Opinion
Civil Action No. 05-788, Section "L" (4).
May 9, 2005
ORDER REASONS
Pending before the Court is the Plaintiffs' Motion to Remand, which was taken under submission by the Court without oral argument on April 13, 2005. For the following reasons, Plaintiff's motion is DENIED.
I. BACKGROUND
On December 1, 2004, Plaintiffs filed suit against the Defendant, Colonial Life Accident Insurance Company, in the Judicial District Court for the Parish of Orleans. Plaintiffs claimed that on or about September 1, 1995, Plaintiff Geraldine Warren purchases a policy of supplemental cancer insurance from the Defendant, insuring Plaintiff James Warren. The Plaintiffs alleged that, pursuant to the insurance policy, the Defendant is obligated to pay to the policyholder the amount charged up to $300 per day for cancericidal chemical substances and their administration. James Warren, who was diagnosed with cancer in October 2003, claims to have timely submitted to the Defendant proofs of loss and the bills associated with his cancer treatment. According to the Plaintiffs, the Defendant denied payment for all the benefits due James Warren under the policy. The Plaintiffs allege that the Defendant arbitrarily and capriciously breached the insurance contract by denying payment for items clearly covered under the insurance policy. Further, the Plaintiffs believe that the Defendant routinely denies payment of benefits for cancericidal chemical substances, medications, supportive and protective drugs, chemotherapy services, procedures, solutions, medical supplies, doctor's consultations, office visits, and transportation expenses. The Plaintiffs claim that the Defendant has been unjustly enriched at the expense of the Plaintiffs and is, therefore, obligated to pay to the Plaintiffs the benefits entitled to them under the insurance policy, as well as statutory penalties, costs, and attorney fees. In their petition, Plaintiffs allege that the amount in controversy does not exceed $75,000 exclusive of interest and costs. In their answer denying liability, the Defendant admitted that the amount in controversy did not then exceed $75,000.
On March 11, 2005, the Defendant filed a notice of removal, alleging diversity jurisdiction pursuant to 28 U.S.C. § 1332. The Defendant claims that it is a South Carolina corporation with its principal place of business in South Carolina, and that Plaintiffs alleged to be residents of Louisiana at the time of filing their petition in state court. Further, the Defendant claims that the amount in controversy, exclusive of interest and costs, now exceeds $75,000 because the Plaintiffs submitted additional bills to the Defendant. Furthermore, the Defendant points out that the Plaintiffs did not cite any limiting statute nor did they file a binding affidavit restricting their recovery to less than $75,000.
II. MOTION
Plaintiffs now move to remand pursuant to 28 U.S.C. § 1447(c). According to the Plaintiffs, the Defendant cannot meet its burden of proving federal jurisdiction over this case. Though the Plaintiffs submit that it is not facially apparent from the petition that the amount in controversy exceeds $75,000, the Plaintiffs argue that the Defendant has not submitted the requisite "summary judgment type evidence" indicating that the jurisdictional amount has been satisfied. Further, the Plaintiffs argue that remand is warranted because the Defendant's removal was untimely. Lastly, the Plaintiffs maintain that they are entitled to an award of attorneys fees and costs pursuant to 28 U.S.C. § 1447(c) and Federal Rule of Civil Procedure 11.
The Defendant responds that, though the notice of removal was filed more than thirty (30) days after the Defendant received the initial pleading, removal was timely because the Defendant filed its notice of removal within thirty (30) days of receiving other papers from the Plaintiffs that rendered the case removable. Further, the Defendant argues that it has submitted "summary judgment type evidence" showing that the jurisdictional amount is met.
III. LAW AND ANALYSIS
Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins Co. of America, 511 U.S. 375, 377 (1994). As such, they have the power to hear only those cases that are authorized by Congress or the Constitution. Id. "It is to be presumed that a cause lies outside this limited jurisdiction (. . .) and the burden of establishing the contrary rests upon the party asserting jurisdiction." Id. Further, "[i]f 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).
