of the other car for his alleged bodily injuries including medical 5 expenses and recovered $15,000 from the other driver. Id. ¶¶ 4, 31. After he settled with the other 6 driver in March 2018, Mr. Vanderloo submitted an underinsured motorist (“UIM”) claim to 7 Allstate as an insured passenger under his friend’s auto policy for alleged bodily injuries. Id. ¶ 4. 8 Mr. Vanderloo “submitted in total over $200,019.71 in Medical Specials” with his UIM demand. 9 Id. ¶¶ 5-6. Because of a dispute over the value of the claim, Mr. Vanderloo demanded UIM 10 arbitration. Id. ¶¶ 8, 33, 37. Before the arbitration, Allstate tendered the remaining $85,000 policy 11 limit for the claim (for bodily injuries including medical expenses). Id. ¶¶ 39, 40, 61. After being 12 paid the policy limit, Mr. Vanderloo filed this action against Allstate for three claims: 1) breach of 13 contract, 2) tortious breach of the implied covenant of good faith, and 3) bad faith denial of 14 insurance coverage. Id. ¶¶ 44, 48, 49, 50, 51(e), 59. 15 Allstate was served with the complaint on June 14, 2023. ECF No. 13, at Declaration of 16 Mitch Oviedo (“Oviedo Decl.”) ¶ 10. Allstate served a request for a statement of damages, which 17 Mr. Vanderloo served on August 30, 2023. ECF No. 1-1 (Badawi Decl.) ¶¶ 7-8; Not. of Removal, 18 Ex. F (“Statement of Damages”). In his Statement of Damages, Mr. Vanderloo disclosed that he 19 was seeking more than $6.2 million in damages. Statement of Damages at 1. On September 27, 20 2023, Allstate filed a notice of removal in this Court. Not. of Removal. 22 “A defendant may remove an action to federal court based on federal question jurisdiction 23 or diversity jurisdiction.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) 24 (citing 28 U.S.C. § 1441). “The mechanics and requirements for removal are governed by 28 25 U.S.C. § 1446.” Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1139 (9th Cir. 2013). 26 “Section 1446(b) identifies two thirty-day periods for removing a case.” Id. (internal quotation 27 marks and citation omitted). “The first thirty-day removal period is triggered if the case stated by 1 Circuit has held that for the first thirty-day removal period to apply, “the ground for removal must 2 be revealed affirmatively in the initial pleading.” Id. (internal quotation marks omitted). If the 3 ground for removal does not appear from the face of the initial pleading, the second thirty-day 4 removal period is triggered when “the defendant receives a copy of an amended pleading, motion, 5 order or other paper from which removability may first be ascertained.” Id. (internal quotations 6 omitted). 7 A party who contests removal may file a motion to remand. See 28 U.S.C. § 1447(c). “A 8 motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction 9 must be made within 30 days after the filing of the notice of removal[.]” Id. “[T]he burden is on 10 the party removing the case from state court to show the exercise of federal jurisdiction is 11 appropriate.” Kuxhausen, 707 F.3d at 1141. 13 The Court first addresses Allstate’s request for judicial notice of the insurance policy. ECF 14 No. 14-1 (“Policy”). Plaintiff does not object. The Ninth Circuit has endorsed the practice of 15 “considering facts presented in the removal petition as well as any ‘summary-judgement-type 16 evidence relevant to the amount in controversy at the time of removal.’” Valdez v. Allstate Ins. 17 Co., 372 F.3d 1115, 1117 (9th Cir. 2004) (internal quotations omitted). Thus, the Court will grant 18 judicial notice and consider the Policy. 19 The Court now turns to the issue of remand. Allstate filed its notice of removal on 20 September 27, 2023, more than 30 days after Allstate was served with the complaint on June 14, 21 2023, and less than 30 days after Allstate received the Statement of Damages from Plaintiff on 22 August 30, 2023. It is clear from the Statement of Damages that the amount in controversy 23 exceeds $75,000. Thus, the issue before the Court is whether it can be “determined through 24 examination of the four corners of” the complaint that the amount in controversy exceeds $75,000. 