Yin v. Commerce West Insurance Company

• Court: District Court, W.D. Washington
• Decided: October 3, 2025
• Docket: 2:25-cv-01159
• Status: Unknown

Opinion

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5 6 7 UNITED STATES DISTRICT COURT 8 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 HENRY YIN, CASE NO. 2:25-cv-01159-LK 11 Plaintiff, ORDER DENYING MOTION TO 12 v. REMAND AND ORDERING DEFENDANT TO SHOW CAUSE 13 COMMERCE WEST INSURANCE COMPANY, doing business as “MAPFRE 14 Insurance”, 15 Defendant. 16

17 This matter comes before the Court on Plaintiff Henry Yin’s Motion to Remand. Dkt. No. 18 10. For the reasons provided below, the Court denies the motion. However, the Court ORDERS 19 Defendant MAPFRE to show cause why this case should not be remanded for lack of complete 20 diversity between the parties. 21 I. BACKGROUND 22 This case involves an insurance coverage dispute concerning a water leak in Yin’s 23 condominium unit. Dkt. No. 1-1 at 2–3. According to the Complaint, Commerce West Insurance 24 Company—doing business as “MAPFRE”—issued an insurance policy for Yin’s condominium 1 unit that was in force “from around August 28, 2023 to August 28, 2024.” Id. at 3. The policy 2 purportedly “provided insurance coverage for damage caused by sudden accidental leak from an 3 appliance.” Id. “Around April 27, 2024, Mr. Yin’s condo unit suffered damage from an accidental 4 leak from an appliance,” which caused damage to both Yin’s unit and the unit below his. Id. While

5 MAPFRE confirmed coverage for “the reported damage to Mr. Yin’s unit,” it denied coverage for 6 the unit below. Id. “[M]itigation and repair of the damage to the unit below Mr. Yin’s unit” was 7 approximately $16,790.69, which MAPFRE refused to pay. Id. at 4. 8 On February 6, 2025, Yin filed suit in King County Superior Court, alleging state law 9 claims of insurance bad faith, violations of the Washington Consumer Protection Act (“CPA”), 10 and breach of contract. Id. at 1, 4–5. The Complaint seeks monetary damages “in an amount to 11 fairly compensate Plaintiff for all consequential, special, and general damages caused by 12 MAPFRE’s wrongful acts and omissions,” as well as attorney’s fees and costs “as allowed by 13 law.” Id. at 5.1 14 On June 20, 2025, MAPFRE removed the case to this Court pursuant to 28 U.S.C. §§ 1332,

15 1441, and 1446. Dkt. No. 1 at 1–2. MAPFRE says that the Court has diversity jurisdiction because 16 the parties are completely diverse and “proper inclu[sion]” of “enhanced damages . . . and attorney 17 fees” pushes the amount in controversy over $75,000. Id. at 3–5. Yin seeks remand, arguing that 18 MAPFRE impermissibly removed this case more than 30 days after “learning the amount in 19 controversy exceeded $75,000,” as required by Section 1446(b)(3). Dkt. No. 10 at 6 (citation 20 modified). 21 22 23

1 Mr. Yin also seeks non-monetary relief, including “an order requiring Mapfre to better train its employees to properly 24 comply with the Washington Administrative Code insurance regulations.” Id. 1 II. DISCUSSION 2 The Court first evaluates Yin’s motion for remand based on MAPFRE’s allegedly late 3 removal. The Court then sua sponte addresses MAPFRE’s inadequate showing of the parties’ 4 citizenship.

5 A. The Court Denies Yin’s Motion to Remand 6 MAPFRE says it first learned that Yin “was seeking damages in excess of $75,000” on 7 May 23, 2025, via an email from Yin’s counsel. Dkt. No. 1 at 3; see also Dkt. No. 1-1 at 37–38. 8 In that email, Yin’s counsel provided MAPFRE with a settlement offer stating that, after adding 9 attorney’s fees and additional living expenses, “[t]he total damages are $86,819.” Dkt. No. 1-1 at 10 37. However, Yin points out that this was not his first settlement offer. On April 7, 2025, Yin 11 provided MAPFRE with a settlement demand for $65,200. Dkt. No. 11 at 13. The demand 12 proposed a “global settlement for $65,200,” a sum that included attorney’s fees of $6,000. Id. Yin 13 says this April 7, 2025 settlement demand triggered the 30-day removal period, Dkt. No. 10 at 2, 14 meaning MAPFRE was barred from removing the case after May 7, 2025.