A. Diversity Jurisdiction
28 U.S.C. § 1332(a) grants original jurisdiction to federal district courts in civil matters where there is diversity of citizenship among the parties, and an amount in controversy exceeding $75,000, excluding costs and interest. In the instant case, the parties agree that diversity of citizenship exists. Therefore, the Court will only discuss issues regarding the amount in controversy. To defeat a plaintiff's motion to remand, a defendant must show by a preponderance of the evidence that the requisite amount in controversy is met. The Defendant can meet this requirement in either of two ways: (1) by showing that it is "facially apparent" in the pleadings that the claims exceed $75,000; or (2) by setting forth summary judgment type evidence to ascertain the amount in controversy. Simon v. Wal-Mart Stores, Inc., 193 F.3d 848, 850 (5th Cir. 1999); St. Paul Reinsurance Co. LTD, 134 F.3d 1250, 1253 (5th Cir. 1998); Allen v. RH Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). General as well as special damages may be included in such calculation. Fairchild v. State Farm Mutual Auto. Ins. Co., 907 F.Supp. 969, 971 (M.D. La. 1995). If the Defendant demonstrates that the amount in controversy actually exceeds the jurisdictional amount, the Plaintiffs must be able to show to a legal certainty that they will not be able to recover more than $75,000. Hummel v. State Farm Mutual Auto. Ins. Co., 2005 WL 32786, *2 (E.D. La. 2005); De Aguilar v. Boeing Co., 47 F.3d 1404, 1411 (5th Cir. 1995).
In this case, it is not facially apparent that the Plaintiffs' claims exceed $75,000. In fact, in the petition for damages, the Plaintiffs assert that their claim does not exceed $75,000. Consistent with Fifth Circuit jurisprudence, the Plaintiffs' claim of jurisdictional amount remains presumptively correct unless the defendant can show by a preponderance of the evidence that the amount in controversy is greater than the jurisdictional amount. De Aguilar, 47 F.3d at 1412. This presumption is strengthened by the fact that the Defendant agreed in its answer to the Plaintiffs' petition that the amount in controversy did not exceed $75,000 at the time of the answer. Therefore, the Court will focus on whether the Defendant has presented summary judgment type evidence to show that the jurisdictional amount is met.
In their petition for damages, the Plaintiffs request an award of benefits entitled to them under the insurance policy, as well as statutory penalties, costs, and attorney fees. Pursuant to La.R.S. 22:657, the statutory damages to which the Plaintiffs would be entitled are double the benefits owed them under the policy plus attorney's fees. The Fifth Circuit has repeatedly held that "the preponderance burden forces the defendant to do more than point to state law that might allow the plaintiff to recover more than what is pled." Hummel, 2005 WL 32786 at *1; De Aguilar, 47 F.3d at 1412. Instead, the Defendant must "produce evidence that establishes that the actual amount in controversy" exceeds $75,000. De Aguilar, 47 F.3d at 1412. In the instant case, the Defendant has satisfied this requirement.
The Defendant was served with the Plaintiffs' petition for damages on December 28, 2004. At that time, only $19,869.30 in benefits had been demanded by the Plaintiffs. The Defendant has submitted concrete evidence in the form of bills submitted by the Plaintiff that demonstrates that between December 8, 2003 and February 16, 2005, the Defendant received demands for benefits from the Plaintiff in the amount of $54,925.41. That same evidence shows that the Defendant has paid the Plaintiffs $2,943.50, leaving the Plaintiffs with a claim for $51,981.90. Considering the statutorily permitted double damages in this case, the actual amount in controversy in this matter is at least $103,963.82.
The Plaintiffs argue that only the $19,896.30 demanded at the time of the Plaintiffs' petition should be considered in determining the amount in controversy. According to the Plaintiff, the benefits demanded after the petition was field constituted additional claims which the Plaintiffs have not sought in the instant action. Plaintiffs argue that they are not seeking prospective relief, and therefore, their recovery is limited to those benefits that had been denied as of the time of filing the instant suit. Plaintiffs' argument is unpersuasive, however, because in their petition Plaintiffs pray for "benefits in the amount of the actual charges incurred by the plaintiff" and "all other legal and equitable relief as the case may permit." If a court were to determine that the Defendant's policy covered the payments made to Plaintiff, then Plaintiff would be entitled to recover for those bills submitted to the Defendants within the relevant pre-trial discovery period and proven as damages at trial. In other words, Plaintiffs' pleadings do not limit their recovery to those benefits due Plaintiffs only up to the time of filing suit against the Defendants. Even Plaintiffs' statement in their petition that the amount in controversy does not exceed $75,000 does not act as a limit to what Plaintiffs could recover. Louisiana law allows a party to recover the relief to which he or she is entitled "even if the party has not demanded such relief in his pleadings." La.C.C.P. art. 862. Therefore, the Plaintiffs' recovery would not exclude prospective relief merely because it was not prayed for in Plaintiffs' petition for damages.
