Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-01689/USCOURTS-cand-4_05-cv-01689-1/pdf.json

Parties Involved:
Arline Butterfield
Plaintiff
State Farm Mutual Automobile Insurance Company
Defendant

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ARLINE BUTTERFIELD,

Plaintiff.

 v.

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY, 

Defendant. _______________________________________

No. C 05-1689 SBA

 

ORDER

This matter comes before the Court on Defendant's Notice of Removal pursuant to 28 U.S.C. §

1332 [Docket No. 1]. The Court has examined the Notice of Removal and all attachments thereto and

has determined that removal was improper. See Martinez v. Westin St. Francis LMT, Partnership, 2002

WL 240022 (N.D. Cal. 2002) (citing Galt G/S v. Hapag-Lloyd AG, 60 F.3d 1370, 1373 (9th Cir.1995)).

Accordingly, the Court REMANDS the above-captioned action to the Superior Court of the State of

California, County of Alameda. 

BACKGROUND

A. Factual Background

On or about January 2000, in consideration of the payment of a semi-annual premium paid by

Plaintiff Arline Butterfield ("Butterfield" or "Plaintiff"), Defendant State Farm Mutual Automobile

Insurance Company ("State Farm" or "Defendant") executed and delivered to Plaintiff Policy No. D032-

589-05A (the "Policy"), which insured Plaintiff against losses resulting from automobile accidents

caused by uninsured motorists in the amount of $30,000 per individual and $60,000 per occurrence. See

Compl. at ¶ 5. On the occurrence of a loss caused by an uninsured motorist, State Farm promised to pay

Plaintiff up to $30,000. See id. The Policy was in effect as of January 17, 2000. Id. 
United States District Court

For the Northern District of California

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On January 17, 2000, Plaintiff was struck by an uninsured motorist. See id. at ¶ 6. Plaintiff

subsequently demanded payment from State Farm in the amount of $30,000, and advised State Farm

that the damages resulting from the incident had a value in excess of $30,000. Id. at ¶ 7. On October

21, 2001, State Farm rejected Plaintiff's demand and offered $10,000 to settle Plaintiff's claim. Id. at

¶ 8. State Farm advised Plaintiff that if she did not accept the $10,000 offer, State Farm would require

Plaintiff to submit to a medical evaluation by a doctor chosen by State Farm. Id.

On October 30, 2001, Plaintiff's counsel rejected in writing the $10,000 offer from State Farm

and advised State Farm that Plaintiff would submit to a medical evaluation by a doctor of State Farm's

choosing. Id. at ¶ 9. Over the next five months, State Farm worked with Plaintiff to obtain the required

medical evaluation. Id. at ¶ 10. 

On April 19, 2002, State Farm repeated its $10,000 settlement offer and apparently sent Plaintiff

a check for $10,000. Id. at ¶¶ 10, 13. Plaintiff rejected the settlement offer and demanded arbitration

of her dispute. Id. at ¶ 10. State Farm subsequently referred the matter to its counsel. Id. at ¶ 11.

Counsel for State Farm agreed to mediate the claim. Id.

On November 1, 2002, Plaintiff and State Farm attended a mediation. Id. At the mediation,

State Farm again offered $10,000 to settle the claim and Plaintiff refused. Id. 

On July 2, 2003, Plaintiff and State Farm participated in an arbitration of Plaintiff's claim. Id.

at ¶ 13. On July 10, 2003, the arbitrator, William W. Haskell, Esq., issued a decision determining that

the total amount that Plaintiff was entitled to recover as a result of her collision with the uninsured

motorist was $56,000 in damages, which was, in fact, in excess of the available uninsured motorists

insurance benefits to which Plaintiff was entitled to receive from State Farm. Id. at ¶¶ 13, 22. On July

21, 2003, State Farm issued Plaintiff a check in the amount of $20,000, representing the remaining

balance of the $30,000 owed to Plaintiff under the Policy. Id. at ¶ 13. 

B. Procedural Background

On February 25, 2005, Plaintiff filed a complaint for breach and tortious breach of insurance

contract for actual and punitive damages ("Complaint") against defendant State Farm in the Superior

Court for the State of California, in and for the County of Alameda. Plaintiff's Complaint alleges the

following causes of action: (1) Breach of Contract; and (2) Tortious Breach of Insurance Contract and
United States District Court

For the Northern District of California

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Breach of the Duty of Good Faith and Fair Dealing. In the Complaint, Plaintiff alleges that State Farm

"failed and refused to pay plaintiff the full amount of the damages to which plaintiff . . . was entitled

under the policy in violation of their contractual obligations." Id. at ¶ 15. Plaintiff also contends that

State Farm's breach of contract forced her to have to unnecessarily pursue arbitration, "resulting in delay

of receipt of benefit and the incurring of additional necessary costs and fees in the amounts of $1,892.10

in costs and $1,333.34 in fees." Plaintiff alleges that she was damaged in the amounts of "$1,892.10 in

costs and $1,333.34 in fees . . . [and] the amount of interest lost of the sum of $30,000 during the period

of time that defendant . . . failed to adequately, fairly, and promptly investigate, evaluate and settle

plaintiff's claim." Id. at ¶ 16. 

