Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-01450/USCOURTS-azd-2_11-cv-01450-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Tuco Devenport and Crystal Diana Kay 

Devenport, 

Plaintiffs, 

vs. 

Milbank Insurance Company, a foreign 

corporation; State Automobile Mutual 

Insurance Company, a foreign corporation; 

State Auto Property & Casualty Insurance 

Company, a foreign corporation; John and 

Jane Does 10V; Black and White 

Corporations I-V, 

Defendants.

No. CV11-1450-PHX-DGC

ORDER 

 

Plaintiffs filed a Complaint in Maricopa County Superior Court against 

Defendants Milbank Insurance Company (“Milbank”), State Automobile Mutual 

Insurance Company (“State Mutual”), and State Auto Property & Casualty Insurance 

Company (“State Auto”), all foreign corporations, alleging that they had not been 

properly compensated for a robbery that occurred at their Glendale home. Doc. 1.1 at 2-

3. Defendants removed the case to District Court. State Mutual and State Auto then filed 

a motion to dismiss Plaintiffs’ complaint as against them, asserting that they were 

improper parties to Plaintiffs’ breach of contract and bad faith claims. Doc. 5. Plaintiff 

does not oppose this motion. Doc. 14. Plaintiff, however, filed a motion to remand to 

Maricopa County Superior Court for lack of subject matter jurisdiction and for late filing 

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for removal. Doc. 13. Plaintiff maintains that dismissal should take place in Superior 

Court. Doc. 13 at 2. For the reasons set forth below, the Court will grant Plaintiffs’ 

motion to remand. The Court therefore makes no ruling on Defendants’ motion to 

dismiss. 

 Plaintiffs also requests Attorneys’ fees and costs related to filing their motion to 

remand. The Court will deny this request. 

I. Removal and Remand Standards. 

 Pursuant to the removal statute, 28 U.S.C. ' 1441, any civil action brought in state 

court over which the federal district courts have original jurisdiction may be removed to 

the federal district court for the district where the action is pending. 28 U.S.C. ' 1441(a). 

Courts strictly construe the statute against removal jurisdiction. Gaus v. Miles, Inc., 

980 F.2d 564, 566 (9th Cir. 1992). Indeed, there is a Astrong presumption@ against 

removal and A[f]ederal jurisdiction must be rejected if there is any doubt as to the right of 

removal in the first instance.@ Id. AThe >strong presumption= against removal jurisdiction 

means that the defendant always has the burden of establishing that removal is proper.@ 

Id. AIf at any time before final judgment it appears that the district court lacks subject 

matter jurisdiction, the case shall be remanded.@ 28 U.S.C. ' 1447(c). 

II. Motion to Remand. 

 This Court has subject matter jurisdiction over cases in which the parties are 

diverse and the amount in controversy exceeds $75,000. 28 U.S.C. ' 1332. Plaintiff 

argues that the amount in controversy is not met in this case. Doc. 13 at 2. Plaintiffs’ 

prayer for relief includes actual and punitive damages, attorneys’ fees, and allowable 

interest, but it is silent as to an actual dollar amount. See Doc. 1.1 at 5. Defendants 

therefore Abear[] the burden of establishing, by a preponderance of the evidence, that the 

amount in controversy exceeds [$75,000].@ Sanchez v. Monumental Life Ins. Co., 102 

F.3d 398, 404 (9th Cir. 1996). To meet this burden, Defendants Amust provide evidence 

establishing that it is >more likely than not= that the amount in controversy exceeds 

[$75,000].@ Id.; see Gaus, 980 F.2d at 566-67 (AIf it is unclear what amount of damages 

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the plaintiff has sought, . . . then the defendant bears the burden of actually proving the 

facts to support jurisdiction, including the jurisdictional amount.@) (emphasis in original); 

McNutt v. GM Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936) (A[T]he court may 

demand that the party alleging jurisdiction justify his allegations by a preponderance of 

evidence.@). 

 Defendants allege that the amount in controversy is more likely than not to exceed 

$75,000 based upon two specific findings of fact: (1) Plaintiffs’ February 22nd 

“Certificate Regarding Compulsory Arbitration” claiming that the amount of damages in 

this case exceeds $50,000, and (2) an affidavit from Defense attorney Michael Hensley 

estimating the likely amount of attorneys’ fees to be between $50,000 and $75,000. Doc. 

