United States District Court, N.D. West Virginia
STEPHEN P. SCHMITT and TINA SCHMITT, Plaintiffs,
RANDOLPH GOFF and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendants.
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS'
MOTION TO REMAND AND DENYING WITHOUT PREJUDICE
DEFENDANT'S MOTION TO DISMISS
FREDERICK P. STAMP, JR. UNITED STATES DISTRICT JUDGE
plaintiffs, Stephen P. Schmitt and Tina Schmitt, originally
filed their complaint in the Circuit Court of Marshall
County, West Virginia against defendant Randolph Goff
alleging personal injury and defendant State Farm Mutual
Automobile Insurance Company (“State Farm”)
alleging breach of contract, Unfair Trade Practices Act
violations, and bad faith. ECF No. 1-2. Plaintiffs seek to
recover all underinsured motorist coverage benefits from
State Farm, any extra-contractual benefits, compensatory
damages, attorney's fees and costs, annoyance and
inconvenience, other general damages, and punitive damages.
State Farm removed this action to this Court on June 20,
2018. ECF No. 1. In the notice of removal, State Farm asserts
that this is a civil action over which this Court has
original jurisdiction under the provisions of 28 U.S.C.
§ 1332, and may be removed by State Farm pursuant to the
provisions of 28 U.S.C. § 1441, because there is
complete diversity as to all real parties in interest. ECF
No. 1 at 2. Further, State Farm asserts that it has a good
faith belief that the matter in controversy exceeds $75,
000.00, exclusive of interest and costs. Id.
Farm states that there is complete diversity because the
plaintiffs are residents of West Virginia and State Farm is
an Illinois corporation with its principal place of business
in Illinois. State Farm states that Randolph Goff
(“Goff”) has settled with the plaintiffs in this
civil action and further contends that defendant Goff,
although a West Virginia resident, is a nominal party - not a
real party in interest - whose citizenship should be
disregarded for purposes of considering this Court's
jurisdiction under 28 U.S.C. § 1332. See Sanders v.
State Farm Ins. Co., 2007 WL 2740657, FN1 (S.D. W.Va.
2007) (citing Tilley v. Allstate Ins. Co., 40
F.Supp.2d 809 (S.D. W.Va. 1999)).
State Farm contends that the amount in controversy exceeds
$75, 000.00. In support, State Farm states that although
plaintiffs have not submitted a settlement demand to State
Farm regarding the claims in their complaint, plaintiffs
claim $41, 983.00 in special damages, including $15, 576.00
in medical expenses, $5, 407.00 in lost wages, and $21,
000.00 in other special damages. Defendant states that
plaintiffs also claim permanent injuries which will require
future medical treatment, and in addition to special damages
and future medical expenses, plaintiffs seek to recover
general damages. Based on the amount of special damages
identified in the complaint, State Farm asserts that
plaintiffs' compensatory damages claim could far exceed
$75, 000.00, exclusive of interest and costs. ECF No. 1 at 4.
State Farm then filed a motion to dismiss Counts Three and
Four of the plaintiffs' complaint (ECF No. 3) under
Federal Rule of Civil Procedure 12b(6) asserting that the
plaintiffs fail to state sufficient facts in support of their
bad faith claims under the common law and under the Unfair
Trade Practices Act (“UTPA”), West Virginia Code
§ 33-11-4(9). ECF No. 3-1. Plaintiffs filed a response
in opposition to the motion to dismiss. ECF No. 7. Plaintiffs
also filed a motion to stay the decision on the motion to
dismiss pending remand. ECF No. 8. State Farm's motion to
dismiss (ECF No. 3) has been stayed by this Court's order
granting plaintiffs' motion to stay decision on the
motion to dismiss until such time as this Court rules on the
plaintiffs' pending motion to remand. ECF No. 9.
same day as the defendant's motion to dismiss, the
plaintiffs filed a motion to remand (ECF No. 4), in which
they argue that the defendant has failed to satisfy its
burden of proving that the amount in controversy exceeds $75,
000.00, exclusive of interest and costs, and that complete
diversity jurisdiction is lacking in this case. ECF No. 4 at
plaintiffs' motion to remand argues the plaintiffs, in
the ad damnum clause of the complaint, demanded judgment
against the defendants in an amount to be determined, and did
not plead a specific amount sought as West Virginia does not
require such pleading. ECF No. 4 at 19-20. The plaintiffs
assert that prior to the filing of the complaint, the
plaintiffs did not make a demand for an amount equal to or in
excess of the amount in controversy, $75, 000.00, exclusive
of interest and costs. In fact, prior to the filing of the
underlying complaint herein, the plaintiffs had made a demand
for the limits of their State Farm underinsurance benefit
coverage of $25, 000.00. ECF No. 4 at 20. Plaintiffs contend
that at the time of removal, defendant State Farm had
extended no settlement offers at all, let alone an offer in
excess of the jurisdictional amount in controversy.
