Court Opinion

ID: 4460345
Source: CourtListenerOpinion
Date Created: 2019-11-29 21:00:25.506306+00
Date Added: 2024-06-11T14:53:05.039436
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       NOV 29 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

EDWARD STOLZ,                                   No.    17-17214

                Plaintiff-Appellant,            D.C. No.
                                                2:14-cv-02060-RFB-NJK
 v.

SAFECO INSURANCE COMPANY OF                     MEMORANDUM*
AMERICA,

                Defendant-Appellee.

                   Appeal from the United States District Court
                            for the District of Nevada
                 Richard F. Boulware II, District Judge, Presiding

                     Argued and Submitted October 25, 2019
                              Seattle, Washington

Before: CLIFTON, IKUTA, and BENNETT, Circuit Judges.

      Edward Stolz appeals the district court’s order granting summary judgment

to Safeco Insurance Company on his Nevada law claims for breach of contract,

contractual breach of the implied covenant of good faith and fair dealing, and

tortious breach of the implied covenant of good faith and fair dealing. While this

appeal was pending, we directed the parties to submit supplemental briefs

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
addressing whether the amount-in-controversy requirement for the district court’s

subject matter jurisdiction under 28 U.S.C. § 1332(a) was met at the time this case

was removed from state court. We are satisfied the district court had subject

matter jurisdiction when this case was removed. We have jurisdiction under 28

U.S.C. § 1291 and affirm.

      “We review the existence of subject matter jurisdiction de novo.” Chavez v.

JPMorgan Chase & Co., 888 F.3d 413, 415 (9th Cir. 2018). Likewise, we review

de novo a district court’s grant of summary judgment. See HS Servs., Inc. v.

Nationwide Mut. Ins. Co., 109 F.3d 642, 644 (9th Cir. 1997).

      “A defendant generally may remove an action filed in state court if a federal

district court would have had original jurisdiction over the action.” Chavez, 888

F.3d at 415 (citing 28 U.S.C. § 1441(a)). Here, the district court would have had

original jurisdiction over the action because the parties do not dispute complete

diversity, and Safeco presented sufficient evidence that the amount-in-controversy

requirement was met when this case was removed. See 28 U.S.C. § 1332(a).

       Stolz did not contest removal when the motion was made, and his

“concession of diversity jurisdiction below is strong evidence that the amount in

controversy exceeds $75,000.” Chavez, 888 F.3d at 416. Stolz’s “concession is

tantamount to a plaintiff expressly alleging damages in excess of the jurisdictional

amount, which we accept as the amount in controversy if done in good faith.” Id.

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Other evidence demonstrates Stolz’s good faith belief that the controversy exceeds

$75,000: Stolz moved for summary judgment in the amount of $350,000 and made

settlement demands of $80,000 and $85,000. See Cohn v. Petsmart, Inc., 281 F.3d

837, 840 (9th Cir. 2002) (per curiam) (“A settlement letter is relevant evidence of

the amount in controversy if it appears to reflect a reasonable estimate of the

plaintiff’s claim.”).

       Moreover, Stolz’s request for $300,000 in punitive damages satisfied

§ 1332(a)’s amount-in-controversy requirement. Regardless whether Stolz is

entitled to punitive damages on the merits, his allegations that Safeco

representatives responded to his claim with “a smoke screen of delay and insults”

and by attempting to “humiliate or intimidate” him put punitive damages in

controversy. See United Fire Ins. Co. v. McClelland, 780 P.2d 193, 198 (Nev.

1989) (an insurer may be liable for punitive damages if the insurer acted with

“oppression, fraud, or malice” and subjected the plaintiff to “cruel and unjust

hardship”). Accordingly, the district court would have had original jurisdiction

over this action, and removal was proper.

       We affirm the district court’s grant of summary judgment for Safeco. Stolz

failed to show that he was entitled to performance by Safeco under the contract.

Under Nevada law, a contractual party’s failure to perform its material obligations

excuses the other party’s performance. See Young Elec. Sign Co. v. Fohrman, 466

                                          3
P.2d 846, 847 (Nev. 1970).

      The undisputed facts establish that Stolz did not fulfill his material

obligations under the contract because he failed to provide to Safeco the required

information about his stolen items. Further, Safeco could not have paid Stolz’s

claim without receiving further information from Stolz. After Stolz submitted his

insurance claim, Safeco sent him requests for additional information every month

from January until October of 2010. Under the insurance policy, Stolz was

required to “prepare an inventory of the loss . . . showing in detail the quantity,

description, replacement cost and age” of the items, as well as receipts and

documents to substantiate the estimated costs of the items. The insurance policy

required Stolz to submit this inventory within 60 days of Safeco’s request. Stolz

sent Safeco a list of stolen items but refused to provide certain required

information, including the estimated values, replacement costs, and age of the

items. Stolz also refused to identify whether certain items were for business or

personal use—information that is necessary to determine the policy coverage limit.

