CASE REMANDED WHERE INSURED’S COUNSEL ADMITTED CASE WAS WORTH LESS THAN $75,000, EVEN THOUGH COUNSEL WOULD NOT SIGN A STIPULATION TO THAT EFFECT PREPARED BY OPPOSING COUNSEL (Philadelphia Federal)
The insurer removed this bad faith action, and the insured sought to remand on the basis that the claims did not exceed $75,000. The court agreed, based chiefly on the fact there was no dispute that plaintiff’s counsel admitted “the damages clearly do not exceed $75,000.”
In addition, although the complaint alleged “substantial” losses and other boilerplate language concerning damages, there were “no allegations of specific events and losses, [and] any determination of same by this Court would constitute pure speculation.” Speculation about damages based on boilerplate allegations can not meet the insurer’s burden to establish a proper basis for removal.
Further, the insured’s refusal to stipulate its claim was worth less than $75,000 was not dispositive. Case law indicates such a stipulation may be considered as evidence, or as a factor, in weighing whether the jurisdictional amount is met. The focus, however, must remain on a reasonable reading of the complaint. This is especially true when the stipulation is entered after the complaint was filed, which the court said “is of no legal significance.”
There was also some issue as to whether choosing not to sign a stipulation prepared by opposing counsel, is the equivalent of refusing to stipulate. The court observes that: “A party’s failure to sign a stipulation limiting damages—though worthy of some consideration—is not dispositive of the amount-in-controversy issue, given that both defendants and plaintiffs typically seek to use it as a tactical advantage in removing cases.”
Quoting an earlier opinion, the court states:
Defendants read too much into this unsigned stipulation. First, as best as this Court can tell, Plaintiffs’ lawyer has not signed the stipulation prepared by opposing counsel, which is different from Plaintiffs refusing to agree to cap their damages. Lawyers tend to be cautious. It is therefore unsurprising that Plaintiffs’ lawyer’s first reaction to a stipulation limiting his clients’ recovery was not to take out his pen and say, “where do I sign?” . . . But just as a complaint that limits damages to a figure below the jurisdictional threshold does not guarantee the case stays out of federal court, a lawyer’s refusal to limit his clients’ recovery by signing a stipulation should not end the inquiry[.]