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Thomas v. Allstate Property and Casualty Insurance Co.

United States District Court, W.D. Kentucky, Louisville Division

January 10, 2017




         This matter comes before the Court on Plaintiffs' Motion to Remand (DN 8). The matter is ripe for adjudication. For the following reasons detailed below, the Plaintiffs' motion is GRANTED.

         I. BACKGROUND

         Plaintiffs Kelvin Thomas and Keyaira Thomas were involved in an accident when their automobile was sideswiped by another vehicle. (Notice Removal Ex. B, at 2, DN 1-2 [hereinafter Police Report]). At the time of the accident, the Thomases had insurance through Allstate Property and Casualty Insurance Company (“Allstate”). (Notice Removal Ex. D, at 2, DN 1-4 [hereinafter Policy]). Their policy included Personal Injury Protection (“PIP”) coverage in the amount of $10, 000.00 for each passenger. (Policy 14). The Thomases alleged that they sustained injuries as a result of the accident and submitted individual claims to Allstate seeking reimbursement for medical treatment and PIP coverage benefits. (Am. Compl. ¶¶ 11-13, DN 32). Mr. Thomas incurred approximately $13, 000.00 in medical bills related to the accident, and Ms. Thomas's bills totaled approximately $5, 800. (Am. Compl. ¶¶ 29, 31). Allstate suspended making a decision on any of the Thomases' claims pending the completion of its fraud investigation and therefore has not paid anything on these claims. (Am. Compl. ¶¶ 30, 32).

         Allstate requested an Examination Under Oath (“EUO”) be scheduled for both Thomases. (Def.'s Resp. Pls.' Mot. Remand Ex. 1, DN 11-1). The Thomases, through their attorney, refused to appear for an EUO. (Def.'s Resp. Pls.' Mot. Remand Ex. 2, DN 11-2). Allstate then filed a petition in Jefferson Circuit Court under KRS 304.39-280(3) seeking a court order authorizing it to take the deposition testimony and obtain an EUO of the Thomases. (Am. Compl. ¶ 25). The Thomases responded by requesting that the court deny Allstate's petition to conduct discovery in the case and seeking an order finding that Allstate improperly denied no-fault benefits to the Thomases. (Am. Compl. ¶ 26).

         The Thomases subsequently filed the Amended Complaint seeking: (i) a declaratory judgment that Allstate “had no reasonable basis to deny or delay payment of no-fault benefits on the basis of demanding an examination under oath be completed prior to payment of no-fault benefits” and that the Thomases are “entitled to no-fault benefits and for injunctive relief preventing Defendant Allstate, as reparations insurer, from denying or delaying payment of no-fault benefits on its insureds behalf in the future . . . to prevent this conduct in the future”; (ii) an injunction “preventing Allstate, as reparations insurer, from the unnecessary, unreasonable and ultimately unlawful practice of denying or delaying payment of no-fault benefits without following the statutory mandates of the Kentucky Motor Vehicle Reparations Act”; and (iii) “damages including 18% interest, attorney fees and failure to pay past-due no-fault benefits” for violations of the Kentucky Motor Vehicle Reparations Act (“MVRA”). (Am. Compl. ¶¶ 73-75, 78). Additionally, the Thomases “stipulate[d] that the total damages claimed for them and each putative class member is less than $75, 000.00 per each plaintiff.” (Am. Compl. ¶ 79).

         The Thomases also contend they are representatives of a putative class, which they seek to certify, of similarly situated individuals in Kentucky who were denied or had payment of no-fault benefits denied or delayed on the basis of the individuals refusing to submit to an examination under oath. (Am. Compl. ¶ 2). Thus, the Amended Complaint also seeks declaratory and injunctive relief on behalf of the entire class. (Am. Compl. ¶¶ 73-75, 78). Allstate removed this action from Jefferson Circuit Court asserting that the amount in controversy was satisfied by combining Plaintiffs' claims for compensatory damages, injunctive relief, and attorney's fees. (Notice Removal, ¶¶ 24-33, DN 1). Plaintiffs have moved to remand this matter to state court, and this matter is ripe for adjudication. (Pls.' Mot. Remand, DN 8).


         “The district courts of the United States . . . are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (internal quotation marks omitted) (citation omitted). The removal statute, 28 U.S.C. § 1441, “authorizes” defendants to remove “civil actions from state court to federal court when the action initiated in state court is one that could have been brought, originally, in a federal district court.” Lincoln Prop. Co. v. Roche, 546 U.S. 81, 81 (2005) (citation omitted). “In order to provide a neutral forum for what have come to be known as diversity cases, Congress also has granted district courts original jurisdiction in civil actions between citizens of different States, between U.S. citizens and foreign citizens, or by foreign states against U.S. citizens.” Exxon Mobil, 545 U.S. at 552 (citing 18 U.S.C. § 1332). “[Section] 1332(a) requires that the matter in controversy in a diversity case exceed a specified amount, currently $75, 000.” Id. at 552. “To satisfy the amount-in-controversy requirement at least one plaintiff's claim must independently meet the amount-in-controversy specification.” Everett v. Verizon Wireless, Inc., 460 F.3d 818, 822 (6th Cir. 2006) (citing Exxon Mobil, 545 U.S. at 551) (emphasis added).

         A defendant wishing to remove a case bears the burden of satisfying the amount-in-controversy requirement. Gafford v. Gen. Elec. Co., 997 F.2d 150, 155 (6th Cir. 1993), abrogated on other grounds by Hertz Corp. v. Friend, 130 S.Ct. 1181 (2010). Where plaintiffs seek “some unspecified amount that is not self-evidently greater or less than the federal amount-in-controversy requirement, ” the defendant satisfies its burden when it proves that the amount in controversy “more likely than not” exceeds $75, 000. Id. at 158. The use of the preponderance of the evidence standard “does not place upon the defendant the daunting burden of proving, to a legal certainty, that the plaintiff's damages are not less than the amount-in-controversy requirement. Such a burden might well require the defendant to research, state and prove the plaintiff's claim for damages.” Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 572 (6th Cir. 2001) (internal quotation marks omitted) (quoting Gafford, 997 F.2d at 158).


         Allstate maintains that the amount in controversy exceeds $75, 000 because Plaintiffs have requested declaratory and injunctive relief that will require Allstate to pay out PIP benefits to all insureds within thirty days of receipt without the opportunity to investigate for fraud and because Plaintiffs have requested statutory attorney's fees under the MVRA. (Notice Removal 9). After calculating the amount in controversy with respect to the compensatory damages, injunctive and declaratory relief, and statutory attorney's fees, the Court concludes that Allstate has failed to satisfy its burden of establishing that it is more likely than not that the amount in controversy will exceed $75, 000.[1]

         A. Compensatory Damages

         The PIP benefits available through the Allstate policy are a maximum of $10, 000.00 per individual, combined with the 18% interest per annum as prescribed in the MVRA. See KRS 304.39-210(2). The class period asserted in the Amended Complaint is for the time period from May 1, 2011, to the present. (Am. Compl. ¶ 2). Thus, the addition of six years of statutory interest for any one plaintiff claiming $10, 000 in past-due PIP benefits could total as much as $10, 800 through April 2017 and, consequently, the absolute maximum any single Plaintiff could receive through that date would be $20, 800.[2] This is still over $54, 000 below the jurisdictional threshold. Allstate does not dispute that the compensatory damages do not reach the amount in controversy, but instead argues that the addition of the value of injunctive relief and statutory attorney's fees to the compensatory ...

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