Riley v. State Farm Mutual Automobile Insurance Company

IN THE UNITED STATES DISTRICT COURT FOR

THE MIDDLE DISTRICT OF ALABAMA

EASTERN DIVISION

OPHELIA RILEY, individually and as )

administrator of the Estate of )

TOMMIE RILEY, )

)

Plaintiffs, )

)

v. ) CIVIL CASE NO. 3:21-cv-401-ECM

) (WO)

STATE FARM MUTUAL INS. CO., and )

PROGRESSIVE CASUALTY INS. CO., )

)

Defendants. )

MEMORANDUM OPINION and ORDER

I. INTRODUCTION

Now pending before this action is Plaintiff Ophelia Riley’s (“Riley”) motion to

remand (doc. 9) which is opposed by Defendants Progressive Casualty Insurance Company

(“Progressive”) and State Farm Mutual Insurance Company (“State Farm”). (Docs. 11

and 12). The motion is fully briefed, under submission, and ready for resolution without

oral argument.

In this action, Riley alleges that on or about October 20, 2019, she sustained serious

injuries and her husband died in an automobile collision in Jefferson County, Alabama.

(Doc. 1-1, at 2-3). Individually, and as administrator of Tommie Riley’s estate, Riley

initiated this suit on April 30, 2021, by filing a complaint in the Circuit Court of Macon

County, Alabama. (Doc. 1-1). Riley alleges claims of negligence, recklessness and

wantonness, and wrongful death against fictitious defendants as well as claims of

underinsured/uninsured motorist coverage against Progressive and State Farm. (Id.) She

seeks compensatory and punitive damages against the Defendants. (Id.).

State Farm removed this case from state court on the basis of diversity jurisdiction.

28 U.S.C. §§ 1332 and 1441. Progressive consented to the removal. (Doc. 1-6). Ophelia

Riley is, and Tommie Riley was, a citizen of the State of Alabama. The notice of removal

asserts that State Farm is a foreign corporation organized under the laws of the state of

Illinois with its principal place of business in Illinois, and Progressive is a foreign

corporation organized under the laws of Ohio with its principal place of business in Ohio.

(Doc. 1 at 2).

Although Riley seeks compensatory and punitive damages, her complaint does not

specify an amount of damages. In its notice of removal, State Farm asserts that the Court

has jurisdiction over this matter because the parties are citizens of different states and the

amount in controversy exceeds $75,000.00. Specifically, State Farm asserts that it is

apparent from the complaint that the amount in controversy exceeds the jurisdictional

threshold because the Plaintiff seeks compensatory and punitive damages for the negligent

and/or wanton death of Tommie Riley and for serious injuries she sustained in the collision.

In addition, the “Plaintiff’s counsel submitted a letter dated February 23, 2021

communicating a pre-suit demand of $150,000 to State Farm.” (Id.).

In response to the notice of removal, Riley filed a motion to remand asserting that

the parties are not diverse because State Farm “has not met its burden of proving complete

diversity of citizenship and the amount in controversy exceeds $75,000.” (Doc. 9 at 2).

Specifically, Riley argues that State Farm “has conducted so much business activity in the

state of Alabama that it can be considered a citizen of Alabama.” (Id. at 4). She further

argues that “it is not ‘facially apparent’ that the amount in controversy exceeds $75,000”

and her demand letter should be “construed as an attempt at posturing” rather than a

measure of damages. (Id. at 6).

Upon consideration of the motion to remand, and for the reasons that follow, the

Court concludes that the motion is due to be DENIED.

II. JURISDICTION

Jurisdiction over this action is premised on the Court’s diversity jurisdiction

pursuant to 28 U.S.C. § 1332. Personal jurisdiction and venue are uncontested.

III. STANDARD OF REVIEW

In examining the issue of jurisdiction upon which the Defendants premise removal,

the Court is mindful of the fact that federal courts are courts of limited jurisdiction.

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Burns v. Windsor

Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). “They possess only that power authorized

by Constitution and statute.” Dudley v. Eli Lilley & Co., 778 F.3d 909, 911 (11th Cir. 2014).

