Insurance Company Trying To Be In Federal Court

Dallas insurance lawyers will want to know the ways that help to keep a case out of Federal Court. The United States District Court, Southern District, Houston Division, issued an opinion that provides one way of staying out of Federal Court. The style of the case is, Jorrie Williams v. Companion Property & Casualty Insurance Co.
Here is relevant information to be known.
Williams filed a state-court suit asserting claims. (This was the second of two lawsuits) The petition included a stipulation that damages were less than $75,000. Defendant had the case removed to this court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332(a). Williams moved to remand based on the damages stipulation and lack of diversity of citizenship.
The defendants argue that removal is proper because the amount in controversy exceeds the $75,000 minimum requirement. The amount in controversy is determined at the time of removal. The court must look to the face of the plaintiff’s original petition to evaluate the amount in controversy. When a pleading does not allege a specific damages amount, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. Presuit demand letters may be submitted. If the record shows that the remand requirements were met when the case was removed, the plaintiff cannot avoid federal jurisdiction by later requesting damages below the jurisdictional minimum. Williams’s complaint does not allege a specific amount in controversy. It states: “The amount in controversy does not exceed the necessary amount to satisfy diversity.” This argument is unpersuasive. Before Williams filed her first lawsuit– which was nearly identical to this one–she made a demand that included the $100,804.51 the appraiser estimated as her property damage. The demand, the petition in the original lawsuit, and the petition in this case allege actual damages, attorney’s fees, mental anguish, treble damages, and exemplary damages. The allegations in Williams’s pleadings, the demand and appraisal, and the additional requests for other damages and fees show that the damages amount could exceed $75,000.00.
Williams’s attorney, however, stipulated before this case was removed that “the total sum or value in controversy in this cause of action does not exceed $75,000.00 exclusive of interest and costs .” The defendants argue that this stipulation is insufficient to defeat federal subject-matter jurisdiction. The defendants’ argument does not account for everything in the stipulation. The stipulation states not only that Williams seeks less than the jurisdictional minimum amount, but that “neither Plaintiff nor his/her attorney will accept an amount that exceeds $75,000.00 exclusive of interest and costs.” A Texas plaintiff must be able to show to a ‘legal certainty’ that she ‘will not be able to recover more than the damages for which he has prayed in the state court complaint.’ The plaintiff may do so by filing a legally ‘binding stipulation or affidavit’ with their state court complaint, stating that she affirmatively seeks less than the jurisdictional threshold and further stating that she will not accept an award that exceeds that threshold.”
The statement in the stipulation that Williams and counsel will neither seek nor accept more than $75,000 in state court after remand establishes to a legal certainty that Williams will not be able to recover more than $75,000.00. Plaintiffs who wish to ensure, to a legal certainty, that their complaints are not construed to include an amount in controversy over $75,000 are well served by filing, concurrently with their complaints in state court, a binding stipulation or affidavit, which state that they will not accept more than the sum or value of $75,000, exclusive of interests and costs. The defendants argue the stipulation is ineffective because it was not filed until after the first lawsuit and is therefore a post removal stipulation. The Fifth Circuit has explained that “once the district court’s jurisdiction is established, subsequent events that reduce the amount in controversy to less than $75,000 generally do not divest the court of diversity jurisdiction.” But the fact that this court had jurisdiction over the first lawsuit, which was dismissed, does not determine whether this court has jurisdiction over the pending second lawsuit. Federal jurisdiction must be present in each suit. Although there was a basis for federal subject-matter jurisdiction over the first lawsuit, there is not over the second lawsuit because of the binding stipulation. The stipulation was filed before the present suit was removed and is therefore not a “post removal” event attempting to divest the federal court of jurisdiction that existed at the time of removal.
Because the amount in controversy does not exceed $75,000, this court lacked jurisdiction and remanded.