Caceres v. Scottsdale Insurance Company

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 19-cv-24163-BLOOM/Louis

JACLYN CACERES and

XAVIER CACERES,

Plaintiffs,

v.

SCOTTSDALE INSURANCE

COMPANY,

Defendant.

______________________________/

ORDER

THIS CAUSE is before the Court upon Plaintiffs Jaclyn Caceres and Xavier Caceres’s

(collectively, “Plaintiffs”) Motion to Remand, ECF No. [12] (“Motion”). Defendant Scottsdale

Insurance Company (“Defendant”) filed its Response in Opposition, ECF No. [17] (“Response”),

to which Plaintiffs replied, ECF No. [18] (“Reply”). The Court has reviewed the Motion, all

opposing and supporting submissions and related exhibits, the record in this case, and the

applicable law, and is otherwise fully advised. For the reasons that follow, the Motion is granted.

I. BACKGROUND

The facts giving rise to the instant action are as follows. The parties entered into an

insurance contract, bearing Policy Number DFS1139525, which was effective from September 11,

2016, to September 11, 2017 (“2017 Policy”). ECF No. [1-3] ¶ 5; ECF No. [17-1] at 2, ¶ 6. On

September 10, 2017, Hurricane Irma struck South Florida and damaged Plaintiffs’ home. ECF No.

[1-3] ¶ 7. Plaintiffs notified Defendant of the loss pursuant to the 2017 Policy. Id. ¶¶ 5-7. Defendant

assigned Claim Number 01787768 to this loss. ECF No. [17-1] at 2, ¶ 8. On November 10, 2017,

Defendant issued Plaintiffs a check in the amount of $10,975.00, listing the Claim Number

1787768. ECF No. [1] ¶ 7; ECF No. [17-3]. The 2017 Policy also carried a wind deductible in the

amount of $5,853.68. ECF No. [1] ¶ 7.

The parties later renewed their insurance contract under the same Policy Number

DFS1139525, which was effective from September 11, 2018, to September 11, 2019 (“2019

Policy”). ECF No. [17-1] at 2, ¶ 7. In mid May 2019, under this subsequent 2019 Policy, Plaintiffs

reported a separate claim for property damage due to heavy rain and roof collapse, to which

Defendant assigned the Claim Number 01893418. Id. at 2, ¶ 10. On June 12, 2019, Defendant

issued Plaintiffs a check in the amount of $7,975.04, for Claim Number 01893418. Id. at 2, ¶ 11;

ECF No. [12-2].1

Prior to this action being filed, on June 22, 2019, Plaintiffs presented Defendant with a

repair estimate in the amount of $91,862.51. ECF No. [1] ¶ 8; ECF No. [1-2]; ECF No. [12-4].

This estimate listed September 10, 2017, as the date of loss, but listed the Claim Number

01893418. ECF No. [12-2]. The repair estimate covered the estimated damages for both the claim

under Claim Number 01787768 and Claim Number 01893418. See ECF No. [17-1] at 5-6; ECF

No. [17-2]; ECF No. [17-4]; ECF No. [18] at 5; ECF No. [18-6] ¶¶ 5-6.

On September 5, 2019, Plaintiff commenced this action by filing a Complaint in the Circuit

Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida. ECF No. [1-1].

Defendant was served with process on September 19, 2019. ECF No. [1] ¶ 3. Plaintiffs’ Complaint

generally alleges that they are seeking damages in excess of $15,000.00. ECF No. [1-3] ¶ 1. On

October 9, 2019, Defendant removed the state court action to federal court, pursuant to 28 U.S.C.

§ 1332. ECF No. [1] (“Notice”). Defendant indicated that the parties to this action are completely

1 In their Complaint, Plaintiffs state the claim number relevant to the Hurricane Irma property damage as

Claim Number 01893418. ECF No. [1-3] ¶ 5. However, the exhibits attached to Defendant’s Response

indicate that Claim Number 01787768 corresponds to a claim with a date of loss of September 10, 2017,

whereas Claim Number 01893418 corresponds to a claim with a date of loss of May 13, 2019. See ECF

diverse and the amount in controversy in this case is $75,033.83, based on the $91,862.51 repair

estimate minus the $10,975.00 check paid and the $5,853.68 wind deductible. Id.

