Monday, March 26, 2018

Western District Federal Court Remands Bad Faith Claim to State Court


In the case of Sciulli v. GEICO, No. 16-1907 (W.D. Pa. Feb. 26, 2018 Flowers Conti, C.J.), the court remanded a case back to State Court under the below circumstances.

According to the Opinion, the carrier had removed the case to Federal Court based upon 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 applied 28 U.S.C. § 1447(c), which provides that “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.

Anyone wishing to review this decision may click this LINK.

I send thanks to Attorney Lee Applebaum of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog for bringing this case to my attention.  Click HERE to visit that Blog (Highly Recommended!).

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