Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02754/USCOURTS-casd-3_13-cv-02754-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1446 Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DAVID F. MICKELSON,

Plaintiff,

Case No. 13-cv-2754-W(BLM)

ORDER REMANDING ACTION

TO STATE COURT FOR LACK

OF SUBJECT MATTER

JURISDICTION

v.

AMERICAN INTERNATIONAL

GROUP, INC., et al., 

Defendants.

On October 15, 2013, Plaintiff David F. Mickelson commenced this action in

Superior Court for the State of California for the County of San Diego against

Defendant American International Group (“AIG”), doing business as American

General Life Insurance Company (“American General”). In the complaint, Plaintiff

asserts two causes of action arising from a judgment entered in United States District

Court for the Southern District of Texas and a payment plan agreed upon to satisfy that

judgment. Thereafter, American General removed this action to this Court. The

notice of removal is based on diversity jurisdiction under 28 U.S.C. §§ 1332, 1441, and

1446.

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For the following reasons, the Court finds that American General’s Notice of

Removal is facially deficient and REMANDS this action to the San Diego Superior

Court.

I. LEGAL STANDARD

“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life

Ins. Co. of Am., 511 U.S. 375, 377 (1994). “They possess only that power authorized

by Constitution or a statute, which is not to be expanded by judicial decree.” Id.

(internal citations omitted). “It is to be presumed that a cause lies outside this limited

jurisdiction and the burden of establishing the contrary rests upon the party asserting

jurisdiction.” Id. (internal citations omitted); see also Abrego Abrego v. The Dow

Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006). 

Consistent with the limited jurisdiction of federal courts, the removal statute is

strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566

(9th Cir. 1992); see also Sygenta Crop Prot. v. Henson, 537 U.S. 28, 32 (2002);

O’Halloran v. Univ. of Wash., 856 F.2d 1375, 1380 (9th Cir. 1988). “The strong

presumption against removal jurisdiction means that the defendant always has the

burden of establishing that removal is proper.” Gaus, 980 F.2d at 566; see also

Nishimoto v. Federman-Bachrach & Assoc., 903 F.2d 709, 712 n.3 (9th Cir. 1990);

O’Halloran, 856 F.2d at 1380. “Federal jurisdiction must be rejected if there is any

doubt as to the right of removal in the first instance.” Gaus, 980 F.2d at 566. 

Although there has not been a request to remand, it is well-established that “a

district court’s duty to establish subject matter jurisdiction is not contingent upon the

parties’ arguments.” See United Investors Life Ins. Co. v. Waddell & Reed Inc., 360

F.3d 960, 966 (9th Cir. 2004). Courts may consider the issue sua sponte. Demery v.

Kupperman, 735 F.2d 1139, 1149 n.8 (9th Cir. 1984). Indeed, the Supreme Court has

emphasized that “district courts have an ‘independent obligation to address subjectmatter jurisdiction sua sponte.’” Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S.

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567, 593 (2004) (quoting United States v. S. Cal. Edison Co., 300 F. Supp. 2d 964, 972

(E.D. Cal. 2004)).

II. ANALYSIS

In attempting to invoke this Court’s diversity jurisdiction, the defendant must

prove that there is complete diversity of citizenship between the parties and that the

amount in controversy exceeds $75,000. 28 U.S.C. § 1332. To determine whether the

amount in controversy has been met on removal, “[t]he district court may consider

whether it is ‘facially apparent’ from the complaint that the jurisdictional amount is in

controversy.” Singer v. State Farm Mutual Auto Ins. Co., 116 F.3d 373, 377 (9th Cir.

1997). In cases in which the plaintiff’s state-court complaint does not specify an exact

damage figure, the defendant “must provide evidence that it is ‘more likely than not’

that the amount in controversy” satisfies the federal diversity jurisdictional amount

requirement. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 

American General fails to satisfy that requirement. See 42 U.S.C. § 1332.

