United States District Court,

W.D. Arkansas, Hot Springs Division.

Jana SKINNER, Plaintiff

v.

EMPIRE EXPRESS, INC.; John Doe Driver; and John Doe Entities 1-3, Defendants

CASE NO. 6:17-CV-6040

|

Signed 07/31/2017

Attorneys and Law Firms

Jake Logan, Rainwater Holt Sexton P.A., Little Rock, AR, for Plaintiff.

Kyle Ray Wilson, Michael A. Thompson, Wright, Lindsey & Jennings LLP, Little Rock, AR, for Defendants.

 

 

ORDER

Susan O. Hickey, United States District Judge

*1 Before the Court is Plaintiff’s Motion for Remand to State Court. ECF No. 6. Defendant Empire Express, Inc., has filed a response. ECF No. 9. The Court finds this matter ripe for consideration.

 

 

1. BACKGROUND

Plaintiff filed her Complaint in the Circuit Court of Hot Spring County, Arkansas, on February 24, 2017. ECF No. 1-1. Plaintiff’s claims arise from an automobile collision that occurred on October 8, 2016, in Hot Spring County, Arkansas. ECF No. 1-1, ¶¶ 10-12. In her Complaint, Plaintiff demands “judgment against the Defendants for a sum in excess of that required for federal court jurisdiction in diversity of citizenship cases and sufficient to fully compensate her for her damages.” ECF No. 1-1, p. 4, ¶ 26.

 

On May 3, 2017, Defendant Empire Express, Inc., (“Empire Express”) removed this matter to the United States District Court for the Western District of Arkansas. In the Notice of Removal, Empire Express stated that this Court has subject matter jurisdiction over this case due to the facts that “this action is between citizens of different states, and the [amount] in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.” ECF No. 1, ¶ 6. Subsequently, on June 1, 2017, Plaintiff filed the instant Motion for Remand to State Court. ECF No. 6.

 

 

1. DISCUSSION

After reviewing the record and the parties’ arguments, the Court finds that Plaintiff’s Motion for Remand to State Court (ECF No. 6) should be granted.

 

“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A party may remove a case from state court only if the party shows that the federal court has original jurisdiction over the case. 28 U.S.C. § 1441(a). Jurisdiction is determined from the date of removal, and the United States Supreme Court has long held that events occurring subsequent to removal may not oust a federal court of jurisdiction. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289-91 (1938); see also Hatridge v. Aetna Cas. & Sur. Co., 415 F.2d 809, 814 (8th Cir. 1969) (citing St. Paul Mercury Indem. Co., 303 U.S. at 292). A party asserting diversity jurisdiction under 28 U.S.C. § 1332 bears the burden of proving, by a preponderance of the evidence, that there is complete diversity and that the amount in controversy is greater than $75,000. Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009); James Neff Kramper Family Farm P’ship v. IPB, Inc., 393 F.3d 828, 831 (8th Cir. 2005). “Under the preponderance standard, ‘[t]he jurisdictional fact … is not whether the damages are greater than the requisite amount, but whether a fact finder might legally conclude that they are.” Bell, 557 F.3d at 959 (quoting Kopp v. Kopp, 280 F.3d 883, 885 (8th Cir. 2002)) (emphasis in original). In general, the amount demanded in the Complaint will be deemed to be the amount in controversy. 28 U.S.C. § 1446(c)(2). However, a plaintiff’s valuation of his own claim is relevant but not necessarily dispositive as to the amount in controversy. See In re Minn. Mut. Life Ins. Co. Sales Practices Litig., 346 F.3d 830, 834-35 (8th Cir. 2003); Boone v. State Farm Mut. Auto. Ins. Co., No. 1:15-CV-01047, 2015 WL 4977193, at *2 (W.D. Ark. Aug. 21, 2015) (finding that the amount in controversy was less than the jurisdictional threshold even though the plaintiff had alleged, as in this case, that the amount sought exceeded “the minimum requirements for jurisdiction in federal court based on diversity”); Robertson v. 1859 Historic Hotels, Ltd., No. 4:06-CV-01727, 2007 WL 1288678, at *1-2 (E.D. Ark. May 1, 2007) (“Plaintiff’s allegation in her Complaint that she believes her damages exceed $75,000 is not dispositive of the amount in controversy inquiry.”). “Federal courts are to resolve all doubts about federal jurisdiction in favor of remand and are strictly to construe legislation permitting removal.” Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965, 968 (8th Cir. 2007) (internal quotations omitted). “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

