Opinion
CIVIL ACTION VERSUS NO. 02-1444 SECTION "K"(4)
August 21, 2002
ORDER AND REASONS
Before the Court is a Motion to Remand brought by plaintiffs, the Bethea Group, pursuant to 28 U.S.C. § 1447. Having reviewed the pleadings, memoranda, exhibits and the relevant law, the Court finds that this Court has diversity jurisdiction over this matter. Thus, the Motion to Remand must be denied.
The named plaintiffs are Drs. Bethea, Moustoukas and Weaver, LLC, Morrison C. Bethea, M.D., A Professional Medical Corporation, Nick M. Moustoukas, M.D., Michael T. Weaver, M.D., Victor E. Tedesco, IV, M.D. and Jared Y. Gilmore III, M.D. ("the Bethea Group").
Background
The Bethea Group filed their Petition for Damages, for Certification of Plaintiffs as Representative of a Class, and for Certification of Defendants as a Class in the 24th Judicial District Court for the Parish of Jefferson on April 2, 2002. In the petition, they seek damages individually and on behalf of others, from their alleged professional liability insurers, St. Paul Guardian Insurance Company, St. Paul Fire and Marine Insurance Company, and the St. Paul Insurance Company ("St. Paul") because allegedly certain free "tail coverage" that was part of the malpractice insurance provided is no longer available to the insureds because of the business decision of the defendants to no longer write medical malpractice insurance in Louisiana. St. Paul has apparently offered to provide such coverage at a cost of $49,000 to each plaintiff per endorsement.
Apparently St. Paul Fire and Marine Insurance Company has appeared in this case in its own corporate capacity and as successor in interest to The St. Paul Insurance Company, which no longer exists.
This provision known as an Optional Reporting endorsement provides, without additional premium, an extended reporting period if, at the time the policy is in effect, the insured dies, becomes disabled or retires. It is commonly known as "death, disability and retirement ("DDR") coverage.
Plaintiffs in their petition allege breach of contract and seek to recover $49,000 for the cost or "economic value" of the Report Endorsement, "together with such consequential damages as may result from interruption of coverage, increased premiums, loss of accrued benefits, forced retirement, or related damage. (Petition, ¶ XV). At paragraph XVIII, the Bethea Group seeks the following relief on its behalf and for all members of the Class that plaintiffs:
the filing of this motion, an amended petition has been filed which adds a cause of action for detrimental reliance pursuant to La. Civ. C. art. 1967.
1) providing of a Report Endorsement upon death, retirement, or disability, or the monetary equivalent thereof, for all qualified Class member;
2) for all others not yet qualified as having been continuously insured for five years, such damages as would make them whole for loss of accrued benefits or ultimate rights to free Reporting Endorsements;
3) any consequential damages that may have resulted from the conduct of St. Paul in arbitrarily discontinuing coverage in the State of Louisiana, breaching its contracts, depriving its insureds of vested benefits, or otherwise harming their practice or leaving them uninsured;
4) emotional distress, mental anguish and humiliation;
5) damages and penalties, including punitive damages, pursuant to any applicable statutory scheme;
6) attorney's fees;
7) costs of litigation and expert fees;
8) judicial interest.
Petition, ¶ XVIII.
St. Paul removed this case to this Court on May 9, 2002 based on diversity jurisdiction. it is uncontested that the parties are diverse, and St. Paul contends that the amount in controversy exceeds $75,000 based on two theories: (1) the damages as stated above are with a reasonable certainty to exceed the sum of $75,000; and (2) because of plaintiffs' entitlement to seek recovery of attorneys' fees and costs which are aggregated and attributed to the class representatives' claims under Louisiana Class Action article, La. Code. Civ. Pro. art 595, jurisdictional amount is met.
The Bethea Group filed the instant motion to remand. They contend that because defendants have filed a motion to dismiss seeking the dismissal of the emotional distress and the punitive damages claims as not recoverable in such an action, these damages should not be included in the resolution of the issue of jurisdictional amount. As such, because the individual claims cannot be aggregated for meeting the jurisdictional amount, plaintiffs contend that diversity jurisdiction attaches only if this Court follows its prior rulings with respect to the aggregation and attribution of attorney's fees to the class representatives. With this as background, the Court will now take up the instant motion.
Analysis
Any civil action brought in a state court of which the district courts have original jurisdiction may be removed to the proper district court. 28 U.S.C. § 1441 (a). District courts have original jurisdiction of all civil actions where the matter in controversy exceed the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different States. 28 U.S.C. § 1332 (a)(l). "Because plaintiffs in Louisiana state courts, by law, may not specify the numerical value ofclaimed damages, 3 La. Code Civ. P. art 893 (West Supp. 2000), the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000.00." Gebbia v. WalMart Stores. Inc., 233 F.3d 880, 882 (9th Cir. 2000) citing Luckett v. Delta Airlines. Inc., 171 F.3d 295, 298 (9th Cir. 1999). To do so, a defendant may demonstrate that the claims are likely about $75,000 in sum or value, or by setting forth the facts in controversy that support a finding of the requisite amount. Id.
In the case before the Court, diversity of citizenship is not contested. Thus, the Court must determine whether defendants have met their burden of proof with respect to the jurisdictional amount being in excess of $75,000. To begin, federal jurisdiction is determined at the time of removal. Federal Savings Loan Ins. Corp. v. Griffen, 935 F.2d 691, 696 (9th Cir. 1991), cert. denied sub nom, Griffen v. First Gibralter Bank, 112 S.Ct. 1163 (1992). In addition, subsequent events that reduce the amount in controversy to less than the required jurisdictional amount do not divest the court of diversityjunsdiction. St. Paul Mercury Indenmity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586 (1938). Pollet v. Travelers Prop. and Cas. Ins. Co., 2002 WL 253204 (E.D.La. Feb. 20, 2002). Thus, plaintiffs' argument that because defendants have filed a motion to dismiss with relation to emotional distress and punitive damages and, the Court should disregard the claims in assessing the jurisdictional amount has no force.
In assessing the damages allege, the Court finds that the $49,000 claim for the cost of the tail coverage, in addition to emotional distress damages, consequential damages, punitive damages, and statutory penalties, if proven, could clearly amount to more that $75,000. Thus, on that basis alone, the Court finds that this Court has diversity jurisdiction stands.
Moreover, this Court has consistently held that the decision of the United States Court of Appeals for Fifth Circuit in In re Abbott Laboratories, 51 F.3d 524 (5th Cir. 1995), requires the plaintiffs' demand for attorneys' fees to be aggregated and attributed to their claims for purposes of determining the amount in controversy. See Francis v. Lomas Mortgage USA. Inc. , 1995 WL 468172 (E.D.La. Aug. 7, 1995); McKnight V. Illinois Central Railroad, 967 F. Supp. 182 (E.D.La. 1997). There has been no controlling Louisiana state court decision that would dictate a revisiting of the Court's reasoning. Thus, the amount in controversy prong of diversity jurisdiction is also satisfied because of the attorneys' fees request in this class action. Accordingly,
IT IS ORDERED that the Motion to Remand filed by plaintiffs (Doc. 5') is DENIED.