The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
TIMOTHY HORNBERGER JU and )
MATTHEW SCHULTZ, )
Plaintiffs,
Vv. ) Civil No. 3:23-cv-146
) Judge Stephanie Haines
STATE FARM MUTUAL AUTOMOBILE )
INSURANCE COMPANY, )
Defendant.
OPINION
IL Introduction and Relevant Background
On June 2, 2023, Plaintiffs, Timothy Hornberger II and Matthew Schultz (“Plaintiffs”),
filed a Complaint in civil action in Blair County Orphans Court (ECF No 1-2) against State Farm
Mutual Automobile Insurance Company (“State Farm’). Plaintiffs each maintained State Farm
automobile insurance and suffered unrelated accidental damage to their vehicles. When
subsequently attempting to service their damaged automobiles at a repair shop called Professional
Auto Body, State Farm refused to inspect or authorize the repairs. Plaintiffs assert that State Farm
denied the repairs because Professional Auto Body sued State Farm in a separate anti-trust case.
Based on the alleged facts, Plaintiffs are sueing State Farm for Breach of Contract and Statutory
Bad Faith (42 Pa. C.S.A. § 8371), preempted on other grounds, Haase v. Metro. Life Ins. Co., 198
F. Supp. 3d 412, 424 (E.D. Pa. 2016).
On June 30, 2023, in accordance with 28 U.S.C. §§ 1441, 1446, the case was removed to
this Federal Court with a Notice of Removal docketed by State Farm (ECF No. 1). State Farm
stated there is complete diversity of citizenship between the Parties and the amount in controversy
exceeds $75,000, making it proper for consideration by the U.S. Federal District Court. 28 U.S.C.
§ 1332(a). On July 17, 2023, Plaintiffs moved to Remand to State Court (ECF No. 6) and filed a
Brief in Support of Remand (ECF No. 7) stating that the amount in controversy required for
diversity jurisdiction is not met. State Farm filed a Brief in Opposition to Plaintiffs Motion to
Remand (ECF No. 11). The issue of removal is ripe for disposition.
I. Legal Standard
Under 28 U.S.C. § 1441(a), a civil action filed in a state court may be properly removed if
the federal court would have had original jurisdiction over the action. District courts “have original
jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between...citizens of different States...” 28 U.S.C.
§ 1332(a)(1). Courts have interpreted Section 1332(a) as requiring “complete diversity between
parties, that is, every plaintiff must be of diverse state citizenship from every defendant.” Jn re
Briscoe, 448 F.3d 201, 215 (d Cir. 2006). Removing defendants “carr[y] a heavy burden” of
showing that the case is properly before the district court. See Brown v. Jevic, 575 F.3d 322, 326
(3d Cir. 2009). The removal statute is strictly construed, and all doubts are to be resolved in favor
of remand to state court. See Johnson v. SmithKline Beecham Corp., 724 F.3d 337, 346 (3d Cir.
2013).
II. Discussion
State Farm’s Notice of Removal (ECF No. 1) provides two bases for finding that this case
is properly under the jurisdiction of the Federal Court: The Parties are in complete diversity and
the amount in controversy including compensatory and punitive damages, as well as consequential
damages, and attorneys’ fees exceeds the $75,000 minimum amount required for removal.
Plaintiffs disagree that the amount in controversy exceeds $75,000 and moved to remand the case
to State Court (ECF No. 6). The Court will address the matters at issue below.
5 □
The complete diversity of citizenship of the Parties is undisputed. Plaintiffs, at the time
this action was initiated, and at the time of removal were and are citizens of Pennsylvania. ECF
No. 1,96. State Farm Automobile Insurance Company is organized under the laws of Illinois and
has its principal place of business in Bloomington, Illinois. /d. § 7. Thus, complete diversity exists
between the Parties and the Court must next consider whether the amount in dispute exceeds
$75,000.
1. Amount in Controversy
Plaintiffs’ Complaint does not provide values for damages. Instead, the Complaint lays .
out the types of damages sought.
A. Interest on the principal amount that should have been paid to [Plaintiffs] at the
prime rate plus three (3%) percent from the date the claim for collision coverage
damages was made.
