Summary
abating case for failure to comply with conditions precedent where the plaintiff participated in, but did not complete, the examination under oath and failed to produce documents requested for investigation into his insurance claim
Summary of this case from AXO Staff Leasing, LLC v. Zurich Am. Ins. Co.Opinion
Civil Action No. 3:04-CV-2699-M.
April 4, 2005
MEMORANDUM OPINION AND ORDER
Before the Court are the Motion to Abate of Defendant Allstate Insurance Company ("Allstate"), filed on January 13, 2005, and Plaintiff Greg Wofford's Motion to Remand, filed on January 21, 2005. Defendant responded to Plaintiff's Motion to Remand, but Plaintiff did not respond to Defendant's Motion to Abate. For the reasons described below, Defendant's Motion to Abate is GRANTED and Plaintiff's Motion to Remand is DENIED.
I. BACKGROUND
This case stems from a dispute over insurance payments allegedly due to Plaintiff for losses he incurred as a result of a July 10, 2004 burglary of his apartment. Plaintiff's belongings were insured by an Allstate renter's insurance policy ("Policy"). Plaintiff alleges that his cash, jewelry, electronics, collectibles, and clothing were stolen from his apartment. The property at issue is valued by the Plaintiff at more than $35,000. On July 12, 2004, Plaintiff filed a claim under the Policy, seeking payment for his losses. To date, the claim has not been paid, but Allstate alleges that the claim is still under investigation. On November 8, 2004, Plaintiff filed suit against Allstate in the 160th Judicial District Court of Dallas, alleging breach of contract, bad faith and gross negligence, and violations of the Deceptive Trade Practices Act ("DTPA") and the Texas Insurance Code. The case was removed to this Court on December 22, 2004. On February 9, 2005, Plaintiff filed his First Amended Complaint, which alleges only a cause of action for breach of contract.
Plaintiff seeks to remand this case to the 160th Judicial District Court of Dallas. He contends that the damages sought in this case do not reach the amount in controversy required for diversity jurisdiction. Defendant seeks to abate this case, arguing that Plaintiff has not met the conditions precedent for filing an insurance claim under the Policy.
II. ANALYSIS
A. Motion to Remand
To determine whether it has diversity jurisdiction, this court must review the claims in the state court petition at the time of removal. Manguno v. Prudential Prop. Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). When that petition does not specifically state the dollar amount of damages sought, the defendant must prove by a preponderance of the evidence that the damages claimed exceed $75,000. St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998); Allen v. R H Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995); De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993). Removal is proper if it is facially apparent that the amount claimed exceeds $75,000. Allen, 63 F.3d at 1335. If it is not facially apparent, the parties may be required to provide summary judgment type proof regarding the amount in controversy at the time of removal. Id. at 1336. The defendant must do more than simply "point to a state law that might allow the plaintiff to recover more than what is pled." De Aguilar v. Boeing, 47 F.3d 1404, 1412 (5th Cir. 1995) (emphasis added). The defendant must provide evidence that the actual amount in controversy exceeds $75,000. See Id. Once a defendant has provided that evidence, removal is proper unless the plaintiff can show with legal certainty that his recovery will not exceed the jurisdictional amount. Id.
Subsequent to the filing of the Motion to Remand, Plaintiff filed an Amended Complaint, seeking $55,000, but not stipulating that he will not later amend to seek more than $75,000. The Court will not examine the Amended Complaint to determine whether removal was proper. Instead, the Court will examine Plaintiff's Original Petition, which was the operative pleading at the time of removal. See Madden v. Able Supply Co., 205 F. Supp. 2d 695, 699 (S.D. Tex. 2002) (citing Manguno, 276 F.3d at 723) ("When determining the propriety of subject matter jurisdiction in the context of a motion to remand, a district court must consider the claims in the plaintiff's state court petition as they existed at the time of removal.").
Plaintiff argues that removal was improper because he is seeking approximately $35,000 in damages, which is obviously less than the minimum of $75,000 for diversity jurisdiction. See 28 U.S.C. § 1332(a) (2005). Allstate contends that "it is facially apparent that an amount in excess of $75,000 (exclusive of interests and costs) is in dispute and the `amount in controversy' requirement of 28 U.S.C. § 1332(a) has been satisfied." Notice of Removal ¶ 9. Allstate states that the Plaintiff's Original Petition alleges damages in the amount of $35,594 ($27,094 for personal property and $8,500 for scheduled jewelry), as well as statutory penalties under Article 21.21 of the Texas Insurance Code and the DTPA. Id. ¶ 9, 10. Under the DTPA the trier of fact can award up to three times the amount of the Plaintiff's actual damages. TEX. BUS. COM. CODEANN. § 17.50(b)(1) (Vernon 2004). Allstate also notes that Plaintiff seeks attorney's fees, which also may be awarded to a prevailing plaintiff under the DTPA. See Id. at § 17.50(d). In addition, pursuant to the Texas Insurance Code, Plaintiff may receive court costs, attorney's fees, and three times the amount of actual damages, if the fact finder determines that Allstate knowingly committed acts violating the Code. TEX. INS. CODEANN. art. 21.21 § 16(b)(1) (Vernon 2004). Thus, Allstate claims the damages alleged in Plaintiff's Original Petition exceed the $75,000 threshold for diversity jurisdiction.
