January 2007 BAD FAITH CASES COURT RULES THERE IS NO FEDERAL JURISDICTION WHENEVER IT IS POSSIBLE AN INSURED WILL RECOVER LESS THAN THE AMOUNT-IN-CONTROVERSY REQUIREMENT (Philadelphia Federal)

In Uccelletti v. State Farm Fire & Casualty Company, the insured filed two claims: one for breach of contract and one for bad faith.  Each claim was followed by a demand for judgment “not in excess of $50,000.”  The case was removed by the insurer to federal court, which has an amount-in-controversy minimum of $75,000 for this type of case.  The United States District Court remanded the case to state court.  It ruled that there was not a legal certainty that the insured, if successful on her claims, would recover in excess of $75,000.  The court reasoned that possible punitive damages and/or attorney’s fees awards in the tens-of-thousands of dollars were “speculative.”  In the court’s mind, the insured’s refusal to concede that her damages were less than $75,000 did not control.

Three relatively contemporaneous cases on the same topic have issued from the Eastern District Court, though by different judges.  In Brownstein v. Allstate Insurance Company, summarized and posted contemporaneously with this summary, the insured’s concession that she was not seeking more than $75,000 was dispositive on the remand issue.  However, another opinion rejected the insured’s effort to remand so long as it is conceivable that the insured could recover $75,000.  Valley v. State Farm Fire and Casualty Company, summarized on this sites’ JANUARY 2007 BAD FAITH CASES.  In Howard v. Allstate Insurance Company, summarized in OCTOBER 2006 BAD FAITH CASES on this site, the Court did remand a case that started as a Philadelphia Court of Common Pleas arbitration, i.e., the demand was less than $50,000, where the carrier seeking to remove the case could not establish by a preponderance of the evidence to a legal certainty that the “amount in controversy” exceeded $75,000.

Date of Decision: October 11, 2006.

Uccelletti v. State Farm Fire & Casualty Company, United States District Court for the Eastern District of Pennsylvania, No. 06-4065, 2006 U.S. Dist. LEXIS 94578 (E.D. Pa. 2006) (Davis, J.).