However, “[a]ny civil case filed in state court may be removed by the defendant to

federal court if the case could have been brought originally in federal court.” Tapscott v.

MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir. 1996) (citing 28 U.S.C. § 1441(a)),

abrogated on other grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir.

2000)). The removal statute requires the notice of removal to “[contain] a short and plain

statement of the grounds for removal . . . .” 28 U.S.C. § 1446(a). The Supreme Court has

interpreted the provision to have the same liberal pleading standard as that of a complaint

in federal court. See Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 87 (2014)

(“Congress, by borrowing the familiar ‘short and plain statement’ standard from Rule 8(a),

intended to ‘simplify the “pleading” requirements for removal’ and to clarify that courts

should ‘apply the same liberal rules [to removal allegations] that are applied to other

matters of pleading.’”) (quoting H.R.Rep. No. 100–889, p. 71 (1988)).

“In a motion to remand, the removing party bears the burden of showing the

existence of federal jurisdiction.” Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1373

(11th Cir. 1998). Any questions or doubts are to be resolved in favor of returning the matter

to state court on a properly submitted motion to remand. Burns, 31 F.3d at 1095.

IV. DISCUSSION

The Defendants removed this case solely on the basis of diversity jurisdiction. Riley

argues that because the insurance contract was signed in Alabama, State Farm has initiated

lawsuits in Alabama, and it has a registered agent in Alabama, State Farm should be

considered a citizen of Alabama, and thus there is not complete diversity of citizenship.

(Doc. 9 at 4).

There is no dispute that Ophelia Riley is, and Tommie Riley was, a citizen of

Alabama. Riley also does not dispute that Progressive is considered a citizen of Ohio for

jurisdictional purposes. The first question the Court must answer is whether State Farm is

considered a citizen of Alabama where it conducts some business in the state or whether it

is a citizen of Illinois where it is incorporated and has its principal place of business.

“[A] corporation shall be deemed to be a citizen of every State and foreign state by

which it has been incorporated and of the State or foreign state where it has its principal

place of business.” 28 U.S.C. § 1332(c)(1). In Hertz Corp. v. Friend, the Supreme Court

determined that, for jurisdictional purposes, a corporation’s principal place of business is

where “a corporation’s officers direct, control, and coordinate the corporation’s activities.”

559 U.S. 77, 92–93 (2010).

And in practice it should normally be the place where the

corporation maintains its headquarters—provided that the

headquarters is the actual center of direction, control, and

coordination, i.e., the “nerve center” and not simply an office

where the corporation holds its board meetings (for example,

attended by directors and officers who have traveled there for

the occasion).

Id. at 93.

In asserting that State Farm should be considered a citizen of Alabama because it

conducts business in the state, the Plaintiff relies on Industrial Tectonics, Inc. v. Aero Alloy,

912 F.2d. 1090 (9th Cir. 1990). (Doc. 9 at 4). Her reliance is misplaced. In Hertz Corp.,

the Court rejected a “business activities” test to determine a corporation’s principal place

of business. Hertz Corp., supra. State Farm asserts that for jurisdictional purposes, its

principal place of business is in Illinois. The Plaintiff presents nothing to dispute that State

Farm is incorporated in Illinois and its corporate headquarters is located there.

Consequently, the Court concludes that State Farm is a citizen of Illinois for the purpose

of establishing diversity jurisdiction, and thus, there is complete diversity between the

parties.1

1 The Court does not consider the citizenship of any potential fictitious parties for the purpose of

determining jurisdiction.

The Court turns next to Riley’s contention that the Defendants have failed to

establish the amount of controversy exceeds the jurisdictional threshold. (Doc. 9 at 4).

Relying on the Plaintiff’s pre-suit demand letter dated January 13, 2021, Progressive argues

that the demand letter is sufficient to establish that the amount in controversy exceeds

$75,000. (Doc. 11-3). In addition, Progressive asserts that the demand for the policy limits

of $150,000 demonstrates that the amount in controversy exceeds $75,000. Finally,

Progressive contends that because this case involves claims of negligence, wantonness and

wrongful death, it is apparent from the face of the complaint that the amount in controversy

exceeds $75,000.

