The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
RYAN RODRIGUEZ CIVIL ACTION
VERSUS NO. 23-5656
OCCIDENTAL FIRE & CASUALTY SECTION “B”(4)
COMPANY OF NORTH CAROLINA
ORDER AND REASONS
Before the Court are plaintiff Ryan Rodriguez’s motion to remand (Rec. Doc. 6) and
defendant Occidental Fire & Casualty Company of North Carolina’s opposition (Rec. Doc. 11).
For the following reasons,
IT IS ORDERED that the motion is DENIED.
I. Factual Background and Procedural History
Plaintiff Ryan Rodriguez is a resident of Jefferson Parish, Louisiana. Rec. Doc. 1-1 at 3.
On August 29, 2021, Hurricane Ida made landfall as a Category 4 storm, causing damage to “the
exterior, specifically but not limited to the roof and shed” of plaintiff’s property. Id. at 5. The
property was insured by a policy of defendant Occidental Fire & Casualty Company of North
Carolina (“Occidental”), against which plaintiff made a timely claim. Id. at 4–5. After Occidental
provided a replacement cost value of $36,604.33 and an actual cost value of $26,816.56 for the
damage and tendered the actual-cost payment, plaintiff brought suit in state court, contending the
“initial estimate grossly undervalued the property damage.” Id. at 5.
Plaintiff provides two causes of action: breach of insurance contract and breach of duty of
good faith and fair dealing. See id. at 6–7. With the latter claim, plaintiff provides that an insurer
is subject to awards of reasonable attorney’s fees and penalties of up to two times the damage
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sustained. Id. at 7 (citing La. R.S. §§ 1892(B)(1), 1973(C)). Plaintiff also lists various damage
types recoverable:
a. Repair and remediation expenses; b. Severe inconvenience, mental anguish and
stress; c. Inability to make appropriate repairs due to inadequate insurance
payments; d. Loss of contents; e. Any and all other applicable damages arising
under any of the policy's sub-coverage limits, including but not limited to increased
cost of construction; f. Actual damages related to the increased cost of repairs; g.
Consequential damages; h. Attorney’s fees and penalties; and i. Costs of this
litigation and any pre-litigation costs related to the insurer's failure to make
adequate insurance payments; j. Any and all other damages that are shown through
discovery and/or proven at trial of this matter.
Id. at 8. No matter the possible damages, plaintiff submits in his state court petition that “his
individual damages exceed the specific amount of damages that are necessary to establish the right
to a jury trial, but are within the jurisdictional limits of this court.” Id. at 4.
On September 29, 2023, defendant timely removed the case. See Rec. Doc. 1. Being
incorporated in and having its principal place of business in North Carolina, defendant claimed
diversity jurisdiction of 28 U.S.C. § 1332 as its removal basis. Id. at 2. With complete party
diversity in a suit filed by a Louisiana citizen, defendant also contended the threshold amount in
controversy to be met. Id. at 3. To justify an amount in excess of $75,000.00, Insurer reproduced
the damages that plaintiff claims and additionally notes plaintiff’s policy coverage: “dwelling
damage coverage in the amount of $336,000.00, other structures coverage in the amount of
$33,600, personal property coverage in the amount of $168,000, and loss of use coverage in the
amount of $100,800.00.” Id. 3–4. Contesting the requisite amount in controversy, plaintiff timely
filed this motion to remand.
II. Parties’ Contentions
a. Plaintiff’s Contentions
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In his motion to remand, plaintiff challenges defendant’s satisfaction of its “burden of
establishing federal diversity jurisdiction at the time of removal.” Rec. Doc. 6. Specifically, Mr.
Rodriguez argues that an amount in controversy exceeding $75,000.00 is not facially apparent
from his petition nor proven by Occidental through documentation. See Rec. Doc. 6-1 at 1. In his
state court pleading, plaintiff states that the exterior of his home was damaged in Hurricane Ida,
“specifically but not limited to the roof and shed.” See id. at 4. Although he contends that
Occidental “undervalued the damages,” plaintiff notes the quoted replacement cost value of
$36,604.33 and actual cash value of $26,816.56 as evidence of an amount below the diversity
threshold. Id. 4–5. Such is the case even when other damage awards—including attorney’s fees—
are factored in, which Mr. Rodriguez mentions without comment. See id. As additional proof,
plaintiff points to a statement in his petition that “his individual damages exceed the specific
amount of damages necessary to establish the right to a jury trial but are within the jurisdictional
limits of this court.” Id. at 4.
