# Murphy v. State Farm Fire and Casualty Company

> District Court, M.D. Alabama · January 2, 2025

URL: https://www.frixlaw.com/law-library/cases/10773330

## Case

- **Court:** District Court, M.D. Alabama
- **Decided:** January 2, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10773330

## How later opinions describe it (automated extraction)

- emphasizing that post- removal affidavits are allowable only if relevant to that specific point in time of removal
- explaining that to satisfy the amount in controversy requirement, damage amounts cannot be “too speculative and immeasurable”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
SOUTHERN DIVISION
SARA BETH MURPHY, )
)
Plaintiff, )
)
v. ) CASE NO. 1:24-cv-00737-RAH-SMD
)
STATE FARM FIRE AND )
CASUALTY COMPANY, )
)
Defendant. )

MEMORANDUM OPINION AND ORDER
Defendant State Farm Fire and Casualty Company previously removed this
action based on federal diversity jurisdiction. Plaintiff Sara Beth Murphy has moved
to remand. Since diversity is uncontested, the sole issue is whether State Farm has
met its burden of showing by a preponderance of the evidence that the amount in
controversy exceeds $75,000. Since State Farm has not met that burden, the Motion
to Remand will be GRANTED.
BACKGROUND
Murphy sued State Farm in the Circuit Court for Henry County, Alabama for
claims of breach of contract and bad faith after she made an insurance claim for roof
damage to her home. Murphy’s Complaint alleges “damages in excess of Twenty
Thousand Dollars . . . exclusive of interest, costs and attorney’s fees.” (Doc. 1-2 at
8.)
State Farm subsequently removed the action to this Court on the basis of
federal diversity jurisdiction. State Farm asserted that all parties are completely
diverse and that the amount in controversy—“an indeterminable amount . . . pursuant
to [Murphy’s] multiple claims”—exceeds $75,000. (Doc. 1 at 5.) As to the amount
in controversy, State Farm asserted that Murphy’s insurance policy coverage
exceeds $75,000, Murphy’s contractor’s estimate for her roof repairs totaled
$26,093.70, Murphy’s “including to but not limited to property damage” language
in her demand for relief leads to a possible claim over $75,000, and that punitive
damages are available for bad faith claims under Alabama law. (Id. at 5–6.) These
combined facts and allegations, State Farm argues, show by a preponderance of the
evidence that the amount in controversy meets the jurisdictional requirement of over
$75,000.
In response, Murphy filed an affidavit stating that 1) the “amount in
controversy does not exceed $75,000, exclusive of interest and costs”; 2) that she
“agree[s] not to accept any judgment in excess of $75,000”; and 3) that she would
agree to a remittitur of any judgment in excess of that amount. (Doc. 6-1 at 2.)
On December 10, 2024, the Court held a telephonic hearing, during which
counsel for both parties were present, to clarify whether the amount in controversy
meets the jurisdictional threshold and whether State Farm would consent to remand
based on the sworn statements in Murphy’s affidavit. During the hearing, Murphy,
through her legal counsel, confirmed that the amount in controversy is less than
$75,000 and made binding stipulations and representations to the Court consistent
with the affirmative statements contained in Murphy’s affidavit. Additionally,
counsel represented that, if tried to a jury, Murphy and her counsel would not ask
for an award of damages in excess of $75,000.
For its part during the hearing, State Farm continued with its opposition to
remand. It stated that it believes jurisdiction exists regardless of Murphy and
counsel’s stipulations. And further, State Farm would rather litigate the case in
federal court without damage stipulations (i.e., no damage caps) rather than in state
court with damage stipulations in place.
STANDARD OF REVIEW
Under 28 U.S.C. § 1332(a), federal courts have original jurisdiction over all
civil actions between citizens of different states where the amount in controversy
exceeds the sum or value of $75,000, exclusive of interest and costs. Underwriters
at Lloyd’s, London v. Osting–Schwinn, 613 F.3d 1079, 1085 & n.4 (11th Cir. 2010).
When “a plaintiff makes an unspecified demand for damages in state court,” the
burden is on the “removing defendant [to] prove by a preponderance of the evidence
that the amount in controversy more likely than not exceeds the jurisdictional
requirement.” Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061 (11th Cir. 2010)
(citation, internal quotation marks, and ellipses omitted); see Adventure Outdoors,
Inc. v. Bloomberg, 552 F.3d 1290, 1294 (11th Cir. 2008); Friedman v. N.Y. Life Ins.
Co., 410 F.3d 1350, 1353 (11th Cir. 2005) (“In removal cases, the burden is on the
party who sought removal to demonstrate that federal jurisdiction exists.” (cleaned
up)).