 

*2 In the instant motion, Plaintiff asserts that “[t]his Court lacks jurisdiction to hear this case due to the amount in controversy being less than the seventy-five thousand dollars ($75,000) required for diversity jurisdiction.” ECF No. 6, ¶ 2. As noted above, in her original Complaint Plaintiff demanded “judgment against the Defendants for a sum in excess of that required for federal court jurisdiction in diversity of citizenship cases and sufficient to fully compensate her for her damages.” ECF No. 1-1, ¶ 26. However, Plaintiff now claims that she “made a standard demand in her original Complaint so as to not cap damages, but recognizes it is unlikely a jury would award her that substantial of a verdict, but not wanting to prejudice her ability to be awarded a higher verdict.” ECF No. 7, p. 1. Specifically, Plaintiff now states that:

Plaintiff Skinner’s total medical expenses are in the amount of $5,339.81, and her demand is for her medical expenses, past and future pain and suffering, and property damages she sustained. It is highly unlikely that any jury will award pain and suffering damages in an amount close to fifteen times the amount in medical expenses. This explanation in no way attempts to minimize the damages that Ms. Skinner did incur, instead Plaintiff moves only to show a realistic award in favor of the Plaintiff would not reach the required amount in controversy.

ECF No. 7, p. 4. Finally, Plaintiff argues that it is “Defendant’s burden to prove by a preponderance of the evidence that the amount in controversy in this case is likely to exceed the $75,000 threshold” and that Defendant Empire Express has failed to carry that burden. ECF No. 7, p. 4. In response, Empire Express asserts that it has met its burden of proving that this Court has subject matter jurisdiction by a preponderance of the evidence. Empire Express argues that the damages sought in Plaintiff’s Complaint as well as relevant case law clearly establish that the amount in controversy is above the jurisdictional threshold.

 

Turning to the issue of whether Defendant Empire Express has proven by a preponderance of the evidence that the requirements for federal diversity jurisdiction have been met, the Court notes that the parties do not dispute that there is complete diversity of parties. The parties currently named in this action are Plaintiff Jana Skinner, a resident of Arkansas, and Defendant Empire Express, a corporation whose principal place of business is in Tennessee. Therefore, it appears that there is complete diversity of parties.

 

Moving on to the amount in controversy, it seems that Defendant Empire Express bases its argument that the present amount in controversy is above the $75,000 threshold on the facts that (1) Plaintiff initially demanded damages over the jurisdictional threshold and (2) “Arkansas has no hard caps on any element of damages in a personal-injury case” (ECF No. 10, p. 4). Empire Express further supports its position by citing an opinion, Bill Davis Trucking, Inc., v. Prysock, 784 S.W.2d 755 (Ark. 1990), in which the Arkansas Supreme Court “affirmed a jury award of $198,000.00 based on only $4,086.61 in past medical expenses, which is approximately 25% less than the $5,339.81 of past medical expenses claimed by the plaintiff here.” ECF No. 10, p. 4. Defendant Empire Express does not cite any other cases to illustrate that, even though Plaintiff’s claims reflect relatively modest medical expenses, the actual amount in controversy in such cases is over $75,000.

