Parnes v. Safeco Insurance Company of America, 1:15-cv-01947

Parnes (CO resident) was rear-ended and settled with the at-fault driver; she claimed underinsured motorist (UIM) benefits from Safeco (NH corp, MA principal place of business), which Safeco denied.
Parnes demanded Safeco pay her $100,000 UIM policy limit in a June 23, 2015 settlement demand; Safeco declined.
Parnes sued in Boulder County District Court asserting breach of contract and bad faith under Colorado law, seeking declaratory relief, damages, fees, costs, and statutory penalties; complaint did not state a specific amount-in-controversy.
Safeco removed to federal court based on diversity jurisdiction; Parnes moved to remand.
Parnes’ remand arguments: the insurance contract requires local-court venue (or limits removal) and the settlement demand cannot be used to establish the amount-in-controversy.
The district court denied remand, finding the contract’s arbitration provision does not bar removal and that the amount-in-controversy likely exceeds $75,000 (considering the $100,000 UIM limit and available statutory/double damages and fees).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the insurance contract restricts litigation to the insured's local court / prevents removal	The contract's arbitration clause and the sentence "Local rules of law as to procedure and evidence will apply" require local-court litigation and thus preclude removal	The arbitration provision governs only arbitration; nothing in the policy limits venue for litigation or prevents removal to federal court	The provision applies only to arbitration and is unambiguous; it does not restrict removal — claim fails
Whether the defendant may rely on Plaintiff's $100,000 settlement demand to establish amount-in-controversy	Settlement offers are inadmissible under Fed. R. Evid. 408 and thus cannot be used to show the amount-in-controversy	Tenth Circuit precedent allows settlement demands to be considered for jurisdictional purposes; combined with the $100,000 policy limit and statutory/double-damages and fee claims, it is possible the controversy exceeds $75,000	Settlement demand may be considered for jurisdictional analysis; given the UIM limit and potential statutory/double damages and fees, amount-in-controversy exceeds $75,000 — diversity jurisdiction proper

McPhail v. Deere & Co., 529 F.3d 947 (10th Cir.) (plaintiff's settlement demand may be used to establish amount-in-controversy for removal)
Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536 (7th Cir.) (only when recovery is legally certain to be below threshold may jurisdictional basis be defeated)
Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294 (Colo. 2003) (insurance-policy terms given plain meaning; ambiguities construed against insurer)