The preponderance of the evidence standard does not require a removing
defendant “to prove the amount in controversy beyond all doubt or to banish all
uncertainty about it.” Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 754 (11th
Cir. 2010). Reliance on “speculation,” however, is “impermissible.” Id. at 771; see
also Ericsson GE Mobile Commc’ns, Inc. v. Motorola Commc’ns & Elecs., Inc., 120
F.3d 216, 221–22 (11th Cir. 1997) (explaining that to satisfy the amount in
controversy requirement, damage amounts cannot be “too speculative and
immeasurable”). And courts should still use common sense to determine “whether
the face of the complaint . . . establishes the jurisdictional amount.” Roe, 613 F.3d
at 1062 (alteration in original) (internal quotations omitted). Because removal
infringes on state sovereignty and implicates central concepts of federalism, removal
statutes are construed narrowly, with all doubts resolved in favor of remand. Univ.
of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999); Burns v. Windsor
Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). And “once a federal court determines
that it is without subject matter jurisdiction, the court is powerless to continue.”
Underwriters, 613 F.3d at 1092 (cleaned up).
DISCUSSION
In determining subject matter jurisdiction, courts must focus on the facts as
they existed when the case was removed and not on later developments. See
Adventure Outdoors, Inc., 552 F.3d at 1294–95 (“The existence of federal
jurisdiction is tested at the time of removal.”); Pintando v. Miami–Dade Hous.
Agency, 501 F.3d 1241, 1243 n.2 (11th Cir. 2007) (per curiam) (“[T]he district court
must look at the case at the time of removal to determine whether it has subject-
matter jurisdiction.”).
To assist in this determination, courts may not consider post-removal changes
to the amount in controversy; but they may, however, consider post-removal
clarifications of what that amount was at the time of removal. See Sierminski v.
Transouth Fin. Corp., 216 F.3d 945, 949 (11th Cir. 2000) (emphasizing that post-
removal affidavits are allowable only if relevant to that specific point in time of
removal). Thus, when a plaintiff seeks, after removal, to clarify, rather than alter,
facts bearing on the amount in controversy, courts in this circuit accept such
evidence to help determine whether diversity jurisdiction existed at the time of
removal. See Pretka, 608 F.3d at 751; Sierminski, 216 F.3d at 949. Further, while a
court must consider punitive damages in an amount in controversy inquiry when
they are available based on claims alleged in a complaint, Bell v. Preferred Life
Assur. Soc’y. of Montgomery, Ala., 320 U.S. 238, 240 (1943), the removing
defendant must still establish a dollar amount from which the court can calculate
punitive damages—failure to establish that baseline amounts to speculation, which
does not establish jurisdiction. See Porter v. MetroPCS Commc’ns Inc., 592 F.
App’x 780, 783 (11th Cir. 2014) (per curiam) (holding that removing party had to
establish a baseline amount from which the court could calculate punitive damages);
Rae v. Perry, 392 F. App’x 753, 756 (11th Cir. 2010) (per curiam) (“[The removing
party] failed to present evidence that showed by a preponderance of the evidence
that the compensatory and unspecified damages in the complaints, including
punitive damages and attorneys’ fees, alone or combined, met the jurisdictional
amount [where the compensatory damages sought equated to $20,000].”).
Here, while State Farm urges the Court to ignore Murphy’s post-removal
affidavit and statements because they constitute improper post-removal
developments, the Court concludes that the affidavit and statements of counsel
simply serve as clarifications of the amount in controversy at the time of removal.
See Sierminski, 216 F.3d at 949.
First, that Murphy’s insurance policy coverage limits exceed the jurisdictional
threshold is not persuasive nor is it representative of the actual amount in controversy
in this case. To this end, nothing in the Complaint or pre-suit settlement demand1
suggests that Murphy has demanded the limits of her insurance policy.
Second, State Farm’s submission shows that Murphy primarily made a claim
for roof damage and provided a contractor’s estimate of $26,093.70, an amount far
less than the $75,000 threshold. That Murphy used language in her Complaint–
“including but not limited to” – does not make the lawsuit something more than just
a case over roof damage. At best, that language suggests an uncertainty, but that
uncertainty must be “resolved in favor of remand.” Burns, 31 F.3d at 1095.
Third, the Complaint does seek unspecified sums for damage to building
contents, loss of use, and interest allowed by law, which would be damages in
addition to the $26,093.70 repair figure. And while it does not specifically seek