Plaintiffs now file the instant Motion seeking to remand this action back to the Circuit

Court, arguing a lack of diversity jurisdiction, although the parties are citizens of different states,

because the amount in controversy does not exceed $75,000.00. See generally ECF No. [12].

Specifically, Plaintiffs argue that this Court lacks diversity jurisdiction because (1) Defendant

cannot use a pre-suit damage estimate as a basis for establishing the amount in controversy, and

(2) even using the pre-suit damage estimate, Defendant failed to account for the second check paid

to Plaintiffs, which would decrease the amount in controversy from $75,033.83 to $67,058.79. See

generally id. Plaintiffs also request an award of attorney’s fees incurred as a result of the allegedly

improper removal. Id. at 11-12.

II. LEGAL STANDARD

Title 28 U.S.C. § 1332(a) vests a district court with subject matter jurisdiction when the

parties are diverse and the amount in controversy exceeds $75,000.00. Id. A party may remove the

action from state court to federal court if the action is within the federal court’s subject matter

jurisdiction. 28 U.S.C. § 1441(a).

“A removing defendant bears the burden of proving proper federal jurisdiction.” Coffey v.

Nationstar Mortg., LLC, 994 F. Supp. 2d 1281, 1283 (S.D. Fla. 2014). “Where, as here, the plaintiff

has not pled a specific amount of damages, the removing defendant must prove by a preponderance

of the evidence that the amount in controversy exceeds the jurisdiction requirement.” Pretka v.

Kolter City Plaza II, Inc., 608 F.3d 744, 752 (11th Cir. 2010); see also 28 U.S.C. § 1332(a).

Further, in determining whether a subject matter jurisdiction exists, the Court must focus on the

amount in controversy at the time of removal, not at any later point. Pretka, 608 F.3d at 751

(citations omitted); E.S.Y., Inc. v. Scottsdale Ins. Co., 217 F. Supp. 3d 1356, 1360 (S.D. Fla. 2015).

“To determine whether this standard is met, a court first examines whether ‘it is facially apparent

from the complaint that the amount in controversy exceeds the jurisdictional requirement.’”

Miedema v. Maytag Corp., 450 F.3d 1322, 1330 (11th Cir. 2006) (quoting Williams v. Best Buy

Co., Inc., 269 F.3d 1316, 1319 (11th Cir. 2001)), abrogated on other grounds by Dudley v. Eli

Lilly & Co., 778 F.3d 909 (11th Cir. 2014). “If the jurisdictional amount is not facially apparent

from the complaint, the court should look to the notice of removal and may require evidence

relevant to the amount in controversy at the time the case was removed.” Id. (quoting Williams,

269 F.3d at 1319).

“Removal is a matter of federal right,” but on a motion to remand, “‘ambiguities are

generally construed against removal.’” Butler v. Polk, 592 F.2d 1293, 1296 (5th Cir. 1979);2 see

also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). Nonetheless, “a removing

defendant is not required to prove the amount in controversy beyond all doubt or to banish all

uncertainty about it.” Pretka, 608 F.3d at 754 (citations omitted). “Where, as in this case, the

complaint alleges an unspecified amount of damages, ‘the district court is not bound by the

plaintiff’s representations regarding its claim,’ and may review the record for evidence relevant to

the amount in controversy.” DO Rests., Inc. v. Aspen Specialty Ins. Co., 984 F. Supp. 2d 1342,

1344 (S.D. Fla. 2013) (citing Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061 (11th Cir. 2010)).

