MINUTE ENTRY

JAY C. ZAINEY, United States District Judge

Before the Court is a Motion To Remand (Rec. Doc. 2) filed by plaintiffs, Henry and Cindi Poynot. Defendant, State Farm Mutual Insurance Company, opposes the motion. The motion, set for hearing on August 14, 2002, is before the Court on the briefs without oral argument. For the reasons that follow, the motion is GRANTED IN PART AND DENIED IN PART.

Factual Background

Plaintiffs sued Anthony Hicks and their uninsured motorist carrier, State Farm Mutual Automobile Association, for damages allegedly arising out of a two car collision. Suit was originally filed in the Civil District Court for the Parish of Orleans but State Farm removed the case to this Court.

Plaintiffs claim that Hicks, an uninsured driver, rear-ended Henry Poynot on Interstate-10 in the Parish of Orleans. Henry Poynot seeks damages for his past, present and future mental and physical pain and suffering; past, present and future disability; past, present, and future medical expenses; lost wages and loss of earning capacity, as well as property damage. Cindi Poynot, Henry's wife, seeks damages for loss of consortium. Plaintiffs petition alleges that these damages exceed $50,000, the state court threshold quantum for a trial by jury. Additionally, Plaintiffs seek damages, penalties, and attorney's fees pursuant to La. R.S. 22:658 and 22:1220 of the Insurance Code for State Farm's alleged arbitrary and capricious failure to settle or pay their claims. Notwithstanding the litany of damages cited, the petition does not state with any specificity how Mr. Poynot was physically injured. However, the record contains two letters from Mr. Poynot's neurologist. Those letters explain that Mr. Poynot requires a left L5-S1 laminotomy and disectomy at a cost of $4200.00 with a potential for 4-8 weeks of recovery depending upon the post-operative activity he sought to pursue. Rec. Doc. 1, Exh. C.

State Farm removed the suit alleging subject matter jurisdiction pursuant to 28 U.S.C. § 1332, diversity of citizenship.

The Motion to Remand

Plaintiffs move to remand the case back to state court on two grounds: 1) the parties are not of diverse citizenship, and 2) the amount in controversy does not exceed $75,000. Plaintiffs also seek costs and attorney's fees of $3000 as a result of State Farm's having improperly removed this case.

On the first issue, Plaintiffs argue that pursuant to 28 U.S.C. § 1332 (c)(1), State Farm is deemed to be a citizen of its insureds' state, in this case Plaintiffs, therefore the parties are not of diverse citizenship. On the second issue, the amount in controversy does not exceed $75,000 because State Farm has already tendered $55,000 of Plaintiffs' $100,000 policy leaving only $45,000 exclusive of costs, expenses, and attorneys fees in controversy.

In opposition, State Farm argues that 28 U.S.C. § 1332 does not affect an insurer's citizenship when a plaintiff sues his own uninsured motorist carrier. As for the amount in controversy, State Farm asserts that $50,000 of remaining coverage is actually available to Henry Poynot and Ms. Poynot's loss of consortium claim would come out of the $300,000 in aggregate coverage available under the policy. State Farm also argues that Ms. Poynot's loss of consortium claim could be astronomical although there is no way of knowing for sure at this time. State Farm also argues that Plaintiff's arguments regarding the jurisdictional amount ignore the possibility of penalties and attorney's fees under La. R.S. 22:658 and 22:1220.

By way of a reply memorandum, Plaintiffs assert that they have informed that they are willing to settle their claims for $15,000. Thus, the jurisdictional amount clearly is not met. As for the loss of consortium claim, it is derivative of Henry's Poynot's claim and therefore must be paid out of the $50,000 allocated to his injuries. Finally, uninsured motorist coverage is part of a liability policy, and so applying Louisiana law instead of federal law, State Farm should be deemed to be a citizen of Louisiana.

By way of supplemental memorandum, State Farm points out that non-binding post-removal stipulations, such as offers to settle, cannot defeat diversity jurisdiction.

Discussion

As an initial matter, the Court rejects Plaintiffs' contention that the parties are not completely diverse. Federal law, not state law, governs whether federal jurisdiction exists. On this note, Plaintiffs' attempt to rely on 28 U.S.C. § 1332 to defeat this Court's jurisdiction is unpersuasive. The statute on its face applies to polices of liability insurance and courts in this circuit have repeatedly recognized that an insured's suit against his own UM carrier does not come within the ambit of section 1332. See, e.g., Gonzalez v. Government Employees Ins. Group, 2000 WL 235236 (E.D. La. Feb. 28, 2000). But see Rayburn v. Colonial Penn Franklin Insurance Co., 1998 WL 883321 (E.D. La. Dec. 15, 1998) (applying Louisiana law). Plaintiffs are citizens of Louisiana, Hicks is a resident of Michigan, and State Farm is a citizen of the state of Illinois. Section 1332(c)(1) does not operate to change that. Thus, the parties are of diverse citizenship.