1 The record reveals that pre-suit, Murphy’s legal counsel made a settlement demand of
approximately $36,093.70 to cover $26,093.70 in estimated repair costs and $10,000.00 in
attorney’s fees.
punitive damages, punitive damages are available for claims of bad faith under
Alabama law. See Acceptance Ins. Co. v. Brown, 832 So. 2d 1, 19 (Ala. 2001). Such
damages would be a measure of damages separate and apart from her compensatory
damages. But Murphy provides no specific monetary amount, nor any measure of
computing it.
As such, the only firm figure is the $26,093.70 repair estimate, with general,
unspecified requests for damages to contents, loss of use, interest allowed by law,
and the possibility of punitive damages. Murphy’s affidavit and the statements and
representations of her counsel clarify that the total amount of these damages –
including the repair estimate and any other damages – is less than $75,000. Indeed,
Murphy’s pre-suit settlement demand of $36,093.70 confirms this clarification.
State Farm’s attempt to use the alleged bad faith claim and availability of punitive
damages does not tip the scales in favor of jurisdiction in light of such facts, and
where doubt remains, remand is due. See Univ. of S. Ala., 168 F.3d at 411.
State Farm submits two cases from a sister court where the district court found
that the jurisdictional threshold was met because the plaintiffs in those cases
“specifically request[ed] punitive damages . . . [,] in Alabama, punitive damages are
available for bad faith claims[,] and . . . punitive damages against a large corporation
like State Farm would alone exceed $75,000.” Allred v. State Farm Fire & Cas. Co.,
5:22-cv-00289-LCB (N.D. Ala. June 21, 2022), ECF No. 22 at 12 (citations
omitted); Bonds v. State Farm Fire & Cas. Co., 5:22-cv-00618-LCB (N.D. Ala. June
21, 2022), ECF No. 13 at 12 (same). Those decisions provide little insight here.
In short, State Farm has not shown by a preponderance of the evidence that
the amount in controversy exceeds $75,000. To this end, the Court places significant
weight on the clarification that Murphy has made in her affidavit testimony and the
statements and representations of her legal counsel, which are presumed true. See
Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 808 (11th Cir.
2003). These are binding no matter what happens in the future. Murphy and her
counsel are cautioned that should she or her legal counsel not follow or honor
Murphy’s sworn testimony or counsel’s representations, this Court will not hesitate
to impose swift sanctions. See id. at 808 & n.6 (observing that plaintiff’s counsel
are officers of the court and subject to Rule 11 sanctions for making representations
for improper purposes and that motions for sanctions may be initiated and decided
even after the underlying case has been resolved and is no longer pending); Burns,
31 F.3d at 1095 (presuming that plaintiff’s counsel recognizes that representations
regarding amount in controversy “have important legal consequences and, therefore,
raise significant ethical implications for a court officer”).
CONCLUSION
Considering the Complaint, Murphy’s stipulations, the representations made
during the hearing on this matter, and the record as a whole, the Court concludes that
State Farm has not met its burden of showing that the amount in controversy is
sufficient to invoke the jurisdiction of this Court. Remand is therefore proper for
lack of subject matter jurisdiction. Murphy’s stipulations and representations,
however, remain binding. The Court provides notice that any violation of these
stipulations and representations by Murphy and/or legal counsel will result in swift
and forthcoming sanctions.
Accordingly, it is ORDERED as follows:
(1) Plaintiff’s Motion to Remand (doc. 6) is GRANTED;
(2) This matter is hereby REMANDED to the Circuit Court of Henry County,
Alabama;
(3) Plaintiff’s Motion to Stay (doc. 7) is DENIED as moot;
(4) The Clerk of the Court is DIRECTED to take the necessary steps to
remand this case back to the Circuit Court of Henry County, Alabama.
DONE and ORDERED on this the 2nd day of January 2025.

R. Mie JR.
UNITED STATES DISTRICT JUDGE

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10773330. Public record. Not legal advice.