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Wright v. USAA Casualty Insurance Co.

United States District Court, E.D. Missouri, Eastern Division

October 10, 2014

MELVIN WRIGHT, JR., Plaintiff,
v.
USAA CASUALTY INSURANCE COMPANY, Defendant.

MEMORANDUM AND ORDER

CAROL E. JACKSON, District Judge.

This matter is before the court on plaintiff's motion to remand this case to the Twenty-Second Judicial Circuit Court of St. Louis, Missouri. This is a breach of contract and vexatious refusal to pay action arising from the defendant's denial of plaintiff's claim for coverage under an underinsured motorist provision in an insurance policy. In removing the action, the defendant asserted jurisdiction based on diversity of citizenship. 28 U.S.C. § 1332. In the motion for remand, plaintiff argues that the amount in controversy requirement for diversity jurisdiction cannot be established. Plaintiff seeks an award of attorney's fees and costs for the improper removal. The defendant has filed a response in opposition, and the issues are fully briefed.

I. Background

The plaintiff alleges that he was injured when the automobile he was driving was struck by an underinsured motorist. At the time of the accident, plaintiff was insured under a policy of insurance issued by defendant that includes coverage for injury caused by an underinsured motorist. The underinsured motorist coverage limit is $50, 000.

After the defendant denied his claim under the policy, plaintiff sued for breach of contract and vexation refusal to pay. See Mo. Ann. Stat. § 375.420 (West 2013). In the complaint, plaintiff seeks to recover damages in an unspecified amount, costs, attorney's fees, and statutory damages under the vexatious refusal statute.[1] Plaintiff received $50, 000 in settlement of his claim against the other driver.

II. Legal Standard

"A defendant may remove a state law claim to federal court only if the action originally could have been filed there." In re Prempro Products Liability Litigation, 591 F.3d 613, 619 (8th Cir. 2010) (citing Phipps v. FDIC, 417 F.3d 1006, 1010 (8th Cir. 2005)). "The defendant bears the burden of establishing federal jurisdiction by a preponderance of the evidence." Altimore v. Mount Mercy College, 420 F.3d 763, 768 (8th Cir. 2005). Diversity jurisdiction requires an amount in controversy greater than $75, 000, exclusive of interest and costs, and complete diversity of citizenship among the litigants. 28 U.S.C. § 1332(a). Here, there is no dispute that the parties are citizens of different states.

When, as here, "the complaint alleges no specific amount of damages or an amount under the jurisdictional minimum, " the removing party must prove by a preponderance of the evidence that the amount in controversy requirement has been met. In re Minnesota Mut. Life Ins. Co. Sales Practices Litig., 346 F.3d 830, 834 (8th Cir. 2003). "Once the removing party has established by a preponderance of the evidence that the jurisdictional minimum is satisfied, remand is only appropriate if the plaintiff can establish to a legal certainty that the claim is less than the requisite amount." Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009). "Under the preponderance standard, the jurisdictional fact... is not whether the damages are greater than the requisite amount, but whether a fact finder might legally conclude that they are....'" Id. at 959 (quoting Kopp v. Kopp, 280 F.3d 883, 885 (8th Cir. 2002)). "It is the substance of the claim, not the conclusory recitation of its worth, that will determine if federal jurisdiction is extant." Rodgers v. Wolfe, 4:05-CV-01600-ERW, 2006 WL 335716 (E.D. Mo. Feb. 14, 2006) (quotation and citation omitted).

Attorney's fees are properly considered, along with damages and statutory penalties, in determining the amount in controversy. Rasmussen v. State Farm Mut. Auto Ins. Co., 410 F.3d 1029, 1031 (8th Cir. 2005). Whether to award attorney's fees and in what reasonable amount is a question of fact for the trial court. Delph v. Dr. Pepper Bottling Co. of Paragould, 130 F.3d 349, 358 (8th Cir. 1997) (citing Shrader v. OMC Aluminum Boat Grp., Inc., 128 F.3d 1218, 1220 (8th Cir. 1997)); see also Tate v. Golden Rule Ins. Co., 859 S.W.2d 831, 835 (Mo.Ct.App. 1993) ("[Missouri's vexatious refusal to pay statute] allows for an award of attorney's fees. The award is not mandatory. Therefore, the granting or refusal to grant attorney's fees by the trial judge is primarily discretionary and will not be disturbed absent the showing of an abuse of discretion." (quotation marks and citation omitted)).

"All doubts about federal jurisdiction should be resolved in favor of remand to state court." In re Prempro Products Liability Litigation, 591 F.3d at 620 (citing Wilkinson v. Shackelford, 478 F.3d 957, 963 (8th Cir. 2007)). A case must be remanded if, at any time, it appears that the district court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c); Fed.R.Civ.P. 12(h)(3).

III. Discussion

A. Amount in Controversy Requirement

Because of the policy limit, the maximum amount that plaintiff could recover against defendant for breach of contract is $50, 000. Under the statutory formula, the maximum amount recoverable on the vexatious refusal claim is $5, 150. Mo. Ann. Stat. § 375.420. Thus, the damages in this case cannot exceed $55, 150,

However, the court can consider attorney's fees in determining the amount in controversy. Rasmussen, 410 F.3d at 1031. To meet the amount in controversy in this case, the defendant must prove by a preponderance of the evidence that a reasonable trier of fact could award plaintiff attorney's fees of at least $19, 850, which would be roughly 35.993% of his potential maximum damages. See Bell, 557 F.3d at 956. To meet its burden, the defendant must present "some specific facts or evidence." Abernathy v. Bank of America, N.A., 4:09-CV-134-HEA, 2009 WL 702785, at *2 (E.D. Mo. Mar. 16, 2009) (citing Hill v. Ford Motor Co., 324 F.Supp.2d 1028, 1036 (E.D. Mo. 2004)). "That evidence may include citations to similar cases in which punitive damages and attorney's fees were awarded." Harris v. TransAmerica Life Ins. Co., ...


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