United States District Court, E.D. Virginia, Richmond Division
LOS AMIGOS FIVE, INC. and MANUEL BALCAREL-VELIZ, Plaintiffs,
CANOPIUS U.S. INSURANCE, INC., Defendant.
HANNAH LAUCK UNITED STATES DISTRICT JUDGE.
matter comes before the Court on the Motion to Remand filed
by Plaintiffs Los Amigos Five, Inc. ("Los Amigos")
and Manuel Balcarel-Veliz (collectively,
"Plaintiffs"). (ECF No. 4.) Plaintiffs move to
remand this case to the Circuit Court for the City of
Richmond (the "Richmond Circuit Court") for lack of
subject matter jurisdiction. Defendant Canopius U.S.
Insurance, Inc. ("Canopius") opposes the remand.
(Resp., ECF No. 7.) Plaintiffs did not file a Reply and the
time to do so has expired. The Court dispenses with oral
argument because the materials before it adequately present
the facts and legal contentions, and argument would not aid
the decisional process. The matter is ripe for disposition.
The Court exercises jurisdiction pursuant to 28 U.S.C. §
1332(a). For the reasons that follow, the Court
will deny the Motion to Remand.
Procedural and Factual Background
Motion to Remand involves a suit that Plaintiffs filed in the
Richmond Circuit Court on April 2, 2018 against Canopius. The
Complaint seeks a declaratory judgment of Canopius'
contractual obligation under Policy Number OUS010004545 (the
"Insurance Policy") to defend and to indemnify Los
Amigos in a separate personal injury case between
Balcarel-Veliz and Los Amigos (the "Underlying
Litigation"), filed June 17, 2017.(Compl. 2-3, ECF
No. 1-1.) Although the instant Complaint does not articulate
an amount of indemnification sought, the Underlying
Litigation complaint "demands judgment against [Los
Amigos], in the sum of [$75, 000]." (Underlying
Litigation Compl. 1-2.) Plaintiffs also seek an award of
Plaintiffs' costs and all other relief to which they may
be entitled. (Compl. 3.)
timely removed the declaratory judgment action from the
Richmond Circuit Court, asserting diversity jurisdiction
under 28 U.S.C. § 1332(a). (Notice Removal ¶¶
5-14, ECF No. 1.) Plaintiffs petition this Court to remand
the case to the Richmond Circuit Court for lack of subject
matter jurisdiction, and request costs and attorneys'
fees under 28 U.S.C. § 1447(c). Plaintiffs' Motion
to Remand makes no reference to fees or other costs related
to Canopius' obligation to defend Los Amigos in the
Underlying Litigation. Instead, Plaintiffs solely contend
that because Balcarel-Veliz seeks exactly $75, 000 in the
Underlying Litigation, the amount in controversy in this suit
does not exceed $75, 000 as required for diversity
jurisdiction under 28 U.S.C. § 1332(a). (Mem. Supp. Mot.
Remand 1, ECF No. 4-1.) Plaintiffs posit that "[t]he
amount in controversy is $75, 000[J as determined by the
prayer for relief in the Underlying Litigation."
opposes the Motion to Remand, arguing that in this
suit, in addition to the $75, 000 indemnification, Los Amigos
seeks to enforce Canopius' contractual duty to defend it
against covered losses under the Insurance
Policy. Specifically, this suit seeks "a
declaration that Defendant Canopius is obligated to defend
and to indemnify Plaintiff Los Amigos in the Underlying
Litigation." (Compl. 3.) Plaintiffs' assertion that
the value of the suit is $75, 000, according to Canopius,
"does not account for the fees and costs that [Canopius]
would incur to defend Los Amigos against the Underlying
Action." (Resp. ¶ 5, ECF No. 7.) Combined, Canopius
argues, the value of the indemnification and defense would
exceed $75, 000.
did not file a Reply, leaving Canopius' argument about
Legal Standard for Removal and Remand
28 U.S.C. § 1441(a),  a defendant may remove a civil action
to a federal district court if the plaintiff could have
originally brought the action in federal court. 28 U.S.C.