The complaint does not state an amount of damages. Where the amount in

controversy is not evident from the face of the complaint, the removing party must

demonstrate by a preponderance of the evidence that the amount in controversy exceeds

the $75,000 jurisdictional minimum set by 28 U.S.C. § 1332. Pretka v. Kolter City Plaza

II, Inc., 608 F.3d 744, 752 (11th Cir. 2010); Lowery v. Ala. Power Co., 483 F.3d 1184,

1207 (11th Cir. 2007). The Plaintiff argues that it is not facially apparent from the

complaint that the amount in controversy exceeds $75,000, the Defendants have not met

their burden of establishing the amount in controversy and the pre-suit demand letter

“should be construed as an attempt at posturing for the purposes of settlement

negotiations.” (Doc. 9 at 6).

Because the Plaintiff did not specify an amount of damages in her complaint, and

because the Defendants removed this case within thirty (30) days of receipt of the

complaint, the Court concludes that the Defendants must establish by a preponderance of

the evidence that the amount in controversy is met.

In response to the motion to remand, Progressive attached a pre-suit demand letter

from Riley’s counsel dated January 13, 2021, that offers to settle all of Ophelia’s claims

for the policy limits of $150,000. (Doc. 11-3 at 2-3). The letter describes in detail Ophelia’s

injuries, her medical expenses, and the mental anguish she continues to suffer. “As a result

of the crash, Mrs. Riley suffered injuries and unfortunately, her husband lost his life. Mrs.

Riley lives each day with the haunting memories of this fatal crash.” (Id. at 2). Counsel

described Ophelia’s injuries as “right scalp hematoma, left heel laceration, hematoma to

left anterior thigh, and left cuboid (foot) fracture.” (Id.). She continued to suffer pain and

was subsequently diagnosed with “displaced avulsion fracture (chip fracture) of the left

talus.” (Id.). The demand letter enumerated Riley’s medical expenses from seven (7)

medical providers as of the date of the letter as $65,255.44. (Id. at 3). It further stated that

Riley will continue to have pain and suffering from the injuries. Counsel then demanded

the policy limits of $150,000 to compensate Ophelia Riley. (Id.)

After the Defendants removed the case to this Court, and after Riley filed her motion

to remand, on July 8, 2021, counsel sent Progressive another demand letter requesting

$130,000 to “resolve her claim.” (Doc. 11-4 at 2). “Mrs. Riley endured severe injuries and

this accident has been life-changing to say the least.” (Id.).

There is little dispute that “[a] settlement offer can constitute an ‘other paper’ within

the meaning of 28 U.S.C. § 1446(b).” Lowery, 483 F.3d at 1212 n.62. And “[w]hile [a]

settlement offer, by itself, may not be determinative, it counts for something.” Burns, 31

F.3d at 1097. Riley contends that her pre-suit demand letter was nothing more than “an

attempt at posturing for purposes of settlement negotiations prior to filing the subject

lawsuit.” (Doc. 9 at 6). Relying on Jackson v. Select Portfolio Servicing, Inc., 651 F. Supp.

2d 1279 (S.D. Ala. 2009), Riley suggests that her first letter constituted “puffing and

posturing.”2 (Id. at 6).

When a settlement letter provides little in the way of support or analysis, courts have

afforded such settlement offers little weight --writing them off as “puffing and posturing.”

