JANUARY 2012 BAD FAITH CASES: FEDERAL COURT REFUSES TO REMAND BECAUSE THE INSURED COULD NOT PROVE WITH LEGAL CERTAINTY THAT THE AMOUNT IN CONTROVERSY WOULD NOT EXCEED $75,000 (Western District)
In Vinski v. State Farm Mutual Automobile Insurance Company, the court examined an insured’s motion to remand to state court for lack of subject matter jurisdiction. The case stemmed from the insured’s claim for under-insured motorist (“UIM”) benefits after a car accident. After the insured filed suit in state court, for the UIM benefits and for breach of fiduciary duty in processing the claim, the carrier removed to federal court on the basis of diversity jurisdiction.
However, the insured opposed this removal and moved the district court to remand the case because the amount in controversy did not exceed $75,000. The insured’s original complaint alleged damages “in a sum in excess of” $25,000.00. Based upon this valuation, the insured took the position that the carrier could not maintain its claim for diversity jurisdiction.
In support of its argument, the insured argues that there was a pending offer to settle the claim for UIM benefits for the sum of $50,000. The insured claims that this offer is “valuable evidence of a reasonable estimate of the value of their claims.” However, the insured does not put forth an upper limit on recovery, should this case go to trial. As such, the court held, the insured failed to meet its burden that the jurisdictional limit could not be met as a legal certainty. Accordingly, the court denied the motion to remand.