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Clear Choice Construction LLC v. Travelers Home and Marine Insurance Co.

United States District Court, D. South Carolina, Rock Hill Division

February 5, 2018

Clear Choice Construction, LLC and Piedmont Disaster Services L.L.C., Plaintiffs,
The Travelers Home and Marine Insurance Company, and XYZ Corporations 1 through 20, which are unknown entities affiliated with the Travelers band of insurers, Defendants.



         Plaintiffs Clear Choice Construction, LLC (hereinafter “Clear Choice Construction”) and Piedmont Disaster Services, L.L.C. (hereinafter collectively referred to as “Plaintiffs”) filed a lawsuit against Defendants The Travelers Home and Marine Insurance Company (hereinafter “Travelers”) and XYZ Corporations 1 through 20, which are unknown entities affiliated with the Travelers brand of insurers (hereinafter collectively referred to as “Defendants”), in the York County Court of Common Pleas, South Carolina. Plaintiffs allege that Travelers failed to pay a claim for covered losses arising out of damage to a home in Rock Hill, South Carolina. Plaintiffs assert causes of actions for a violation of S.C. Code. Ann. § 38-59-40, which provides for attorney's fees where an insurer has refused to pay a claim; bad faith administration of a claim; declaratory judgment entitlement as to overhead, profits, ordinance, and law; and for tortious interference of contractual relationships. ECF No. 1. On July 17, 2017, Defendant Travelers filed a notice of removal pursuant to 28 U.S.C. § 1332 on the basis of diversity of jurisdiction. Id. at 2-3. On August 18, 2017, Plaintiffs filed a motion to remand, ECF No. 14, to which Defendant Travelers filed an opposition on September 1, 2017. ECF No. 17.


         Defendant Travelers issued a policy of insurance, policy no. 0B1409983263628633 (hereinafter the “Policy”) to Sean Seymour and Jamie Miller a/k/a Jamie Seymour (hereinafter the “Insureds”) for property damage and repair to their residence in Rock Hill, South Carolina (hereinafter, the “Property”). ECF No 1-1 at 3. On or about May 24, 2014, the Insureds suffered property damage to the roof and gutters caused by a substantial wind and hail storm. Id. The Insureds hired Plaintiff Piedmont Disaster Services, L.L.C. to make the necessary repairs on the property. ECF No. 1-1 at 4. Thereafter, the Insureds assigned their rights to Ronald Pierce and/or Piedmont Disaster Services, LLC. Id. Ronald Pierce then assigned all of his rights to Plaintiff Clear Choice Construction. Id.

         Following the assignments, Plaintiffs filed a property damage claim against Travelers for the repairs on the property. Id. Plaintiffs contend an estimate in the amount of $17, 101.82 was submitted to Travelers on numerous occasions. ECF No. 1-1 at 4. To date, Plaintiffs indicate that $5, 917.73 has been paid by Travelers. Id. Plaintiffs allege that repeated communications with Travelers have failed along with multiple requests for arbitration. ECF No. 1-1 at 5.

         On June 16, 2017, Plaintiffs served the Summons and Complaint on Travelers through the South Carolina Department of Insurance pursuant to the provisions of S.C. Code Ann. § 38-5-70.[1]ECF No. 1. The record does not reflect that Defendants XYZ Corporations 1 through 20 have been served with Plaintiffs' Summons and Complaint. On July 17, 2017, Travelers filed an Answer that admitted to the roof and gutter damage on the property. ECF No. 4 at 4. However, Travelers denies that the “estimate accurately reflects the appropriate quantities of materials necessary or the repairs agreed to or required for the roof and gutters.” ECF No. 4 at 4. On the same day, Travelers also filed a notice of removal that indicated the parties are completely diverse pursuant to 28 U.S.C. § 1332 and the amount in controversy exceeds $75, 000. ECF No. 1 at 2-3.

         On August 18, 2017, Plaintiffs' filed a motion to remand. ECF No. 14. Plaintiffs argue that Rule 11(a) of the South Carolina Rules of Civil Procedure requires that Defendants confer in good faith with Plaintiffs' counsel prior to the filing of a “motion” such as a notice of removal. Id. at 2. Plaintiffs further contend that consultation with Plaintiffs' counsel would have been beneficial to both parties and would have resolved the issue regarding the amount in controversy, which was intended to be capped at $74, 999.99. Id. at 3. As a result, Plaintiffs allege that the failure to consult with Plaintiffs' counsel has resulted in this matter being unnecessarily removed to federal court. Id.

