JANUARY 2007 BAD FAITH CASES NO FEDERAL JURISDICTION WHERE PLAINTIFF UNEQUIVOCALLY ADMITS THAT HER CASE DOES NOT MEET THE AMOUNT-IN-CONTROVERSY REQUIREMENT (Philadelphia Federal)
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. In Howard v. Allstate Insurance Company, 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.),