 

Although Plaintiff’s Complaint indicates that the amount in controversy is “in excess of that required for federal court jurisdiction in diversity of citizenship cases,” there is little in the record to support such an assertion. Further, in the present motion, Plaintiff states that she “incurred $5,339.81 in total medical expenses for her treatment related to the injury which forms the basis for this case.” ECF No. 7, p. 1. Likewise, Plaintiff states that her demand for “a sum in excess of that required for federal court jurisdiction in diversity of citizenship cases” was simply included pursuant to Arkansas Rule of Civil Procedure 8(a)1 so as not to cap her damages.2 All of these facts make it appear that, although Plaintiff demanded an award higher than the jurisdictional threshold, the actual amount in controversy is less than $75,000.

 

*3 Although Defendant Empire Express has cited one case in which a jury awarded a sum well over the jurisdictional threshold in a personal injury case somewhat factually similar to the present controversy, it has failed to cite other relevant cases to illustrate that juries regularly award such large sums in simple automobile collision cases. Accordingly, Defendant Empire Express has not submitted sufficient evidence to show that it is more likely than not that the actual amount in controversy at the time of removal was more than $75,000. Therefore, the Court finds that Empire Express has failed to carry its burden of proving by a preponderance of the evidence that this Court has subject matter jurisdiction. Thus, this Court lacks subject matter jurisdiction in the present case and Plaintiff’s Motion for Remand to State Court (ECF No. 6) should be granted.

 

 

III. CONCLUSION

For the foregoing reasons, the Court finds that Plaintiff’s Motion for Remand to State Court (ECF No. 6) should be and hereby is GRANTED. Accordingly, this action is hereby remanded to the Circuit Court of Hot Spring County, Arkansas, for further adjudication.

 

IT IS SO ORDERED, this 31st day of July, 2017.

 

All Citations

Slip Copy, 2017 WL 3228124

 

 

Footnotes

1

Arkansas Rule of Civil Procedure 8(a) states, in relevant part:

In claims for unliquidated damage, a demand containing no specified amount of money shall limit recovery to an amount less than required for federal court jurisdiction in diversity of citizenship cases, unless language of the demand indicates that the recovery sought is in excess of such amount.

2

Although the Court understands Plaintiff’s reasoning, such pleading techniques are potentially problematic. Many defendants, as here, may see such a demand and believe the matter is eligible for adjudication in federal court and accordingly remove the case to federal court. Then, as here, the case will be removed to federal court when, upon examination, the federal court lacks subject matter jurisdiction over the controversy. Such improper removal protracts the litigation, adds expense for the parties, and needlessly congests the federal court docket.

United States District Court,

N.D. Alabama, Northeastern Division.

CANAL INDEMNITY COMPANY, Plaintiff,

v.

Frankie CARBIN, d/b/a Carbin Construction, et al., Defendants.

Civil Action Number 5:16-cv-00630-AKK

|

Signed 08/10/2017

Attorneys and Law Firms

John W. Johnson, II, Christian & Small LLP, Birmingham, AL, for Plaintiff.

Robert C. Gammons, Harrison Gammons & Rawlinson PC, Melissa Dawn Endsley, Thomas S. McGrath, McGrath Law Firm, Huntsville, AL, for Defendants.

 

 

MEMORANDUM OPINION

ABDUL K. KALLON, UNITED STATES DISTRICT JUDGE

*1 Canal Indemnity Company filed this action against Frankie Carbin, doing business as Carbin Construction (“Carbin”), Sherry L. Ford, and Aaron Jerome Ford, asking the court for a judgment declaring that it has no duty to defend Carbin in the underlying lawsuit styled Frank Carbin Construction, Inc. v. Aaron Jerome Ford and Sherry L. Ford, et al., case number 47-CV-2014-901887.00, pending in the Circuit Court of Madison County, Alabama. See doc. 1. The court has for consideration Canal’s motion for summary judgment, doc. 25, which is fully briefed, docs. 25; 28; 29, and is due to be granted.

