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Horton v. Allstate Vehicle and Property Insurance Co.

United States District Court, W.D. Texas, San Antonio Division

April 9, 2019




         This Report and Recommendation concerns Plaintiff Veronica Horton's Motion to Remand. See Dkt. No. 12. The District Court referred this case to the undersigned pursuant to Western District of Texas Local Rule CV-72 and Appendix C. See Dkt. No. 8. The undersigned has authority to enter this recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). For the reasons set forth below, Horton's Motion to Remand, Dkt. No. 12, should be DENIED.

         I. Factual and Procedural Background

         This insurance dispute arises from an April 2016 hail storm in San Antonio, Texas. Plaintiff Veronica Horton submitted a property-damage claim to her insurance company, Allstate Vehicle and Property Insurance Company, for damage to her home's composition shingle roof, roofing components, fascia and storage shed. Orig. Pet. ¶¶ 14-20. Allstate assigned Defendant John Suther of Pilot Catastrophe Services to inspect the property and adjust Horton's claim. Id. According to Horton, Suther was improperly trained and/or supervised in inspecting hail damage and conducted a substandard review of her claim. Id. ¶ 21. Allstate, it is alleged, in turn relied on Suther's inadequate inspection, causing Allstate to improperly deny Suther's claim. Id. In doing so, Horton alleges that Allstate ignored her independent property damage assessment, which “confirmed wind and/or hail damage to [Horton's] Property in the amount of $19, 764.34.” Id. ¶ 22. According to Horton, Defendants collectively “misrepresented to [Horton] that the Property damage was not the result of the Storm damages to the Property” and “intentionally omitted and failed to allow for the replacement of the composition shingle roof, roofing components, fascia[, ] and storage shed.” Id. ¶¶ 23, 30.

         When Allstate denied the claim under Horton's Texas Homeowner's Insurance Policy, Horton sent Allstate a demand letter on September 24, 2018. See Dkt. No. 1-12. In her demand letter, Horton claimed a total of $28, 384.28 in damages, calculated as follows: (1) $18, 554.34 to repair her dwelling ($19, 764.34 less her $1, 210 deductible); (2) $4, 629.94 in interest pursuant to the Texas Prompt Payment Act, calculated from April 22, 2017 through the date of the letter; and (3) $1, 200 in attorney's fees incurred as of that date. See Id. at 2-3. The demand only related to Horton's causes of action under the Texas Insurance Code; it did not include any damages related to Horton's potential Texas Deceptive Trade Practices Act (“DTPA”) claims, which could permit the recovery of treble damages. See Id. at 3. Finally, the letter advised Allstate that the settlement offer of $28, 384.28 “represents a tremendous savings to Allstate given [its] potential exposure under the Texas Insurance Code, ” as juries have allegedly awarded close to $100, 000 to well-over $1 million when faced with claims involving similar causes of action. See id.

         No settlement was reached, and on January 9, 2019, Horton sued Allstate, Suther, and Pilot in the 37th Judicial District Court of Bexar County, Texas. See Orig. Pet. Her Original Petition raised the following claims: (1) breach of contract; (2) breach of the common law duty of good faith and fair dealing; (3) unfair settlement practices in violation of Section 541.151 of the Texas Insurance Code; (4) violation of the Texas Prompt Payment Act, Tex. Ins. Code § 542.058; (5) various violations of the DTPA, Tex. Bus. & Com. Code § 17.41-63; and (6) fraud. Horton sought in relief: (1) actual damages, including loss of the benefits that allegedly should have been paid under the policy and damages for mental anguish; (2) attorneys' fees; (3) treble damages under the DTPA; (4) 18 percent interest pursuant to the Texas Prompt Payment Act, Tex. Ins. Code § 542.060; and (5) costs. See Id. Pursuant to Section 542A.006 of the Texas Insurance Code, Allstate elected to accept any and all liability for the actions of Suther in relation to this action. See Ex. D to Dkt. No. 1.

         On February 15, 2019, Allstate removed this action with the consent of Defendant Pilot, citing diversity jurisdiction. See Dkt. No. 1. According to the Notice of Removal, Horton is a citizen of Texas, Allstate is an Illinois corporation with its principal place of business in Illinois, and Suther is a resident of Alabama who is licensed by the Texas Department of Insurance to adjust claims in Texas.[1] Although the Notice of Removal does not specify Defendant Pilot's citizenship, it appears that Pilot is also a citizen of Alabama. See Orig. Pet. ¶ 4.

