CROWDER LAWN AND GARDEN v. FEDERATED LIFE INSURANCE COMPANY
1:09-cv-00581
S.D. Ind.Nov 29, 2010Background
- Plaintiffs Crowder Lawn and Garden, Gerald Crowder, and Nancy Crowder filed a Complaint in Parke Circuit Court alleging two counts against Federated Life Insurance: Count I sought $44,000 (with an estoppel-like theory) and Count II sought contract-based damages plus bad-faith punitive damages.
- Federated removed the case to federal court asserting federal-question and diversity jurisdiction; later conceded federal-question lack and proceeded under diversity alone.
- Plaintiffs voluntarily dismissed Count II after discovery revealed no contract with Federated, leaving only Counts I and the bad-faith/punitive-damages theory in the original pleading.
- Plaintiffs moved to remand arguing the amount in controversy did not exceed $75,000; Federated contends it had a good-faith basis to estimate the stakes exceeded $75,000 at removal.
- The district court denied the motion to remand, applying Oshana’s standard that the removing defendant need only show a good-faith basis for the amount in controversy at the time of removal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the amount in controversy exceeded $75,000 at removal | Crowder argues no; no contract means no $75k | Federated had a good-faith basis to estimate >$75k despite lack of contract | Yes; Federated had a good-faith basis to estimate >$75k |
| Whether it was legally certain the claim was under $75,000 at removal | Plaintiffs cannot recover >$75k given lack of contract | Despite lack of contract, removal valid unless legally certain under $75k | No legal certainty; jurisdiction remains; remand denied |
Key Cases Cited
- Oshana v. Coca-Cola, Co., 472 F.3d 506 (7th Cir. 2006) (amount-in-controversy determined at removal or filing; good-faith estimate allowed; legal certainty governs if below threshold)
- Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536 (7th Cir. 2006) (legal-certainty standard; delineates three ways to defeat jurisdiction)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) (stays of removal jurisdiction despite post-removal reductions; clarifies jurisdictional issues)
- Smith v. American General Life and Acc. Ins. Co. Inc., 337 F.3d 890 (7th Cir. 2003) (pre-Oshana rule: show any disputed aspect by probable proof; actual knowledge of insufficient amount not ignored)