With the jurisdictional amount not facially apparent, plaintiff also contends that defendant
has not introduced any summary judgment type evidence to establish the sufficient amount in
controversy. See id. at 5. Mr. Rodriguez argues that Occidental’s attachment of the Policy
Declarations Page of the insurance policy is unhelpful to the amount-in-controversy question. See
id. As the only exhibit attached to the notice of removal, the declarations provide evidence of the
amount of coverage, but not the amount in dispute. See id. at 5–6. To plaintiff, Occidental’s use of
the policy attachment is merely “conclusory” and fails to show by preponderance of the evidence
an amount exceeding $75,000.00. Id. at 6.
Finally, in the face of amount-in-controversy ambiguity, plaintiff insists the court should
favor remand. See id. at 2–3 (citing Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720,
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723 (5th Cir. 2002)). Occidental failed to clarify such ambiguity, Mr. Rodriguez avers. See id. at
3.Therefore, the burden does not shift to plaintiff to prove an amount less than $75,000.00. See
id. at 4. In sum, defendant’s failure “to meet the stringent burden placed on it by the statutes and
jurisprudence” convinces plaintiff that remand is proper.
b. Defendant’s Contentions
In contrast to plaintiff’s “stringent” interpretation, defendant categorizes its burden as
needing “only [to] prove that it is more likely than not that the amount in controversy exceeds
$75,000, exclusive of interest and costs.” Rec. Doc. 11 at 1. And according to Occidental, the
more-likely-than-not standard is met for multiple reasons: “the value of the Policy far exceeds
$75,000, [] the plaintiff refuses to stipulate that the damages will be less than $75,000, and the
significant number of unspecified damages listed within the Insured’s Petition.” Id. at 2.
As to the value of the policy, defendant lists coverage categories that exceed $600,000 in
total value. See id. at 1. Occidental insists that the maximum amount of coverage is implicated
because Mr. Rodriguez “reserves his right to supplement or amend” his claim. Id. Further, because
its payment of $26,816.56 is already considered by plaintiff to be “an underpayment,” a higher
amount is in contest. Id. at 4.
Moreover, Occidental insists the real value of the claim is calculated not merely by the
purportedly undervalued property damage but also by the various “unspecified, alleged damages.”
Id. at 4–5 (listing plaintiff’s ten types of petitioned damages). When evaluating this list, defendant
submits that a court need not evaluate the likelihood of recovery but only the value of the object
of litigation. See id. at 5 (citing Durbois v. Deutsche Bank Nat’l Tr. Co., 37 F.4th 1053, 1057 (5th
Cir. 2022)). Plaintiff’s “significant number of unspecified damages” expands the value, defendant
insists, beyond the jurisdictional threshold. Id. at 6.
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As another indication of the necessary amount, Occidental notes that Mr. Rodriguez
has not stipulated to a lower amount “despite repeated requests to do so.” Id. at 6.
(Emphasis added). Defendant includes two emails from defense counsel, inquiring of
plaintiff’s willingness to stipulate to a damage amount below $75,000.00. See Rec. Doc. 11-1.
Apparently, the emails received no response from plaintiff counsel. See id. Although
stressing the absence of a stipulation, Occidental also acknowledges that even if a
stipulation were made the case could remain in federal court. See Rec. Doc. 11 at 6 (citing Weeden
v. PSC Indus. Outsourcing, LP, No. 19-18, 2019 WL 4023755, at *5 (M.D. La. Aug. 7, 2019)).
Such a stipulation would “not [be] conclusive” as to the jurisdictional amount. Id.
Finally, defendant contends that circuit case law supports removal in close cases. See id. at
4 (quoting Bank of Am. Nat. Tr. & Sav. Ass’n v. Reeves, No. 94-2580, 1994 WL 660561, at *1
(E.D. La. Nov. 23, 1994) (“Under Fifth Circuit precedent, the jurisdictional standard clearly favors
those parties seeking to invoke federal jurisdiction.”)). When the removal threshold is met by a
defendant, Occidental argues that a plaintiff “can defeat diversity jurisdiction only by showing to
a legal certainty that the amount in controversy does not exceed $75,000.00.” Id. (quoting
Robinson v. Acad. Louisiana Co. No. 09-771, 2009 WL 10678984, at *2 (M.D. La. Oct. 16, 2009)).
Believing the removal threshold met, defendant notes no evidence of plaintiff’s contradiction to a
legal certainty. See id. at 6.
III. Law and Analysis
a. Standard of Review
Federal courts are courts of limited jurisdiction. Halmekangas v. State Farm Fire and Cas.
