As discussed before, litigating cases in Federal Court is what an insurance company prefers to do. Ans as discussed before, there are ways to keep this from happening in the right circumstances. The United States 5th Circuit issued an opinion issued an opinion in 1998, that is worth knowing about as it relates to calculating damages and how that calculation effects whether or not a case will be litigated in Federal Court. The opinion is styled, St. Paul Reinsurance Co., LTD. v. Greenberg.
This declaratory judgment action is a case wherein the insurance company won their fight to have the case litigated in Federal Court because the amount in controversy requirement for diversity jurisdiction under 28 U.S.C., section 1332, was not satisfied.
Greenberg had a homeowners policy with St. Paul. Greenberg’s home was destroyed by arson. Greenberg filed a sworn proof of loss for $35,000, which was the policy limits. St. Paul denied the claim for three reasons.