B. Loss of use of his vehicle
C. Punitive damages; and
D. Court costs plus attorneys’ fees.
ECF No. 1-2, 931, 40. State Farm argues that the accrual of these damages plus other fees, which
are not payable under the State Farm automobile insurance policies,! would exceed the threshold
amount for diversity jurisdiction.? ECF No. 1, 412. State Farm argues that damages such as
punitive damages, interest, and attorneys’ fees are mandated by Pennsylvania’s bad-faith statute,
42 Pa. C.S.A. §8371; see also Suber v. Chrysler Corp., 104 F.3d 578, 585 (3d Cir. 1997)
(“attorneys’ fees are necessarily part of the amount in controversy if such fees are available to
1 The State Farm Insurance Policies cover bodily injury, property damage, and collision coverage
on the vehicle. ECF No. 1-2, {ff 4, 14.
2 One such fee Defendants cite is a $3,440 fee charged by Professional Auto Body to release
Plaintiff Hornberger’s vehicle so that it can be inspected by State Farm. ECF No. 1, 4 11. Another
potential fee is a storage fee for holding the car during the pendency of the dispute. ECF No. 1-2,
{ 26. These “consequential damages” are not part of Plaintiffs’ prayer for relief but damages such
as storage fees and rental fees are mentioned in the Complaint.
successful plaintiffs under the statutory cause of action.”). Plaintiffs refute State Farm’s assertions
saying that it has made fanciful and unrealistic determination of damages and has not established
by a “preponderance of the evidence” that federal jurisdiction exists. Frederico v. Home Depot,
507 F.3d 188, 194 (3d Cir. 2007).
Courts typically determine the amount in controversy by looking at the sum demanded in
the original Complaint. See Dart Cherokee Basin Operating Co. v. Owens, 574 US. 81, 84 (2014);
28 U.S.C. §1446(c)(2). But here Plaintiffs have not asserted a sum certain for any damages
claimed. Therefore, the Court must next look to the amount asserted in the Notice of Removal.
See Dart, 574 US. at 84.; 28 U.S.C. § 1446(c)(2)(A). If the amount put forth in the Removal is
contested the Court must view the pleadings and must determine a reasonable reading of the value
of the rights being litigated. See Angus v. Shiley, Inc. 989 F.2d 142, 146 (3d Cir. 1993). If “the
court is left to guess at whether the jurisdictional threshold has been met, then a removing
defendant has not carried its burden.” Rossi v. Neumayr, No. 3:20-CV-00844, 2020 WL 6710428,
at *2 (M.D. Pa. Nov. 16, 2020)? (quoting Dorley vy. Save-a-Lot, No. 16-CV-04510, 2016 WL
6213074, at *2 (E.D. Pa. Oct. 25, 2016)). “[T]he court must determine by a preponderance of the
evidence whether the amount in controversy requirement has been satisfied.” Rossi, 2020 WL
6710428, at *2.
In support of its argument State Farm asserts several types of damages that would be
included in a calculation of the amount in controversy of this case. Potential damages include
compensatory damages, punitive damages, consequential damages (such as storage and removal
3 In Rossi, the Court found defendants did not meet their burden to establish the amount in
controversy exceeds $75,000. It found that the Plaintiffs’ demand “in excess of $50,000 ‘proves
nothing about the actual amount in controversy’” and that speculative arguments that punitive
damages “could easily exceed $25,000 are generally insufficient to establish subject matter
jurisdiction. Jd.
fees), attorneys’ fees, and interest on the amount that should have been paid by State Farm for the
auto repair. That said, State Farm has only provided the Court with estimated values of attorneys’
fees and $3440 in consequential damages for the release of the Hornberger vehicle for inspection.
Using the case cited for attorneys’ fees, Suber v. Chrysler Corp.,' State Farm says the Third Circuit
found $10,000 in attorneys’ fees was a reasonable amount.> ECF No. 1, §17. State Farm also
states that punitive damages can be considered using a multiplier of the alleged compensatory
damages. ECF No. 1, 919. But State Farm provides no analysis as to what the compensatory
damages are in this case. Based on the substantive information provided by State Farm, and with
generous latitude given by this Court, the amount in controversy is at best $13,440.00, well below
the threshold for diversity jurisdiction.
Plaintiffs contest the amounts provided by State Farm. ECF No. 7, p. 3. Plaintiffs state
that the values and claims asserted by State Farm are bald allegations without support.
