Opinion
Civil Action No. 3:02-CV-0433-D
April 9, 2002
MEMORANDUM OPINION AND ORDER
In this removed action arising from an insured's collision with an uninsured motorist, plaintiff Deborah Heitman ("Heitman") moves to remand the case to state court, contending that defendant State Farm Mutual Automobile Insurance Company ("State Farm") alleged only its residence, not its citizenship, in the notice of removal and that State Farm failed to state any facts that support the conclusion that the matter in controversy exceeds the sum of $75,000. For the reasons that follow, the court denies the motion.
I
Heitman sued State Farm in Texas state court to recover under the uninsured motorist provision of her insurance policy with State Farm and on theories of breach of the duty of good faith and fair dealing and the Prompt Payment Act. She alleged that she was rear-ended by a driver whose insurance had expired, and that, as a result of the accident, she suffered disabling injuries to her neck, shoulders, and back, and severe pain, mental anguish, mental impairment, lost wages, and loss of wage earning capacity that have continued since the collision and will continue for a long time in the future. She asserted that she had already presented State Farm with past and future medical expenses totaling $42,410.00. Heitman sued State Farm on January 29, 2002 concerning an accident that took place on May 5, 1994, meaning that, under her own allegations, she had suffered these bodily and monetary injuries for almost eight years already, and she asserted that she expected them to continue "for a long time in the future." Heitman also sued for extracontractual and exemplary damages.
State Farm removed the case to this court based on diversity of citizenship. Heitman moves to remand. She maintains that State Farm pleaded in its notice of removal its residence rather than its citizenship and that it has failed to plead facts that establish that the amount in controversy exceeds the sum of $75,000.
II
This court sua sponte screens notices of removal to ensure that they plead citizenship rather than residency. It is well settled that an allegation of residency, rather than citizenship, is inadequate to invoke this court's diversity jurisdiction. See Neeley v. Bankers Trust Co. of Tex., 757 F.2d 621, 634 n. 18 (5th Cir. 1985) (holding that plaintiff's complaint failed to establish diverse citizenship because "[a]n allegation of residency, however, does not satisfy the requirement of an allegation of citizenship"). In the instant case, although State Farm did refer in its notice of removal to being a "resident of Illinois," see Not. Rem. at ¶ II, it otherwise correctly pleaded the parties' citizenship. Elsewhere in the notice it alleged that it is "organized under the laws of the state of Illinois with its principal place of business in Illinois." See id. These assertions correspond with the requirements of diversity based on corporate citizenship, since a corporation is considered to be a citizen both of its state of incorporation and of its principal place of business. See Ill. Cent. Gulf R.R. Co. v. Pargas, Inc., 706 F.2d 633, 637 (5th Cir. 1983) (holding that "a complaint properly asserting diversity jurisdiction must state both the state of incorporation and the principal place of business of each corporate party."). And despite State Farm's reference to its residence, it also alleged that the action "is between citizens of different states" and that the case is "removable based on diversity of citizenship." See Not. Rem. at ¶ II. Accordingly, while the better practice would be for State Farm to eliminate any references to residence when it files a notice of removal based on diversity of citizenship, considered in its entirety, the notice of removal in the present case is sufficient to invoke this court's subject matter jurisdiction.
III
Heitman also maintains that State Farm has failed to allege facts that establish that the amount in controversy exceeds the sum of $75,000. She contends that State Farm relies on conclusory assertions alone and thus has failed to meet its burden of demonstrating jurisdiction by a preponderance of the evidence and of overcoming the presumption against removal.
Removal based on diversity of citizenship is not available unless the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. See 28 U.S.C. § 1332(a)(1) ("The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States[.]"). To establish jurisdiction when the plaintiff's state court petition does not allege a specific amount of damages, as in the instant case, "the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds [$75,000]." Allen v. R H Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995) (quoting De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993)). "[A] court can determine that removal was proper if it is facially apparent [from the state court petition] that the claims are likely above [$75,000]." Id. If the amount in controversy is not apparent from the face of the petition, the court may rely on facts asserted in the removal notice or in an affidavit submitted by the removing defendant to support a finding of the requisite amount. Id. The court may also apply common sense to conclude that the minimum jurisdictional amount is met. See id. at 1336 (holding that "[a] court, in applying only common sense, would find that if the plaintiffs were successful in their punitive damages claim, they would collect more than [$75,000.]").
It is facially apparent from the Heitman's complaint, viewed through the prism of common sense, that Heitman seeks more than the sum of $75,000, exclusive of interest and costs. Heitman alleges not only that she has suffered disabling injuries to her neck, shoulders, and back, and severe pain, mental anguish, mental impairment, lost wages, and loss of wage earning capacity that have continued for the period of almost eight years since the collision, but that these injuries will continue "for a long time in the future." She describes the collision as one that occurred "violently," caused in part by the uninsured driver's excessive speed. Heitman alleges that she has already presented State Farm with past and future medical expenses totaling $42,410.00, and she sues State Farm not only for these and other personal injury damages but also for extracontractual damages for breach of the duty of good faith and fair dealing and for exemplary damages. It is no stretch in reasoning or common sense to find from a preponderance of the evidence that Heitman sues State Farm for more than the minimum jurisdictional amount.
Even were it not apparent from the face of Heitman's state court petition, State Farm has introduced evidence that its counsel advised her counsel that State Farm was contemplating removal but would forgo doing so if Heitman's attorney would stipulate that she is "not seeking in excess of $74,999.00 as damages, attorneys' fees, etc." Her counsel would not enter into the stipulation. The refusal to stipulate that the amount in controversy does not exceed $75,000 indicates that the actual amount in controversy does exceed that sum. See De Aguilar v. Boeing, 47 F.3d 1404, 1412 (5th Cir. 1995) (holding that "[l]itigants who want to prevent removal must file a binding stipulation or affidavit [stating that the amount in controversy does not exceed $75,000] with their complaints[.]" (quoting In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992) (per curiam)).
State Farm has met its burden of establishing this court's subject matter jurisdiction.
* * *
The court holds that State Farm properly pleaded the parties' citizenship in its notice of removal and that it has established that the amount in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. Accordingly, plaintiff's March 13, 2002 motion to remand is denied.