25 Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005). 26 Mr. Vanderloo argues that the complaint “clearly contained within its four corners that the 27 amount in controversy was clearly going to exceed $75,000.00.” Mot. at 6. Mr. Vanderloo points 1 he attributes to the subject incident.” Id. (citing Compl. ¶ 6). Mr. Vanderloo further argues that 2 the complaint “clearly stated that Plaintiff’s total recovery from litigation was a total of [sic] 3 $100,00.00 in previous proceedings involving the Personal Injury matter,” leaving “over 4 $100,000.00 in medical specials remained outstanding” relating to “past pain and suffering or 5 future pain and suffering.” Id. at 6-7. Thus, Mr. Vanderloo concludes, because Defendants did 6 not remove within 30 days of service of the complaint, “Defendants waived their right to remove 7 the case to State Court.” Id. at 8. 8 Allstate does not dispute that the complaint alleges the $200,019.71 UIM figure, Compl. ¶ 9 6, the $85,000 arbitration recovery, id. ¶¶ 39, 40, 61, or that Plaintiff recovered $15,000 from the 10 other driver, id. ¶¶ 4, 31. Rather, Allstate argues that the complaint’s allegation “that [Plaintiff] 11 submitted $200,019.71 in medical bills as part of his UIM demand before Allstate paid the policy 12 limit is irrelevant to establishing the amount in controversy” because the complaint “alleged 13 unreasonable delay in paying his medical expenses, not for the medical expenses themselves.” 14 Opp. at 6, 7 (emphasis in original). Allstate further argues that any additional but unspecified 15 damages do not establish an amount in controversy. Id. at 5. 16 The Court agrees with Allstate. The complaint seeks damages stemming from each of its 17 three claims: 1) breach of contract, Compl. ¶¶ 41-45; 2) tortious breach of the implied covenant of 18 good faith, id. ¶¶ 46-57; and 3) bad faith denial of insurance coverage, id. ¶¶ 58-63. Specifically, 19 Mr. Vanderloo seeks damages for “loss of timely use of benefits,” id. ¶ 45, “continued damages” 20 as a result of Allstate’s alleged delay in settling the matter, id. ¶ 49, interest, id. ¶ 45, 55, “financial 21 hardship and attorney’s fees and costs,” id. ¶ 56-57, damages “that were not fully compensated or 22 addressed when Allstate finally tendered the policy limits,” id. ¶ 61, and punitive damages, id. ¶ 23 49, 53, 63. The prayer for judgment also re-lists these categories of damages. Id. at 13. 24 The Court first addresses the $200,019.71 in Medical Specials. In the first party uninsured 25 motorist context, damages “occasioned by the vehicular accident itself” that “occur prior to the 26 insurer’s alleged breach of its duty of good faith and fair dealing . . . ‘cannot be a proximate result 27 of [any bad faith conduct], and therefore cannot serve as a proper measure of damages.’” State 1 Farmers Ins. Exch., 21 Cal. 3d 910, 925 (1978)). 2 The complaint alleges that “Mr. Vanderloo submitted in total over $200,019.71 in Medical 3 Specials that did not take into account his pain and suffering associated with the injuries sustained 4 on the date of INCIDENT.” Compl. ¶ 6. Because Mr. Vanderloo brought a first party claim under 5 his friend’s policy and fully collected the policy limit under it, he is not entitled to further damages 6 stemming from the accident. State Farm, 123 Cal. App. 4th at 1434; Neal, 21 Cal. 3d at 925. To 7 this point, the complaint never seeks damages related to “Medical Specials,” but instead seeks 8 damages for Allstate’s alleged unreasonable delay. See, e.g., Compl. ¶ 44 (Allstate “breached the 9 terms of the contract by failing to timely pay monies due under