"PLAINTIFFS DEMANDED TOO MUCH FOR REMAND”—SAN ANTONIO FEDERAL COURT

The United States District Court for the Western District of Texas (in San Antonio) retained jurisdiction over a lawsuit despite the plaintiffs claiming they were not seeking sufficient damages to warrant federal court jurisdiction.  In a currently-ongoing case, Sliepcevic v. American Family Connect Property and Casualty Insurance Company, Inc., 2023 WL 4351504 (W.D. Tex.), Mark and Linda Sliepcevic experienced an accidental discharge of water that allegedly caused damages to their home.  They filed a claim with American Family Connect, which referred them to seek repairs from ServPro.  ServPro began working on the Sliepcevics’ home, then American Family Connect denied their coverage.  The Sliepcevics sued American Family Connect in state court in Kendall County, Texas, and American Family Connect removed the case to federal court on the basis of diversity jurisdiction.  The parties conceded that they were diverse; however, in an interesting turn of events, the Sliepcevics sought a remand, claiming that their lawsuit sought less than $75,000 and therefore did not meet diversity jurisdiction’s amount-in-controversy requirements. 

The Federal San Antonio Court disagreed, noting that (1) ServPro quoted the Sliepcevics’ repairs to cost over $50,000 in remediation and reconstruction, (2) the Sliepcevics filed a Deceptive Trade Practices Act cause of action that could entitle them to treble damages ($150,000 in this case), and perhaps most importantly (3) in a pre-suit demand letter, the Sliepcevics demanded $188,000 + attorney’s fees. The parties disputed whether the Court was permitted to consider the pre-suit demand or whether its consideration was barred by Rule 408 of the Federal Rules of Evidence. The Western District followed other Districts’ examples and stated that “settlement offers are compelling evidence of the minimum amount in controversy.”  (citing Ham v. Bd. of Pensions of Presbyterian Church (U.S.A.), No. Civ. 3:04-CV-2692-P, 2005 WL 6271207, at *3 (N.D. Tex. Mar. 8, 2005) (emphasis added by San Antonio Court).  Thus the Court denied the Sliepcevics’ motion to remand.