Moreover, “defendants may submit a wide range of evidence in order to satisfy the jurisdictional

requirements of removal,” including “affidavits, declarations, or other documentation.” Pretka,

608 F.3d at 755. The Court may also use its judicial experience and make reasonable inferences

and deductions to determine the amount in controversy. See Roe, 613 F.3d at 1061-62; Pretka, 608

2 In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc), the Court of Appeals for the

Eleventh Circuit adopted as binding precedent the decisions of the Court of Appeals for the Fifth Circuit

F.3d at 754 (discussing the difference between reasonable deductions and inferences with

“conjecture, speculation, or star gazing”); E.S.Y., Inc., 217 F. Supp. 3d at 1360.

III. DISCUSSION

The instant Motion seeks to remand this action because Plaintiffs contend that the

$75,000.00 amount in controversy has not been met. Defendant takes the contrary position.

At the outset, the Court notes that district courts may properly consider pre-suit demands

in evaluating whether a case has been properly removed. See, e.g., Katz v. J.C. Penney Corp., No.

09-CV-60067, 2009 WL 1532129, at *4 (S.D. Fla. June 1, 2009). Thus, the Court may consider

Plaintiffs’ pre-suit estimate of repairs in determining whether this case has been properly removed.

Further, on the merits, the parties voice substantial disagreement as to many of the facts

relevant to the instant Motion, and the Eleventh Circuit has stressed that in “matters concerning

removal and remand . . . ‘it is axiomatic that ambiguities are generally construed against removal.’”

Whitt v. Sherman Int’l Corp., 147 F.3d 1325, 1329 (11th Cir. 1998) (quoting Butler v. Polk, 592

F.2d 1293, 1296 (5th Cir. 1979)). Specifically, the parties submit contrary arguments regarding

whether the 2019 claim number reflected subsequent, continuing damage from the initial loss after

Hurricane Irma, or whether this subsequent claim was for losses independent of those sustained in

2017. Likewise, the parties disagree as to which check amounts should be subtracted from the

$91,862.51 repair estimate in determining the applicable amount in controversy.

It is undisputed, however, that Plaintiffs’ total estimate of damages for the claims from

both the September 10, 2017, loss and the May 13, 2019, loss amounted to $91,862.51. Likewise,

the parties have indicated that Defendant issued two checks to Plaintiffs for the September 10,

2017, and May 13, 2019, losses, one in the amount of $10,975.00 in connection with the 2017

claim and one in the amount of $7,975.04 in connection with the 2019 claim. Additionally, the

parties agree that the wind deductible of $5,853.68 was applied to the 2017 claim. Thus, regardless

of whether the 2017 and 2019 claims should have both been included under the same claim

number, it is clear to this Court that the amount in controversy in this case, which is based upon

the combined $91,862.51 damage estimate, necessarily must account for all payments and

deductibles applied in connection with the 2017 and 2019 claims. Thus, the amount in controversy

in the instant action is $67,058.79. It would defy logic to permit Defendant to use a combined total

estimate of damages that includes damages for an allegedly unrelated claim of loss to satisfy the

amount in controversy requirement for federal diversity jurisdiction, while ignoring payments

made to Plaintiffs to reduce the damages from the same allegedly unrelated claim of loss.

Defendant also argues that the amount in controversy requirement has been satisfied

because Plaintiffs seek to recover attorney’s fees and costs in this litigation pursuant to Florida

Statutes § 627.428, which, through trial, could easily exceed the remaining $7,941.21 needed to

establish the amount in controversy under Plaintiffs’ interpretation. “The general rule is that

attorneys’ fees do not count towards the amount in controversy unless they are allowed for by

statute or contract.” Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 808 n.4

(11th Cir. 2003) (citing Graham v. Henegar, 640 F.2d 732, 736 (5th Cir. 1981)); Morrison v.

Allstate Indem. Co., 228 F.3d 1255, 1265 (11th Cir. 2000) (“When a statute authorizes the recovery

of attorney’s fees, a reasonable amount of those fees is included in the amount in controversy.”);

see also Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 202 (1933). However, “when the

amount in controversy substantially depends on a claim for attorney fees, that claim should receive

heightened scrutiny.” Cohen v. Office Depot, Inc., 204 F.3d 1069, 1080 n.10 (11th Cir. 2000).