15 Federal jurisdiction exists over civil actions where the amount in controversy exceeds 16 $75,000 and the action is between citizens of different states. 28 U.S.C. § 1332(a)(1). Removal of 17 a civil action is permissible when the federal court would have original jurisdiction over the action 18 filed in state court. Id. § 1441(a). If a case is not removable based on the initial pleading but later 19 becomes removable, a defendant must remove the case “within thirty days . . . from which it may 20 first be ascertained that the case is one which is or has become removable.” Id. § 1446(b)(3). 21 If at any time a district court determines that “less than a preponderance of the evidence 22 supports the right of removal,” it must remand the action to state court. Hansen v. Grp. Health 23 Coop., 902 F.3d 1051, 1057 (9th Cir. 2018). The removal statutes are strictly construed against

24 removal jurisdiction, id. at 1056–57, and if there is “doubt regarding the right to removal,” the 1 Court should remand the case, Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 2 (9th Cir. 2003). 3 To determine whether MAPFRE timely removed this case, the Court must determine 4 whether “a preponderance of the evidence” would have supported removal by MAPFRE following

5 Yin’s April 7, 2025 settlement demand, Dkt. No. 11 at 13. Put another way, could MAPFRE have 6 “ascertained” that the case was removable when it received Yin’s April 7, 2025 settlement offer 7 for $65,200, Dkt. No. 11 at 13? 28 U.S.C. § 1446(b)(3). For the reasons stated below, the answer 8 is no. 9 Yin does not contest that the Court can rely on his settlement demands to establish the 10 amount in controversy, and in the Ninth Circuit, a settlement offer “is relevant evidence of the 11 amount in controversy if it appears to reflect a reasonable estimate of the plaintiff’s claim.” Cohn 12 v. Petsmart, Inc., 281 F.3d 837, 840 & n.3 (9th Cir. 2002) (per curiam). Here, Yin’s settlement 13 demands seem to reflect a reasonable estimate of his costs, current attorney’s fees, and CPA 14 damages. Dkt. No 1-1 at 37–38; Dkt. No. 11 at 13.

15 Yin says that the Court must remand because “any doubt that the amount [in] controversy, 16 including attorney fees, would exceed $75,000 . . . vanished when Mapfre received [his] April 7, 17 2025 settlement proposal.” Dkt. No. 10 at 2. But the April 7, 2025 offer proposed a global 18 settlement of $65,200—including $6,000 in attorney’s fees that Yin had accrued to that date. Dkt. 19 No. 11 at 13. The $65,200 offer was therefore $9,800.01 short of exceeding $75,000—the required 20 amount in controversy for diversity jurisdiction, 28 U.S.C. § 1332(a)(1). Yin nevertheless argues 21 that MAPFRE should have known that the amount in controversy requirement was met because 22 future attorney’s fees, together with “general damages” and “treble damages,” would have totaled 23 “far more than the $75,000 requirement[.]” Dkt. No. 10 at 2. Accordingly, Yin contends that

24 1 MAPFRE was required to remove the case within 30 days of the April 7, 2025 settlement offer. 2 Id. 3 MAPFRE acknowledges that “both present and future attorneys’ fees are included in the 4 amount in controversy determination.” Dkt. No. 1 at 4; see also Fritsch v. Swift Transp. Co. of

5 Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018 (concluding that “a court must include future 6 attorneys’ fees recoverable by statute or contract when assessing whether the amount-in- 7 controversy requirement is met”). But according to MAPFRE, the $9,800.01 gap between the April 8 settlement offer and the $75,000 amount in controversy requirement could only have been bridged 9 by impermissible speculation about future attorney’s fees. Dkt. No. 13 at 4–5. Accordingly, as of 10 the April 7, 2025 settlement offer, MAPFRE argues that it could not have established the amount 11 in controversy requirement by a preponderance of the evidence. Id. at 5. 12 The Court agrees. Yin’s April 7, 2025 offer proposed a “global settlement” of $65,200, 13 which included $6,000 in attorney’s fees accrued to that date. Dkt. No. 11 at 13. The proposal was 14 $9,800.01 short of the $75,000 jurisdictional minimum. Yin had only accrued $6,000 in attorney’s

15 fees at that stage in litigation, Dkt. No. 11 at 13, suggesting that it could have taken a significant 16 amount of time to bridge the nearly $10,000 gap. Calculation of future attorney’s fees does not 17 necessarily extend through trial—or even through discovery. “[D]istrict courts are well equipped 18 . . . to determine when a fee estimate is too speculative because of the likelihood of a prompt 19 settlement.” Fritsch v. Swift Transportation Co. of Arizona, LLC, 899 F.3d 785, 795 (9th Cir. 20 2018). Considering this, as well as the fact that the parties were already exchanging settlement 21 offers, the Court would have acted well within the bounds of the law be remanding such a 22 prematurely removed case. See Hansen, 902 F.3d 1057 (9th Cir. 2018) (“If a district court 23 determines at any time that less than a preponderance of the evidence supports the right of removal,

24 it must remand the action to the state court”); Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1 1089, 1090 (9th Cir. 2003) (reasoning that courts should remand cases when there is “doubt 2 regarding the right to removal.”).2 3 For the reasons laid out above, MAPFRE could not have “ascertained” that the case was 4 removable as of April 7, 2025. See 28 U.S.C. § 1446(b)(3). Therefore, MAPFRE was not barred

