Opinion
No: C 00-1566 MMC
June 13, 2001
ORDER GRANTING PLAINTIFF'S MOTION TO REMAND; VACATING HEARING
Before the Court is plaintiff Oxana Zhukovsky's motion to remand the instant action to state court pursuant to 28 U.S.C. § 1447(c). Defendant Allstate Insurance Co. filed opposition, to which plaintiff replied. The Court deems the matter appropriate for decision on the papers filed in support of and in opposition to the motion, VACATES the hearing scheduled for June 15, 2001, and rules as follows.
BACKGROUND
Plaintiff and defendant entered into a contract under which defendant provided plaintiff uninsured motorist coverage. (See Compl. at ¶ 7 and Ex. to Compl.)Plaintiff alleges that on September 30, 1995, her vehicle was struck by an uninsured motorist. (See id. at ¶ 12-14.) Plaintiff submitted to defendant a claim for benefits, which defendant did not pay. (See id. at ¶¶ 17.) Plaintiff's claim for uninsured motorist benefits was then arbitrated, and the arbitrator awarded plaintiff $30,900 in damages. (See Joint Case Management Statement filed April 27, 2001 at 2:7-11.) Thereafter, defendant paid the award. (See id. at 2:12.) Subsequently, on March 8, 2000, plaintiff filed the instant complaint in state court, alleging breach of contract, breach of the covenant of good faith and fair dealing, and related claims. In her complaint, plaintiff did not allege any specific amount in controversy.
On May 3, 2000, defendant removed plaintiff's complaint to federal district court, alleging jurisdiction on the basis of diversity. Defendant alleged that the parties were of diverse citizenship, (see Notice of Removal at ¶¶ 8-9), and that the amount in controversy exceeded $75,000. (See id. at ¶ 7.) Plaintiff now moves to remand on the ground that defendant cannot establish that the amount in controversy exceeds $75,000.
DISCUSSION
In a diversity case, where the amount of damages sought by a plaintiff is unclear, a removing defendant "bears the burden of actually proving the facts to support jurisdiction, including the jurisdictional amount." See Gaus v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir. 1992). The defendant must make such a showing by a preponderance of the evidence. See Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." See Gaus, 980 F.2d at 566. "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447 (c).
Plaintiff, in her complaint, seeks general damages, special damages, attorney's fees, and punitive damages, each in an amount unspecified. (See Compl., prayer at ¶¶ A, B.) Plaintiff offers evidence, however, that the value of her claim for attorney's fees is $11,981.33. (See Heffner Decl. at ¶ 7.) Moreover, in response to requests for admissions, plaintiff represented that her attorney's fees were the only "actual damages sustained." (See Mellema Decl., Ex. A at 2:5-6, 14-15.) Defendant offers no evidence to the contrary.
Defendant argues "[i]t is almost unimaginable that a plaintiff's verdict in this case would be $75,000 or less." (See Def.'s Opp. at 5:13.) In support thereof, defendant relies on its net worth of over twelve billon dollars, (see Todd Decl. at ¶ 2 and Ex. A) and on the results of a survey of "recent bad faith verdicts" prepared by attorney Joseph Louis Kish ("Kish"). (See Kish Decl. at ¶¶ 2, 3 and Ex. A.) Kish surveyed 60 verdicts rendered between July 1998 and June 2000, and calculated an average award of $4,108.470. (See id Ex. A.) Additionally, by defendant's calculations, 92.5% of the plaintiffs' verdicts cited in the Kish survey resulted in an award in excess of $75,000. Although the Court does not disagree that it can consider verdicts awarded in other cases as evidence of the amount in controversy, the evidence provided here is insufficient. District courts have held that where a defendant relies on verdicts in other cases to prove the amount in controversy, the defendant fails to meet its burden if it asserts that large awards have been made in other bad faith actions, yet makes no effort to compare the facts of those cases with the facts of the case at issue. See, eg., Conrad Assocs. v. Hartford Accident Indem. Co., 994 F. Supp. 1196, 1201 (N.D. Cal. 1998) (holding defendant failed to meet burden by citing cases in which punitive damages awards averaged in the millions of dollars); Haisch v. Allstate Ins. Co., 942 F. Supp. 1245, 1248 (D. Ariz. 1996) (holding, where defendant "failed to articulate why the particular facts that are alleged in the instant action might warrant extraordinary punitive damages," defendant could not rely on large punitive damages awards in other cases and defendant's wealth to establish amount in controversy).
