Well, Insurance Lawyers, here it is happening again. Knowing the little ways to keep a lower dollar case out of Federal Court are just too simple for it to happen again and again. This 2020, opinion is also from the Southern District, Houston Division, and is styled, Michael Dyll and Remi Dyll v. Palomar Specialty Insurance Company.
The Dylls sued Palomar in State Court and Palomar properly removed the case to Federal Court pursuant to 28 U.S.C., Section 1441(a). A defendant has the burden of proving by a preponderance of the evidence that subject matter jurisdiction exists. The operative facts and pleadings are evaluated at the time of removal.
Federal Courts have jurisdiction when the parties are from different states and the amount in controversy exceeds $75,000. The amount in controversy is ordinarily determined on the basis of the sum demanded in good faith in the initial pleading. A demand is made in bad faith if its purpose is to defeat Federal jurisdiction. The removing defendant must show by a preponderance of the evidence that the amount in controversy exceeds $75,000. A Plaintiff must make a showing that his recovery will not exceed the amount stated in the complaint if the amount is less than $75,000. To make such a showing of legal certainty, Texas plaintiffs must file a binding stipulation or affidavit with the original state petition. A stipulation filed after removal is irrelevant to the court’s analysis.
The Dylls argue that remand is justified because their original state petition stated that they sought no more than $75,000 in damages. In the original petition, the Dylls sought monetary relief of $100,000 or less not to exceed $75,000, for actual damages, attorney’s fees, statutory and exemplary damages. The Texas Rules of Civil Procedure do not allow plaintiffs to request a specific amount of damages beyond one of the ranges set forth in Rule 47(c). Accordingly, the Dylls allegation that their claims do not exceed $75,000 is an attempt to avoid federal jurisdiction. The allegation of damages in the Dyll’s original state petition was made in bad faith and does not control the amount in controversy.
Palomar has offered evidence that the Dylls admitted the estimated cost to repair or replace the roof alone is $20,000. The Dylls have not objected to this evidence, nor have they offered any contradictory evidence. The court considers Palomar’s uncontested evidence as establishing that the Dylls seek to at least $20,000 in actual damages. In addition to actual damages, and statutory and exemplary damages up to three times the actual damages. the treble damages alone would be at least $60,000. Adding attorney’s fees and mental anguish damages would raise the amount in controversy above the $75,000 threshold. Thus, the court finds that Palomar has shown by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount.
The Dylls motion to remand is denied.