O'Brien Watters & Davis, LLP v. Hanover Insurance Company

Background

O'Brien Watters & Davis, LLP sued Hanover Insurance Company for coverage under an insurance policy for business losses. Hanover removed the action to federal court. The plaintiff moved to remand, meaning to return the action to state court. The parties agreed that the only issue was whether Hanover had shown that the amount in controversy exceeded $75,000, the jurisdictional threshold for diversity jurisdiction under 28 U.S.C. § 1332(a)(1).

Amount in Controversy

The complaint sought damages “in an amount in excess of the court’s minimum jurisdiction & at least $30,000.” When the complaint was filed, Hanover had paid $74,906 of the $105,000 in losses claimed by the plaintiff, leaving $30,094 in unpaid coverage. The court found that nothing in the record suggested the plaintiff was seeking significantly more than $30,000. The plaintiff also stipulated that it would not seek more than $75,000, including attorneys’ fees and costs, in state court.

Although the complaint did not expressly limit the damages period, the court said it could not read affirmative statements into the complaint that were not there. The court therefore concluded that Hanover had not shown, by a preponderance of the evidence, that the amount in controversy exceeded $75,000.

Sanctions Request

The plaintiff also requested attorneys’ fees as sanctions under Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1447(c). The court denied that request because the plaintiff had not filed it as a separate motion, as required by the applicable local rule and Rule 11. The court additionally stated that, even if the request had been properly filed, the record did not support a finding that Hanover acted unreasonably or in bad faith in removing the case.

Disposition

The court granted the plaintiff’s motion to remand, denied its request for sanctions, and directed the clerk to remand the action to Sonoma County Superior Court.