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Peichoto v. Speedway, LLC

United States District Court, E.D. Kentucky, Central Division, Lexington

November 22, 2019

SPEEDWAY, LLC, Defendant.



         The Court confronts Plaintiff's remand effort. DE #6. Finding the jurisdictional requirements met, the Court denies remand and retains the case federally.

         I. Relevant Background

         The allegations in this personal injury action are straightforward. Plaintiff Autumn Peichoto avers that she was injured in June 2018, while refueling her vehicle at a Speedway gas station. DE #1-1 at 2 (Complaint), at ¶ 9.[1] Plaintiff maintains that a faulty pump hose sprayed fuel in her eye, causing her “to sustain personal injuries of a permanent nature[.]” Id., at ¶¶ 10, 13. The Complaint, pursuing a negligence theory, alleges that Speedway breached its duty of care to properly maintain the premises and avoid dangerous conditions on its property, resulting in Peichoto's harm. Id. ¶¶ 9, 11-12. Plaintiff seeks several relief categories, including monetary damages for (1) permanent mental and physical pain and suffering; (2) permanent impairment of her ability to labor and earn; (3) all hospital, medical, and rehabilitation expenses; and (4) “loss of ability to lead and enjoy a normal life[.]” Id. at ¶ 13.

         Peichoto filed this case in the Fayette Circuit Court in January 2019, and Speedway removed to this Court just over a month later. DE #1 (Notice of Removal). Defendant invokes the Court's diversity jurisdiction, alleging that Plaintiff is a Kentucky citizen and Speedway (an LLC) is foundationally a citizen of Ohio and Delaware. See Id. at ¶ 2-4. Speedway further alleges- based on the Complaint's allegations and sought damages, and the fact that Peichoto, given ongoing medical treatment and expenses, withdrew her previous stipulation that the case was worth less than the jurisdictional minimum-that more than $75, 000 is here in controversy. Id. at ¶¶ 5-6. Plaintiff has moved to remand, disputing the amount in controversy requirement. DE #6. Defendant responded, opposing remand, see DE #9, and Plaintiff did not reply.

         II. Removal Standard

         Removal is proper if the plaintiff could have originally brought the case in federal court. 28 U.S.C. § 1441(a). Diversity jurisdiction-the removal basis here-exists “where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different states.” 28 U.S.C. § 1332(a). The amount in controversy must exceed the jurisdictional minimum at the time of removal. See Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir. 2000); see also Harnden v. Jayco, Inc., 496 F.3d 579, 581 (6th Cir. 2007). The burden rests on the removing party to demonstrate the amount in controversy requirement by a preponderance of the evidence. See Gafford v. Gen. Elec. Co., 997 F.2d 150, 158 (6th Cir. 1993), abrogated on other grounds by Hertz Corp. v. Friend, 130 S.Ct. 1181 (2010); see also Northup Props., Inc. v. Chesapeake Appalachia, LLC, 567 F.3d 767, 769-70 (6th Cir. 2009) (“The burden is on [the removing party] to show by a preponderance of the evidence that the allegations in the complaint at the time of removal satisfy the amount in controversy requirement.”).

         In matters removed from Kentucky state courts, the amount in controversy is frequently unclear from the face of a complaint because the Kentucky civil rules bar plaintiffs from specifying the amount of unliquidated damages they seek. See Ky. R. Civ. P. 8.01(2). Parties thus often must engage in pre-removal discovery before a defendant can ascertain that a case is removable. See 28 U.S.C. § 1446(b)(3) (“[I]f the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant . . . of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.”). A removing party may satisfy the requirement via “competent proof” of the at-issue amount, see Cleveland Hous. Renewal Project v. Deutsche Bank Tr. Co., 621 F.3d 554, 559 (6th Cir. 2010), which “can include affidavits, documents, or interrogatories” obtained during pre-removal discovery. Bishop v. Tennessee Gas Pipeline, LLC, No. 5:17-CV-00424-JMH, 2018 WL 4686416, at *2 (E.D. Ky. Sept. 27, 2018). The definition of “other paper” for § 1446(b)(3) purposes, though, “is broad and may include any formal or informal communication received by a defendant.” Hiser v. Seay, No. 5:14-CV-170, 2014 WL 6885433, at *2 (W.D. Ky. Dec. 5, 2014). Indeed, “[v]irtually every court that has considered the issue has held that settlement demand letters and other correspondence between parties may constitute ‘other paper.'” Mathes v. Burns, No. 3:19-CV-00751, 2019 WL 5394310, at *5 (M.D. Tenn. Oct. 22, 2019) (collecting cases); see also Pope v. Everest Nat'l Life Ins. Co., No. 19-CV-10895, 2019 WL 2366590, at *3 (E.D. Mich. June 5, 2019) (considering a medical bill an “other paper” within the meaning of § 1446).

         The Court evaluates any proof against the backdrop of “a ‘fair reading' of the allegations in the complaint.” Shupe v. Asplundh Tree Expert Co., 566 Fed.Appx. 476, 478 (6th Cir. 2014) (quoting Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 573 (6th Cir. 2001)). Always, courts must strictly construe removal statutes and resolve doubts as to jurisdiction in favor of remand. See, e.g., Brierly, v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534 (6th Cir. 1999). However, the removal 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.” Hayes, 266 F.3d at 572 (citation omitted). Rather, per the applicable preponderance standard, the “removing defendant must show that it is ‘more likely than not' that the plaintiff's claims meet the amount in controversy requirement. Rogers, 230 F.3d at 871 (citation omitted).

         III. Amount in Controversy Analysis

         The “other paper” from which Speedway first ascertained removability (in light of the Complaint's allegations and relief demands, as well as prior settlement discussions and exchanged medical expense documentation) was email correspondence from Plaintiff's counsel. Peichoto, through counsel, withdrew a prior settlement offer[2] and, citing expanding treatment and mounting medical expenses, retracted her stipulation that the case was worth less than the jurisdictional minimum:

I spoke with my client last night and she was just referred to an ophthalmologist who has diagnosed her as having blepharitis (an inflammation of the eyelid) and placed on her a four (4) month course of antibiotics with alternative treatment modalities already being discussed.
As this appears to be something that will be continuing, I must withdraw our current demand and will need to move forward with litigation. Also, with this new information and her treatment progressing more than initially anticipated, I can no longer stipulate that the case will be less than $75, 000.00; I just don't know at this point because she is still treating.

DE #1-2 at 2. Alone, a refusal to stipulate to case value below the jurisdictional minimum cannot satisfy the removal burden. See, e.g., Lobley v. Guebert, No. 5:16-CV-202-TBR, 2017 WL 1091796, at *1 (W.D. Ky. Mar. 22, 2017) (holding that a response refusing to admit or deny that the amount in controversy exceeded the jurisdictional minimum, standing alone, was insufficient); Stratton v. Konecranes, Inc., No. 5:10-CV-66-KSF, 2010 WL 2178544, at *3 (E.D. Ky. May 28, 2010) (“A refusal to stipulate, by itself, would not justify removal[.]”); Davis v. BASF Corp., No. 03-CV-40198, 2003 WL 23018906, at *2 (E.D. Mich. Nov. 24, 2003) (“[I]f a defendant asks a plaintiff to stipulate that the damages are below the jurisdictional amount [and] if the plaintiff refuses to stipulate, the case cannot be removed based solely on this refusal.”) (citation omitted). A refusal to stipulate ...

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