This story is reprinted with permission from FC&S Legal, the industry’s only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe.

A federal district court in Florida has remanded to state court a case brought by two insureds against their insurance company after concluding that the insurer had not established that the amount in controversy exceeded the $75,000 jurisdictional amount – even though the insureds had sent a demand email to their insurer seeking $77,500.

The Case

Victor Galbis and Martha Trujillo sued their insurance company, Praetorian Insurance Company, in a Florida state court after Praetorian denied coverage of a claim they filed.

After the insureds sent Praetorian an email demanding $77,500, “inclusive of attorney’s fees and costs,” Praetorian removed the action to federal court.

The insureds moved to remand, attaching a sworn proof of loss of $62,475.82 to demonstrate that their damages could not exceed $75,000. The insureds disputed that Praetorian had met its burden of demonstrating that their claim exceeded $75,000 exclusive of interest and costs because Praetorian failed to inquire what portion of their demand email was attributable to costs and interest, as opposed to attorneys’ fees and their damages.

Praetorian countered that the insureds’ demand email demonstrated that the jurisdictional limit was exceeded because it represented the total sum of what they wanted to recover.

The District Court’s Decision

The district court granted the motion to remand.

In its decision, the district court explained that because the parties disputed the amount in controversy, Praetorian had the burden to prove by a preponderance of the evidence that the amount in controversy exceeded the $75,000 jurisdictional threshold, “exclusive of interest and costs.”

It then ruled that Praetorian had not met its burden of showing with “specific information” that the jurisdictional limit was met.

The district court reasoned that the insureds’ demand email contained no supporting attachments detailing the amount of attorneys’ fees, costs, or the ultimate award to the insureds, and that none of the other exhibits attached to their notice of removal “clearly” established that the amount in controversy exceeded $75,000 independent of any costs.

Moreover, the district court said, it was not clear that the attorneys’ fees as calculated at the time of removal pushed the amount in controversy past the jurisdictional limit because their demand included both costs and attorneys’ fees “and was for barely more than $75,000.”

The district court also found that the exhibits reflected that the insureds’ maximum damages did not exceed the sworn proof of loss, $62,475.82.

The district court concluded that it could not determine whether the insureds’ demand email had been “merely puffing or posturing,” and it remanded the case to state court.

The case is Galbis v. Praetorian Ins. Co., No. 18-23144-GAYLES (S.D. Fla. Nov. 13, 2018). Attorneys involved include: For Victor Galbis, Martha Trujillo, Plaintiffs: Margaret Ellen Garner, LEAD ATTORNEY, Kanner & Pintaluga, Boca Raton, FL; Max Michael Messinger, LEAD ATTORNEY, Kanner & Pintaluga, P.A., Boca Raton, FL. For Praetorian Insurance Company, Defendant: Joseph William Gelli, LEAD ATTORNEY, Jordan Lynn Parker, Garrison, Yount, Forte, & Mulcahy, L.L.C., Tampa, FL.

Steven A. Meyerowitz, Esq., is the Director of FC&S Legal, the Editor-in-Chief of the Insurance Coverage Law Report, and the Founder and President of Meyerowitz Communications Inc. As FC&S Legal Director, Mr. Meyerowitz, a member of the team that conceptualized FC&S Legal, provides daily analysis and commentary on the most significant insurance coverage law decisions from courts across the country and news regarding legislative and regulatory developments. A graduate of Harvard Law School, Mr. Meyerowitz was an attorney at a prominent Wall Street law firm before founding Meyerowitz Communications Inc., a law firm marketing communications consulting company.