 

 

1. STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 56(a), summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” “Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (alteration in original). The moving party bears the initial burden of proving the absence of a genuine dispute of material fact. Id. at 323. The burden then shifts to the non-moving party, who is required to go “beyond the pleadings” to establish that there is a “genuine issue for trial.” Id. at 324 (internal citations and quotation marks omitted). A dispute about a material fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

 

The court must construe the evidence and all reasonable inferences arising from it in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 244 (all justifiable inferences must be drawn in the non-moving party’s favor). Any factual dispute will be resolved in the non-moving party’s favor when sufficient competent evidence supports that party’s version of the disputed facts. But see Pace v. Capobianco, 238 F.3d 1275, 1276–78 (11th Cir. 2002) (a court is not required to resolve disputes in the non-moving party’s favor when that party’s version of events is supported by insufficient evidence). However, “mere conclusions and unsupported factual allegations are legally insufficient to defeat a summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (citing Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere ‘scintilla’ of evidence supporting the opposing party’s position will not suffice; there must be enough of a showing that a jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252).

 

 

1. FACTUAL BACKGROUND

Carbin filed the underlying lawsuit against the Fords, asserting “a mechanic [’]s and materialman’s lien and seeking sums allegedly due for work performed under a construction contract.” Doc. 25 at 2. Relevant here, the Fords filed counterclaims against Frank Carbin Construction, Inc. and third-party claims against Frank Carbin, individually, based on their allegations that, “over a year past the deadline to complete construction, [Carbin] … refused to perform any other work on the residence until [it] was paid an additional $11,771.43” and “walked off the job” after receiving “96.6 percent of the money owed under the contract although only approximately 88 percent of the construction work had been completed.” See doc. 1-2 at 3. Carbin has submitted this counterclaim to Canal, and Canal has filed this action seeking a declaration that it has no obligation to defend Carbin.

 

 

III. ANALYSIS

*2 Canal insured Carbin under a policy that provides, in pertinent part,

We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. ….

Doc. 1-4 at 11. The policy defines “bodily injury” and “property damage” as events caused by an “occurrence,” see id. at 11, which the policy, in turn, defines as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” doc. 1-5 at 12 (emphasis added). As its primary argument in support of its contention that it has no duty to defend Carbin, Canal asserts that the injuries the Fords allege in the underlying lawsuit do not constitute “bodily injury” or “property damage” caused by an “accident.” Doc. 25 at 8.

 

The policy does not define “accident.” However, the Alabama Supreme Court has described an accident, in the insurance context, as “an unintended and unforeseen injurious occurrence; something that does not occur in the usual course of events or that could be reasonably anticipated.” Hartford Casualty Ins. Co. v. Merchants & Farmers Bank, 928 So. 2d 1006, 1011 (Ala. 2005) (internal quotation marks omitted). See also Liberty Mut. Ins. Co. v. Wheelwright Trucking Co., 851 So. 2d 466, 480 (Ala. 2002) (defining “accident” as “an unexpected happening rather than one occurring through intentional design or an event which takes place without one’s foresight or expectation or design”). To get around this definition, Carbin contends, first, that its actions “were not done with expectation or intent of injury.” Doc. 28 at 10. According to Carbin, it “did not intend or expect the fixed price of the contract to be changed,” “the Fords made oral modifications to the allowances, choosing expensive upgrades in excess of the allowances,” and “the Fords’ allegation that Carbin failed to disclose that he would not finish the project for the fixed price does not constitute an intentional occurrence, because the price change was due to the Fords’ actions.” Id. at 11. These contentions are unavailing, because the construction contract’s express provisions regarding changes or upgrades affecting the final price (and timely payment for such modifications) show that, while these events may have been unexpected, they were not unforeseeable. See, e.g., doc. 1-1 at 9 (requiring, prior to the implementation of any requested upgrades, a “written change order, in a form which is acceptable to [Carbin] and which sets forth the changes to be made and the additional consideration to be paid….”); id. (“In the event that [Carbin] agrees to such changes and has not received all of the additional consideration to be paid …, then the balance of said consideration shall be paid as a part of the final payment….”).1

 

*3 Second, Carbin contends that it “did not make unilateral changes to the specifications” and that the “Fords made verbal modifications to the original contract which included the requests for various upgrades.” Doc. 28 at 13–14. Therefore, Carbin asserts that any “changes to the plans” were the Fords’s fault, and that Carbin’s actions “are correctly characterized as an accident.” Id. at 13–14. Even if it is true that the Fords made or caused the changes, verbal modifications or requests for upgrades are, by their nature, intentional conduct. Therefore, this contention is also unavailing.