      Stolz’s failure to provide the required information excused Safeco’s

performance, and summary judgment in favor of Safeco was therefore appropriate

on Stolz’s claim for breach of contract. See Fohrman, 466 P.2d at 847. Likewise,

summary judgment was appropriate on Stolz’s claims for contractual and tortious

breach of covenant, because Safeco’s refusal to compensate Stolz was neither

                                           4
unreasonable nor “without proper cause.” Pemberton v. Farmers Ins. Exch., 858

P.2d 380, 382, 384 (Nev. 1993).1

      AFFIRMED.

1
 Safeco’s Corrected Motion to Supplement the Record (Dkt. 53) is GRANTED.
Safeco’s Motion to Supplement the Record (Dkt. 51) is DENIED AS MOOT.
Safeco’s Motion to File Oversized Brief (Dkt. 50) is GRANTED.

                                       5
                                                                          FILED
Stolz v. Safeco Ins. Co., No. 17-17214                                    NOV 29 2019
                                                                      MOLLY C. DWYER, CLERK
BENNETT, Circuit Judge, dissenting:                                     U.S. COURT OF APPEALS

      I respectfully dissent because the district court did not have subject matter

jurisdiction over this case when it was removed from state court under 28 U.S.C. §

1441(a). “Federal jurisdiction must be rejected if there is any doubt as to the right

of removal in the first instance,” including whether the amount-in-controversy

requirement in a diversity action was met at the time of removal. See Gaus v.

Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

      Where, as here, it is not facially evident from the complaint that the

controversy involves more than $75,000, the removing defendant “bears the

burden of actually proving the facts to support jurisdiction, including the

jurisdictional amount.” Id. at 567. Safeco has not proven, by a preponderance of

the evidence, that the amount in controversy exceeded $75,000 “at the time of

removal.” See Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090

(9th Cir. 2003) (citation omitted).

      Safeco’s evidence is insufficient to prove that more than $75,000 was in

controversy. First, Safeco contends that Stolz’s failure to object to removal and

request for summary judgment in the amount of $350,000 (including $50,000 in

compensatory damages and $300,00 in punitive damages) are “admissions” that

the amount in controversy was met. While these are relevant considerations,

                                          1
“litigants cannot stipulate to subject matter jurisdiction where it does not otherwise

exist.” Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 416 (9th Cir. 2018).

Stolz’s request for $350,000 is not “supported by the plausibility of the

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

1997). The bulk of Stolz’s request for judgment is $300,000 in punitive damages,

which are implausible in this case. See United Fire Ins. Co. v. McClelland, 780

P.2d 193, 198 (Nev. 1989) (holding that to impose punitive damages, Nevada law

requires an insurer to act with “oppression, fraud or malice”); Matheson, 319 F.3d

at 1091 (“[U]nder the circumstances it is not clear that punitive damages

significantly in excess of the $10,000 floor mentioned in the complaint are at

stake.”). Second, Safeco points to Stolz’s settlement offers of $80,000 and

$85,000 to show that the amount in controversy exceeded $75,000. The only

evidence of these settlement offers is an affidavit filed by Safeco’s attorney, and

the amount of the settlement offers is not corroborated by any other evidence in the

record. Cf. Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002). Further, the

affidavit does not indicate when these settlement offers were made, and there is no

evidence that they existed at the time of removal. Third, Safeco asserts that a hotel

incident report stated that $500,000.00 worth of items were stolen. This number is

approximately ten times greater than every other estimate in the record, and on oral

                                          2
argument, Safeco’s counsel did not deny that this number likely represents a

typographical error.

      Because the amount-in-controversy requirement was not met when this case

was removed to federal court, federal jurisdiction should be rejected. I would

remand the case to the district court with instructions to remand to the state court.

See Gaus, 980 F.2d at 567. Were I to reach the merits, I would agree with the

majority that the district court’s grant of summary judgment should be affirmed.

                                          3