In determining the amount in controversy, the Court considers items for which Allstate can be liable under state law, including attorney's fees, penalties, statutory damages, and punitive damages. Greenberg, 134 F.3d at 1253 (holding that statutory damages of 18 percent per annum under Article 21.55 of the Texas Insurance Code must be included in determining the amount in controversy). See also U.S. Fire Ins. Co. v. Villegas, 242 F.3d 279, 284-85 (5th Cir. 2001) (concluding that punitive damages may properly be considered in determining whether the amount in controversy exceeds $75,000); Manguno, 276 F.3d at 723 (finding that attorney's fees should be included in the calculation of the amount in controversy when a state statute provides for such fees). If claimed statutory penalties and treble damages could be awarded, and that would cause the plaintiff's claim to exceed $75,000, then diversity jurisdiction exists. See Antwine v. Bristol-Myers Squibb Co., No. 3:04-CV-0072-K, 2004 WL 1391744, at *2-3 (N.D. Tex. June 21, 2004); Lewis v. State Farm Lloyds, 205 F. Supp. 2d 706, 708 (S.D. Tex. 2002); Parker v. S. Farm Bureau Cas. Ins. Co., No. 3:01-CV-1342-M, 2001 WL 1335832, at *2
(N.D. Tex. Oct. 23, 2001); HWJ, Inc. v. Burlington Ins. Co., 926 F. Supp. 593, 596 (E.D. Tex. 1996). Allstate has satisfied its burden to prove that the damages claimed exceed $75,000. The Court finds that it is facially apparent from the Plaintiff's Original Petition that the damages sought exceed the statutory minimum, based on Plaintiff's claims for actual damages of $35,594, attorney's fees, punitive damages, and enhanced statutory damages. Therefore, Plaintiff's Motion to Remand is DENIED.
B. Motion to Abate
Allstate seeks to abate this suit until Plaintiff completes an examination under oath and produces documents that Allstate has requested for its investigation. Allstate points out that the Policy requires Plaintiff to provide certain information in the event of a covered loss.
Your Duties After Loss. In case of a loss to covered property caused by perils insured against, you must:
. . . .
(4) furnish a complete inventory of damaged personal property showing the quantity, description, and amount of loss. Attach all bills, receipts, and related documents which you have that justify the figures in the inventory.
(5) as often as we reasonably require:
(a) provide us access to the damaged property
(b) provide us with pertinent records and documents we request and permit us to make copies.
(c) submit to examination under oath and sign and swear to it.
(6) send to us, if we request, your signed sworn proof of loss within 91 days of our request on a standard form supplied by us. We must request a signed sworn proof of loss within 15 days after we receive your written notice, or we waive our right to require a proof of loss. Such waiver will not waive our other rights under this policy.
Def. Mot. Abate Ex. A. at 8. Allstate contends that Plaintiff has not provided the required information. In particular, Allstate alleges Plaintiff has not completed his examination under oath. In support of this proposition, Allstate has submitted the transcript of the Plaintiff's examination. Id. at Ex. B. The examination, which lasted approximately three hours, ended when Plaintiff testified that he could he could not read the exhibits because he did not have his eyeglasses. Id. at 152-57. At the end of the examination, Plaintiff's counsel stated that the examination would "resume . . . at a time and place [convenient] for all parties." Id. at 154. The examination has apparently not yet resumed. Def. Mot. Abate at 5. Allstate also alleges that Plaintiff has not supplied the supporting documentation for his claim, despite its repeated requests. See id at Ex. C, D, F, G, H, K.
"Insurance policy provisions requiring the insured's submission to examination under oath as a condition precedent to sustaining a suit on the policy are valid." State Farm General Ins. Co. v. Lawlis, 773 S.W.2d 948, 949 (Tex.App.-Beaumont 1989, no writ). The Court finds that Plaintiff has not satisfied the conditions precedent to filing suit under the Policy. According to long-standing precedent, the proper remedy for failure to satisfy an insurance policy's conditions precedent is abatement of the lawsuit. See Farnsworth v. Massey, 365 S.W.2d 1, 4 (Tex. 1963); Lidawi v. Progressive County Mut. Ins. Co., 112 S.W.3d 725, 735 (Tex.App.-Houston [14th Dist.] 2003, no pet.); Pennsylvania Fire Ins. Co. v. Faires, 35 S.W. 55, 55 (Tex.Civ.App.-San Antonio 1896, no writ). Therefore, Defendant's Motion to Abate is GRANTED.
III. CONCLUSION
Plaintiff's Motion to Remand is DENIED. Defendant's Motion to Abate is GRANTED. This case is abated until sixty days after Plaintiff has fulfilled his obligations under the Policy, including the completion of his examination under oath and the production of any and all documents in support of his claim which are reasonably requested by Allstate. The parties shall advise the Court within ninety days of the date of this Order as to the status of this case.