Opinion
CIVIL ACTION NO. 03-6874
April 7, 2004
MEMORANDUM ORDER
Presently before the Court is Plaintiff's Motion to Remand. (Doc. No. 5.) Defendant removed this case from the Court of Common Pleas of Philadelphia County. Plaintiff argues that we should remand this case because Defendant has not shown that the amount in controversy exceeds $75,000, the amount required for diversity jurisdiction. 28 U.S.C. § 1332(a). For the following reasons, Plaintiff's Motion will be granted.
Plaintiff was injured in a motor vehicle accident. (Compl. ¶¶ 3, 5.) She is undergoing medical treatment and is suing Defendant for benefits under an insurance policy issued by Defendant. ( Id. ¶ 5.) Plaintiff and Defendant are citizens of different states. ( Id. ¶¶ 1-2.) Plaintiff asks the Court to award her "benefits, plus treble damages, interest, costs, and counsel fees in a sum in excess of [Pennsylvania's] arbitration limits." ( Id. ¶ 13.) Plaintiff's Complaint states that Plaintiff seeks damages in excess of $50,000. There is no other indication in the Complaint as to the amount in controversy.
While attorneys' fees and costs are generally excluded when calculating the amount in controversy, they are included in the calculation when a plaintiff can recover fees and costs under a specific statute. Suber v. Chrysler Corp., 104 F.3d 578, 585 (3d Cir. 1997). Here, Plaintiff sues under Pennsylvania's statute governing bad faith claims in insurance actions which permits Plaintiff to recover attorneys' fees and costs. 42 PA. CONS. ST. § 8371(3). Thus, in this case attorneys' fees and costs are included in calculating the amount in controversy. Punitive damages are also included in the calculation. Penn v. Wal-Mart Stores, Inc., 115 F. Supp.2d 557, 570 (D.N.J. 2000).
In the Pennsylvania Court of Common Pleas of Philadelphia County, where Plaintiff filed her complaint, all cases seeking damages less than $50,000 must proceed to compulsory arbitration. Phila. Civ. R. 1301; 42 PA. CONS. STAT. § 7361(b)(2).
On February 27, 2004, we denied Plaintiff's motion to remand without prejudice. (Doc. No. 8.) We concluded that Defendant had not met its burden of showing to a legal certainty that the amount in controversy exceeded $75,000. However, instead of remanding the case, we allowed Defendant to conduct jurisdictional discovery to determine the amount in controversy. The parties completed jurisdictional discovery and entered into certain stipulations related to the amount in controversy. After review of the stipulation we conclude that Defendant still has not met the burden of showing to a legal certainty that the amount in controversy exceeds $75,000. Accordingly, we will remand this case to state court.
The removal statute, 28 U.S.C. § 1441, must be strictly construed to honor Congress' intent to restrict federal diversity jurisdiction. Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004). When the parties are citizens of different states, we will exercise jurisdiction over a removed case if the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). The removing party bears the burden of proving to a legal certainty that federal subject matter jurisdiction exists. Samuel-Bassett, 357 F.3d at 396. All doubts about jurisdiction must be resolved in favor of remand. Id. at 403.
Plaintiff's Complaint does not seek a precise amount of damages. When a complaint does not seek a precise damage amount, we may make an independent appraisal of the value of the claim to determine whether the requirements for diversity jurisdiction are met. Angus v. Shiley Inc., 989 F.2d 142, 146 (3d Cir. 1993). Besides the complaint, we may look to the notice of removal, stipulations, and discovery evidence to determine the value of the claim at issue. The Bachman Co. v. MacDonald, 173 F. Supp.2d 318, 323 (E.D. Pa. 2001).
Pursuant to our February 27, 2004 Order, the parties engaged in jurisdictional discovery with respect to the amount in controversy. After discovery, the parties stipulated to the following facts: (1) the insurance policy at issue allows a maximum of $25,000 in coverage; (2) approximately $5,000 to $6,000 has been paid by Defendant against that limit, leaving about $19,000 to $20,000 in coverage remaining under the policy; (3) Plaintiff is still receiving treatment for her injuries and bills for such treatment continue to be submitted to Defendant; (4) few to none of the bills submitted to Defendant remain unpaid. (Letter of Moira Clare Duggan, dated March 31, 2004.)
Defendant claims that it has paid all of the bills submitted to it on behalf of Plaintiff. Plaintiff claims that the unpaid "bills at issue are few to none."
Though there are few or no unpaid medical bills in dispute, Defendant argues that the amount in controversy exceeds $75,000. Defendant claims that the $19,000 to $20,000 in coverage remaining under the policy is in dispute. When that amount is added to the amount that could be awarded in punitive damages, attorneys' fees, and costs, Defendant claims the jurisdictional threshold is met. We disagree. First of all, exclusive of punitive damages, attorneys' fees, and costs, very little or no money seems to be in dispute in this case. The parties agree that there are few or no unpaid medical bills in dispute. Furthermore, there is no indication that Defendant will refuse to pay any future bills submitted to it on behalf of Plaintiff. Thus, it appears that punitive damages, attorneys' fees, and costs will make up the bulk of any recovery to Plaintiff. In such a case, we must closely scrutinize the claims to see if the jurisdictional threshold is met. See Wal-Mart Stores, 116 F. Supp.2d at 570 ("As with claims for attorneys' fees, [claims for punitive damages] are subject to close scrutiny when, in order to satisfy the [jurisdictional] threshold, they need to represent a large share of any possible recovery.") (citing Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 222-23 (3d Cir. 1999)).
Defendant offers no evidence as to the amount of attorneys' fees and punitive damages that could be awarded in this case. For example, Defendant offers no evidence that this case is so complex that Plaintiff's attorneys' fees will be substantial. Defendant also offers no evidence that a substantial punitive damage award might be appropriate. In short, Defendant asks that we conclude that a potential award of punitive damages, attorneys' fees, and costs will exceed $75,000, without any evidence that it will exceed that amount. It is the Defendant's burden to show to a legal certainty that the amount in controversy exceeds $75,000. "If this Court has to guess, defendant has not proved its point." Irving v. Allstate Indem. Co., 97 F. Supp.2d 653, 656 (E.D. Pa. 2000) (remanding case because the defendant presented no evidence that the potential punitive damages, attorneys' fees, interests and costs would combine with other damages to exceed the jurisdictional threshold); Wal-Mart Stores, 116 F. Supp.2d at 570-71 (remanding case because defendant did not meet its burden to show that the potential damages would exceed the jurisdictional threshold). Defendant is asking us to guess. Accordingly, we will remand this case to the state court.
An appropriate Order follows.
ORDER
AND NOW, this 7th day of April, 2004, upon consideration of Plaintiff's Motion to Remand (Doc. No. 5), it is ORDERED that Plaintiff's Motion is GRANTED. It is further ORDERED that this matter shall be REMANDED to the Court of Common Pleas of Philadelphia County.IT IS SO ORDERED.