First, American General assertsthat “Mr.Mickelson’sComplaint plainly requests

the Court enter a judicial decree that American general be required to return

$40,724.36 to Mr. Mickelson in addition ‘to the $40,000’ Mr. Mickelson agreed to pay

American General” in the payment plan. (Removal Notice ¶ 10 (emphasis in

original).) This contention is simply not consistent with the damages sought in the

complaint.

Mr. Mickelson’s prayer for relief seeks “damages in a sum to be determined at

trial, but in no event less than $40,724.36.” (Compl. 10:4–16.) He further alleges that

“[t]he amount of $40,764.36 reflects the difference between the total amount received

by AIG from Mickelson ($80,764.36), less the amount that Mickelson had contracted

to pay AIG in satisfaction of the Final Judgment ($40,000.00).” (Compl. ¶ 36

(emphasis added).)

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Nowhere in the complaint does Mr. Mickelson seek an award of the $40,000 that

he explicitly contends constitute his obligations to American General under the

payment plan. (Compl. 10:13–14.) On the contrary, he “seeks declaratory relief that

the parties’ rights and obligations are dictated by the Payment Plan Agreement,” under

which he agreed to pay American General a sum of $40,000. (Compl. ¶¶ 41–42

(emphasis added).) Mr. Mickelson seeks the amount that American General allegedly

collected in excess of that agreement from commissions administered by Crump Life

Insurance Services from policies not issued through American General. (Compl. ¶¶ 9,

12–13, 21, 48.) In sum, American General’s attempt to add the $40,000 allegedly

agreed upon in the payment plan to the amount in controversy is inaccurate and

inappropriate. 

American General makes two further contentions in support of removal: (1) Mr.

Mickelson seeks reasonable cost of suit; and (2) he seeks punitive damages according

to proof. (Removal Notice ¶ 10.) 

Attorneys’ fees are not part of the amount in controversy in this case.

When the applicable substantive law makes the award of an

attorney’s fee discretionary, a claim that this discretion

should be exercised in favor of plaintiff makes the requested

fee part of the amount in controversy. But when there is no

direct legal authority for an attorney’s fee, a request for a fee

cannot be included in the computation or the jurisdictional

amount.

Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1155 (9th Cir. 1998)(internal quotation

marks omitted). Mr. Mickelson fails to identify any direct legal authority authorizing

his request for attorneys’ fees. Consequently, a request for such fees is not included in

the calculation to determine the amount in controversy. See id.

American General also failsto show that the possibility of Mr. Mickelson proving

punitive damages at trial makes it more likely than not that the amount in controversy

exceeds $75,000. See 28 U.S.C. § 1332; Sanchez, 102 F.3d at 404. “It is well

established that punitive damages are part of the amount in controversy in a civil

action.” Gibson v. Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001), holding modified

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by Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (2005). Mr. Mickelson

seeks compensation for at least the amount of $40,724.36, but he does not state a

monetary figure for punitive damages, interest, or any possible future increase in the

amount of compensatory damages sought. (See Compl. ¶ 36.) These figures are all

unknown. 

In order for the total amount in controversy to exceed $75,000, American

General must show that it is more likely than not that the total of punitive damages,

interest, and any increase in the amount of compensatory damages at trial add to at

least $34,275.65. See id.; Sanchez, 102 F.3d at 404. It fails to do so. American

General’s conclusory assertion that “the Complaint makes clear Mr. Mickelson seeks

a judgment against American General in excess of the jurisdictional amount” is

insufficient. Because there is doubt as to the right of removal, federal jurisdiction must

be rejected. See Gaus, 980 F.2d at 566. 

III. CONCLUSION & ORDER

American General fails to provide an adequate explanation supported by

evidence that the amount in controversy exceeds the jurisdictional threshold. 

Therefore, the Court REMANDS this action to the San Diego Superior Court. See 28

U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district court

lacks subject matter jurisdiction, the case shall be remanded.”).

IT IS SO ORDERED.

DATE: February 3, 2014

HON. THOMAS J. WHELAN

United States District Court

Southern District of California

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