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Stanley v. Auto-Owners Insurance Co.

United States District Court, D. South Carolina, Columbia Division

October 21, 2019

Barbara P. Stanley and Bobby R. Stanley, Plaintiffs,
v.
Auto-Owners Insurance Company, d/b/a Homeowners Insurance Company, Owners Insurance Company, & Property Owners Insurance Company, Defendants.

          ORDER AND OPINION

         The matter comes before the court on Plaintiffs Barbara P. Stanley and Bobby R. Stanley's (the “Stanleys”) Motion to Remand (ECF No. 9). For the reasons set forth below, the court GRANTS the Stanleys' Motion to Remand (ECF No. 9).

         I. BACKGROUND

         On July 3, 2019, the Stanleys filed a civil action against Defendants in the Circuit Court of Richland County, South Carolina, as No. 2019-CP-40-03659. (ECF No. 1-2 at 2.) Defendants were thereafter served on or about July 12, 2019, through the Department of Insurance. Defendants timely removed the case to this court on August 12, 2019. (ECF No. 1.) For jurisdictional purposes, the Stanleys alleged that they are citizens of the State of South Carolina; and Defendants are corporations organized under the laws of a state other than the State of South Carolina.[1] At the time of removal, the face of the Complaint did not specify the amount of damages sought, but prayed for an award of actual and punitive damages, costs and attorney's fees. (ECF No. 1-2 at 7.)

         On August 26, 2019, the Stanleys timely filed their Motion to Remand the case to state court along with a unilateral stipulation of damages. (ECF No. 7; ECF No. 9.) In the stipulation, the Stanleys state that they “irrevocably stipulate that the amount in controversy in this case does not exceed $75, 000.00.” The Stanleys further stipulate that they will “at no time move to amend their Complaint to seek an amount in excess of $75, 000.00.” The Stanleys further agree they will “not attempt to collect on any judgment rendered in excess of $75, 000.00 in the event a verdict is rendered exceeding this amount.” (ECF No. 7.) On August 30, 2019, Defendants filed a response to the Motion to Remand (ECF No. 12.)

         II. STANDARD

         As the party seeking to invoke the court's jurisdiction after removing a case from state court to federal court, the defendant has the burden of proving jurisdiction upon a plaintiff's motion to remand. Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (citing Mulcahy v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994)); see Caterpillar Inc. v. Lewis, 519 U.S. 61, 73 (1996) (stating that the party seeking to remove a case from state court to federal court bears the burden of demonstrating that jurisdiction is proper at the time the petition for removal is filed). In deciding a motion to remand, the federal court should construe removal jurisdiction strictly in favor of state court jurisdiction. Id. “If federal jurisdiction is doubtful, a remand is necessary.” Mulcahy, 29 F.3d at 151 (citations omitted), Pohto v. Allstate Ins. Co., No. 10-2654, 2011 WL 2670000, at *1 (D.S.C. July 7, 2011) (“Because federal 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.”).

         III. DISCUSSION

         A. The Parties' Arguments

         The Stanleys' Complaint brings a cause of action for breach of contract and bad faith for failure to pay an insurance claim. It also alleges reckless, wanton, and willful disregard for the Stanleys' rights. (ECF No. 1-2 at 7, ¶ 25.) For these claims, the Stanleys request actual and punitive damages, but do not specify an amount. (Id. at ¶ 26.) The Stanleys request that the court remand the case to the Circuit Court of Richland County because the amount in controversy does not exceed $75, 000.00. The Stanleys base this argument on their unilateral post-removal stipulation, which stipulates that (1) the total amount in controversy of their claims is no more than $75, 000.00, (2) they will not move to amend their Complaint to seek an amount in excess of $75, 000, and (3) they will not attempt to collect on any excess of $75, 000.00 in the event that a jury should return a verdict exceeding this sum. (ECF No. 7.) (emphasis added). Defendants argue that the Stanleys' stipulation only seeks to limit the amount received post-verdict, and not the amount sought during the trial. (ECF No. 12 at 3.) Defendants also argue that the stipulation is defective because it is ambiguous “at best” and is not binding because the amount in controversy was “satisfied at the time of removal.” (ECF No. 12 at 7.) Therefore, the sole issue before the court is whether the Stanleys' post-removal stipulation that the amount in controversy does not meet the jurisdictional limit ousts this court of federal diversity jurisdiction.

         B. The Court's Review

         Courts generally determine the amount in controversy by examining the complaint at the time of commencement of the state court action and at the time of removal. JTH Tax, Inc. v. Frashier, 624 F.3d 635, 638 (4th Cir. 2010); Brown v. VSC Fire & Sec., Inc., 2016 WL 1600126, at *2 (D.S.C. Apr. 20, 2016). “The Fourth Circuit has not adopted a rule regarding the burden of proof on the removing party for establishing the amount in controversy.” Clifton v. Allen, No. 9:17-CV-02920-DCN, 2018 WL 3095026, at *2 (D.S.C. June 22, 2018) (quoting Carter v. Bridgestone Americas, Inc., 2013 WL 3946233, at *1-2 (D.S.C. July 31, 2013) (citing Rota v. Consolidation Coal Co., 1999 WL 183873, at *1 n. 4 (4th Cir. Apr. 5, 1999) (expressly declining to adopt any particular standard of proof for determining the amount in controversy). Regardless, “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.” Id. (quoting Brooks v. GAF Materials Corp., 532 F.Supp.2d 779, 781-82 (D.S.C. 2008)).

