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Walker v. Scales

United States District Court, N.D. Mississippi, Aberdeen Division

February 20, 2014



SHARION AYCOCK, District Judge.

Before the Court are Plaintiff's Motion to Remand to State Court [4] and the parties' Joint Motion to Remand to State Court [7]. Upon due consideration of the motions, as well as all relevant rules and authorities, the Court finds as follows:

Factual and Procedural Background

Plaintiff Wilbur Walker commenced this suit in the County Court of Lee County, Mississippi, asserting a claim for negligence against Defendant Tiffany Scales and claims for breach of contract and bad faith denial of insurance coverage against Defendant Safeway Insurance Company, arising out of an automobile accident that occurred in Tupelo, Mississippi. Specifically, Plaintiff alleges in his complaint that Scales ran a red light, failed to yield the right of way, was inattentive, and failed to keep a proper lookout, all of which led to her colliding with Plaintiff, causing him pain and suffering, emotional distress, property damage, loss of income, and other damages. Plaintiff also alleges that, although Scales allegedly claimed to be uninsured at the time of the subject accident, Safeway, Plaintiff's automobile insurance carrier, rejected his uninsured motorist claim. Plaintiff seeks uninsured motorist benefits for bodily injury and property damage, as well as an unspecified amount of damages for emotional distress and punitive damages.

Safeway removed the matter to this Court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. As grounds for removal, Safeway states that complete diversity of citizenship exists between it and Plaintiff and that the citizenship of Scales should be disregarded. Safeway argues that Plaintiff's claims against Scales and against Safeway do not involve a distinct litigable event or share common questions of law or fact and are thus fraudulently and/or egregiously misjoined. Safeway further asserts that the amount in controversy exceeds $75, 000, exclusive of interest and costs, based upon Plaintiff's demand for uninsured motorist benefits, extra-contractual damages, and unspecified punitive damages.

Plaintiff filed a motion to remand to state court claiming that "Plaintiff is not seeking nor will Plaintiff seek an amount greater than Seventy-Five Thousand and 00/100 Dollars ($75, 000.00)." Plaintiff further contends that he seeks uninsured motorist benefits in an amount much less than $75, 000, that Scales did not consent to removal, and that his claims against Scales were not fraudulently and/or egregiously misjoined because he will "need to prove that Defendant Scales was an uninsured motorist at the time of the subject accident and that Defendant Scales negligently caused the subject accident."

Safeway did not file a response in opposition to Plaintiff's motion to remand. Rather, Safeway and Plaintiff subsequently filed a joint motion to remand to which they attached a Covenant Not to Execute signed by Plaintiff's counsel on behalf of Plaintiff. In pertinent part, the Covenant states that "[i]n consideration of an agreed upon remand of this case to state court, plaintiff covenants... to refrain from enforcing against defendant, by execution or otherwise, more than Seventy-Five Thousand and 00/100ths Dollars ($75, 000.00) of any judgment that may be rendered in the above designated action...."

Remand Standard

Federal courts are courts of limited jurisdiction. Epps v. Bexar-Medina-Atascosa Counties Water Improvement Dist. No. 1 , 665 F.2d 594, 595 (5th Cir. 1982). The Judiciary Act of 1789 provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). Original federal diversity jurisdiction exists "where the matter in controversy exceeds the sum or value of $75, 000.00, exclusive of interest and costs, and is between... citizens of different States." 28 U.S.C. § 1332(a); Addo v. Globe Life and Accident Ins. Co. , 230 F.3d 759, 761 (5th Cir. 2000).

Upon removal of a case, a plaintiff may move for remand, and "[if] it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). The Fifth Circuit has held that the "removal statutes are to be construed strictly against removal and for remand." Eastus v. Blue Bell Creameries, L.P. , 97 F.3d 100, 106 (5th Cir. 1996); Shamrock Oil & Gas Corp. v. Sheets , 313 U.S. 100, 108-109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). Furthermore, "[a]ny ambiguities are construed against removal because the removal statute should be strictly construed in favor of remand." Manguno v. Prudential Prop. & Cas. Ins. Co. , 276 F.3d 720, 723 (5th Cir. 2002) (citing Acuna v. Brown & Root, Inc. , 200 F.3d 335, 339 (5th Cir. 2000)).

Amount in Controversy

A plaintiff's claim for damages-as set forth in the complaint-normally remains presumptively correct unless the removing defendant can show by a preponderance of the evidence that the amount in controversy is actually greater than $75, 000. See Horton v. Liberty Mut. Ins. Co. , 367 U.S. 348, 353, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961) (holding that amount in controversy is determined from complaint itself, unless it appears that "the amount stated in the complaint is not claimed in good faith"); St. Paul Mercury Indem. Co. v. Red Cab Co. , 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938); St. Paul Reins. Co., Ltd. v. Greenberg , 134 F.3d 1250, 1253 (5th Cir. 1998); De Aguilar v. Boeing Co. , 47 F.3d 1404, 1412 (5th Cir. 1995). As a result, unless the removing defendant can meet its burden, a plaintiff may normally avoid federal diversity jurisdiction by pleading, in good faith, state court damages below the minimum federal jurisdictional amount. Allen v. R & H Oil & Gas Co. , 63 F.3d 1326, 1335 (5th Cir.1995) ("[I]f a plaintiff pleads damages less than the jurisdictional amount, he generally can bar a defendant from removal.").

However, in cases such as this, where a plaintiff fails to allege a specific amount of damages, the Fifth Circuit has prescribed the following procedure:

In removal practice, when a complaint does not allege a specific amount of damages, the party invoking federal jurisdiction must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount. The district court must first examine the complaint to determine whether it is "facially apparent" that the claims exceed the jurisdictional amount. If it is not thus ...

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