the Policy” and “delaying 10 payment of policy benefits” ), id. ¶ 49 (Allstate “unreasonably delayed payment” and “delayed 11 resolution of Plaintiff’s claim”), id. ¶ 50 (Allstate “unreasonably delayed payment four times” 12 and “lowballed and delayed Plaintiff’s claim”), id. ¶ 51 (Allstate handled “Plaintiff’s claim in a 13 dilatory manner, which has resulted in unnecessary delay in processing Plaintiff’s claim . . .”), id. 14 ¶ 59 (“Allstate breached its “obligations under the insurance Policy by . . . unreasonably delaying 15 in processing the claim or paying benefits due Plaintiff.”) (emphases added). Thus, the Court 16 finds that the $200,019.71 in “Medical Specials” do not contribute to the amount in controversy. 17 Much of the remaining damages sought are of an amount to be determined “at trial” or 18 “according to proof.” Courts have found pleadings with that level of specificity are “inadequate to 19 provide a defendant with notice that the amount in controversy is greater than that mandated by 28 20 U.S.C. § 1332.” Washington v. Allstate Ins. Co., No. 2:10-CV-02130 MCE, 2010 WL 4137286, at 21 *2 (E.D. Cal. Oct. 19, 2010). “To hold otherwise would require defendants to speculate as to the 22 amount of damages sought and would encourage early removals.” Id.; see also Harris, 425 F.3d 23 at 697. The complaint states several times that the damages amount will be proven at trial or 24 according to proof. See, e.g., Compl. ¶ 9 (“Plaintiff has been substantially damaged and has 25 incurred substantial costs . . . in an amount to be proven at the time of Trial”), id. ¶ 45 (“costs to 26 be proven at Trial”), id. ¶ 45 (“economic losses . . . in an amount to be proven at Trial”), ¶ 55 27 (“Plaintiff has suffered, and will continue to suffer in the future, damages under The Policies, plus 1 submitted at the time of Trial”), id. 4 61 (“damages in an amount to be determined at the time of 2 || Trial”). The prayer for judgment also re-lists several categories of damages with dollar amounts 3 that will be determined “according to proof.” Jd. at 13. The Court finds that these damages claims 4 || do not obviously lift the amount in controversy above $75,000. 5 Finally, the Court addresses the remaining damages sought, which are of unspecified 6 amounts. “[N]on-specific allegations of damages . . . do not translate into an ascertainable amount 7 || that puts [the defendant] on notice of removability.” Bullard v. Allstate Ins. Co., No. C-06-05550 8 RMW, 2006 WL 3734359, at *3 (N.D. Cal. Dec. 18, 2006). The complaint leaves several 9 || damages amounts unspecified. Compl. § 49 (“Such bad faith conduct constitutes a continuing tort 10 || which is causing Plaintiff continued damages”), id. § 53 (“Entitling Plaintiff to punitive damages 11 in an amount appropriate to punish or set an example of Allstate”), id. ¢ 56 (“Plaintiff has incurred 12 || substantial damages, including but not limited to, financial hardship and attorney’s fees and 13 costs”), id. J 63 (“Plaintiff seeks punitive damages . . . to the maximum extent allowed by the 14 law’). The Court finds that because the damages claims are unspecified, they do not obviously lift 3 15 the amount in controversy above $75,000. a 16 Because none of the damages sought obviously lift the amount in controversy above 3 17 $75,000, the first thirty-day period was not triggered by any of these general damages claims. 18 Allstate has therefore met its burden in showing that it was not clear from the four corners of the 19 complaint that the amount in controversy exceeded $75,000. Accordingly, the Court finds that 20 || Allstate’s removal in response to Plaintiff's Statement of Damages was timely. 21 || IV. ORDER 22 For the foregoing reasons, IT IS HEREBY ORDERED that Plaintiff's Motion to Remand 23 || is DENIED. 24 25 Dated: January 18, 2024

BETH LABSON FREEMAN 27 United States District Judge 28