         The Fourth Circuit, however, has adopted a general rule regarding the effect of post-removal stipulations on the propriety of removal where the amount in controversy is plainly stated in the complaint. In situations where the amount in controversy is plainly and unambiguously stated in the complaint, “‘[e]vents occurring subsequent' to the filing of the complaint ‘which reduce the amount recoverable below the statutory limit do not oust jurisdiction.'” JTH Tax, Inc., 624 F.3d at 638 (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 292 (1938)). In other words, under St. Paul Mercury, a plaintiff may not reduce or change his or her demand for damages by way of stipulation to defeat diversity jurisdiction once an amount has been stated. See Porsche Cars N. Am., Inc. v. Porsche.net, 302 F.3d 248, 255-56 (4th Cir. 2002) (“[A] court determines the existence of diversity jurisdiction at the time the action is filed, regardless of later changes in originally crucial facts such as the parties' citizenship or the amount in controversy.” (citation and internal quotations marks omitted)); Griffin v. Holmes, 843 F.Supp. 81, 87 (E.D. N.C. 1993) (“[T]he plaintiff ... may not defeat diversity jurisdiction by filing a post-removal amendment of the complaint which reduces the amount of damages requested by the complaint below the amount in controversy required by 28 U.S.C. § 1332(a).”); see also In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992) (recognizing that post-removal stipulations reducing the amount in controversy do not deprive a district court of jurisdiction).

         However, the Fourth Circuit has not opined on the effect of a post-removal stipulation, as is the case here, where the initial complaint does not specify an amount. Regardless, there is guidance from the U.S. Court of Appeals for the Fifth Circuit and a myriad of federal district courts within the Fourth, Fifth, and Sixth Circuits on this very issue. Indeed, “various jurisdictions have found that a post-removal stipulation that damages will not exceed the jurisdictional minimum can be considered as a clarification of an ambiguous complaint, rather than a post-removal amendment of the plaintiff's complaint.” Carter 2013 WL 3946233, at *1-2; see also Gebbia v. Walmart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000) (asserting that post-removal affidavits and stipulations may be considered in determining the amount in controversy only if the jurisdictional basis was ambiguous at the time of removal); see also Ferguson v. Wal-Mart Stores, Inc., 1994 WL 653479, at *2 (D.S.C. Nov. 15, 1994) (remanding case when the plaintiff alleged an unspecified amount of damages and then filed a post-removal stipulation clarifying that the amount of damages sought was below the jurisdictional amount); Gwyn v. Wal-Mart Stores, Inc., 955 F.Supp. 44, 46 (M.D. N.C. 1997) (when presented with indeterminate claims, “the court may consider a stipulation filed by the plaintiff that the claim does not exceed” the jurisdictional amount). This use of clarification is permitted, rather than forbidden, under St. Paul Mercury. See Walker v. Poland, 2009 WL 5195762, at *1-2 (D.S.C. Dec. 22, 2009); see also Tommie v. Orkin, Inc., 2009 WL 2148101, at *1-2 (D.S.C. July 15, 2009).

         Upon review, the court notes that the Stanleys did not specify an amount of damages in their Complaint. (See ECF No. 1-1 at 7.) Therefore, the court interprets the Stanleys' stipulation as to damages as a clarification of the amount of damages they are seeking. See, e.g., Cox v. Willhite Seed, Inc., No. 1:13-CV-02893-JMC, 2014 WL 6816990, at *2 (D.S.C. Dec. 4, 2014); see also Carter v. Bridgestone Americas, Inc., C/A No. 2:13-CV-00287-PMD, 2013 WL 3946233, at *3 (D.S.C. July 31, 2013) (“Defendant concedes that ‘Plaintiff does not specify an amount of damages in her Complaint'…the Court interprets Plaintiff's statements in her notarized affidavit as to the amount in controversy as a stipulation, clarifying that the total amount of damages sought by her Complaint is not more than $60, 000.000.”); Tommie v. Orkin, Inc., C/A No. 8:09-1225- HMH, 2009 WL 2148101, at *2 (D.S.C. July 15, 2009) (“The complaint requests an unspecified amount of damages. The court interprets Tommie's statement in the motion as to the amount in controversy as a stipulation that she cannot recover a total amount of actual and punitive damages exceeding the sum of $75, 000.00, exclusive of interest and costs.”); Ferguson v. Wal-Mart Stores, Inc., No. 94-2696, 1994 WL 653479, at *2 (D.S.C. Nov. 15, 1994) (remanding case when the plaintiff alleged an unspecified amount of damages and clarified the amount of damages sought was below the jurisdictional amount by filing a post-removal stipulation); Gwyn v. Wal-Mart Stores, Inc.,955 F.Supp. 44, 46 ...


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