Plaintiffs assert that, to the contrary, in response to
plaintiffs' demand for the $25, 000.00 limits of
underinsurance coverage, defendant State Farm refused, via
letter dated February 1, 2018, to make any offer on the basis
that State Farm “concluded that the tortfeasor's
$25, 000.00 policy limits were sufficient in this
claim.” Furthermore, plaintiffs state that defendant
State Farm incorrectly represents the special damage
allegations in plaintiffs' complaint, suggesting that
plaintiffs allege special damages of $42, 983.00; however,
plaintiffs contend that is not accurate. Plaintiffs state
that the complaint alleges $15, 576.00 in medical expenses to
date, and loss of income of $5, 407.00 which total
approximately $21, 000.00 of special damages to date. ECF No.
4 at 21. Furthermore, plaintiffs argue that many of the items
of damage alleged in the plaintiffs' complaint are
unliquidated and indeterminate in character, and the
assessment of such damages is the peculiar and exclusive
province of the jury such that the damages cannot reasonably
be calculated. ECF No. 4 at 21. Under these circumstances,
plaintiffs contend State Farm has not met its burden, and
merely relies upon speculation, not facts, and therefore
removal was inappropriate as this Court lacks subject matter
jurisdiction. ECF No. 4 at 22.
State Farm filed a response in opposition to the
plaintiffs' motion to remand. ECF No. 6. In response,
State Farm initially states “[n]otably, Plaintiffs do
not dispute that complete diversity exists among all
‘real parties in interest.'” ECF No. 6 at 2.
Defendant State Farm then argues that the instant case is
very different from the cases cited in the first section of
plaintiffs' motion to remand stating that in this
underinsured motorist coverage and bad faith case, there is
sufficient information regarding plaintiffs' claims for
damages to allow this Court to exercise jurisdiction pursuant
to 28 U.S.C. § 1332.
defendant asserts it is not too speculative for this Court to
consider the multiplier for punitive damages assigned in
other cases in determining the amount in controversy. ECF No.
6 at 5. Defendant states that punitive damages are
recoverable in bad faith claims against insurance companies,
and those damages augment compensatory damages in determining
the amount in controversy for purposes of federal diversity
jurisdiction. ECF No. 6 at 5. Moreover, defendant argues it
is not too speculative for this Court to conclude that
plaintiffs' claim for special damages will exceed the
underinsured motorist benefits available, especially because
plaintiffs claim permanent injuries, future medical damages,
and damages for annoyance and inconvenience and other general
damages, which inflate the amount in controversy. ECF No. 6
at 6. Defendant adds that “[a]lthough the specific
amount claimed is not stated by Plaintiffs, this Court may
use its common sense to conclude that these damages, plus the
punitive damages claimed, satisfy the amount in
controversy.” ECF No. 6 at 6. Finally, defendant adds
that because plaintiffs claim a right to recover
attorney's fees in addition to their claim for
underinsured motorist benefits, Marshall v. Saseen
and Hayseeds, Inc. v. State Farm Fire &
Casualty, apply in regard to presumptive calculation of
reasonable attorney's fees. ECF No. 6 at 6. Thus,
defendant argues that even though plaintiffs'
attorney's fee claim is not quantified in the complaint,
common sense allows this Court to conclude that the
attorney's fee sought, coupled with the special,
punitive, and other general damages outlined above, satisfy
the amount in controversy. ECF No. 6 at 6.
plaintiffs filed a reply to State Farm's response in
opposition. ECF No. 10. In reply, the plaintiffs maintain
that this case should be remanded because the defendant has
failed to prove that the amount in controversy exceeds $75,
000.00, exclusive of interest and costs. ECF No. 10 at 1.
Plaintiffs contend that defendant State Farm, in both its
notice of removal and its response “simply re-lists the
causes of action and categories of damages, ” relies
purely on speculation and no competent proof, and has failed
to submit any documents, evidence, or affidavits with its
notice of removal. ECF No. 10 at 1. Plaintiffs reiterate that
they did not plead a specific amount sought, and at the time
of defendant's removal, had not made any demands in
excess of the jurisdictional amount. ECF No. 10 at 2.
Plaintiffs add that in order to prevail upon their
underinsurance claim, they must first obtain a judgment or
verdict in excess of $25, 000.00, which is the limits
heretofore received from Progressive Insurance Company, which
is defendant Goff's liability carrier. ECF No. 10 at 2.
Plaintiffs assert that defendant's argument regarding
punitive damages is purely speculative and the mere
likelihood of punitive damages, without more, does not give
rise to federal jurisdiction. ECF No. 10 at 2. Finally,
plaintiffs assert that any claim for attorney's fees at
this juncture is speculative and conditional. ECF No. 10 at
4. For those reasons, the plaintiffs believe the amount in
controversy requirement remains unsatisfied and, therefore,
seek to remand this civil action.
reasons set forth below, the plaintiffs' motion to remand
(ECF No. 4) is GRANTED, and the defendant's motion to
dismiss Counts Three and Four of plaintiffs' complaint
(ECF No. 3) is DENIED WITHOUT PREJUDICE.