The insured successfully remanded the case back to state court when the insurer could not substantiate that the amount in controversy would exceed $75,000. Puente v. State Farm Lloyds, 2016 U.S. Dist. LEXIS 58103 (S.D. Texas March 28, 2016).
The insured's property was damaged in a wind and hail storm. State Farm denied coverage because the claimed damages were not covered by the policy. The insured hired a public adjuster and submitted another claim for $29,870. State Farm continued to deny the claim.
The insured filed suit in state court, seeking actual damages, punitive damages, pre- and post-judgment interest, court costs and attorneys' fees. Additional damages under the Texas Insurance Code, which allowed an award up to three times the amount of actual damages if the insurer knowingly committed the act complained of, were also requested.
State Farm removed the case to federal court, alleging that the amount in controversy at the time of removal exceeded $75,000. The insured filed a motion to remand the case to state court. She argued that the amount in controversy had not been met because the pre-suit letter only identified a total damage amount of $29,870.
The federal magistrate noted that the insured was seeking $12,673.88 for policy claims and $5,000 for mental anguish, for actual damages in the amount of $17,673.88. If she were successful in obtaining treble damages, the insured could receive $53,021.64 in total damages.
In her demand letter, the insured sought $7,874.54 in past attorneys' fees. When added to the potential treble damage award, the total amount could be $62,924.02. State Farm argued that, given how the insured's attorney incurred $7,874 in fees in the first month of representation, fees to be incurred over the course of the litigation would be substantially higher. But State Farm provided no evidence establishing that the insured would continue to incur $7,800 a month in fees until the case was concluded. Rather, State Farm asked the court to engage in conjecture as to the trajectory that the attorneys' fees would take.
Therefore, State Farm failed to carry its burden to establish that the claims in the case would meet or exceed $75,000. The magistrate recommended that the motion to remand be granted.
