Federal Court refuses to remand Kentucky Uninsured Motorist insurance case

by Mandy Hicks

In Helton v. Lelion, a couple sued a driver who was operating a vehicle in which a tire became loose and hit their vehicle. The couple initially filed a negligence lawsuit in Wolfe County Circuit Court against the driver who lost her tire. The allegedly negligent motorist with the loose tire apparently did not carry liability insurance when the accident occurred. Because of this, the injured driver also demanded the full policy limits of her uninsured motorist coverage from her own auto insurer, as well as attorneys’ fees and interest.

The defendants removed the uninsured motorist case to the U.S. District Court for the Eastern District of Kentucky in Lexington based on diversity of citizenship. Under 28 U.S.C. Section 1332(a), a federal court may exercise such jurisdiction when the amount in controversy exceeds $75,000 and the parties are citizens of different states. In response, the couple filed a motion to remand the case back to a Kentucky state court. Although the plaintiffs agreed that the parties were diverse, they claimed that federal jurisdiction was improper because the amount in controversy did not exceed the statutory minimum. The injured driver also signed a stipulation that the entirety of the damages she sought were less than $75,000.

First, the U.S. District Court for the Eastern District of Kentucky stated a lawsuit may only be removed in situations where the case could have originally been filed in a federal court. The court added that the burden of demonstrating removal to federal court is proper rests with the party seeking transfer. Next, the federal court said whether the case meets or exceeds the amount in controversy required to establish diversity jurisdiction must be assessed when the case is filed. The federal court also stated that, although Kentucky law allows a plaintiff to recover damages in excess of those requested in a complaint, it does not allow a plaintiff to request a specific sum in his or her pleadings.

The federal court handling the uninsured motorist case then addressed the defendants’ claim that the allegations included in the injured motorist’s complaint met the minimum requirement. In order to determine whether this was in fact the case, the court examined a settlement offer the injured driver sent to her auto insurer. In the letter, she asked the company to pay her the total uninsured motorist policy limits of $150,000. According to the court, a settlement offer letter may be used to estimate the amount in controversy. The court also noted that the injured woman sought additional damages, such as legal fees and interest, in her complaint.

The court then addressed the injured driver’s post-removal stipulation that she would not seek damages over $75,000. After examining the relevant case law, the federal court said post-removal stipulations used to clarify the amount of damages sought do not require remand unless they are “unequivocal.” The U.S. District Court for the Eastern District of Kentucky found that the language used in the hurt driver’s stipulation was not unequivocal, nor was it sufficient to warrant remand back to Wolfe County Circuit Court. Since the auto insurer offered sufficient evidence to suggest the amount in controversy exceeded $75,000, the U.S. District Court for the Eastern District of Kentucky denied the injured woman’s motion to remand the case.

The procedural and other rules that must be followed often vary between state and federal courts. If you sustained a serious injury in a Kentucky motor vehicle accident, you should discuss your rights with a personal injury lawyer as soon as you can. Call English, Lucas, Priest & Owsley, LLP at (270) 781-6500 today or contact our knowledgeable attorneys through our website.

Additional Resources:

Helton v. Lelion, Dist. Court, ED Kentucky 2014

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