MAY 2011 BAD FAITH CASES WESTERN DISTRICT REMANDS CASE TO STATE COURT AFTER DETERMINING THAT THE AMOUNT IN CONTROVERSY DOES NOT SATISFY DIVERSITY JURISDICTION REQUIREMENTS (Western District)

In Croft v. Nationwide Insurance Company of America, the insured had filed a Complaint including claims for breach of contract and bad faith.  The insurer removed the case to federal court on diversity jurisdiction, but the insured only alleged damages in the amount of $25,000, while the required amount to remove a case to federal court is $75,000.  The court issued a Rule to Show Cause on the amount in controversy, and counsel for the insured submitted a sworn affidavit, stating his belief that “there is no reasonable probability that the recoverable damages in this case would exceed the sum of $75,000.00.”  He even agreed to defer any amount in excess of $75,000.00 should the insurer receive damages in that amount.  Therefore, the court determined that it was without jurisdiction to hear the case, and it remanded the case to state court.

Date of Decision:  May 10, 2011

Croft v. Nationwide Ins. Co. of Am., 11cv0578, United States District Court for the Western District of Pennsylvania, 2011 U.S. Dist. LEXIS 50164, (May 10, 2011) (Schwab, J.)