Nevertheless, Plaintiffs, using the claimed amounts of $3,440 in consequential damages and
$10,000 in attorneys’ fees, determined that punitive damages would need to be calculated at a ratio
of 19:1 to achieve the jurisdictional minimum of $75,000. ECF No. 7, p. 4. They state this is well
above the typical 4:1 mathematical ratio for compensatory to punitive damages. Jd.
4104 F.3d 578, 585 (3d Cir. 1997).
5 The Court in Suber came to the $10,000 value for attorneys’ fees using the definitive amounts
provided in the case. “According to Suber, his total Lemon Law damages are $40,015.20. As
stated on his contract with the dealership, sales tax and registration fees bring the cost of the van
to $31,649. Once finance charges are added, Suber alleges that the total cost of the van is
$41,404.20. As calculated by Suber, the reasonable allowance for use that is required to be
deducted pursuant to the Lemon Law is $1,389.10, which brings the total to $40,015.20. If Suber's
allegation is correct, attorney's fees necessary to get him above the $50,000 threshold might not
be unreasonable.” 104 F.3d 578, 585 (3d Cir. 1997), as amended (Feb. 18, 1997).
In it’s Brief in Reply, State Farm retorts that $3,440 only represents a release fee for just
one of the vehicles and that other consequential damages, for two plaintiffs, will be much greater.
ECF No. 11, p. 1. But again, State Farm leaves the Court to guess at the amount of potential
consequential damages. Also, as support, State Farm states that they sought to negotiate this case
seeking a cap on their damages of $75,000, which Plaintiffs refused. 7d. State Farm also says that
Hornberger and Schultz each filed a lawsuit on the general docket in Blair County which is
acknowledgment that they each individually seek damages in excess of $50,000 compulsory
arbitration limits. Jd. State Farm states that Plaintiffs Motion to Remand lacks the “legal certainty”
that the claim is less than the jurisdictional amount to justify remand. ECF No. 11, p. 2. See
Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 398 (3d Cir. 2004)° (“In many cases ...
disputes over factual matters may be involved. In resolving those issues ... preponderance of the
evidence standard would be appropriate. Once findings of fact have been made, the court may
determine whether ... ‘legal certainty’ test for jurisdiction has been met.”). At the current early
posture of this case, before any dispositive motions have been filed, and before any discovery has
occurred, there has been no determinations of fact at all. Thus, State Farm’s assertion of a “legal
certainty” standard is misplaced. Even if the Court were to use a “legal certainty” standard the
sword cuts both ways and State Farm has not presented facts that support the jurisdictional
minimum is met to a legal certainty.
6 The Court in Samuel-Bassett concluded “that the case must be remanded to the District Court for
fact-finding on the amount in controversy. We repeat the admonition expressed in our case law
that in order to carry out the Congressional intent to limit jurisdiction in diversity cases, doubts
must be resolved in favor of remand. Moreover, estimations of the amounts recoverable must be
realistic. The inquiry should be objective and not based on fanciful, ‘pie-in-the-sky,’ or simply
wishful amounts, because otherwise the policy to limit diversity jurisdiction will be frustrated.”
357 F.3d 392, 403 (3d Cir. 2004) (internal citations omitted).
Absent any value of damages in Plaintiffs’ Complaint or Remand Pleadings, the Court
must defer to reasonable estimations of the Defendant for the amount in controversy in a contested
removal action. Here State Farm has not provided any empirical or substantive evidence of the
value of this case. As stated above, the Court cannot be left to guess the potential damages and
costs of the case. Nor does the Court believe attorney negotiations or the case filing in Blair
County to be persuasive in determining the amount in controversy. The Court finds that State
Farm has not satisfied its burden by a preponderance of the evidence that the amount in controversy
is greater than $75,000.
IV. Conclusion
Having found Defendant State Farm did not establish federal jurisdiction by a
preponderance of the evidence, Plaintiff's Motion to Remand to State Court (ECF No. 6) will be
GRANTED.
An appropriate Order will be entered.
Dated: September 19, 2023 C tip ge oo: □□□
? pe py od
Af CED, te py
PEER ESE SER OTE ee
_” Stephanie L. Haines
United States District Judge