Although the Eleventh Circuit has explained that, “[w]hen a statute authorizes the recovery

of attorney’s fees, a reasonable amount of those fees is included in the amount in controversy,”

Morrison, 228 F.3d at 1265, it has not yet clarified whether the amount of attorney’s fees included

in the amount in controversy is the amount accrued at the time of removal or the prospective

amount of attorney’s fees required to litigate the entire case. In fact, this issue of including statutory

attorney’s fees in the amount in controversy has caused a split in district courts within the Eleventh

Circuit. See Bender v. GEICO Gen. Ins. Co., No. 8:17-cv-872-T-33TBM, 2017 WL 1372166, at

*1 (M.D. Fla. Apr. 17, 2017) (discussing the divide among courts in this Circuit “over whether to

include the projected amount of attorney’s fees or only attorney’s fees as of the time of removal”

(citations omitted)); Brown v. Am. Exp. Co., Inc., No. 09-61758-CIV, 2010 WL 527756, at *7

(S.D. Fla. Feb. 10, 2010) (discussing the “[c]onflicting case law [that] exists as to whether the

amount of attorney’s fees for the amount-in-controversy analysis should be calculated as of the

date of removal or through the end of the case” (citations omitted)).

Despite this split, many district courts across Florida have calculated these statutorily

authorized attorney’s fees as those accrued at the time of removal, especially in determining

whether federal jurisdiction exists.3 This conclusion is in line with Eleventh Circuit precedent

establishing that “[j]urisdictional facts are assessed on the basis of plaintiff’s complaint as of the

time of removal. . . . That plaintiff might ask for or recover more after removal is not sufficient to

support jurisdiction.” Burns v. Windsor Ins. Co., 31 F.3d 1092, 1097 n.13 (11th Cir. 1994)

(citations omitted). In addition, calculating attorney’s fees as of the time of removal comports with

“the general rule that post-removal events, such as the subsequent generation of attorney fees,

cannot create jurisdiction that was lacking at the outset.” Lott & Friedland, P.A., 2010 WL

2044889, at *4 (citing Rogatinsky, 2009 WL 3667073, at *3 (“post-removal events . . . will not

retroactively establish subject-matter jurisdiction.”)); Waltemyer, 2007 WL 419663, at *2 (“While

3 See Frisher v. Lincoln Benefit Life Co., No. 13-20268-CIV, 2013 WL 12092525, at *2 (S.D. Fla. Aug. 19,

2013); Gold v. Traveler Indemnity Co., No. 12-80036-CIV, 2012 WL 13019199, at *2 (S.D. Fla. Mar. 29,

2012); Lott & Friedland, P.A. v. Creative Compounds, LLC, No. 10-20052-CV, 2010 WL 2044889, at *4

(S.D. Fla. Apr. 21, 2010); Rogatinsky v. Metropolitan Life Ins. Co., No. 09-80740-CIV, 2009 WL 3667073,

at *3 (S.D. Fla. Oct. 26, 2009); Waltemyer v. Nw. Mut. Life Ins. Co., No. 2:06-cv-597-FtM-29DNF, 2007

attorney fees through the conclusion of the litigation are included when the action is filed initially

in federal court, there is no reason to deviate from the general rule that in a removed case the

amount in controversy is determined as of the time of removal and the court cannot rely on post-

removal events in examining its subject matter jurisdiction.” (citing Morrison, 228 F.3d at 1265;

Poore v. American-Amicable Life Ins. Co. of Tex., 218 F.3d 1287, 1290-91 (11th Cir. 2000))).

