United States District Court, E.D. Kentucky, Central Division, Lexington
OPINION AND ORDER
K. CALDWELL UNITED STATES DISTRICT JUDGE.
matter is before the Court on plaintiff Haley
Willoughby's motion to remand (DE 7) this action to state
court. For the following reasons, the motion will be granted.
filed this action in Powell Circuit Court alleging that she
was injured while a passenger in a car driven by Broukelyn
Martin. She alleged that she was insured by a policy issued
by defendant Allstate Property & Casualty Insurance
Company, which provided at least $100, 000 in underinsured
motorist coverage. She alleged that she filed a claim with
Allstate, but Allstate has not responded to her claim.
Willoughby asserts a claim against Allstate for the
underinsured motorist coverage she alleges is due under the
policy. She also asserts claims for statutory and common-law
bad faith against Allstate.
removed the action to this Court asserting that this Court
has "diversity" jurisdiction over the action
pursuant to 28 U.S.C. § 1332(a), which establishes
federal jurisdiction over actions that are between citizens
of different states where the amount in controversy exceeds
$75, 000. There is no dispute that the parties are citizens
of different states. Willoughby is a Kentucky citizen;
Allstate is an Illinois citizen.
issue is whether the amount in controversy exceeds $75, 000.
In the complaint, Willoughby alleges that Allstate has acted
in bad faith "[b]y failing to honor the Plaintiffs
claims for underinsured benefits in the amount of at least
$100, 000, and pay, despite the Plaintiffs repeated demands.
..." (DE 1-1, Complaint ¶19.) In addition,
Willoughby seeks punitive damages. Nevertheless, Willoughby
states in the complaint that she seeks a judgment for the
policy claim and the statutory bad faith claim in an amount
"not to exceed $74, 999." (DE 1-1, Complaint at
CM-ECF p. 8.) Willoughby further states in the complaint that
the limitation applies to damages for pain and suffering,
medical expenses, lost wages, punitive damages, and "any
and all other damages discovered." (DE 1-1, Complaint at
CM-ECF p. 8.)
since the plaintiff is master of the claim, a claim
specifically less than the federal requirement should
preclude removal." Gafford v. Gen. Elec. Co.,
997 F.2d 150, 157 (6th Cir. 1993), abrogated on other
grounds by Hertz Corp. v. Friend, 559 U.S. 77 (2010).
This is because it is perfectly acceptable for a plaintiff
who does not wish to try his case in federal court to sue for
less than the federal jurisdictional amount and, in such
circumstances, the defendant cannot remove the case even
though the plaintiff would be entitled to more damages than
he seeks. Id.
argued in its notice of removal, however, that
Willoughby's statement in the state court complaint
limiting Willoughby's damages is not
"unequivocal." Only "unequivocal"
statements limiting damages are acceptable to clarify the
amount in controversy. Shupe v. Asplundh Tree Expert
Co., 566 Fed.Appx. 476, 481 (6th Cir. 2014). Thus,
Allstate argues, the statement should not be considered in
determining this Court's jurisdiction.
does not state in her complaint that she will not seek or
accept damages of more than $75, 000. She merely states that
she demands judgment for damages "not to exceed $74,
999." The statement is even more ambiguous regarding the
amount in controversy given that, under Kentucky Rule of
Civil Procedure 54.03(2), the state court must grant the
plaintiff the amount she is entitled to, regardless of
whether she demanded that amount in her complaint.
Sixth Circuit has recognized that rules like this "might
enable a plaintiff to claim in his or her complaint an amount
lower than the federal amount-in-controversy requirement in
an attempt to defeat federal jurisdiction, while actually
seeking and perhaps obtaining damages far in excess of the
federal requirement." Gafford, 997 F.2d. at
157-58. To prohibit such gamesmanship, the Sixth Circuit
permits removal, even where the plaintiff alleges in his
complaint that he seeks less than $75, 000, if the removing
defendant shows that it is '"more likely than
not' that the plaintiffs claims meet the amount in
controversy requirement." Rogers v. Wal-Mart Stores,
Inc., 230 F.3d 868, 871 (6th Cir. 2000) (quoting
Gafford, 997 F.2d at 158).
support of removal, Allstate points to the fact that its
policy provides at least $100, 000 in underinsured motorist
coverage. It submits a letter dated August 13, 2018 in which
Willoughby's counsel demands the full $100, 000. (DE 1-2,
Letter.) Further, Allstate points out that Willoughby seeks
both compensatory and punitive damages for Allstate's bad
faith in handling the claim. With her motion to remand,
however, Willoughby attaches a stipulation in which she
states, "I am not seeking, will not seek on behalf of
myself, nor will I accept on behalf of myself, damages in
excess of $74, 999.00, inclusive of punitive damages,
attorney's fees and the fair value of injunctive
relief." She further clarifies, "[t]his stipulation
should be construed that I am limiting my total recovery to
no greater than $74, 999.00."
response, Allstate states that it will "accept"
Willoughby's stipulation and "agree" to the
case being remanded if Willoughby states two things in her
reply memorandum. First, she must clarify that she will not
seek more than $74, 999 as a total amount collectively for
both the policy and bad-faith claims. Second, her counsel
must also state that they will not seek damages of more than
$74, 999 on Willoughby's behalf.
did not file a reply memorandum. Nevertheless, whether
Allstate accepts the stipulation and agrees to this Court
remanding the case is not dispositive on the issue of federal
jurisdiction. The question is whether Allstate has proved it
more likely than not that the amount in controversy exceeds
$75, 000. If so, the Court cannot remand it. "[W]hen a
federal court has jurisdiction, it also has a 'virtually
unflagging obligation. . . to exercise' that
authority." Mata v. Lynch, 135 S.Ct. 2150, 2156
(2015) (quoting Colorado River Water Conservation Dist.
v. United States, 424 U.S. 800, 817 (1976)). If, on the
other hand, Allstate has failed to sufficiently prove that
the amount in controversy exceeds $75, 000 then the Court has
no jurisdiction over this action, and it must remand it.
amount in controversy is determined by the status of the case
at the time of removal. Rogers, 230 F.3d at 871.
Nevertheless, courts have accepted stipulations filed after
removal where the stipulation merely clarifies the amount in
controversy and does not change the amount in controversy
from the time of removal. See e.g., Shupe, 566
Fed.Appx. at 481; Egan v. Premier Scales & Sys.,
237 F.Supp.2d 774, 777-78 (W.D.Ky.2002); Cole v. Great
Ail. & Pac. Tea Co., 728 F.Supp. 1305, 1309 (E.D.
Ky. 1990); Helton v. Lelion, No. CTV.A.
5:14-363-DCR, 2014 WL 5824894, at *3 (E.D. Ky. Nov. 10,
discussed, the amount in controversy is not clear from the
face of the plaintiffs complaint. As Allstate points out, the
statement in the complaint limiting damages to below $75, 000
is ambiguous. Accordingly, the Court will consider the
stipulation to the extent it clarifies the amount in
controversy. The stipulation clarifies that Willoughby is not
seeking, will not seek, and will not accept damages of more
than $74, 999. It clarifies that the limitation applies to
all damages ...