         On September 1, 2017, Travelers filed a response in opposition to Plaintiffs' motion to remand. ECF No. 17. Travelers argues that Plaintiffs' motion to remand should be denied because: (1) it is untimely; (2) the South Carolina Rules of Civil Procedure do not govern this Court; (3) even if the South Carolina Rules of Civil Procedure applied, a notice of removal is not a “motion, ” and (4) Plaintiffs have not capped damages at $75, 000 or less. ECF No. 17 at 1. Plaintiffs did not file a reply to Travelers' opposition.

         The matter is now before the court on the issue as to first, whether diversity jurisdiction exists, and second, whether Plaintiffs' motion to remand was timely filed.


         A. Diversity of Jurisdiction

         Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994). A defendant is permitted to remove a case to federal court if the court would have had original jurisdiction over the matter. 28 U.S.C. § 1441(a). A federal court has “original jurisdiction of all civil actions where the matter in controversy exceeds the sum or the value of $75, 000 and is between citizens of different states.” 28 U.S.C. § 1332(a). In cases in which the district court's jurisdiction is based on diversity of citizenship, the burden of establishing federal jurisdiction rests upon the party seeking removal. Strawn v. AT&T Mobility LLC, 530 F.3d 293, 298 (4th Cir. 2008) (holding that in removing cases based on diversity jurisdiction, the party invoking federal jurisdiction must allege same in their notice of removal and when challenged demonstrate basis for jurisdiction); Mulcahey v. Columbia Organic Chem. Co. Inc., 29 F.3d 148, 151 (4th Cir. 1994) (holding that the burden is on the removing defendant to establish subject matter jurisdiction). “Because courts are forums of limited jurisdiction, any doubt as to whether a case belongs in federal or state court should be resolved in favor of state court.” Messex v. Quicken Loans, Inc., C/A No. 2:15-cv-04773-JMC, 2016 WL 3597597, at *2 (D.S.C. July 5, 2016); See also Mulcahey, 29 F.3d at 151 (holding that “if federal jurisdiction is doubtful, a remand is necessary”).

         The Fourth Circuit has not set forth a rule concerning the burden of proof on the removing party in regard to establishing the amount in controversy. Brailsford v. Fresenius Med. Ctr. CNA Kidney Ctr. LLC, C/A No. 2:15-cv-04012-DCN, 2017 WL 1214337, at *1 (D.S.C. August 3, 2017) (citing Rota v. Consol. Coal Co., C/A No. 98-1807, 1999 WL 183873 (4th Cir. 1999) (declining to adopt any particular standard of proof for determining amount in controversy)). However, “courts within the District of South Carolina have leaned towards requiring defendants in this position to show either to a ‘legal certainty' or at least within a ‘reasonable probability' that the amount in controversy has been satisfied.” Brailsford, 2017 WL 1214337 at *3. For example, when a Plaintiff has alleged an indeterminable amount of damages and claims an amount not to exceed $75, 000, the federal court must attempt to ascertain the amount in controversy by a preponderance of the evidence and consider Plaintiff's claims as alleged in the complaint, the notice of removal filed with the court, and other relevant materials in the record. Crosby v. CVS Pharm., Inc., 409 F.Supp.2d 665, 667 (D.S.C. 2005). “In fact, claims of punitive damages must be included in the calculation of the amount in controversy.” American Health and Life Ins. Co. v. Heyward, 272 F.Supp.2d 578, 581 (D.S.C. 2003). This District court has also taken the same approach regarding consequential damages and attorney's fees and costs. See Thompson v. Victoria Fire & Cas. Ins. Co., 32 F.Supp.2d 847 (D.S.C. 1999) (holding that the amount in controversy exceeds $75, 000 where complaint sought punitive damages, consequential damages, and attorney's fees and costs beyond the $25, 000 in actual damages claimed); Barker v. Washington Nat'l. Ins. Co., C/A No. 9:12-cv-1901-PMD, 2013 WL 1767620, at *2 (D.S.C. April 24, 2013) (“[A]lthough not specifically alleged in the complaint, the actual amount in controversy at the time of removal appears to be at least $40, 000. However, because [Plaintiff] seeks actual and punitive damages, attorney's fees, and costs against [Defendants], the total amount in controversy exceeds $75, 000.”).

         B. ...

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