5 from removing the case after that date. See id. The evidence before the Court demonstrates that 6 MAPFRE first “ascertained” that the case was removable when it received Yin’s May 23, 2025 7 settlement offer for $86,819,” Dkt. No. 1-1 at 37, so MAPFRE’s removal on June 20, 2025 was 8 timely. 28 U.S.C. § 1446(b)(3). 9 B. MAPFRE Fails to Adequately Show the Parties’ Citizenship. 10 Federal courts “have an independent obligation to determine whether subject-matter 11 jurisdiction exists[.]” Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006); see also Fed. R. Civ. P. 12 12(h)(3). This determination is an “inflexible” threshold requirement that must be made “without 13 exception, for jurisdiction is power to declare the law and without jurisdiction the court cannot 14 proceed at all in any cause.” Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999) (citation

15 modified). Indeed, “[i]f at any time before final judgment it appears that the district court lacks 16 subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c) (emphasis added). 17 Here, MAPFRE does not adequately set forth either party’s citizenship. MAPFRE alleges 18 that it “is a foreign insurer incorporated in the state of Rhode Island” and therefore it “is an [sic] 19 Rhode Island resident” for purposes of diversity jurisdiction. Dkt. No. 1 at 3. Properly alleging an 20

2 Mr. Yin responds that MAPFRE is trying to “have it both ways” by including attorney’s fees to meet the amount in 21 controversy following the May 23, 2025 settlement offer but saying that “it did not need to consider attorney fees when it evaluated Plaintiff’s April 7, 2025 settlement email.” Dkt. No. 14 at 4. This argument misses important nuance. 22 The May 23, 2025 settlement offer exceeded the amount in controversy requirement when accounting for attorney’s fees already accrued. See Dkt. No. 1-1 at 37. The April 7, 2025 settlement offer also included accrued attorney’s fees, 23 but the sum did not reach the amount in controversy requirement. See Dkt. No. 11 at 13. It was $9,800.01 short. See id. The Court agrees that MAPFRE was required to consider future attorney’s fees in calculating the amount in controversy, Fritsch, 899 F.3d at 794, but—unlike the April 7, 2025 settlement offer—the May 23, 2025 settlement 24 offer reached $75,000 without speculation as to future attorney’s fees. 1 insurance company’s citizenship involves determining whether it should be treated as an 2 incorporated or unincorporated entity based on how the relevant state law treats it. See Mut. Serv. 3 Cas. Ins. Co. v. Country Life Ins. Co., 859 F.2d 548, 550–51 (7th Cir. 1988) (observing that Texas 4 mutual insurance company was an unincorporated association under Texas law, while Minnesota

5 law treated mutual insurance company as a corporation); see also, e.g., S.P. v. Spinks, No. 6 2:20CV995-MHT, 2021 WL 1383233, at *1 (M.D. Ala. Apr. 12, 2021) (“Whether State Farm 7 should be considered a corporation for diversity purposes depends on state law.” (citation 8 modified)). An insurance company that is a corporation for diversity purposes is a citizen of not 9 only the state in which it is incorporated, but also the state where it has its principal place of 10 business. 28 U.S.C. § 1332(c)(1). An insurance company that is unincorporated for purposes of 11 diversity jurisdiction has the citizenship of each of its members. Americold Realty Tr. v. Conagra 12 Foods, Inc., 577 U.S. 378, 381 (2016). 13 The Court has been unable to verify that MAPFRE is a Rhode Island corporation after 14 searching Rhode Island’s registered corporations. See Rhode Island Department of State Entity

15 Search, https://business.sos.ri.gov/CorpWeb/CorpSearch/CorpSearch.aspx (last visited September 16 15, 2025). But even assuming that MAPFRE is indeed a corporation, as it claims to be, MAPFRE 17 fails to allege its principal place of business, and “[f]ailure to make proper and complete allegations 18 of diversity jurisdiction relegates a litigant to . . . jurisdictional purgatory[.]” Fifty Assocs. v. 19 Prudential Ins. Co. of Am., 446 F.2d 1187, 1190 (9th Cir. 1970). 20 MAPFRE’s notice of removal further alleges that Yin “is a resident of King County, 21 Washington.” Dkt. No. 1 at 3. But individuals are citizens of the place in which they are domiciled, 22 which is not necessarily the same as where they reside. Kanter v. Warner-Lambert Co., 265 F.3d 23 853, 857 (9th Cir. 2001) (“A person residing in a given state is not necessarily domiciled there,

24 and thus is not necessarily a citizen of that state.”). 1 Accordingly, the Court orders MAPFRE to show cause for why this case should not be 2 remanded for lack of subject-matter jurisdiction due to lack of complete diversity of citizenship. 3 III. CONCLUSION 4 Based on the foregoing analysis, the Court DENIES Yin’s motion to remand, Dkt. No. 10,

5 and ORDERS MAPFRE to show cause for why this case should not be remanded for lack of 6 complete diversity of citizenship. If MAPFRE provides supplemental briefing clarifying the 7 parties’ citizenship and establishing the Court’s jurisdiction within seven days, the Court will 8 discharge this Order. 9 Dated this 3rd day of October, 2025. 10 A 11 Lauren King United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23