Furthermore, for purposes of determining whether this case was properly removed, Plaintiffs' $15,000 settlement demand is without legal significance. It is well-settled that post-removal events, such as a change in the damage request or an offer of settlement, cannot deprive a court of jurisdiction once it has attached. Cavallini v. State Farm Mutual Auto Ins. Co., 44 F.3d 256, 265 (5th Cir. 1995). Rather, jurisdictional facts that support removal are to be judged at the time of removal. Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000). Thus, Plaintiffs' settlement demand is not probative of whether this Court has subject matter jurisdiction over the suit.

Having clarified the issue of State Farm's citizenship and the irrelevance of Plaintiffs' $15,000 settlement demand, the Court now turns its attention to the determinative issue in this case: whether the amount in controversy exceeds $75,000.

The Fifth Circuit has a clear analytical framework for evaluating jurisdiction in cases removed from Louisiana state courts where no damage quantum is asserted in the petition. In such a situation the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. Simon v. Wal-Mart Stores, Inc., 193 F.3d 848, 850 (5th Cir. 1999). The defendant can meet this burden in one of two ways: (1) by demonstrating that it is "facially apparent" from the petition that the claim exceeds $75,000, or (2) by setting forth facts in controversy, either by affidavit or in the removal petition, that support a finding of the requisite amount. Id.

The parties agree that Mr. Poynot only has $50,000 of coverage remaining since State Farm has already tendered partial payment on his policy. The law in this circuit has long been that the amount in controversy between a plaintiff and an insurer is the value of the policy and not the amount claimed in damages. Payne v. State Farm Mut. Auto. Ins. Co., 266 F.2d 63, 65 (5th Cir. 1959) (citing Carnes Co. v. Employers' Liability Assurance Corp., 101 F.2d 739 (5Z Cir. 1939)), cited with approval by Hartford Ins. Grp. v. Lou-Con, Inc., 293 F.3d 908, 911 (5th Cir. 2002). Although Mrs. Poynot has asserted a claim for loss of consortium, a claim which State Farm asserts would be paid out of the $300,000 aggregate coverage, it is unclear whether State Farm is arguing that the Poynots' claims should be aggregated to meet the jurisdictional amount — something typically not allowed — or whether her own claim exceeds $75,000. Either way the value of Ms. Poynot's consortium claim at this juncture is wholly speculative and therefore is of limited use in helping State Farm to meet its burden.

Given then that Mr. Poynot's claim only has $50,000 in controversy, the question remaining is whether State Farm has shown by a preponderance of the evidence that his claims for penalties and attorney's fees pursuant to the Louisiana Insurance Code would exceed $25,000. State Farm argues that if found liable under these two statutes, it could face possible penalties and attorney's fees in the range of $100,000.

Although Plaintiffs cannot recover penalties under both La. R.S. 22:658 and 1220, those penalty provisions must be considered when assessing the jurisdictional amount. Section 658 could potentially allow for a 10 percent penalty of $5000. See La. R.S. 22:658(B)(1), supra note 2. Section 1220, however, allows for a penalty of the greater of twice the damages sustained from a violation of section 1220, or $5000. See La. R.S. 22:1220(C), supra note 3. As the Court explained in Bagneris v. State Farm Mutual Insurance Company, 1995 WL 683876 (E.D. La. Nov. 15, 1995), plaintiff must show actual damages resulting from a breach of section 1220 and if he fails to do so, can only recover $5000 at most. Although the petition alleges damages resulting from the breach of section 1220, those damages are alleged with no specificity whatsoever. As the Bagneris court also recognized, attorney fee awards under section 658 are typically less than $7500.

Considering the foregoing, the Court concludes that State Farm has failed to show that the amount in controversy requirement is met even after Plaintiffs' claims under sections 658 and 1220 are considered. All of State Farm's arguments are grounded on speculation, however, the Court's subject matter jurisdiction must be rooted in far more stable soil. Therefore, the Court concludes that subject matter jurisdiction is lacking.

Accordingly;

IT IS ORDERED that the Motion To Remand (Rec. Doc. 2) filed by plaintiffs, Henry and Cindi Poynot, should be and is hereby GRANTED. This matter is REMANDED to the Civil District Court for the Parish of Orleans pursuant to 28 U.S.C. § 1447 (c);

IT IS FURTHER ORDERED that Plaintiffs' request for attorney's fees and costs is DENIED. .