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Thornton v. United American Insurance Co.

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

May 29, 2019

DORIS WHEAT THORNTON, by and through her daughter and next of friend VERA THORNTON HAWTHORNE Plaintiff,



         Pending before the Court is the Plaintiff's Motion to Remand. (Doc. 5.) For the reasons stated herein, this motion is due to be granted.

         I. BACKGROUND

         The Plaintiff asserts that Defendant United American Insurance Company (“United” or “Defendant”) refused to pay invoices for November and December of 2016 under a long-term care policy, which resulted in an outstanding balance of $5, 563.56 owed to the Plaintiff's long-term care facility. On or about January 11, 2018, the Plaintiff filed suit in Montgomery County Circuit Court alleging breach of contract, normal bad faith, and abnormal bad faith. (Doc. 1-1, at 3). The Plaintiff sought compensatory and punitive damages.

         Discovery commenced in the state court action. The state court file ballooned to over 1, 200 pages, and it appears that the Defendant produced over 1, 500 documents in discovery. The depositions of six United employees were scheduled in Texas on December 11 and 12, 2018. Prior to the depositions, United made a settlement offer of $12, 500. (See Doc. 6-3). In response to that offer, Plaintiff's counsel sent a one-page demand for $100, 000 to settle the case. The Plaintiff characterized this demand as “non-negotiable” and specified that the offer would expire at noon the next day. The Defendant then removed the case to federal court based on diversity jurisdiction, claiming that this settlement demand letter established that the amount in controversy exceeded $75, 000. (Doc. 1).

         A review of the state court file reveals that the Plaintiff “claims damages for the benefits denied under the subject policy, plus interest and costs of litigation. In addition, mental anguish and punitive damages are claimed.” (Doc. 1-5, at 178). In a motion to compel filed in state court, the Plaintiff asserts that she seeks “pattern and practice evidence” to demonstrate “motive, plan, scheme, design and intent” for the purpose of proving punitive damages. (Doc. 1-4, at 57). The Plaintiff further complains that she “has a good faith belief Defendant engaged in fraud…and further believes that Defendant engaged in substantially similar frauds in other states . . ..” (Doc. 1-4, at 123).

         The Defendant argues that the Plaintiff's “non-negotiable demand”, made “by experienced counsel after the completion of substantial discovery” unambiguously establishes that at least $75, 000 is in dispute. (Doc. 9, at 1; 5). The Plaintiff, however, characterizes her settlement demand as “puffing and posturing” that does not establish the requisite amount in controversy. (Doc. 6, at 3).


         A. Removal Generally

         Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Accordingly, they only have the power to hear cases over which the Constitution or Congress has given them authority. See Kokkonen, 511 U.S. at 377. Congress has empowered the federal courts to hear cases removed by a defendant from state to federal court if the plaintiff could have brought the claims in federal court originally. See 28 U.S.C. § 1441(a); Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Federal courts may exercise diversity jurisdiction over civil actions where the amount in controversy exceeds $75, 000 exclusive of interest and costs, and the action is between citizens of different states. 28 U.S.C. § 1332(a)(1). However, “removal statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand.” Burns, 31 F.3d at 1095.

         B. Removal under 28 U.S.C. § 1446(b)(3)

         The Defendant removed this action under the subsection of 28 U.S.C. § 1446 that establishes a thirty-day removal period after which the defendant receives a document “from which it may first be ascertained that the case is one which is or has become removable.” § 1446(b)(3). The procedure for removal under § 1446(b)(3) is governed by Lowery v. Alabama Power Co., 483 F.3d 1184 (11th Cir. 2007), overruled on other grounds by Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 752 (11th Cir. 2010); see also Sallee v. Ford Motor Co., 2014 WL 1492874, at *4-5 (M.D. Ala. 2014) (relying on Lowery to explain the procedure governing § 1446(b)(3) removals); Erby v. Pilgrim's Pride, 2016 WL 3548792, at *7 (N.D. Ala. 2016) (finding that Lowery remains “the binding framework for removing under § 1446(b)(3)”); Simpson v. Primerica Life Ins. Co., 2017 WL 2857699, at *4 (M.D. Ala. 2017), report and recommendation adopted, 2017 WL 2838078 (M.D. Ala. 2017) (finding that because the case was removed for a second time, the defendants must unambiguously establish the amount in controversy).

         Where the plaintiff timely challenges the propriety of removal under § 1446(b)(3), as Plaintiff has done here, a defendant must “unambiguously establish federal jurisdiction.” Lowery, 483 F.3d at 1213; see also Advantage Med. Elecs, LLC v. Mid-Continent Cas. Co., No. 14-0045, 2014 WL 1764483, at *5 (S.D. Ala. 2014) (The “Lowery's unambiguously establish burden replaces [the preponderance-of-the-evidence] burden when a plaintiff challenges the procedural propriety of a removal under [§ 1446(b)(3) ] by . . . timely moving to remand under § 1447(c)” (citation and internal quotation marks omitted)). To accomplish this in cases removed based on diversity jurisdiction, the “jurisdictional amount” must be “stated clearly on the face of the documents before the court, or readily deducible from them.” Lowery, 483 F.3d at 1211.[1]

         III. ...

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