 

Third, Carbin contends that its actions were unintentional and therefore an accident. Another judge of this court has rejected a similar contention by a builder, noting that “[the builder] mean[s] to argue that [it] did not unjustifiably abandon the site. [It] certainly left the site before finishing the home, apparently because of monetary disputes with the [buyer].” Emplrs. Mut. Cas. Co. v. Smith Constr. & Dev., L.L.C., 949 F. Supp. 2d 1159, 1172–73 (N.D. Ala. 2013) (emphasis in original). The court held that, regardless of whose “fault” it was, the builder’s abandonment of the project was still an intentional act. See id. Similarly here, Carbin’s abandonment of the project was an intentional act.

 

As its second argument in support of its motion, Canal contends that the Fords’s allegations do not support the negligence and wantonness claims (which do not require “intent” as an element), and, “[w]here facts are alleged in the complaint to support a cause of action, it is the facts, not the legal phraseology, that determine whether an insurer has a duty to defend its insured in the action.” Doc. 25 at 10 (citing Hartford Casualty Ins. Co., 928 So. 2d at 1012). Carbin disagrees, and contends, based on the underlying complaint, in which the Fords base these claims, in part, on “extensive damage to their residence,” see doc. 1-2 at 5, 8, and the purported “failure to construct the home by the plans and specifications could surely have been done negligently,” doc. 28 at 24, that the Fords’s “accusation that Carbin negligently constructed the home is enough to state a negligence claim….” and to qualify as an accident under the policy, id. However, Carbin cites no case to support this contention. See id. at 23–24. In fact, to the extent the terms “negligence” or “wantonness” might suggest non-intentional conduct, the Alabama Supreme Court has not described conduct similar to Carbin’s alleged conduct as “accidental” for purposes of insurance coverage, and has not extended its definition of “accident” in a manner that supports Carbin. See, e.g., Hartford Casualty Ins. Co., 928 So. 2d at 1013 (negligence claim did not qualify as an “accident” because, although the insured “may have made a mistake of fact or an error in judgment,” it “at all times acted in a deliberate and purposeful manner”) (internal quotation marks omitted); U.S. Fid. & Guar. Co. v. Warwick Dev. Co., Inc., 446 So. 2d 1021, 1023 (Ala. 1984) (faulty workmanship claim did not constitute an “occurrence,” which policy defined as “an accident, including … bodily injury or property damage neither expected nor intended from the standpoint of the insured”).

 

 

1. CONCLUSION

In short, based on the allegations in the underlying complaint, the court concludes that the Fords’s alleged injuries did not arise out of bodily injury or property damage caused by an “accident.” Accordingly, Canal’s motion for summary judgment, doc. 25, is due to be granted. The court will enter a separate order contemporaneously herewith.

 

*4 DONE the 10th day of August, 2017.

 

All Citations

Slip Copy, 2017 WL 3437655

 

 

Footnotes

1

The court is also not persuaded by Carbin’s related argument that it “did not intend or expect to be delayed in completing the Fords’ home by the deadline contemplated in the contract” due to the Fords’s “fail [ure] to pay Carbin as work was completed” and Carbin’s consequent inability “to continue work on the home due to lack of funds,” doc. 1-1 at 12. As explained supra, even if Carbin “expected” the Fords to timely pay for the upgrades, their alleged failure to do so cannot reasonably be described as unforeseeable in light of the construction contract. See id. at 11–12 (“The Completion Date may be extended by Contractor for such additional time as Contractor shall determine to be reasonably necessary … to complete the construction of the Dwelling as the result of any delays in the progress of the construction of the Dwelling … due to changes in the Plans and Specifications….”).