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.).