HERMAN N. JOHNSON, JR., Magistrate Judge.
This action for breach of an insurance contract proceeds before the court sua sponte to assess the basis for subject matter jurisdiction. Because the amount in controversy in this case falls far below the threshold to warrant the exercise of diversity subject matter jurisdiction, the court
Plaintiff Fred White commenced this action by filing a complaint in the Morgan County Circuit Court. (Doc. 1-1 at 3-5). The complaint alleges a single breach of contract claim, and further declares that White "suffered the loss of his trailer" and "lost the use of his trailer and the income he would have made had he had a trailer." (Doc. 1-1 at 3). Plaintiff demands "compensatory and punitive damages, in a sum the Court and jury deem just. . . ." (Doc. 1-1 at 4). As indicated, White did not request a specific sum of damages in his complaint. Essentially, White sued the Defendant, National Fire & Marine Insurance, for refusing to pay on an insurance policy covering a conversion trailer, which sustained severe damage while deployed on a farm to haul wheat.
While the case was pending in state court, National Fire served requests for admissions pursuant to Alabama Rule of Civil Procedure 36. The requests sought admissions to the following assertions:
(Doc. 1-1 at 39). White did not respond to National Fire's requests for admission.
Shortly after White's failure to answer the requests for admission, National Fire removed this action to federal court. In its Notice of Removal, National Fire invokes the diversity subject matter jurisdiction of this court pursuant to 28 U.S.C. § 1332.
After the parties submitted summary judgment briefs and materials — although White only submitted an eight-page response — the court discerned for the first time that White only paid approximately $19,000 for the trailer at issue in the dispute, and he only insured it for $19,000. Therefore, the court issued an Order to Show Cause questioning the exercise of diversity subject matter jurisdiction over this action. National Fire responded with arguments centered on White's failure to respond to the requests for admission, while White did not respond.
The foregoing background readily establishes the necessity for remand of this case to state court: the evidence in this case conclusively establishes that the amount in controversy in this action constitutes no more than approximately $19,000, far less than the jurisdiction threshold of $75,000. For this reason, the court will remand this action to state court.
"`Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.'" Dudley v. Eli Lilly & Co., 778 F.3d 909, 911 (11
National Fire invokes diversity jurisdiction as the basis for the court's exercise of subject matter jurisdiction. As reflected previously in describing diversity jurisdiction, 28 U.S.C. § 1332 provides that "district courts shall 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). Title 28 U.S.C. § 1441 allows defendants to remove actions from state court that portray a basis for original jurisdiction in federal district courts.
In actions removed by a defendant pursuant to purported diversity jurisdiction, the court shall deem the "sum demanded in good faith in the initial pleading [as] the amount in controversy." 28 U.S.C. § 1446(c)(2). As reflected previously, White did not request a sum certain in his complaint. Where a complaint is silent on the amount of damages sought, a defendant's notice of removal may assert the amount in controversy if the complaint seeks nonmonetary relief; if a state prohibits specific damage requests in initial pleadings; or if a state "permits recovery of damages in excess of the amount demanded." Id. at § 1446(c)(2)(A)(i) & (ii). White's circumstances correspond to the latter specification, as he may recover a money judgment on his breach-of-contract claim in excess of the unspecified amount sought in his complaint.
In actions removed from state court, the "defendant's amount-in-controversy allegation should be accepted when not contested by the plaintiff or questioned by the court." Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 553 (2014). When a plaintiff or a court challenges the defendant's amount-in-controversy allegation, however, proper jurisdiction persists "`if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds' the jurisdictional threshold." Id. at 553-54 (quoting 28 U.S.C. § 1446(c)(2)(B)). "Both sides" may "submit proof" concerning the amount in controversy, and the district court must decide, "by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied." Id. at 554.
In assessing the basis for diversity jurisdiction, "`the district court must make findings of jurisdictional fact to which the preponderance standard applies.'" Id. (quoting H.R. Rep. No. 112-10, p. 16 (2011)). 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 (11
In conducting its analysis, the district court may make "reasonable deductions, reasonable inferences, or other reasonable extrapolations" and may use "judicial experience and common sense in determining whether the case stated in a complaint meets federal jurisdictional requirements." Pretka, 608 F.3d at 754. "[E]stimating the amount in controversy is not nuclear science," and "the undertaking is not to be defeated by unrealistic assumptions that run counter to common sense." S. Fla. Wellness, 745 F.3d at 1317. In the same vein, gamesmanship in pleading can neither create nor defeat a court's jurisdiction. Goodwin v. Reynolds, 757 F.3d 1216 (11
As foreshadowed earlier, the action at bar unequivocally does not advance an amount in controversy close to the $75,000 jurisdictional threshold. In the parties' submissions regarding Defendant's summary judgment motion, the court discerned that the trailer at issue cost Plaintiff $19,000, which is far less than the $75,000 jurisdictional floor. Moreover, the policy establishes that White insured the trailer at a value of $19,000. (Doc. 17-3 at 14).
