Hail Damage – Amount In Controversy

Lawyers who handle hail claims need to ready a McAllen Division opinion from the Southern District of Texas. The case is styled, Mirosalva Cantu v. Allstate Vehicle and Property Insurance Company.
Cantu filed suit in State Court and Allstate timely removed the case to Federal Court arguing that the amount in controversy exceeds $75,000. Cantu filed a motion to remand stating that the amount in controversy did not exceed $75,000. The Court denied the motion.
The removing party bears the burden of establishing whether federal jurisdiction exists, and the Court must resolve all doubts regarding whether removal jurisdiction is proper in favor of remand. The Court does not have subject matter jurisdiction under 28 U.S.C. § 1332 unless the parties are completely diverse and the amount in controversy exceeds $75,000. Generally, “the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy.” However, when the state practice does not permit a demand for a specific sum, removal is proper if the removing party proves by a preponderance of the evidence that the amount in ontroversy exceeds $75,000. Defendant can satisfy this burden by (1) showing it is “apparent from the face of the petition that the claims are likely to exceed $75,000” or (2) setting forth “summary judgment-type evidence of facts in controversy that support a finding of the requisite amount.”
“If it is facially apparent from the petition that the amount in controversy exceeds $75,000 at the time of removal, post-removal affidavits, stipulations, and amendments reducing the amount do not deprive the district court of jurisdiction.” In other words, these post-removal filings may only be considered in determining the amount in controversy “if the basis for jurisdiction is ambiguous at the time of removal.” “Under those circumstances, the court is still examining the jurisdictional facts as of the time the case is removed, but the court is considering information submitted after removal.” Once Defendant has established by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount, removal is proper, unless Plaintiffs show with legal certainty that the claim is for less than the jurisdictional amount asserted in the original petition. The Fifth Circuit has held that plaintiffs may make this showing by citing to a statute limiting recovery or by filing “a binding stipulation or affidavit with their complaints.” Indeed, it is well established law that post-removal stipulations are irrelevant at this atage of the Court’s analysis.
Plaintiff claims that diversity jurisdiction is improper in this case because the amount in controversy has not been satisfied. Specifically, in the instant motion, Plaintiff asserts that the amount in controversy is $23,945.43. For its part, Defendant points out to the Court that while $23,945.43 is the amount Plaintiff claims as actual damages, Plaintiff’s original petition also requests exemplary damages in addition to her other requested damages. Thus, Defendant argues that when Plaintiff’s actual damage claims are coupled with claims for exemplary damages, “it is apparent…the amount in controversy exceeds $75,000.” The Court agrees.
As an initial matter, the Court observes that Plaintiff’s original petition specifically states that ‘Plaintiff seeks monetary relief of $200,000 or more, including damages of any kind, penalties, costs, expenses, prejudgment interest, and attorney’s fees. With that in mind, the Court notes that under Texas law, punitive damages are included within the definition of exemplary damages. Moreover, in Texas, an exemplary damages award can result in an increase of up to at least $200,000 for a plaintiff. Finally, the Fifth Circuit has held that punitive damages are “to be considered in ascertaining the amount in controversy when the insurer could be liable for those sums under state law….” Therefore, the Court believes the judicial threshold requirement of $75,000 could easily be met if Plaintiff’s claim for exemplary damages is successful.
In her last effort to avoid the federal forum, Plaintiff contends that removal was improper because she has offered a binding stipulation that the amount in controversy is less than $75,000 First and foremost, the Court clarifies that the parties have not actually signed a stipulation limiting the amount of damages.Second, and most importantly, the Court may not consider post-removal stipulations once jurisdiction has been properly established, and such a filing would be irrelevant for purposes of the Court’s legal certainty analysis. Thus, Plaintiff’s proposed stipulation may not be considered by this Court.
For the foregoing reasons, the Court finds that it has jurisdiction to hear this case because the amount in controversy exceeds $75,000. Therefore, Plaintiff’s motion to remand is Denied.