FEBRUARY 2009 BAD FAITH CASES INSURED’S MOTION TO REMAND DENIED WHERE THERE WAS A VALID CLAIM FOR PUNITIVE DAMAGES (Middle District)

In Webb v. Discover Property & Casualty Insurance Company, the insured instituted suit against the insurer contesting, among other things, the validity of the forms used by the insurer for the rejection of underinsured motorist coverage.   The complaint, which was brought in the Court of Common Pleas, Luzerne County, Pennsylvania, included a bad faith claim, wherein the insured sought punitive damages.  

The insurer removed the case to the United States District Court for the Middle District of Pennsylvania. According to the insurer, because the insured sought punitive damages, the  claim satisfied the $75,000.00 “amount in controversy” threshold and therefore, removal was appropriate.  The insured disagreed and filed a motion to remand the case to state court.     

The court held that if an insured makes an appropriate claim for punitive damages, the amount in controversy requirement is generally met “because it cannot be stated to a legal certainty that the value of the plaintiff’s claim is below the statutory minimum.” Because the insured in this case made a valid claim for punitive damages under its bad faith cause of action, the Court opined that it could not find, to a legal certainty, that the value of the insured’s claims are below the statutory threshold and, therefore denied the insured’s motion to remand.  

Date of Decision: November 24, 2008

Webb v. Discover Prop. & Cas. Ins. Co., No. 3:08cv1607, 2008 U.S. Dist. LEXIS 95431 (M.D. Pa. Nov. 24, 2008)(Munley, J.). 

 

J.M.A.