United States District Court, N.D. Alabama, Southern Division
MATTHEW B. MENENDEZ, et al, Plaintiffs,
AMERICAN STRATEGIC INSURANCE CORPORATION, et al, Defendants.
MEMORANDUM OPINION AND ORDER
MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE.
Matthew and Emily Menendez filed this insurance coverage
action in state court against defendants American Strategic
Insurance Corporation and the Progressive Corporation. (Doc.
1-1). The insurance companies removed the action to federal
court on the basis of diversity jurisdiction. (Doc. 1). The
plaintiffs have moved to remand their claims to state court,
arguing that the insurance companies cannot demonstrate that
the amount in controversy exceeds $75, 000.00. (Doc.
For the reasons discussed below, the Court denies the motion
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
issued a home insurance policy to Mr. and Mrs. Menendez in
June of 2012. (Doc. 1-1, p. 7, ¶ 7). In April of 2018,
after discovering that two areas of their home-the kitchen
and the front wall-had water damage, Mr. and Mrs. Menendez
filed a claim under their policy. In their complaint, the
plaintiffs allege that ASI denied the claim. (Doc. 1-1, p. 9,
¶ 17). They filed this lawsuit in the Circuit
Court of Jefferson County, Alabama, seeking a declaration
that they are entitled to benefits under their policy. (Doc.
1-1). Mr. and Mrs. Menendez also seek damages for breach of
contract and bad faith failure to pay their insurance claim.
insurance companies timely removed this action to federal
court pursuant to 28 U.S.C. § 1332. (Doc. 1). ASI has
filed evidence supporting its contention that the amount in
controversy exceeds $75, 000.00. (Docs. 2-1 through 2-6). Mr.
and Mrs. Menendez contend that ASI's evidence is improper
and does not demonstrate that the amount in controversy
exceeds $75, 000.00. (Doc. 5). Mr. and Mrs. Menendez have
filed evidence in support of their position. (Docs. 5-2, 5-2,
7-1). Mr. and Mrs. Menendez recently have asserted that they
are not alleging that they suffered mental anguish, and they
are not seeking punitive damages. (Doc. 11).
“civil action brought in a State court of which the
district courts of the United States have original
jurisdiction, may be removed by the defendant or defendants,
to the district court of the United States for the district
and division embracing the place where such action is
pending.” 28 U.S.C. § 1441(a). Where, as here, the
removing parties rely on 28 U.S.C. § 1332(a) as the
basis for removal, there must be complete diversity of
citizenship, and the amount in controversy must exceed $75,
000.00, exclusive of interest and costs. Underwriters at
Lloyd's, London v. Osting-Schwinn, 613 F.3d 1079,
1085 (11th Cir. 2010) (“For federal diversity
jurisdiction to attach, all parties must be completely
diverse, and the amount in controversy must exceed $75,
000.”) (internal citations omitted). The removing
parties bear the burden of demonstrating that federal
jurisdiction exists. Williams v. Best Buy Company,
Inc., 269 F.3d 1316, 1319 (11th Cir. 2001).
“the plaintiff has not pled a specific amount of
damages, ” Williams, 269 F.3d at 1319
(internal citations omitted), or when, after removal, the
plaintiff contests the defendants' assertion of the
amount in controversy, Dart Cherokee Basin
Operating Co., LLC v. Owens, 135 S.Ct. 547, 553-54
(2014), the removing defendants must prove “by the
preponderance of the evidence” that the amount in
controversy exceeds $75, 000. 135 S.Ct. at 553-54. The
preponderance of the evidence standard does not require a
removing defendant “to prove the amount in controversy
beyond all doubt or to banish all uncertainty about it,
” Pretka v. Kolter City Plaza II, Inc., 608
F.3d 744, 754 (11th Cir. 2010), but a “conclusory
allegation in the notice of removal that the jurisdictional
amount is satisfied, without setting forth the underlying
facts supporting such an assertion, is insufficient, ”
Williams, 269 F.3d at 1319-20.
analyzing the amount in controversy, district courts may make
“reasonable deductions, reasonable inferences, or other
reasonable extrapolations, ” Pretka, 608 F.3d
at 754, and may use “judicial experience and common
sense, ” Roe v. Michelin North America, Inc.,
613 F.3d 1058, 1062 (11th Cir. 2010). “[E]stimating the
amount in controversy is not nuclear science, ” and
“the undertaking is not to be defeated by unrealistic
assumptions that run counter to common sense.” S.
Fla. Wellness, Inc. v. Allstate Ins. Co., 745 F.3d 1312,
1317 (11th Cir. 2014). Moreover, gamesmanship in pleading can
neither create nor defeat federal jurisdiction. Goodwin
v. Reynolds, 757 F.3d 1216 (11th Cir. 2014).
their complaint, Mr. and Mrs. Menendez do not claim a
specific amount of damages, and the amount in controversy is
not apparent on the face of the complaint. (Doc. 1-1). Mr.
and Mrs. Menendez allege that because of the defendants'
purported breach of contract and bad faith failure to
properly investigate their claim, they (the plaintiffs)
suffered “the financial loss of the insurance benefits
to which they are entitled, ” (Doc. 1-1, p. 9,
¶¶ 14, 15, 17, 18, 23, 26), and they “demand
judgment against Defendants in such sums as a jury may
assess, ” (Doc. 1-1, p. 10). In their motion to remand,
the plaintiffs state that the “sums that a jury may
assess” consist of “the damage caused by the
covered loss and the attendant bad faith damages.”
(Doc. 5, p. 2).
establish that the amount in controversy exceeds $75, 000,
the insurance companies rely primarily on two pieces of
evidence -- an estimate for kitchen repairs of $47, 650.00
that Ms. Menendez submitted to ASI on April 27, 2018, (Doc.
2-5, p. 2), and the affidavit of Viki Miles, a lead adjuster
for ASI, (Doc. 2-1, p. 2, ¶ 2). Plainly, the $47, 650.00
estimate does not exceed the $75, 000 jurisdictional
threshold, but the estimate concerns only kitchen repairs and
does not account for structural and mold damage elsewhere in
the house for which Mr. and Mrs. Menendez seek coverage. In
her affidavit, Ms. Miles asserts that the structural and mold
damage to the front of the house is “more
extensive” and “will likely exceed the kitchen
repair estimate given the extensive damage to the structural
elements of the front of the home.” (Doc. 2-1, p. 4,
¶ 8). Ms. Miles describes the repairs as
“necessary.” (Doc. 2-1, p. 4, ¶ 8).
Mrs. Menendez argue that the Court may not rely on the $47,
650.00 kitchen repair estimate in evaluating the amount in
controversy because the estimate is not limited to water
damage repairs but instead reflects the total cost of
remodeling the kitchen, a project that was underway when Mr.
and Mrs. Menendez discovered the water damage in their house.
In their motion to remand, the plaintiffs state:
“Plaintiffs were already in the midst of a remodel to
their home when they discovered the covered water damage.
Plaintiffs do not and have never claimed that their covered
losses include entire cost of their remodel.” (Doc. 5,
p. 6). In their reply in support of their motion to remand,
the plaintiffs assert:
to the extent this construction estimate i[s] offered as
evidence of the amount in controversy in this case, it is
over-inclusive: Plaintiffs do not and have never suggested,
either in their Complaint or in any claim filed with
Defendants that Defendants were obligated under the Policy to
pay for granite countertops or any of the other line items in
the estimate ...