Opinion
Civ. File No. 02-3679 (PAM/RLE)
January 8, 2003
MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff's Motion to Remand. For the following reasons, the Court grants the Motion.
BACKGROUND
Defendant Allstate Insurance Company ("Allstate") provided automotive insurance for Plaintiff Nicole C. Dakis. After an automobile accident and subsequent repair, Dakis alleges that the value of her vehicle diminished. She made a property damage claim including the amount of the diminished value, but Allstate refused to compensate her for that amount. On August 20, 2002, Dakis filed this action in state court on behalf of herself and all other policyholders in Minnesota who were similarly situated. Allstate removed the case to federal court on the basis of diversity jurisdiction. Dakis now asks this Court to remand the case back to state court for lack of diversity jurisdiction, specifically on the grounds that Allstate has failed to demonstrate an amount in controversy that exceeds $75,000, as required by 28 U.S.C. § 1332(a).
In the underlying Complaint, Dakis requests a declaration that Allstate is obligated to disclose to policyholders and pay them for the losses they sustain as a result of diminished market value that occurs even after the most thorough repairs have been performed. Second, Dakis seeks a declaration that Allstate is required to include an assessment of diminished value, just as it does other damages, and to adopt a methodology for doing so. Third, Dakis asks for an injunction requiring Allstate to serve notice to its policyholders, to compensate them for the diminished market value, and enjoining Allstate from calculating losses without including the diminished market value of the vehicle. Allstate argues that the requested relief totals more than $75,000 and that jurisdiction in this Court is therefore proper. Dakis contends that the Eighth Circuit requires district courts to determine the amount in controversy from each plaintiff's perspective, prohibiting the aggregation of damages, whether punitive, compensatory, or equitable.
DISCUSSION A. Inclusion of Equitable Relief
When ruling on a motion to remand, courts construe all doubts in favor of remand. Green v. Ameritrade, Inc., 279 F.3d 590, 596 (8th Cir. 2002) (citing In re Bus. Men's Assurance Co. of Am., 992 F.3d 181, 183 (8th Cir. 1993)). The party opposing remand also has the burden of proof to demonstrate that diversity jurisdiction exists. Trimble v. Asarco, Inc., 232 F.3d 946, 959 (8th Cir. 2000). Allstate argues that the state court appropriately aggregated the equitable relief sought by Dakis and that the court correctly based removal on Allstate's view of the amount in controversy. The Court disagrees with both assertions.
First, parties cannot aggregate damages to reach an amount in controversy that exceeds $75,000, unless the claims in question seek to enforce a single claim that is undivided and common to the class, such as a single indivisible res. Crawford v. F. Hoffman-La Roche, Ltd., 267 F.3d 760, 765-66 (8th Cir. 2001); Trimble, 232 F.3d at 960; Chace v. W.R. Grace Co.-Conn., 168 F. Supp.2d 1020, 1022 (D.Minn. 2001) (Davis, J.). The proceeds of a life or fire insurance policy can exemplify a common right and be therefore exempt from the non-aggregation rule. See Petersen v. BASF Corp., 12 F. Supp.2d 964, 972 (D.Minn. 1998) (Tunheim, J.) (citing Bishop v. General Motors Corp. 925 F. Supp. 294, 297-98 (D.N.J. 1996)). However, in this case, the equitable damages do not concern disbursement of an insurance fund, but rather the meaning of an insurance contract and the coverage of an insurance policy. Therefore, Allstate cannot satisfy the amount in controversy requirement by aggregating the proposed damages for the entire class.
