In Dennis Bruce Landscape Management Services, Inc. v. Merchant's Mutual, the United States District Court for the Western District of Pennsylvania denied Plaintiff’s motion to remand and held that the amount in controversy had been met.  In addition, the court granted defendant insurer’s motion to dismiss plaintiff’s claim for punitive damages, but granted plaintiff’s request to file an amended complaint to include  a claim for bad faith.  Plaintiff owned trucks and equipment, which were insured by the defendant.  After sustaining fire damage to one of its trucks and vandalism damage to another, plaintiff submitted two claims to defendant, however, defendant made no payment, denial or adjustment and retained possession of the truck.  Plaintiff's instituted an action in the Allegheny County Court of Common Pleas alleging two claims for breach of contract, a claim for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection ("UTPCPL") and a claim for punitive damages.  Defendant removed the complaint to federal court based on diversity jurisdiction.  Plaintiff filed a motion to remand arguing that the amount in controversy was not sufficient to sustain jurisdiction.  Defendant filed a motion to dismiss the UTPCL claim as well as the claim for punitive damages.

The court denied Plaintiff's motion to remand and held that although the damages alleged in Plaintiff's complaint only amounted to $74,545.00, $455 lower than the jurisdictional minimum, the punitive damages sought also may be included in the amount in controversy calculation unless they are "patently frivolous and without foundation."  The court held that although punitive damages are not available for breach of contract or UTPCPL claims, the Plaintiff was clearly attempting to assert a bad faith claim rather than a claim under the UTPCPL.  The court, therefore, also granted defendant's motion to dismiss the UTPCPL and punitive damage claims, but allowed plaintiff to amend its complaint to assert a claim for bad faith, which permits punitive damages.

Four relatively recent decisions on removal and remand addressing the $75,000 jurisdictional minimum are summarized on this blog, and can be found under the procedural issues category.  These include:

Brownstein v. Allstate Insurance Company, Valley v. State Farm Fire and Casualty Company, Howard v. Allstate Insurance Company, and


    

In Uccelletti v. State Farm Fire & Casualty Company, the insured filed two claims: one for breach of contract and one for bad faith.  Each claim was followed by a demand for judgment “not in excess of $50,000.”  The case was removed by the insurer to federal court, which has an amount-in-controversy minimum of $75,000 for this type of case.  The United States District Court remanded the case to state court.  It ruled that there was not a legal certainty that the insured, if successful on her claims, would recover in excess of $75,000.  The court reasoned that possible punitive damages and/or attorney’s fees awards in the tens-of-thousands of dollars were “speculative.”  In the court’s mind, the insured’s refusal to concede that her damages were less than $75,000 did not control.

Three relatively contemporaneous cases on the same topic have issued from the Eastern District Court, though by different judges.  In Brownstein v. Allstate Insurance Company, summarized and posted contemporaneously with this summary, the insured’s concession that she was not seeking more than $75,000 was dispositive on the remand issue.  However, another opinion rejected the insured’s effort to remand so long as it is conceivable that the insured could recover $75,000.  Valley v. State Farm Fire and Casualty Company, summarized on this sites’ JANUARY 2007 BAD FAITH CASES.  In Howard v. Allstate Insurance Company, summarized in OCTOBER 2006 BAD FAITH CASES on this site, the Court did remand a case that started as a Philadelphia Court of Common Pleas arbitration, i.e., the demand was less than $50,000, where the carrier seeking to remove the case could not establish by a preponderance of the evidence to a legal certainty that the “amount in controversy” exceeded $75,000.

Date of Decision: October 11, 2006.

Uccelletti v. State Farm Fire & Casualty Company, United States District Court for the Eastern District of Pennsylvania, No. 06-4065, 2006 U.S. Dist. LEXIS 94578 (E.D. Pa. 2006) (Davis, J.).

 

In Brownstein v. Allstate Insurance Company, the insured alleged that her premises suffered $23,254.80 in damage, and that the insurer acted in bad faith by refusing to pay her claim for that amount.  The case was removed by the insurer to federal court, which has an amount-in-controversy minimum of $75,000 for this type of case.  The insured argued that the case should be remanded to state court because, “the amount in controversy in this case clearly does not exceed $ 75,000.”  Due to this unequivocal assertion, the court remanded the case to state court for lack of jurisdiction.  However, without the above statement by the insured, the case would likely not have been remanded.  The insured could conceivably recover in excess of $75,000 if she succeeded on her contract claim for $23,254.80 and her bad faith claim (which presumably sought punitive damages and attorneys fees). 

Three relatively contemporaneous cases on the same topic have issued from the Eastern District Court, though by different judges.  In Uccelletti v. State Farm Fire & Casualty Company, summarized and posted contemporaneously with this summary, the case was remanded because of the lack of legal certainty the claims would be worth in excess of $75,000.  However, in another Pennsylvania Eastern District Court opinion, the insured’s effort to remand was denied, so long as it is conceivable that the insured could recover $75,000. See  Valley v. State Farm Fire and Casualty Company, summarized on this sites’ JANUARY 2007 BAD FAITH CASES .  In Howard v. Allstate Insurance Company, summarized in OCTOBER 2006 BAD FAITH CASES on this site, the Court did remand a case that started as a Philadelphia Court of Common Pleas arbitration, i.e., the demand was less than $50,000, where the carrier seeking to remove the case could not establish by a preponderance of the evidence to a legal certainty that the “amount in controversy” exceeded $75,000.

Date of Decision: November 16, 2006.

Brownstein v. Allstate Insurance Company, United States District Court for the Eastern District of Pennsylvania, No. 06-4351, 2006 U.S. Dist. LEXIS 94577 (E.D. Pa. 2006) (Diamond, J.),