The opinion of the court was delivered by: J. Phil Gilbert, District Judge
This matter comes before the Court on plaintiff Nancy Stachewicz's motion to remand this case to the Circuit Court for the Third Judicial Circuit, Madison County, Illinois (Doc. 12). Defendant National Union Fire Insurance Company of Pittsburg, PA, ("National Union") has responded to the motion (Doc. 18), and Stachewicz has replied to that response (Doc. 20).
This matter stems from a disability insurance policy National Union first issued to Stachewicz on a complimentary trial basis in May 2004 and then in exchange for premium payments beginning in July 2004. Before enrolling Stachewicz in the complimentary trial coverage, National Union explained the policy to her via a telemarketer. During the trial period, National Union provided Stachewicz with written promotional materials describing the insurance coverage to entice her to become a paying customer. The written materials contained inconsistent descriptions of the coverage; one explanation represented that the coverage would be effective if any one of three events occurred (the "Citi Window description"), and the other explanation represented that the coverage would be effective only if all three of the events occurred. The policy document itself expressed the latter definition. Nevertheless, Stachewicz enrolled and paid her $21.90 premium every month without incident.
On May 9, 2008, Stachewicz experienced at least one but not all three of the coverage triggering events and requested benefits under her disability insurance policy. National Union denied her claim, and she filed suit in Madison County, Illinois, on May 8, 2009. In Count I she seeks a declaratory judgment that National Union has a duty to pay her benefits under the policy. Count II is a breach of contract claim. In Count III Stachewicz claims National Union denied her benefits in bad faith in violation of the Illinois Insurance Code, 215 ILCS 5/155(1). She brings Count IV under the Illinois Consumer Fraud and Deceptive Practices Act ("Consumer Fraud Act"), 815 ILCS 505/1 et seq. In addition to declaratory relief, Stachewicz seeks attorney's fees under the Insurance Code and under the Consumer Fraud Act as well as punitive damages under the Consumer Fraud Act.
Recognizing that the parties are completely diverse and believing more than $75,000 is in issue, National Union removed the case to federal court on June 22, 2009. In the pending motion, Stachewicz asks the Court to remand the case because less than $75,000 was in issue on the day the case was removed. National Union disagrees and urges the Court to retain the case in this forum.
A defendant may remove to federal court a case filed in state court if there is original federal jurisdiction over the case. 28 U.S.C. § 1441(a); Schur v. L.A. Weight Loss, No. 07-3761, 2009 WL 2477642, * 3 (7th Cir. Aug. 17, 2009); Chase v. Shop 'N Save Warehouse Foods, 110 F.3d 424, 427 (7th Cir. 1997). The party seeking the federal forum has the burden of establishing federal jurisdiction by a preponderance of the evidence. See McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 541 (7th Cir. 2006); Rising-Moore v. Red Roof Inns, Inc., 435 F.3d 813, 815 (7th Cir. 2006); Chase, 110 F.3d at 427. The Court should interpret the removal statute narrowly and resolve doubt in favor of remand. Schur, 2009 WL 2477642 at * 3.
In its § 1441 notice of removal National Union asserts that the Court has original diversity question jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a), which requires that the amount in controversy exceed $75,000 exclusive of interest and costs. Thus, National Union, as the party seeking to invoke federal jurisdiction, bears the burden of demonstrating that the amount in controversy requirement is satisfied. After the Court decides any contested facts relevant to the amount in controversy, "the case stays in federal court unless it is legally certain that the controversy is worth less than the jurisdictional minimum." Meridian, 441 F.3d at 542; see St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938) ("[T]he sum claimed by [the proponent of federal jurisdiction] controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal." (footnote omitted)). In removal cases based on diversity jurisdiction, the amount in controversy is determined based on the plaintiff's complaint at the time the notice of removal is filed. Meridian, 441 F.3d at 538; BEM I, LLC v. Anthropologie, Inc., 301 F.3d 548, 552 (7th Cir. 2002). Thus, in this case, National Union must establish by a preponderance of the evidence facts showing that more than $75,000 was in issue at the time it filed its notice of removal on June 22, 2009. National Union relies on three factors to make such a showing: (1) the face value of the disability insurance policy, (2) statutory damages under the Insurance Code and (3) punitive damages under the Consumer Fraud Act.