Second, Allstate argues that the Court should include the cost of the proposed injunctive relief when calculating the amount in controversy. Allstate cites a case from this District noting that the Eighth Circuit has yet to rule on the issue, see Crosby v. Aid Ass'n for Lutherans, 199 F.R.D. 636, 638 (D.Minn. 2001) (Davis, J.), and claims that the issue of whether a court can consider the amount in controversy from the defendant's point of view remains unsettled. In Crosby, Judge Davis correctly noted that the Eighth Circuit had not yet addressed "whether the cost to a defendant in complying with injunctive relief may be used to satisfy the amount in controversy requirements." Id. Nevertheless, the court determined that "the weight of authority does not support the Defendants' contention." Id. at 638-39. One month later, in a separate case, the Circuit directly addressed the issue and agreed with Judge Davis's conclusion. See Smith v. American States Preferred Ins. Co., 249 F.3d 812, 813-14 (8th Cir. 2001). In that case, the court stated unequivocally that "[o]ur own circuit precedent requires the district court to rely solely on the plaintiff's viewpoint in meeting the requisite amount." Id. Therefore, the Court disregards Allstate's arguments that it would have to incur more than $75,000 in order to comply with the requested injunctive relief. Because the individualized relief requested does not include the costs to Allstate of compliance with the proposed injunctions, it does not exceed $75,000, and this Court lacks subject matter jurisdiction to adjudicate Dakis' claims. Accordingly, the Court remands the case back to state court.
B. Attorneys' Fees
When a court remands a removed case back to state court, the "order remanding the case may require the payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c). Dakis asks for such an award in this case. However, while § 1447 empowers the Court to award attorneys' fees, the authority to do so is discretionary. Some Courts of Appeals hold that a court may properly award attorneys' fees only when the removing party knew or should have known that jurisdiction did not rest in federal court. E.g., Miranti v. Lee, 3 F.3d 925, 927-28 (5th Cir. 1993); Moore v. Permanente Med. Group, 981 F.2d 443, 445-46 (9th Cir. 1992). Other courts observe that § 1447 contains no requirement concerning state of mind, and that courts may award fees without a showing of improper motive. E.g., Morris v. Bridgestone/Firestone, Inc., 985 F.2d 238, 239-30 (6th Cir. 1993); Morgan Guaranty Trust Co. v. Republic of Palau, 971 F.2d 917, 923 (2d Cir. 1992).
The Eighth Circuit has not rendered an opinion on whether a court must find bad faith before it can award attorneys' fees. District courts within the Eighth Circuit have split when faced with the issue. Compare Ross v. Thousand Adventures of Iowa, Inc., 178 F. Supp.2d 996, 1003 (S.D.Iowa 2001) (court must determine that the party opposing remand acted in bad faith before awarding fees); Wells' Dairy, Inc. v. Am. Indus. Refrigeration, Inc., 157 F. Supp.2d 1018, 104-42 (N.D.Iowa 2001) (same); Farmers Co-operative Elevator of Buffalo Ctr., IA v. Abels, 950 F. Supp. 931, 941(N.D.Iowa 1996) (same), with Calloway v. Union Pac. R.R. Co., 929 F. Supp. 1280, 1283 (E.D.Mo. 1996) (decision to award fees not dependant on finding of bad faith), and Lytle v. Lytle, 982 F. Supp. 671, 674 (E.D.Mo. 1997) (noting that while propriety of the removal is a key factor, an award of fees does not rest upon a finding that the state court action was removed in bad faith). Thus, most courts in the Eighth Circuit at least agree that propriety, or motive, constitutes a factor, if not a requirement of awarding attorneys' fees. This Court previously held "the propriety of the defendant's removal should be the focus of a decision regarding whether to impose fees." Masepohl v. American Tobacco Co., 947 F. Supp. 1245, 1256 (D.Minn. 1997) (Magnuson, J.). In that case, the Court found that removal had been proper. Here, however, the Court concludes that the matter belongs in state court. Allstate did not act in bad faith, although the Eighth Circuit had already spoken on the issue of aggregating the costs of injunctive relief to satisfy the amount in controversy requirements of § 1447. Therefore, the Court does not award attorneys' fees to Dakis.
CONCLUSION
The Eighth Circuit determined that a district court should consider remand from the plaintiff's viewpoint only. Further, a party may not aggregate damages, even equitable ones, in order to meet § 1332's requirements. Finally, Allstate did not act in bad faith and will not be required to pay attorneys' fees on remand. Accordingly, for the foregoing reasons, and upon all of the files, records, and proceedings herein, IT IS HEREBY ORDERED that Plaintiff's Motion for Remand (Clerk Doc No. 12) is GRANTED.