United States District Court, N.D. Ohio, Eastern Division
MEMORANDUM OF OPINION AND ORDER
PATRICIA A. GAUGHAN, JUDGE
matter is before the Court upon Plaintiffs Radhakrishnan
Ramamurthy and Suvarna Pappu's Motion for Remand (Doc.
8). This case is an insurance dispute arising out of the
damages that Plaintiffs incurred when a pipe burst in their
residence on January 21, 2015. For the reasons that follow,
Plaintiff's motion to remand is GRANTED.
originally filed this action in the Cuyahoga Court of Common
Pleas against Defendants Stillwater Insurance Company and
Stillwater Property and Casualty Insurance Company. According
to Plaintiffs' complaint, they purchased a policy of
insurance from defendants that covered their residence. On
January 21, 2015, a pipe burst in their residence, causing
damage to their real and personal property. Defendants have
paid a total of $593, 573.41 under Plaintiffs' policy,
which contains a total limit of $890, 800. Nevertheless,
Plaintiffs bring a breach of contract claim asserting that
Defendants “have failed to fully pay for the
damages incurred” as a result of the burst pipe.
(Compl. ¶¶ 9-19) (emphasis added). They also bring
a claim for bad faith denial, alleging that “Defendants
have delayed determination of parts of the claim and refused
to pay portions of the claim that are within the terms of the
policy.” (Id. ¶ 20-26). In their prayer
for relief, Plaintiffs seek “actual and punitive
damages as well as attorneys' fees, court costs and other
relief as this Court deems proper and just in [an] amount
exceeding Twenty-Five Thousand Dollars.” Defendants
filed a timely notice of removal on the grounds that
diversity jurisdiction exists over this matter. Their notice
states that complete diversity of citizenship exists between
Plaintiffs and Defendants and that “Plaintiffs are
claiming in excess of $75, 000.” (Doc. 1, ¶ 6).
Plaintiffs now move to remand to state court. They do not
contest that diversity of citizenship exists but argue that
Defendants have failed to meet their burden of establishing
that the amount in controversy is sufficient. Defendants
oppose the motion to remand.
jurisdiction requires complete diversity of the parties and
an amount in controversy that exceeds $75, 000. 28 U.S.C.
§ 1332. For purposes of the amount in controversy, the
amount claimed by the plaintiff in the complaint is the
amount in controversy. Naji v. Lincoln, 665
Fed.Appx. 397, 400 (6th Cir. 2016). If a plaintiff
claims an unspecified amount in damages, however, the
defendant has the burden to establish by a preponderance of
the evidence that the amount in controversy exceeds the
statutory threshold. Id. Under 28 U.S.C. §
1447(c), cases originally filed in a state court must be
remanded if, at any time before trial, it appears that the
federal district court to which they were removed lacks
subject matter jurisdiction. Coyne v. The American
Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999)
(“[I]n a removed action, upon determination that a
federal court lacks jurisdiction, remand to state court is
mandatory.”). Any doubt as to whether removal is proper
must be resolved in favor of remand. Id.
Plaintiffs' complaint seeks an unspecified amount of
damages. In their notice of removal, Defendants alleged only
that “Plaintiffs are claiming in excess of $75,
000” but did not submit any evidence to support this
allegation. By itself, this statement is insufficient to show
an adequate amount in controversy. Naji, 665
Fed.Appx. at 400 (“While [a defendant] need not show to
a legal certainty that the amount in controversy met the
federal requirement, [he] must do more than show a mere
possibility that the jurisdictional amount is
satisfied.”) (citations and quotations omitted).
their brief in opposition, Defendants argue that the amount
in controversy is sufficient because the remaining coverage
under the policy exceeds $75, 000 and Plaintiffs are seeking
punitive damages and attorneys' fees. The Sixth Circuit
has not decided whether, in an insurance dispute, courts
should measure the amount in controversy by the policy limits
or by the value of the underlying claim. Other courts,
including district courts in the Sixth Circuit, have held
that the policy limits are controlling only when the validity
of the entire contract is in dispute. When the applicability
of an insurance policy to a particular occurrence is the
question, however, the amount in controversy is measured by
the value of the underlying claim. Grange Mut. Cas. Co.
v. Safeco Ins. Co. of Am., 565 F.Supp.2d 779, 784 (E.D.
Ky. 2008) (finding that value of claim rather than policy
limits controls when the issue is a claim on the policy)
(citing Hartford Ins. Group v. Lou-Con, Inc., 293
F.3d 908, 911 (5th Cir. 2002); Budget
Rent-A-Car, Inc. v. Higashiguchi, 109 F.3d 1471, 1473
(9th Cir. 1997) (finding that the maximum
liability under a rental agreement is “relevant to
determining the amount in controversy only if the validity of
the entire insurance policy is at issue”)).
Court agrees that the more logical conclusion is to evaluate
the value of the underlying claim rather than the policy
limit when the issue in a case is a claim on the policy.
Here, there is nothing in the record that allows the Court to
deduce the value of Plaintiffs' claim. The complaint
contains no information about the remaining damages they are
seeking for the burst pipe, and Defendants have produced no
evidence of this amount. Without this information, the Court
has no ability to assess the value of the punitive damages or
attorney fees that Plaintiffs might be entitled to. Thus, the
Court cannot even speculate that the amount in controversy is
sufficient, let alone conclude that Defendants have
established by a preponderance of the evidence that the
amount in controversy exceeds the statutory threshold.
Because the Court does not have subject matter over this
dispute, it must be remanded to the Cuyahoga County Court of
foregoing reasons, Plaintiffs' Motion for ...