DECEMBER 2017 BAD FAITH CASES: REMAND DENIED WHERE AMOUNT IN CONTROVERSY MET; THE COURT NOTING THAT FEDERAL COURTS ROUTINELY HEAR UIM CONTRACT AND BAD FAITH CLAIMS (Western District)

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This is a report and recommendation authored by a U.S. Magistrate Judge, subject to final review and decision by the District Court Judge.

The insured sued his insurer for breach of contract and bad faith surrounding a UIM claim in the Fayette County Court of Common Pleas. The insurer removed the action to federal court based upon diversity jurisdiction. Thereafter, the insured filed a motion to remand, arguing that the case should not proceed in federal court because it involves questions of Pennsylvania law.

The Court stated “the party asserting jurisdiction bears the burden of showing that at all stages of the litigation the case is properly before the federal court.” As such, the insurer “bears the burden of demonstrating that . . . removal . . . [is] proper in all respects.”

The insured cited case law referencing the Declaratory Judgment Act, but the insured’s complaint did not seek a declaratory judgment. Consequently, the Court found that the insured’s brief was largely irrelevant. The Court further found that the amount in controversy requirement was satisfied because the insured sought damages of $60,000, plus additional damages of attorneys’ fees, costs, and more, likely reaching the $75,000 threshold. Because “[f]ederal courts routinely resolve issues of state law relating to insurance, including UIM benefits and bad faith[,]” the Court denied the insured’s motion to remand.

Date of Decision: December 12, 2017

Carney v. GEICO, Civil Action No. 17-1486, (W.D. Pa. Dec. 12, 2017) (Mitchell, M.J.)

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