Wheeler v. Allstate Floridian Indemnity Co., No.: 3:05cv208 (N.D. Fla. April 26, 2006).
Given the high incidence of shark attacks along the Florida Panhandle last summer, Allstate may want to be careful splashing around in the warm waters of the Gulf, given its recent skinned knee — a loss on a remand motion in Florida federal court. The last place the insurance company may want to try this dispute — is it required to pay the full value of a homeowner’s insurance policy when the home has been totally destroyed? — is in a state court before a jury of potentially hostile Floridians. If that wasn’t troublesome enough, according to a Florida statute referred to as the “Value Policy Law,” an insurance company is required to pay the face value of the policy to an insured who has suffered a total loss of any building. Not surprisingly, Allstate attempted to remove the class action to the Northern District of Florida to escape this potential feeding frenzy, but was unable to establish by a preponderance of the evidence that CAFA’s $5 million amount in controversy was satisfied.
District Judge M. Casey Rodgers began by assigning the burden of establishing the amount in controversy to Allstate since the plaintiffs had not claimed a certain amount of damages in their complaint. (Editor’s Note: In assigning the burden of proof to Allstate, Judge Rodgers simply followed the burden of proof precedent applicable to the dispute before CAFA was enacted, and did not conduct an analysis of whether, or in what way, CAFA altered the traditional burden of proof equation. For the analysis of CAFA Law Blog editors Anthony Rollo, Hunter Twiford and John Rouse, see the recent law review article posted on the CAFA Law Blog entitled “CAFA’s New ‘Minimal Diversity’ Standard For Interstate Class Actions Creates A Presumption That Jurisdiction Exists, With The Burden Of Proof Assigned To The Party Opposing Jurisdiction.”). Allstate attempted to satisfy this burden by arguing that the amount of a representative individual claim of total property loss, approximately $93,000 or $46,000, depending on the policy, when considered with the number of claims filed with Allstate by policy holders claiming total property loss, totaled in the aggregate well over $5 million. Allstate offered evidence in the form of an affidavit from an Allstate insurance adjuster that over one hundred Allstate insureds claimed total losses on their policies as a result of Hurricane Ivan’s winds. Allstate also pointed the court to other individual claims filed by the attorneys acting as class counsel, alleging individual damages well over $50,000.
Judge Rodgers was, however, not overly impressed. In concluding Allstate failed to satisfy its burden, he averred that Allstate’s reliance on the complaint’s sketchy damage references, and its own estimations and comparisons was too speculative for his court to find section 1332(d) was satisfied. Judge Rodgers was not persuaded by Allstate’s comparisons to the individual cases, stating that the argument “added little more than uncertainty as to the value of the claims in this case.” Although Judge Rodgers recognized in a footnote that the aggregated claims may well exceed $5 million, he declared “this finding cannot be made on the record before the court applying a preponderance of the evidence standard of proof.” Allstate has been shipped back to Escambia County Circuit Court, and along the beaches of Pensacola, the sharks are circling.