The Court calculates the percentage at 87.1%.
Here, defendant fails to provide any information about the cases reported in the Kish survey, such as the nature of the loss and the nature of the behavior of the insurer. Further, the Kish survey only provides the total amount of the verdicts reported, without indicating the amount of the award attributable to compensatory as opposed to punitive damages. In those cases resulting in a large total award, in all likelihood there was a large underlying claim for compensatory damages, unlike the instant case where the "actual damages" claimed are less than $12,000. Additionally, to the extent defendant relies on an "average" award, such figure is meaningless in the abstract. For example, the "average' of one $1,000,000 award and one $10,000 award is $505,000, a figure which is not reflective of the true amount of either verdict. Accordingly, the Court finds the Kish survey provides insufficient evidence to establish that the amount in controversy exceeds $75,000.
The only exception is Sonnier v. Farmers Ins. Exch., which resulted in verdict in excess of $10 million dollars. (See Kish Decl., Ex. A at 35.) According to the kish survey, that case involved a claim of "bad faith termination of claim adjuster," (see id.), a claim very different from the one made in the instant action, and thus essentially irrelevant to the issue presented here.
In so finding, the Court has not relied on the evidence plaintiff offered to rebut defendant's showing. Plaintiff provided jury verdicts in bad faith insurance cases in which no punitive damages were awarded, or the total awarded, or the total award was $75,000 or less, or less, or where the defendant prevailed at trial. (See Heffner Decl., Exs. 2-5.) Plaintiff offers such verdicts to "demonstrate how precarious Allstate's assertion as to the jury value exceeding $75,000 is in the current jury verdict environment." (See Pl.'s Mot. to Remand at 6:19-20.) The issue, however, is not whether defendant will be found liable and compensatory and punitive damages are awarded, that award will exceed $75,000.
Finally, defendant relies on the fact that plaintiff, in response to an interrogatory served after the action was removed, did not confirm whether she is seeking damages in excess of $75,000. (See Mellema Decl., Ex. A.) Defendant argues that the Court should consider plaintiff's "refusal to stipulate to damages of no more than $75,000" as evidence that the amount in controversy exceeds that amount. (See Def.'s Opp. at 7:11-12.) The Court, however, will not consider plaintiff's "refusal to stipulate" as evidence that the amount in controversy exceeds $75,000. To do so would effectively shift the burden of proving the amount in controversy from defendant to plaintiff and essentially relieve every defendant of the need to establish the amount in controversy by the simple expedient of asking the plaintiff to so stipulate. See Valera v. Wal-Mart Stores, East, Inc., 86 F. Supp.2d 1109, 1112 (D.N.M. 2000) ("declin[ing] to draw any negative inference from [plaintiff's] refusal to stipulate to a cap on damages"); Conrad, 994 F. Supp. at 1199 (citing cases in Northern District declining to find failure to stipulate persuasive).
CONCLUSION
For the reasons expressed, the Court finds defendant has failed to present sufficient evidence to establish that the amount in controversy exceeds $75,000. Consequently, the Court lacks subject matter jurisdiction over this removed action.
Accordingly, plaintiff's motion to remand is hereby GRANTED and the action is hereby REMANDED to the California Superior Court in and for the County of San Francisco pursuant to 28 U.S.C. § 1447 (c).
The Clerk shall close the file and terminate all pending motions.