Co., 603 F.3d 290, 292 (5th Cir. 2010). Removal of a civil action to federal court is governed by
28 U.S.C. § 1441 and is proper where the federal court has original jurisdiction. See 28 U.S.C. §
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1441(a). “Original jurisdiction, in non-maritime claims, lies where the conditions of 28 U.S.C. §§
1331 [federal question] or 1332 [diversity] are satisfied.” Halmekangas, 603 F.3d at 292 (alteration
in original) (internal quotations and citation omitted). Federal diversity jurisdiction under 28
U.S.C. § 1332 exists where there is complete diversity of citizenship of the parties, and where the
amount in controversy exceeds the sum or value of $75,000.00, exclusive of interest and costs. 28
U.S.C. § 1332(a). Motions to Remand are governed by 28 U.S.C. § 1447(c), which provides that:
“[i]f at any time before the final judgment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). “Any 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)).
“To determine whether jurisdiction is present for removal, we consider the claims in the
state court petition as they existed at the time of removal.” Id. (citing Cavallini v. State Farm Mut.
Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995)). However, Louisiana law prohibits plaintiffs from
pleading a specific amount of monetary damages. See La. Code Civ. Proc. art. 893(A)(1). Where
statements in a petition allude to damages less than $75,000, they are not dispositive as to the
amount in controversy. See De Aguilar v. Boeing Co., 47 F.3d 1404, 1410 (5th Cir. 1995). Instead,
courts understand pleadings in compliance with Article 893 as stating an indeterminate amount of
damages. See, e.g., Maze v. Protective Ins. Co., No. 16-15424, 2017 WL 164420, at *2 (E.D. La.
Jan. 17, 2017).
Where an indeterminate amount of damages is alleged, the removing party “must establish
by a preponderance of the evidence that the amount in controversy exceeds $75,000.” See
Manguno, 276 F.3d at 723 (citation omitted). This can be established if it is facially apparent that
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the amount of damages is likely to exceed the jurisdictional amount of $75,000, or by “summary
judgment type evidence” of the facts in controversy that support a finding of exceeding the
jurisdictional amount. See id. (citations omitted). In determining the amount, a court does not
prejudge the plaintiff’s likely recovery but merely makes “an estimate of the amount that will be
put at issue in the course of the litigation.” Durbois v. Deutsche Bank Nat’l Tr. Co. as Tr. of
Holders of AAMES Mortg. Inv. Tr. 20054 Mortg. Backed Notes, 37 F.4th 1053, 1057 (5th Cir.
2022) (citation omitted).
b. Motion to Remand
Here, Occidental contends the removal threshold is met due to the insurance policy’s
potential coverage and Mr. Rodriguez’s connected damage claims. See Rec. 11 at 6. The petition
alleges damage to “the exterior, specifically but not limited to the roof and shed” of his property.
Id. at 5 (emphasis added). We observe that alleged facts—and not insured limits—determine the
amount in controversy. See Tanet v. USAA Ins. Co., No. 09-6779, 2011 WL 39036, at *2 (E.D. La.
Jan. 5, 2011).
In Louisiana, a breach of contract is found when (1) an obligor has a performance due, (2)
the obligor fails to perform the obligation, and (2) the failure to perform causes damages to the
obligee. See IberiaBank v. Broussard, 907 F.3d 826, 835 (5th Cir. 2018) (quotation omitted).
Louisiana Civil Code Article 1995 provides the classical definition of damages: “Damages are
measured by the loss sustained by the obligee and the profit of which he has been deprived.” Here,
Occidental timely provided $26,816.56 in payment of its insurance obligation. See Rec. Doc. 11-
2 at 1. Mr. Rodriguez asserts this payment “grossly undervalued the property damage.” Id. at 5.
Nonetheless, as parties have given no indication of profits thereby deprived, breach-of-contract
damages are measured in the amount beyond the tendered payment.
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In connection to the breach of contract damages, plaintiff also cites two statutory options
for recovery under the theory of defendant’s breach of good faith and fair dealing, Louisiana
Revised Statutes Sections 22:1892 and 22:1973. See Rec. Doc. 1-1 at 7. Each has penalty
provisions, but Mr. Rodriguez can recover only from whichever provides the greater amount. See
Rebecca Truck Plaza & Casino, L.L.C. v. Landmark American Insurance Co., No. 23-3709, 2023
WL 6842241, at *3 (E.D. La. Oct. 17, 2023) (citing Calogero v. Safeway Ins. Co. of La., 753 So.
2d 170, 174 (La. 2000); Zydeco’s II, L.L.C. v. Certain Underwriters at Lloyd’s, London, 356 So.
3d 345, 387–88 (La. App. 5 Cir. 2021)). Further, the statutory penalty amount is properly included
in the amount-in-controversy calculation. See St. Paul Reinsurance Co. v. Greenberg, 134 F.3d
1250, 1254–55 (5th Cir. 1998).
