MARCH 2018 BAD FAITH CASES: COURT REMANDS CASE WHERE BAD FAITH CLAIM DROPPED AFTER REMOVAL, AND SUM AT ISSUE FALLS BELOW $75,000 (Western District)
The carrier removed the case based on diversity jurisdiction. At the time of removal, there was diversity and “there was a good faith belief that the amount in controversy exceeded $75,000 because [the insured] could recover punitive damages under the Pennsylvania Bad Faith statute.” However, the insured later “agreed to voluntarily dismiss the insurance bad faith claim leaving only an $18,000 breach of contract claim.
The court looked to 28 U.S.C. § 1447(c): “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” Applying section 1447(c), the court found the case no longer involved a dispute in excess of $75,000, and the insurer agreed that remand was proper.