§ 1441(a). Section 1446 delineates the procedure for
removal, including the requirement that the defendant file a
notice of removal in the federal district court and the state
court. See 28 U.S.C. §§ 1446(a), (d). The
state court loses jurisdiction upon the removal of an action
to federal court. 28 U.S.C. § 1446(d) ("[T]he State
court shall proceed no further unless and until the case is
remanded."). The removability of a case "depends
upon the state of the pleadings and the record at the time of
the application for removal" Ala. Great S. Ry. Co.
v. Thompson, 200 U.S. 206, 216 (1906); see also
Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939)
("the right to remove ... [is] determined according to
the plaintiffs' pleading at the time of the petition for
party seeking removal bears the initial burden of
establishing federal jurisdiction." Abraham v.
Cracker Barrel Old Country Store, Inc., No. 3:11 cvl 82,
2011 WL 1790168, at * 1 (E.D. Va. May 9, 2011) (citing
Mulcahey v. Columbia Organic Chem. Co., 29 F.3d 148,
151 (4th Cir. 1994)). No. presumption favoring the existence
of federal subject matter jurisdiction exists because federal
courts have limited, not general, jurisdiction. Id.
(citing Pinkley Inc. v. City of Frederick, 191 F.3d
394, 399 (4th Cir. 1999)). In deference to federalism
concerns, courts must construe removal jurisdiction strictly.
Id. (citing Mulcahey, 29 F.3d at 151).
"If federal jurisdiction is doubtful, a remand is
necessary." Id. (quoting Mulcahey, 29
F.3d at 151).
federal district court has diversity jurisdiction over
"all civil actions where the matter in controversy
exceeds ... $75, 000 ... and is between ... [c]itizens of
different states." 28 U.S.C. § 1332(a)(1). When
diversity of citizenship provides the grounds for removal,
then "the sum demanded in good faith in the initial
pleading shall be deemed to be the amount in
controversy" 28 U.S.C. § 1446(c)(2). "The
notice of removal may assert the amount in controversy if the
initial pleading seeks ... nonmonetary relief." 28
U.S.C. § 1446(c)(2)(A). When the notice of removal, as
here, asserts the amount in controversy, "removal of the
action is proper... if the district court finds, by the
preponderance of the evidence, that the amount in controversy
exceeds [$75, 000]." 28 U.S.C. § 1446(c)(2)(B);
accord Francis v. Allstate Ins. Co., 709 F.3d 362,
367 (4th Cir. 2013) ("If a complaint 'does not
allege a specific amount of damages, the removing defendant
must prove by a preponderance of the evidence that the amount
in controversy exceeds [$75, 000].'" (quoting
DeAguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir.
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." Hunt v.
Washington State Apple Adver. Comm'n, 432 U.S. 333,
347 (1977); see McNutt v. Gen. Motors Acceptance Corp. of
Indiana, 298 U.S. 178, 181 (1936) (noting the
"principle that jurisdiction is to be tested by the
value of the object or right to be protected against
interference"); Francis, 709 F.3d at 367;
Liberty Mut. Fire Ins. Co. v. KB Home, Inc., No.
4:13CV98, 2013 WL 5739799, at * 1 (E.D. Va. Oct. 22, 2013).
Although the amount-in-controversy calculation does not
generally include attorneys' fees, "courts have
created two exceptions to this rule: '(1) if the fees are
provided for by contract; or (2) if a statute mandates or
allows payment of [attorneys'] fees."'
Francis, 709 F.3d at 368 (quoting 15-102
Moore's Federal Practice, Civil §
Analysis: Diversity Jurisdiction Exists Because the
Plaintiffs Seek Both Indemnification and Legal Defense, a
Combined Value Exceeding $75, 000
parties' jurisdictional disagreement pertains exclusively
to whether the amount in controversy exceeds $75, 000 because
Plaintiffs concede diversity of citizenship. For the reasons
that follow, the Court concludes that the amount in
controversy exceeds $75, 000. Because diversity of
citizenship and the amount in controversy meet jurisdictional