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Rael v. Geico General Insurance Co.

United States District Court, D. New Mexico

June 27, 2017



         THIS MATTER is before the Court on Plaintiff Kristine Rael's Motion to Remand, filed April 13, 2017. Doc. 12. Plaintiff asserts that the Court lacks diversity jurisdiction in this case because the amount in controversy is less than $75, 000. For the reasons set forth below, Plaintiff's motion to remand is denied.

         I. Background

         On February 2, 2017, Plaintiff filed suit against Defendant for recovery of uninsured motorist benefits in the First Judicial District Court for the State of New Mexico. Doc. 1-1 (Ex. A). In her single-count complaint, Plaintiff alleges she was in an automobile collision on January 22, 2013 that was caused by the other driver's negligence. Id. ¶¶ 13-17. At the time of her accident, Plaintiff had uninsured/underinsured motorist coverage from Defendant GEICO General Insurance Company. Id. ¶ 4. Having settled her liability claims against the other driver, Plaintiff asserts in her complaint that she is entitled to underinsured motorist benefits from Defendant because her damages exceed the other driver's available liability limits. Id. ¶¶ 22-25. Plaintiff specifically seeks damages for past and future medical expenses, past and future pain and suffering, and lost wages. Id. ¶¶ 18-21.

         On March 14, 2017, Defendant removed the case to this Court, asserting federal subject matter jurisdiction on the basis of diversity of citizenship. See Doc. 1. In its notice of removal, Defendant asserted that its citizenship is diverse from that of Plaintiff because Plaintiff is a citizen of New Mexico and Defendant is a Maryland corporation with its principal place of business in Maryland. Id. at 2. Defendant also asserted that the amount in controversy exceeds $75, 000. Id. at 3-5. On April 13, 2017, Plaintiff filed the present motion to remand this case to state court, arguing that the Court lacks jurisdiction over this case because Defendant has failed to meet its burden of showing that the amount in controversy exceeds $75, 000. See Doc. 12. This is the sole issue raised by Plaintiff in her motion to remand.[1]

         II. Standard of Review

         An action is removable from state court if the federal district court has original jurisdiction over the matter. 28 U.S.C. § 1441(a). Pursuant to 28 U.S.C. § 1332(a), a federal district court possesses original subject matter jurisdiction over a case when the parties are diverse in citizenship and the amount in controversy exceeds $75, 000.00. See Johnson v. Rodrigues, 226 F.3d 1103, 1107 (10th Cir. 2000). The Tenth Circuit Court of Appeals has defined “amount in controversy” as an “estimate of the amount that will be put at issue in the course of the litigation.” See McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir. 2008).

         If the plaintiff's complaint, filed in state court, demands monetary relief of a stated sum, that sum, if asserted in good faith, is “deemed to be the amount in controversy.” § 1446(c)(2). When the plaintiff's initial pleading seeks nonmonetary relief or does not state the amount in controversy, the defendant's notice of removal may do so. § 1446(c)(2)(A). “[A] defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. Evidence establishing the amount is required by §1446(c)(2)(B) only when the plaintiff contests, or the court, questions the defendant's allegation.” Dart Cherokee Basin Operating Co., LLC v. Owen, 135 S.Ct. 547, 554 (2014). Thus, “when a defendant seeks federal-court adjudication, the defendant's amount-in-controversy allegation should be accepted when not contested by the plaintiff or questioned by the court.” Dart Cherokee, 135 S.Ct. at 553.

         If the defendant's allegation regarding the amount in controversy is contested, Section 1446(c)(2)(B) provides that “removal of the action is proper on the basis of an amount in controversy asserted” by the defendant “if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds” the jurisdictional minimum. As the Supreme Court has explained, “[t]his provision . . . clarifies the procedure in order when a defendant's assertion of the amount in controversy is challenged. In such a case, both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied.” See Dart Cherokee, 135 S.Ct. at 554. A defendant seeking removal can establish jurisdictional facts by a preponderance in a number of ways:

by contentions, interrogatories or admissions in state court; by calculation from the complaint's allegations[;] by reference to the plaintiff's informal estimates or settlement demands[;] or by introducing evidence, in the form of affidavits from the defendant's employees or experts, about how much it would cost to satisfy the plaintiff's demands.

McPhail, 529 F.3d at 954 (quoting Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 541-42 (7th Cir. 2006)). If a defendant is able to prove these jurisdictional facts, the matter should stay in federal court “unless it is ‘legally certain' that less than $75, 000 is at stake.”[2] McPhail, 529 F.3d at 954; see also Hammonds v., Inc., 844 F.3d 909, 912 (10th Cir. 2016) (“to justify dismissal under this standard it must appear to a legal certainty that the claim is really for less than the jurisdictional amount”).

         III. Analysis

         In this case, the allegations in Plaintiff's complaint did not provide sufficient information from which to determine the amount in controversy. Consistent with New Mexico's pleading rules, Plaintiff's complaint did not specify a monetary amount for damages. See NMRA 1-008 (stating that a “complaint shall not contain an allegation for damages in any specific monetary amount”). Although Plaintiff alleged that she sustained “serious injuries” in the automobile accident that necessitated medical treatment, Plaintiff did not describe the nature of these bodily injuries or the extent of the medical treatment she received in her complaint. See Doc. 1-1 at ¶¶ 18-19. Additionally, while Plaintiff sought damages for past and future medical expenses, past and future pain and suffering, and lost wages, id. at ¶¶ 19-21, she did not allege any facts from which to estimate the amount of these damages. Likewise, while Plaintiff alleged that her damages exceeded the other driver's policy limits, she did not indicate what the other driver's policy limits were or the amount of the settlement she received from the other driver. Id. at ¶¶ 22-23. Plaintiff also did not set forth the amount of UM/UIM coverage available under her GEICO insurance policy.

         Since the amount in controversy could not be ascertained based on the contents of the initial pleading, Defendant was required in its notice of removal to “show how much is in controversy through other means.” McPhail, 529 F.3d at 955. Defendant chose to do so by relying on Plaintiff's initial settlement demand. See id. at 956 (stating that documents “demonstrat[ing] plaintiff's own estimation of its claim are a proper means of supporting the allegations in the notice of removal”). Defendant specifically alleged that the amount in controversy was met based on Plaintiff's initial settlement demand for $145, 000 that she sent to Defendant in a letter dated July 29, 2016. See Doc. 1-1 (Ex. E).

         In her detailed July 29 letter, Plaintiff supported her $145, 000 demand by: 1) indicating that she has total UM/UIM limits of 300, 000/900, 000 under her policy; 2) providing a thorough summary of her medical treatment to date; and 3) itemizing damages in the amount of $25, 013.90 in past medical expenses, $10, 000 in future medical expenses, past and future pain and suffering damages for a 27-year period, and lost wages in the amount of $2, 100. See Doc. 1-1 (Ex. E). With regard to medical issues, the demand letter detailed Plaintiff's persistent neck, shoulder, and back pain as a result of the accident. Id. Medical providers treated this pain with prescription medication and multiple rounds of physical therapy over a two-year period. Id. Plaintiff further cited to an increased frequency of migraine headaches, an ...

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