Delaware Business Litigation Report

Federal Court Denies Motion To Remand Because Plaintiffs Demand For Coverage Met the Amount-In-Controversy Requirement

Eames v. Nationwide Mut. Ins. Co., No. CIV.A. 04-1324-KAJ, 2005 WL 1385130 (D.Del. Apr. 27, 2005). The plaintiffs filed a Motion to Remand a proposed class action involving insurance issues. The defendant removed the action from the Delaware Superior Court under 28 U.S.C. § 1441, diversity jurisdiction. The plaintiffs alleged that because the amount requirements under 28 U.S.C. § 1332 ($75,000) were not met, the action merited remand. The Court denied plaintiffs' motion. This action arose from defendant's underwriting of insurance policies providing Personal Injury Protection coverage ("PIP"). The Plaintiffs alleged that the defendant misrepresented the limits of the PIP coverage. They further alleged that the policy term "full" referred to the maximum insurance coverage under PIP Nationwide offered at that time which was $100,000 per person and $300,000 per accident. The defendant contended that the policy covered only $15,000 per person and $30,000 per accident. The plaintiffs sought a declaratory judgment that their policy entitled them to the $100,000/$300,000 PIP coverage. Thus, the removal action was, according to the Court, predicated on the jurisdictional amount in controversy. The Court examined several cases, including Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 347 (1977) which held that "[i]n actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation." Further, the Court quoted St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938) that held that in order to justify remand "it must appear to a legal certainty that the claim is really for less than the jurisdictional amount ...." Applying the above case law to the instant case, the Court observed that to value the "object" of this litigation, the meaning of "full" had to be determined. The Court relied on persuasive authority that had ruled on exactly the same point in a similar situation and held that because plaintiffs had demanded coverage in the present action up to $300,000 they had satisfied the amount-in-controversy mandate of 28 U.S.C. § 1332(a). It therefore denied plaintiffs Motion to Remand. Authored by: Raj Srivatsan 302.888.6831 rsrivatsan@morrisjames.com Share