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Perez v. Allstate Texas Lloyd's

United States District Court, N.D. Texas, Dallas Division

April 28, 2017

JOE PEREZ, Plaintiff,
v.
ALLSTATE TEXAS LLOYD'S, Defendant.

          MEMORANDUM OPINION AND ORDER

          SAM A. LINDSAY, UNITED STATES DISTRICT JUDGE

         I. Introduction and Background

         Before the court is Plaintiff's Motion to Remand (Doc. 5), filed September 7, 2016. On October 13, 2016, the court referred Plaintiff's Motion to Remand to the Honorable United States Magistrate Judge David L. Horan for findings and recommendations for disposition of the motion. On October 27, 2016, Magistrate Judge Horan issued the Findings, Conclusions, and Recommendation of the United States Magistrate Judge (“Report”). The Report concludes that Plaintiff's Motion to Remand should be granted because the amount-in-controversy requirement has not been met and the court lacks subject matter jurisdiction to hear this action.

         Defendant Allstate Texas Lloyd's (“Defendant” or “Allstate”) objected to the Report. To ensure that the substance is not lost, the court sets forth a summary of the objection as stated by Allstate:

Allstate respectfully files its objections to the Magistrate's Recommendation because it is based on the incorrect presumption that the amount-in-controversy in this matter is controlled by Plaintiff's improper Rule 47 statement in his Original Petition. Allstate also objects to the Magistrate's Recommendation because it requires Allstate to pay attorney's fees to Plaintiff for an argument it did not make. Specifically, the Recommendation concludes that Allstate insisted that Plaintiff's Policy limits dictate the amount-in-controversy in this case, and[, ] therefore, Allstate did not have an objectively reasonable ground to remove this action. Allstate did not make this argument. Rather, Allstate alleged, consistent with the Fifth Circuit case law, that Policy limits and Plaintiff's pleaded damages should be considered when ascertaining the amount-in-controversy in removal proceedings.

         Def.'s Objs. to Report 1. For the reasons that follow, the court determines that Allstate fails to show by a preponderance of evidence that the amount in controversy exceeds $75, 000, and the court, therefore, lacks subject matter jurisdiction to hear this action.

         Joe Perez (“Plaintiff” or “Perez”) originally filed this action against Allstate on May 9, 2016, in the 95th Judicial District Court of Dallas County, Texas. Perez sustained losses to his dwelling (home) and his personal property as a result of windstorm, hailstorm, and water damage to his property. Perez contends that Allstate failed to compensate him fully for the damage to his home and personal property in accordance with his Insurance Policy (“Policy”) with Allstate. Pl.'s Original Pet. 3-4.

         Perez asserts claims for breach of contract, violations of the Texas Deceptive Trade Practices Act (“DTPA”), violations of the Texas Insurance Code, and breach of the duty of good faith and fair dealing. He seeks actual and special damages as follows:

past, present, and future cost of repair to Plaintiff's home, any investigative and engineering fees incurred in the claim, cost of mitigation, reliance damages, restitution damages, and costs of alternative housing while repairs are occurring. The Plaintiff is also entitled to recover consequential damages from Defendant's breach of contract. The Plaintiff is also entitled to recover the amount of Plaintiff's claim plus 18% per annum penalty on that claim against Defendant as damages under Section 542 of the Texas Insurance Code, plus pre-judgment and post judgment interest and attorney's fees.

Pl.'s Original Pet. 13-14.

         Allstate removed the state court action to federal court on August 17, 2016, contending that complete diversity of citizenship exists between the parties and that the amount in controversy exceeds $75, 000, exclusive of interest and costs. Perez disagrees and contends that Allstate has not established that the amount in controversy exceeds $75, 000 and seeks a remand of this action to state court.

         II. Subject Matter Jurisdiction

         A federal court has subject matter jurisdiction over civil cases “arising under the Constitution, laws, or treaties of the United States, ” or over civil cases in which the amount in controversy exceeds $75, 000, exclusive of interest and costs, and in which diversity of citizenship exists between the parties. 28 U.S.C. §§ 1331, 1332. Federal courts are courts of limited jurisdiction and must have statutory or constitutional power to adjudicate a claim. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994) (citations omitted); Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998). Absent jurisdiction conferred by statute or the Constitution, they lack the power to adjudicate claims and must dismiss an action if subject matter jurisdiction is lacking. Id.; Stockman v. Federal Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998) (citing Veldhoen v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir. 1994)). A federal court must presume that an action lies outside its limited jurisdiction, and the burden of establishing that the court has subject matter jurisdiction to entertain an action rests with the party asserting jurisdiction. Kokkonen, 511 U.S. at 377 (citations omitted). “[S]ubject-matter jurisdiction cannot be created by waiver or consent.” Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001).

         Federal courts may also exercise subject matter jurisdiction over a civil action removed from a state court. Unless Congress provides otherwise, a “civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for ...


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