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BAD FAITH CASE REMANDED WHERE JURISDICTIONAL MINIMUM NOT SHOWN TO A LEGAL CERTAINTY (Western District)


The insurer removed this breach of contract and bad faith case, and the insured moved to remand on the basis the claims’ value did not exceed $75,000.  Western District Judge Fischer granted the motion.

In diversity cases, the removing defendant bears the burden to show the claims exceed the jurisdictional minimum.  Courts in the Third Circuit apply the “legal certainty test”, i.e., “[t]he case will be dismissed only if from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed, or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount.”

The insured willingness to stipulate it is not seeking more than $75,000 is not dispositive, but the insurer still has to show by a preponderance of the evidence the complaint seeks $75,000 or more.

The insured alleged $14,155.56 in compensatory damages under the policy, and actually specified the sum of his total claim at $68,776.89, adding in interest, punitive damages and attorneys’ fees.  By contrast, the insurer did not make its case that the bad faith claim bridged the $60,844.44 gap between the compensatory damage claim and $75,000.

Judge Barry Fischer cited a number of supporting cases, and distinguished case law, in supporting her remand decision in the bad faith “bridging the gap” context.  These opinions include, among others, her 2014 Brewer opinion, summarized here, and 2020 Dendy decision, summarized here, and Judge Marston’s detailed 2020 Sciarrino decision, summarized here.

Date of Decision:  April 29, 2022

Kennedy v. State Farm Fire and Casualty Company, U.S. District Court Western District Pennsylvania No. CV 22-571, 2022 WL 1291428 (W.D. Pa. Apr. 29, 2022) (Fischer, J.)

 

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