Therefore, the Court concludes that the amount in controversy does not include highly

speculative, prospective amounts of attorney’s fees, but rather includes only those fees accrued as

of the time of removal. Gold, 2012 WL 13019199, at *2 (“The Seventh Circuit in Gardynski-

Leschuck v. Ford Motor Company, considered this issue and ruled that the amount in controversy

calculation should not include ‘the value of legal services that have not been and may never be

incurred’ because the amount of legal fees are not ‘in controversy’ until they are accrued.” (quoting

Gardynski-Leschuck v. Ford Motor Co., 142 F.3d 955, 958 (7th Cir. 1998))). Here, Defendant

presents no evidence to establish that Plaintiffs have accrued $7,941.21 in attorney’s fees as of the

time of this removal. As such, Defendant has failed to satisfy its burden of establishing that the

amount in controversy in this case exceeds $75,000.00. Coffey, 994 F. Supp. 2d at 1283 (“A

removing defendant bears the burden of proving proper federal jurisdiction.”). Therefore, the Court

concludes that it does not have subject-matter jurisdiction over the instant action.

Regarding Plaintiffs’ request for attorney’s fees incurred as a result of this removal, “the

standard for awarding fees should turn on the reasonableness of the removal.” Martin v. Franklin

Capital Corp., 546 U.S. 132, 141 (2005). The United States Supreme Court has explained that

courts are generally permitted to award attorney’s fees under 28 U.S.C. § 1447(c) “only where the

removing party lacked an objectively reasonable basis for seeking removal. Conversely, when an

objectively reasonable basis exists, fees should be denied. In applying this rule, district courts

retain discretion to consider whether unusual circumstances warrant a departure from the rule in a

given case.” Id. (citations omitted). “When a court exercises its discretion in this manner, however,

its reasons for departing from the general rule should be ‘faithful to the purposes’ of awarding fees

under § 1447(c).” Id.; see also Milwaukee v. Cement Div., National Gypsum Co., 515 U.S. 189,

196, n.8 (1995) (“[A]s is always the case when an issue is committed to judicial discretion, the

judge’s decision must be supported by a circumstance that has relevance to the issue at hand”).

“The appropriate test for awarding fees under § 1447(c) should recognize the desire to deter

removals sought for the purpose of prolonging litigation and imposing costs on the opposing party,

while not undermining Congress’ basic decision to afford defendants a right to remove as a general

matter, when the statutory criteria are satisfied.” Id. at 140.

Here, Plaintiffs’ Complaint seeks redress for losses sustained on September 10, 2017, as a

result of Hurricane Irma, yet it alleges the claim number assigned in connection with the damage

to Plaintiffs’ property that was sustained on May 13, 2019. ECF No. [1-3] ¶¶ 5, 7. These

inconsistent references are also present in Plaintiffs’ repair estimate. ECF No. [1-2]. Nevertheless,

as the exhibits to Defendant’s Response indicate, Defendant was aware that the repair estimate

included damages and repairs from both claims prior to removing the case. ECF No. [17-1] at 5-

6. As such, Defendant should have known to account for the payment made in connection with the

2019 claim when using Plaintiffs’ estimate of repairs as the basis for establishing the amount in

controversy requirement for diversity jurisdiction. The Court concludes that Defendant did not

have an objectively reasonable basis for removal under these circumstances. Therefore, Plaintiffs’

request for an award of attorney’s fees and costs incurred as a result of this removal is granted.

IV. CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED as follows:

1. Plaintiffs’ Motion to Remand, ECF No. [12], is GRANTED.

Case No. 19-cv-24163-BLOOM/Louis

2. Defendant is required to pay Plaintiffs’ “just costs and any actual expenses,

including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447.

3. This case is REMANDED to the Circuit Court of the Eleventh Judicial Circuit

in and for Miami-Dade County, Florida.

4. To the extent not otherwise disposed of, any scheduled hearings are

CANCELED, all pending motions are DENIED as moot, and all deadlines are

TERMINATED.

5. The Clerk of Court shall CLOSE this case.

DONE AND ORDERED in Chambers at Miami, Florida, on December 5, 2019.

UNITED STATES DISTRICT JUDGE

Copies to:

Counsel of Record

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