Section 22:1973 obligates the insurer to “adjust claims fairly and promptly and to make a
reasonable effort to settle claims with the insured or the claimant, or both.” La. R.S. § 22:1973(A).
Such a duty is breached, inter alia, where an insurer fails “to pay the amount of any claim due any
person insured by the contract within sixty days after receipt of satisfactory proof of loss from the
claimant when such failure is arbitrary, capricious, or without probable cause.” Id. §
22:1973(B)(5). Suffering such a breach, “a claimant may be awarded penalties assessed against
the insurer in an amount not to exceed two times the damages sustained or five thousand dollars,
whichever is greater.” Id. § 22:1973(C). The Louisiana Supreme Court has interpreted the
language “damages sustained” to correspond with Section 22:1973’s introductory language:
“damages sustained as a result of the breach.” Durio v. Horace Mann Ins. Co., 2011-0084 (La.
10/25/11), 74 So. 3d 1159, 1170 (emphasis in original). Such a breach does not occur where an
insurer simply disputes a claim in good faith. See Dickerson v. Lexington Ins. Co., 556 F.3d 290,
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299 (5th Cir. 2009). It is reasonable to find that property damages that will be put at issue as a
result of the alleged underpayment will approach the diversity jurisdiction amount.
Section 22:1892 provides a separate additional means of recovery for the insured. Under
that statute, the insurer is liable for a coverage denial that is “arbitrary, capricious, or without
probable cause” and results in a non-payment or underpayment “thirty days after receipt of
satisfactory proofs of loss of that claim.” La. R.S. § 22:1892(B). When the loss occurs due
to a “presidentially or gubernatorially declared disaster,” penalties consist of “fifty percent of
the difference between the amount paid or tendered and the amount found to be due as well as
reasonable attorney fees and costs or two thousand five hundred dollars, whichever is greater.”
Id. § 22:1892(B)(1)(b). Here, the alleged property damage in Jefferson Parish, Louisiana resulted
from Hurricane Ida, which was declared a disaster by President Biden on August 26, 2021. See
Declaration HQ-21-181 (Aug. 30, 2021). As defendant tendered its payment within the
mandated thirty-day period, the Court can look only to the possible difference between the
amount paid and the amount due. It is reasonable to expect the difference will increase the
amount-in-controversy calculation under Section 22:1973.
Moreover, Section 22:1892 additionally permits the recovery of “reasonable attorney
fees and costs.” Although such language is absent in Section 22:1973, the Louisiana Supreme
Court has held that because “the conduct prohibited is virtually identical” reasonable attorney’s
fees can be awarded with Section 22:1973 penalties upon a finding of arbitrary and capricious
conduct by the insurer. Calogero, 753 So. 2d at 174. These fees are included in the jurisdictional
amount. See Manguno, 276 F.3d at 723–24; St. Paul Reinsurance Corp., 134 F.3d at 1253–54.
Attorney’s fees are includible in determining the amount in controversy for diversity jurisdiction
purposes, including those associated with state and federal court proceedings throughout this
litigation.
Plaintiff has listed a significant number of unspecified damages within his petition.
Although most of the prayed-for damages directly relate to the alleged contractual breach—which
have been discussed above—Mr. Rodriguez includes in his list “[s]evere inconvenience, mental
anguish and stress.” Rec. Doc. 1-1 at 8. Again, this become includible for reaching plaintiff’s
potential damages.
General damages of the type asserted are available in breach-of-good-faith insurance
cases. See, e.g., Dickerson, 556 F.3d at 304 (5th Cir. 2009) (“By authorizing ‘any damages,’
including ‘any general or special damages,’ the legislature pointedly permitted the award of mental
anguish damages.”); Orellana v. Louisiana Citizens Prop. Ins. Corp., 2007-1095 (La. App. 4 Cir.
12/5/07), 972 So. 2d 1252, 1255, writ denied, 2008-0041 (La. 10/24/08), 25 So. 3d 777. Further,
where mental anguish is found, the award can be significant. See Dickerson, 556 F.3d at 304
(affirming $25,000 award); Orellana, 972 So. 2d at 1255 (affirming $125,000 award). In sum,
defendant has shown that plaintiff’s contractual and other demands for relief present an
amount in controversy to minimally satisfy the jurisdictional threshold.
It is also noteworthy, as pointed out infra, that an insured's sworn stipulation to damages
totaling less than the diversity amount along with declining to seek or accept an above the latter
limit is admissible proof of the amount-in-controversy - but not necessarily fully determinative.
New Orleans, Louisiana this 31st day of October, 2023
________________________________________
SENIOR UNITED STATES DISTRICT JUDGE
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