Jackson, 651 F. Supp. 2d at 1281 (A settlement offer has “little weight” in the amount-in-

controversy calculus when it merely “reflect[s] puffing and posturing.”); Perkins v. Merion

Realty Servs., LLC, 2015 WL 998198, *2 (M.D. Ala. 2015) (a settlement letter that “fails

to provide particularized information and a reasonable assessment of value . . . is indicative

of posturing and abstract assessments.”). However, in contrast, “when a settlement offer

provides enough specific information to support the plaintiff’s claim for damages to

indicate that the offer is a reasonable assessment of the value of the plaintiff’s claim, it is

afforded additional weight.” Capps v. Winn-Dixie Stores, Inc., 2019 WL 5688148, *2

(M.D. Ala. 2019) (internal quotations removed); Boland v. Auto-Owners Ins. Co., 2009

WL 4730681, *3 (M.D. Ala. 2009).

The Plaintiff’s demand letter set forth in detail her injuries, medical expenses, and

damages. It explains the nature of Riley’s injuries, and how her injuries would support

damages in the amount of $150,000. This is not a case where the Plaintiff made conclusory

2 Riley does not reference her second letter. Nor does she mention that Progressive has agreed to pay

uninsured motorist benefits to the Estate of Tommie Riley in the amount of the policy limits of $150,000.

(Doc. 11 at 1).

and vague assertions about her injuries. The comprehensive description of Riley’s injuries

and medical expenses justifying her damages moves this case from the realm of puffery

and posturing into a concrete assessment of damages. Only after facing the possibility of

having her case remain in federal court does the Plaintiff characterize her settlement

demand as “puffing and posturing.”

So, plaintiff’s claim, when it is specific and in a pleading

signed by a lawyer, deserves deference and a presumption of

truth. We will not assume – unless given reason to do so – that

plaintiff’s counsel has falsely represented, or simply does not

appreciate, the value of his client’s case. Instead, we will

assume that plaintiff’s counsel best knows the value of his

client’s case and that counsel is engaging in no deception. We

will further presume that plaintiff’s counsel understands that,

because federal removal jurisdiction is in part determined by

the amount of damages a plaintiff seeks, the counsel’s choices

and representations about damages have important legal

consequences and, therefore, raise significant ethical

implications for a court officer.

Burns, 31 F.3d at 1095. The Court will take Plaintiff’s counsel at her word and credit her

assessment of her client’s case as valued at $150,000, an amount which more than exceeds

the Court’s jurisdictional requirement.

Furthermore, in Roe v. Michelin N. Am., Inc., the Eleventh Circuit held that, when

a case is removed on the basis of an initial complaint that does not plead a specific amount

of damages, the removing defendant is required to show by a preponderance of the

evidence that more likely than not the amount in controversy exceeds the jurisdictional

minimum. 613 F.3d 1058, 1061 (11th Cir. 2010). Under Roe, this Court can apply “judicial

experience and common sense” to the allegations of the complaint regarding Riley’s

injuries and determine that, more likely than not, when coupled with her mental anguish

and medical expenses of $65,225.44 in January 2021, Riley’s damages are sufficient to

meet the jurisdictional minimum.

Moreover, Progressive asserts that that the Rileys had insurance policies with bodily

injury liability limits of $100,000 per person, $300,000 per accident and

uninsured/underinsured motorist limits of $50,000 per person, $100,000 per accident.

(Doc. 11-2 at 2). “Put simply, a district court need not “suspend reality or shelve common

sense in determining whether the face of a complaint ... establishes the jurisdictional

amount.” Roe, 613 F3d at 1062. Common sense dictates that the wrongful death claim of

Tommie Riley, and Ophelia Riley’s claim for damages, each easily exceed the

jurisdictional threshold of $75,000.3

Riley’s motion to remand relies entirely on lack of diversity. Because there is

complete diversity between the parties, and the amount in controversy exceeds $75,000,

the Court concludes that removal was proper.

V. CONCLUSION

Accordingly, for the reasons as stated, and for good cause, it is

ORDERED that the Plaintiff’s motion to remand (doc. 9) is DENIED.

DONE this 7th day of October, 2021.

/s/ Emily C. Marks

EMILY C. MARKS

CHIEF UNITED STATES DISTRICT JUDGE

3 Even if the Court were to apply the heightened “unambiguously established” standard set out in Lowery,

the result would be the same. The Court concludes that the Defendants have established that the amount in

controversy is met.