A. Insurance Benefits in Issue
In a case seeking payments under a disability insurance policy where the dispute is over whether the plaintiff qualifies for the benefits, only amounts allegedly past due can be considered "in controversy." Thus, future payments under a disability insurance policy cannot be used to determine the amount in controversy for federal jurisdiction purposes where the plaintiff seeks only payment of certain benefits. Keck v. Fidelity & Cas. Co., 359 F.2d 840, 841 (7th Cir. 1966); see 16 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 229:53 (3d ed. 2000). "Future benefits payable under a contract of insurance may be used to compute the sum in controversy for jurisdictional purposes only when the validity of the insurance policy itself, and not merely the presence or absence of conditions measuring the insurer's liability thereunder, is the matter in dispute." Keck, 359 F.2d at 841.
The parties agree that on June 22, 2009, under Stachewicz's view of the policy, $32,000 was past due, but that Stachewicz has since waived her right to $10,000 of that amount. Relying on Keck, Stachewicz argues that only $22,000 was in issue because she is not challenging the validity of the policy, only whether she met the conditions for benefits under the policy. National Union, on the other hand, argues that the entire face value of the policy -- $1.2 million -- was in issue because Stachewicz challenges whether the Citi Window description is part of the policy and thus challenges the validity of the policy. It relies on Hawkins v. Aid Association for Lutherans, 338 F.3d 801, 805 (7th Cir. 2003). In Hawkins, an insurer sought to enforce a group of its insureds (life insurance) to arbitrate their fraud claims against it. Id. at 804-05. The insureds argued the arbitration clause in their policy terms was invalid. Id. at 804-05. Without extended discussion, the Court of Appeals found that the attempt to nullify the arbitration provision and to enjoin cancellation of the policies presented a challenge to the validity of the policies. Id. at 805.
Hawkins does not control this case. Unlike the insureds in Hawkins, Stachewicz does not seek to invalidate any part of the policy. Instead, she asks that her policy be construed to include the Citi Window description. See Dobosz v. State Farm Fire & Cas. Co., 458 N.E.2d 611, 613-14 (Ill. App. Ct. 1983) (acknowledging that an advertising brochure may be treated as part of the insurance contract in certain situations). Then the policy would contain inconsistent descriptions of the coverage, which she believes would create an ambiguity that must be interpreted in her favor, that is, the favorable Citi Window description would apply and she would qualify for benefits. The core issues in this case are the construction of the policy in light of its promotional materials and whether Stachewicz is entitled to benefits under the appropriate construction of the policy. Whether the policy, or any part of it, is valid is simply not an issue; what the policy says is.
Nevertheless, $22,000 is not the proper amount of past due benefits in controversy. While Stachewicz purports to disclaim in her complaint $10,000 of the $32,000 in past due benefits as of June 22, 2009, her disclaimer is insufficient to lower the amount in controversy. Stachewicz's effors are similar to those made by the plaintiff in Oshana v. Coca-Cola Co., 472 F.3d 506 (7th Cir. 2006), cert. denied, 551 U.S. 1115 (2007). There, the plaintiff attempted to limit the amount in controversy by explicitly stating in her complaint that the amount she was seeking was lower than the federal jurisdictional threshold for diversity cases. Id. at 511. The Court of Appeals noted that plaintiffs often use such disclaimers to avoid federal court, but that such disclaimers are only effective if they are binding. Id. The Oshana plaintiff's complaint was not binding because pleadings in Illinois courts do not bind the parties and do not therefore limit ...