January 2007 BAD FAITH CASES COURT RULES THERE IS NO FEDERAL JURISDICTION WHENEVER IT IS POSSIBLE AN INSURED WILL RECOVER LESS THAN THE AMOUNT-IN-CONTROVERSY REQUIREMENT (Philadelphia Federal)
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.
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.).