Pre-Suit Documents Do Not Trigger Thirty Day Removal Deadline In § 1446(b)

In Village Square Condominium of Orlando, Inc. v. Nationwide Mutual Fire Insurance Co. (09-cv-1711-Orl), Middle District of Florida Judge Gregory Presnell addressed an interesting issue relating to removal of a plaintiff's complaint to federal court.

After allegedly sustaining damages during Hurricane Charley, the condominium association filed a lawsuit in state court.  "Although the Complaint revealed that the parties were diverse, Plaintiff did not demand a specific amount of damages. Instead, Plaintiff simply alleged that the state court’s jurisdictional minimum of $15,000 had been met (Doc. 2, ¶ 1). Soon after it made its initial appearance, Defendant served Plaintiff with a limited set of interrogatories focused specifically on the amount of Plaintiff’s damages (Doc. 1-5 at 22). Plaintiff responded on September 14, 2009, swearing that its damages amounted to $881,384.83 (Doc. 1-5 at 25). On October 8, 2009, Defendant removed the case pursuant to 28 U.S.C. §§ 1332 and 1441(Doc. 1)."

The plaintiff filed a motion to remand and argued that the "Defendant first learned that the case was removable almost a year before the Complaint was even filed, i.e., on April 9, 2008 – the day that it received Plaintiff’s 'Sworn Statement in Proof of Loss'.”  The court disagreed because "the amount in controversy requirement is frequently a subjective and contentious statutory pre-requisite to diversity jurisdiction that must be assessed not at the time suit is commenced but at the time it is removed."

Even assuming that Defendant could determine which portion of the losses Plaintiff claims that it already paid, it is far from clear that Defendant knew, or should have known, that the amount of damages that Plaintiff claimed in the Complaint remained the same for an entire year.8 In other cases, defendants often must rely on demand letters, medical bills, affidavits from experts and carefully worded (if not deliberately evasive) responses to discovery requests – each of which may have a bearing on aplaintiff’s damages only at a particular point in time – in order to meet their burden of proving that the amount of controversy has been met at the time of removal. This evidence is often susceptible to multiple inferences. Unlike citizenship, then, determining what a defendant knew or could have “intelligently ascertained” about the amount in the controversy at a given point in time is inherently subjective and ambiguous.

With regard to whether a case should be remanded because the defendant had documents, the court stated:

The better approach, it seems, as the Fifth Circuit concluded in Chapman, is that Congress contemplated only those papers that are received by the defendant after receipt of the initial pleading – not pre-suit documents received prior to the initial pleading....Finally, the polices regarding removal counsel against adopting a rule that would impute knowledge of pre-suit documents to defendants. Congress has made clear its intent that defendants must be circumspect in deciding whether to remove a case.....On the other hand, a bright-line rule prohibiting the use of pre-suit documents “promotes certainty and judicial efficiency by not requiring courts to inquire into what a particular defendant may or may not subjectively know.”

Accordingly, the Court holds that pre-suit documents concerning the amount in controversy do not trigger the thirty-day clock in 28 U.S.C. § 1446(b). Plaintiff’s“Sworn Statement in Proof of Loss” was therefore of no moment and Defendant’s Notice of Removal was timely.

The court's decision can be found HERE.