On April 25, 2005, Defendant filed its answer to the Complaint. Also on April 25, 2005,

Defendant filed the instant Notice of Removal, thereby removing the action to this Court. 

LEGAL STANDARD

The federal removal statute, 28 U.S.C. § 1441, provides that "any civil action brought in a State

court . . . may be removed by the defendant or the defendants" to federal court on the basis of federal

question or diversity jurisdiction. 28 U.S.C. 1441(a); Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th

Cir. 1977). 

The removal statute is to be strictly construed against removal and any doubt is resolved in favor

of remand. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996). The burden of establishing

jurisdiction rests with the party effecting the removal. Emrich v. Touche Ross & Co., 846 F.2d 1190,

1195 (9th Cir. 1988) (citations omitted). The Court must determine whether removal was proper by

"looking to the complaint at the time the removal petition was filed." Chesler/Perlmutter Prods. v.

Fireworks Entm't, Inc., 177 F. Supp. 2d 1050, 1058 (C.D. Cal. 2001) (citing Libhart v. Santa Monica

Dairy Co., 592 F.2d 1062, 1065 (9th Cir. 1979)). The United States Supreme Court has explained that

"if the case is not then removable it cannot be made removable by any statement in the petition for

removal or in subsequent pleadings by the defendant." Great N. Ry. v. Alexander, 246 U.S. 276, 281

(1918). 

In order to remove on the basis of diversity jurisdiction, the parties must be from different states

and the amount in controversy must exceed $75,000. 28 U.S.C. § 1332. The jurisdictional amount is
United States District Court

For the Northern District of California

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normally met if the plaintiff claims a sum greater than the jurisdictional minimum. Gaus v. Miles Inc.,

980 F.2d 564, 566 (9th Cir. 1992). If, however, the allegations of a complaint filed in state court do not

conclusively demonstrate that the amount in controversy exceeds the jurisdictional minimum, the

removing party must demonstrate by a preponderance of the evidence that the jurisdictional minimum

has been met. See Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). “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; see also Matheson v. Progressive Speciality Ins. Co., 319 F.3d 1089, 1090 (9th Cir.

2003). A district court should consider facts presented in the removal petition or any "summaryjudgement-type evidence relevant to the amount in controversy at the time of removal." Matheson, 319

F.3d at 1090. "Conclusory allegations as to the amount in controversy are insufficient." Id. at 1090-91.

A district court may sua sponte raise the issue of subject matter jurisdiction and may remand a

case if, after examining the notice of removal, it determines that removal of the case to federal court was

not proper. See Martinez v. Westin St. Francis LMT, Partnership, 2002 WL 240022 at *1(citing Galt

G/S, 60 F.3d at 1373). 

ANALYSIS

Here, Defendant's Notice of Removal does not include any underlying facts that support its

assertion that the amount in controversy exceeds $75,000. In fact, in order to establish the existence of

diversity jurisdiction, State Farm relies solely upon its own conclusion that the "amount in controversy

includes plaintiff's alleged contract damages 'well in excess of' $30,000, [an] arbitration award in the

amount of $56,000, arbitration fees and costs in excess of $1,800, attorneys' fees and costs, [and] general

and punitive damages." See Not. of Removal at ¶ 4. Thus State Farm attempts to suggest, in the Notice

of Removal, that Plaintiff is requesting damages in excess of $87,800. This conclusion is completely

erroneous and is based upon a gross misrepresentation of not only the nature of the Complaint itself, but

also the allegations contained in the Complaint. The Complaint plainly states that Plaintiff is only

seeking damages relating to State Farm's allegedly unreasonable delay in the payment of the $30,000

in insurance proceeds. Nowhere in the Complaint does Plaintiff even suggest that she is entitled to

recover $30,000 from State Farm again; in fact, she concedes that this amount has already been paid.

See Compl. at ¶ 28. Further, it is clear that the arbitration award of $56,000 is mentioned in the
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For the Northern District of California

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Complaint only because it is Plaintiff's proof that she was, in fact, entitled to recover the full $30,000

in insurance proceeds. Further, Plaintiff's prayer for relief explicitly states that the amount in

controversy is "$1,892.10 in costs and $1,333.34 in fees . . . [plus] interest [at] the legal rate on the sum

of $20,000 [and] interest . . . on the sum of $20,000" during the period of "time that defendant . . . failed

to adequately, fairly, and promptly investigate, evaluate and settle plaintiff's claim." Id. at ¶¶ 16, 30.

The total sum of this amount falls considerably short of the $75,000 jurisdictional minimum. 

CONCLUSION

IT IS HEREBY ORDERED THAT the above-captioned matter is REMANDED to the Superior

Court of the State of California, County of Alameda. All matters calendared in this action are

VACATED. The Clerk shall close the file and terminate any pending matters.

IT IS SO ORDERED.

 Dated: 10/17/05 SAUNDRA BROWN ARMSTRONG

United States District Judge