To be sure, White claims lost income due to the loss of his trailer, which conceivably could merit damages greater than $75,000. However, this action involves a single claim — breach of an insurance contract — that does not afford White compensatory and punitive damages. See United Servs. Auto. Ass'n v. Wade, 544 So.2d 906, 913 (Ala. 1989) (The "`law in this state does not permit recovery for personal injury, inconvenience, annoyance, or mental anguish and suffering in an action for breach of a contract of insurance.' . . . In a legitimate contract dispute over insurance coverage where there is no wrongful conduct by the insurer, mental anguish damages would not be recoverable.") (citations omitted); Liberty Nat. Life Ins. Co. v. Stringfellow, 92 So.2d 924, 926 (Ala. Ct. App. 1956) ("The general rule as to damages for breach of a contract is that only those damages are recoverable which are the natural and probable result of the breach of the contract, and could be reasonably contemplated by the parties as a probable result of the breach. . . . It is further a basic principal of law governing the liability of an insurer that such liability is to be determined by the provisions of the insurance contract.") (citation omitted). Furthermore, "profits are too remote and cannot be recovered when they are not the immediate fruits of the principal contract, but are dependent on collateral engagements not brought to the notice of the contracting parties. In addition, . . . compensatory damages for lost profits are not allowed if they are too speculative." Garrett v. Sun Plaza Dev. Co., 580 So.2d 1317, 1320 (Ala. 1991) (citations omitted).
Most importantly, the parties' insurance contract forecloses White's recovery of lost income, as it provides the following coverage limitations on White's trailer:
(Doc. 17-3 at 33). The limit of liability for White's trailer reflects a $19,000 value (Doc. 17-3 at 14), so the most White can obtain under the policy is that amount.
At best, the policy covers White's purported lost income in a provision concerning "loss of use expenses" for "hired auto liability." (Id. at 26). However, "hired auto liability" refers to damages inflicted upon a rental vehicle, (id.), which do not apply to White's insurance claim because he avers compensable damage to his own trailer. Moreover, even if the loss-of-use-expenses provision covers White's trailer, the policy caps such coverage at $600. (Id. at 26). Therefore, National Fire has not established by the preponderance of the evidence that this action satisfies § 1332's amount-in-controversy requirement.
The only evidence National Fire proffers in opposition to remand constitutes the deemed admission resulting from White's failure to respond to the requests for admission. Failing to respond to a request for admission renders the matter admitted conclusively, see Fed. R. Civ. P. 36(a)(3) & (b), subject to the court's discretion as described infra.
As an initial matter, there exists no need to linger on the issue whether the failure to respond to requests for admissions constitutes an "other paper" warranting removal pursuant to 28 U.S.C. § 1446(b)(3).
In any event, the question remains whether White's deemed admission sustains National Fire's burden to preponderantly demonstrate that the amount in controversy exceeds the $75,000 jurisdictional threshold. "`[B]ecause removal jurisdiction raises significant federalism concerns, federal courts are directed to construe removal statutes strictly. Indeed, all doubts about jurisdiction should be resolved in favor of remand to state court.'" Dunlap v. Cockrell, 336 F.Supp.3d 1364, 1367-68 (S.D. Ala. 2018) (quoting City of Vestavia Hills v. General Fidelity Ins. Co., 676 F.3d 1310, 1313 (11
More concretely, the "scope and effect of admissions (like the scope and effect of stipulations) is a matter for determination by the trial court, in the exercise of its broad discretion." Johnson v. DeSoto Cnty. Bd. of Comm'rs, 204 F.3d 1335, 1341 (11
Based upon the foregoing review of applicable precedent and authority, White's deemed admissions purportedly establishing an amount in controversy over $75,000 — operative by virtue of his failure to respond to requests for admissions — do not "clearly" and "unambiguously" withstand the concrete evidence that his claim does not exceed $19,000. White's deemed admission does not rest on "any specified fact"; as reflected earlier, the clear evidence of record indicates that White's policy with National Fire limited his insurance claim to $19,000. Far from being ambiguous, there exists no doubt about diversity jurisdiction in these circumstances: the court preserves none because the amount in controversy falls far below the $75,000 jurisdictional threshold.
As one court discerns, retaining diversity jurisdiction in these circumstances impermissibly authorizes the parties' consent to, or waiver of, subject matter jurisdiction:
Jones v. AAA Club Family Ins. Co., No. CIV.A. 07-6988 C(1), 2007 WL 4365443, at *1 (E.D. La. Dec. 10, 2007); c.f., Mabry v. Gov't Employee's Ins. Co., 267 F.Supp.3d 724, 729, 730 (N.D. Miss.), reconsid. denied, 268 F.Supp.3d 885 (N.D. Miss. 2017) ("If a denial of a request for admission could definitively establish jurisdiction in this Court, such a rule would be tantamount to allowing parties to improperly consent to jurisdiction even in the face of other undisputed evidence showing the absence of the requisite amount in controversy. . . . Rather, the denial of a request for admission, like a refusal to stipulate to the amount in controversy, may be considered as a relevant factor in the amount-in-controversy inquiry.") (citations & footnote omitted).
Finally, National Fire beseeches this court to order on remand that White is judicially estopped from pursuing damages in excess of $75,000, and that National Fire shall be permitted removal should White seek damages in such an amount. In the absence of subject matter jurisdiction, the court cannot issue an order adjudging the merits of a remanded case. See United States v. Straub, 508 F.3d 1003, 1008-10 (11
However, National Fire may pursue its requested relief in state court. To the extent White pursued any position regarding the court's adjudication of the amount-in-controversy requirement, "the doctrine of judicial estoppel applies to preclude a party from assuming a position in a legal proceeding inconsistent with one previously asserted." Henriksen v. Roth, 12 So.3d 652, 658 (Ala. 2008) (citations and internal quotation marks omitted).
More fundamentally, the principles of collateral estoppel may bar White's pursuit of damages contravening the court's assessment of § 1332's amount-in-controversy requirement. A "federal court always has jurisdiction to determine its own jurisdiction. . . ." United States v. Ruiz, 536 U.S. 622, 628 (2002); see also United States v. Salmona, 810 F.3d 806, 810 (11
For the foregoing reasons establishing that the amount in controversy in this case falls far below the threshold to warrant the exercise of diversity subject matter jurisdiction, the court