16.1 & 16.4 at 2. This estimate “includes the possibility of multiple depositions, expert 

fees, and motion practice.” Doc. 16 at 6. Defendants conclude that “assuming Plaintiffs’ 

claims are true, the attorneys’ fees, along with Plaintiffs’ actual and punitive damages 

more likely than not will exceed the $75,000 amount in controversy limit.” Id. 

 Although Plaintiffs’ Certificate Regarding Compulsory Arbitration establishes that 

prior to removal Plaintiffs sought an award in excess of $50,000, whether the actual 

amount of damages sought along with the addition of punitive damages and attorneys’ 

fees would push the amount in controversy above the $75,000 jurisdictional threshold is 

speculative. Litigation often is expensive and frequently proceeds beyond the early 

stages; however, the Court will not assume that to be inevitable. Moreover, on August 1, 

2011, Plaintiff served an offer of judgment to Defendant Milbank for the sum of $45,000 

“inclusive of all damages, taxable court costs, interest and attorneys’ fees incurred to 

date.” Doc 13.B. Defendants note that Plaintiffs filed this offer subsequent to removal 

for an amount less than Plaintiffs’ earlier certification, but Plaintiffs’ offer is nonetheless 

relevant to the current determination because the Court is bound to remand A[i]f at any 

time before final judgment it appears that the district court lacks subject matter 

jurisdiction.@ 28 U.S.C. ' 1447(c) (emphasis added). 

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 Under these facts, Defendants’ speculation Aneither overcomes the >strong 

presumption= against removal jurisdiction, nor satisfies [Defendants’] burden of setting 

forth . . . the underlying facts supporting its assertion that the amount in controversy 

exceeds [$75,000].@ Gaus, 980 F.2d at 567 (emphasis in original). Accordingly, the 

Court will remand to state court. See 28 U.S.C. § 1447(c); Valdez, 372 F.3d at 1118 (“If 

the district court determines that it is sufficiently doubtful that the amount-in-controversy 

requirement has been met and thus that federal subject matter jurisdiction is lacking, the 

district court should . . . remand to state court.”); Matheson, 319 F.3d at 1090 (“Where 

doubt regarding the right to removal exists, a case should be remanded to state court.”); 

Sanchez, 102 F.3d at 406 (directing the district court to remand to state court where the 

defendant had failed to establish the jurisdictional amount by a preponderance of the 

evidence). 

III. Attorneys’ Fees. 

 Plaintiffs have requested an award of attorneys’ fees related to their costs for filing 

the motion to remand. Doc. 13 at 4. Plaintiffs fail to provide a specific statutory basis 

for this request but argue that Defendants lacked an objectively reasonable basis to 

remove the case. Id. Under 28 U.S.C. ' 1447(c), “[a]n order remanding the case may 

require payment of just costs and any actual expenses, including attorney fees, incurred 

as a result of the removal.” 28 U.S.C. ' 1447(c). The Supreme Court has stated that 

“[a]bsent unusual circumstances, courts may award Attorneys’ fees under § 1447(c) only 

where the removing party lacked an objectively reasonable basis for seeking removal. 

Conversely, when an objectively reasonable basis exists, fees should be denied.” Martin 

v. Franklin Capital Corp., 546 U.S. 132 (2005). Here, the Court would have had 

original jurisdiction over Plaintiffs’ claims under 28 U.S.C. ' 1332 if the amount in 

controversy exceeded $75,000. While the Court finds that Defendants have not 

established by a preponderance of the evidence that the amount in controversy meets this 

threshold, the Court nonetheless finds that at the time of removal Defendants had an 

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objectively reasonable basis for such a claim. Therefore, Plaintiffs’ request for attorneys’ 

fees is denied. 

IV. Motion to Dismiss. 

 Pursuant to the Court’s order to remand this case to state court, the Court lacks 

jurisdiction to rule on Defendants’ motion to dismiss. 

IT IS ORDERED: 

 1. Plaintiffs’ motion to remand (Doc. 13) is granted. 

 2. Plaintiffs’ request for attorneys’ fees (Doc. 13) is denied. 

 3. Defendants’ motion to dismiss (Doc. 5) is remanded to Maricopa County 

 Superior Court. 

 Dated this 8th day of September, 2011. 

 

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