"Jurisdictional facts that support removal must be judged at the time of removal." Hummel, 2005 WL 32786 at *1, citing, Allen, 63 F.3d at 1335. At the time the Defendant filed its notice of removal, it had evidence that the amount in controversy was in excess of $103,963.82. Therefore, the Defendant has carried its burden of proving jurisdictional amount by a preponderance of the evidence. Consequently, to defeat removal, the Plaintiffs must demonstrate to a legal certainty that they would not be able to recover more than $75,000. The Fifth Circuit has explained various ways in which a plaintiff's "legal certainty" obligation might be met:
"Plaintiff's state complaint might cite, for example, to a state law that prohibits recovery of damages that exceed those requested in the ad damnum clause and that prohibits the initial ad damnum to be increased by amendment. Absent such a statute, '[l]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints'." De Aguilar, 47 F.3d at 1412, quoting In re Shell Oil Co., 970 F.2d 355, 356 (5th Cir. 1995)
In this case, Plaintiffs have presented no evidence to satisfy their "legal certainly" obligation. Plaintiffs make the argument that they have adequately stipulated in their petition that the amount in controversy does not meet the jurisdictional limit in this case. However, Plaintiffs' petition merely states that the amount in controversy does not exceed $75,000. Under Louisiana law, this assertion does not prohibit the Plaintiffs from recovering more than that amount. Therefore, Plaintiffs representation of the amount in controversy in their state petition is not a binding stipulation that demonstrates to a legal certainty that the Plaintiffs cannot recover more than $75,000 in their claim against the Defendant.
B. Timely Removal
Generally, removal is timely when a defendant does so within thirty (30) days of receiving a plaintiff's initial pleading. 28 U.S.C. § 1446(b). However, 28 U.S.C. § 1446(b) also provides:
If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant . . . of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable . . .
Neither party argues that the Defendant filed its notice of removal within thirty (30) days of receiving the Plaintiffs' petition. However, the Defendant claims that the documentation it received from the Plaintiffs on February 16, 2005 demanding coverage for bills incurred after the filing of the Plaintiffs' petition constitute "other paper" from which the Defendant concluded that the jurisdictional amount had been met. Plaintiffs disagree and argue that the correspondence merely asserts newly filed claims that are not a part of the present litigation. The Court agrees with the Defendant's position.
The Fifth Circuit has held that "'other paper' must result from the voluntary act of a plaintiff which gives the defendant notice of the changed circumstances which now support federal jurisdiction." Addo v. Global Life and Accident Ins. Co., 230 F.3d 758, 762 (5th Cir. 2000), citing, S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 494 (5th Cir. 1996). Further, "other paper" need not be a document that is actually filed in the state court proceedings. Id. As explained in the above discussion on diversity jurisdiction, the Plaintiffs have prayed for "benefits in the amount of the actual charges incurred" and "all other legal and equitable relief as the case may permit." Though at the time of the filing of the Petition the Plaintiffs had only submitted bills to the Defendant in the amount of $19,860, by February 16, 2005 Plaintiffs had submitted to the Defendant additional bills indicating that the amount in controversy exceeded $75,000. These supplemental bills sent to the Defendant by the Plaintiffs constitute "other paper" because they resulted from a voluntary act of the Plaintiffs which put the Defendant on notice of a change in the amount in controversy.
Plaintiffs argue that, if the Court accepts the argument that they are entitled to prospective relief though it was not prayed for, then the Defendant was on notice that the jurisdictional amount was met when the petition was served on the Defendant on December 28, 2004. This argument fails, however, because, at the time the petition was served, the Defendant did not have any evidence that the actual amount in controversy currently exceeded $75,000. The Defendant did not have such evidence until the February 16, 2005 correspondence from the Plaintiffs. The Defendant then removed the case to federal court on March 11, 2005, within thirty days of receiving the additional bills. Therefore, the Defendant's notice of removal was timely filed.
IV. CONCLUSION:
For the foregoing reasons, the Plaintiff's Motion to Remand is hereby DENIED.