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Arrington v. State Farm Ins. Co.

United States District Court, M.D. Alabama, Northern Division

July 1, 2014

STATE FARM INS. CO., et al., Defendants.


CHARLES S. COODY, Magistrate Judge.

Before the court is the Plaintiffs' motion to remand (Doc. 9). Having considered the motion, the court concludes that the motion is due to be granted.

I. Standard of Review

Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); see also Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). This court is "empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution, ' and which have been entrusted to them by a jurisdictional grant authorized by Congress." Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)). Therefore, a federal court is obligated to inquire into subject matter jurisdiction sua sponte "at the earliest possible stage in the proceedings." Id. at 410. "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." Kokkonen, 511 U.S. at 377. Thus, when a case is removed to federal court, the "heavy" burden of establishing the existence of subject matter jurisdiction rests on the removing party. Burns, 31 F.3d at 1095. All questions or doubts as to subject matter jurisdiction are to be resolved in favor of returning the matter to state court. Burns, 31 F.3d at 1095.

II. Discussion

A. Procedural History and Issues Presented

On August 29, 2013, Michael and Tammy Arrington filed a complaint in the Circuit Court of Pike County, Alabama, asserting state law claims against State Farm Insurance Companies, State Farm General Insurance Company, and State Farm Fire and Casualty Company (collectively, "State Farm"). The Arringtons also named State Farm insurance agent Danny Graham as a Defendant. (Doc. 1-10 ¶ 5). The Arringtons and Defendant Graham are Alabama citizens. (Doc. 1-9 ¶¶ 1, 5). The State Farm defendants are foreign corporations doing business in Alabama. (Doc. 1-9 ¶ ¶ 2-4).

In their complaint, the Arringtons allege the following facts: Graham sold the Arringtons a State Farm homeowners' insurance policy and represented that State Farm would provide coverage if the Arringtons' home suffered a covered peril. (Doc. 1-9 ¶¶ 14-15). In December 2012, a storm damaged the Arringtons' home, causing the roof to leak. (Doc. 1-9 ¶¶ 17-18). The Arringtons submitted a claim for State Farm to pay for home repairs, and State Farm paid only a portion of the claim, refusing to pay the rest. (Doc. 1-9 ¶¶ 19-21). The Arringtons allege that, as a result, they

have been injured and damaged as follows: their home has been damaged, they have spent a great deal of money on premium payments for a policy of insurance that did not provide full coverage. They have been caused to suffer and continue to suffer mental anguish and emotional distress. They have been otherwise injured and damaged.

(Doc. 1-9 ¶ 25).

The Arringtons assert claims for breach of contract, bad faith refusal to pay an insurance claim and bad faith failure to investigate an insurance claim, fraud, negligence, wantonness, and negligent or wanton hiring, training, or supervision. In addition to compensatory damages for their alleged injuries, the Arringtons also seek punitive damages.

On March 24, 2014, the Defendants filed a notice of removal. The Defendants contend that the Arringtons' February 28, 2014 deposition testimony revealed that they cannot arguably prove certain facts necessary to their claims against Graham, the only non-diverse Defendant. (Doc. 1). Accordingly, the Defendants argue that Graham was fraudulently joined and that diversity of citizenship exists in this case for purposes of establishing subject matter jurisdiction. See Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1332 (11th Cir. 2011) ("When a plaintiff names a non-diverse defendant solely in order to defeat federal diversity jurisdiction, the district court must ignore the presence of the non-diverse defendant and deny any motion to remand the matter back to state court.'" (quoting Henderson v. Washington Nat'l Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006)).

However, to establish diversity jurisdiction, the removing party must not only demonstrate that the properly-joined parties are completely diverse, but, where the amount in controversy is not evident from the face of the complaint, the removing party must also demonstrate that the amount in controversy exceeds the $75, 000 jurisdictional minimum set by 28 U.S.C. § 1332.[1] Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 752 (11th Cir.2010); Lowery v. Ala. Power Co., 483 F.3d 1184, 1207 (11th Cir.2007).

The Defendants have submitted a contractors' estimate for repairs to the exterior of the Arringtons' home in the amount of $34, 680.00. (Doc. 1-7). The Defendants have presented no evidence as to the probable value of the remaining claims for damages.[2] (Doc. 1-7). Instead, relying on Roe v. Michelin N. Am., Inc., 613 F.3d 1058 (11th Cir. 2010), the Defendants argue that evidence establishing the jurisdictional amount is not necessary where it is "facially apparent' from the pleading itself that the amount in controversy exceeds the jurisdictional requirement, even when the complaint does not claim a specific amount of damages.'" Roe, 613 F.3d at 1061 (quoting Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 754 (11th Cir. 2010)). The Defendants argue that, under Roe, this court can simply apply "judicial experience and common sense" to the bare allegations of the ...

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