         On March 4, 2019, Horton filed the instant Motion to Remand. See Dkt. No. 12. Horton requests that the Court remand this case to the Bexar County District Court and award the reasonable attorneys' fees incurred in filing the remand motion.

         II. Analysis

         At issue is whether Allstate has carried its burden to show that the amount in controversy exceeds $75, 000. See 28 U.S.C. § 1332(a). There is no meaningful dispute as to the complete diversity of the parties. For the reasons discussed below, the undersigned concludes Allstate has met the amount-in-controversy requirement, notwithstanding the fact that “any doubt as to the propriety of removal should be resolved in favor of remand.” See In re Hot-Hed Inc., 477 F.3d 320, 323 (5th Cir. 2007); Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Allstate has done so both by showing that (1) it is facially apparent from the state court Petition that the claim exceeds $75, 000 and (2) evidence supports the requisite finding. Manguno, 276 F.3d at 723 (providing that a removing party need only prove one or the other).

         First, according to Horton's Original Petition, the cost to repair Horton's damaged property is $19, 764.34. See Orig. Pet. ¶ 15. In addition to this repair cost, Horton claims an unspecified amount in damages for mental anguish, attorneys' fees, 18% interest pursuant to the Texas Prompt Payment Act, and treble economic and mental-anguish damages pursuant to the DTPA.[2] See Orig. Pet. ¶¶ 80-83. All of these amounts are included in the amount-in-controversy calculation, and they reflect that in this case the requisite amount is reached by the required preponderance of the evidence.[3] Merely trebling Horton's repair costs (without considering any mental-anguish damages) yields claimed damages of $59, 293.02. Prevailing on her Prompt Payment Act claims would entitle Horton to significant statutory interest, even at this stage, given that her claim has been pending for approximately three years. See Nautilus, Inc. v. ICON Health & Fitness, Inc., No. SA-16-CV-00080-RCL, 2018 WL 2107729, at *4 (W.D. Tex. May 7, 2018) (explaining that 18% late-payment interest is calculated as simple interest); Tex. Ins. Code § 542.060(c) (providing that interest awarded under the Prompt Payment Act “accrues beginning on the date the claim was required to be paid”). Any such interest award very likely would increase by the time of entry of judgment. See Great Am. Ins. Co. v. AFS/IBEX Fin. Servs., Inc., 612 F.3d 800, 809 (5th Cir. 2010) (interest under the Prompt Payment Act accrues until the date judgment is entered). Even assuming that Horton will not recover any mental-anguish damages and will only recover minimal attorneys' fees, the Court concludes-based on the nature of the claims, types of damages sought, the alleged property damage, and applying common-sense[4]-it is facially apparent from Horton's Original Petition that the jurisdictional threshold has been met here.[5]

         Horton's pre-suit demand letter, which Allstate attached to the Notice of Removal, lends further support to the Court's conclusion. See Armendariz v. Allstate Texas Lloyd's, No. EP-16 CV-00334-DCG, 2016 WL 6915279, at *2 (W.D. Tex. Nov. 23, 2016) (recognizing that “[c]ourts have considered pre-suit demand letters as such evidence in determining whether defendants have met the preponderance burden”). Although Horton only requested $28, 384.28 in actual damages, statutory interest, and attorneys' fees to settle this dispute, the letter by its express terms does not include Horton's present demand for treble damages.[6] Accounting for treble damages, as well as additional statutory interest and attorneys' fees incurred through the date of judgment, it is more likely than not that the amount in controversy here exceeds $75, 000. See St. Paul, 134 F.3d at 1254 n. 13 (explaining that “[t]he test is whether it is more likely than not that the amount of the claim will exceed $[75, 000]”).

         Accordingly, Horton can obtain remand here only if she establishes to a “legal certainty” that her claims are really for less than the jurisdictional threshold. See De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir. 1995). Horton has failed to do so here. There is no state law that prohibits Horton from recovering damages in excess of $75, 000, and Horton has refused to stipulate to less than $75, 000 in damages. See Dkt. No. 1 ¶ 25. Under these circumstances, remand should be denied. See DeAguilar, 47 F.3d at 1412.; see also Ray v. State Farm Lloyds, Inc., No. CIV.A.3:98-CV-1288-G, 1999 WL 151667, at * (N.D. Tex. Mar. 10, 1999).

         III. Conclusion ...

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