Helton v. USAA General Indemnity Company et al

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Robert Helton,
Plaintiff,
v.
USAA General Indemnity Company, et al.,
Defendants.
No. CV-25-03822-PHX-KML
ORDER
Defendant USAA General Indemnity Company removed this case from state court
based on diversity jurisdiction. Plaintiff Robert Helton seeks remand, arguing USAA failed
to establish more than $75,000 is in controversy. Before filing his suit Helton indicated his
total damages approached $200,000, not including punitive damages and attorneys’ fees.
The motion to remand is denied.
I. Factual and Procedural Background
In October 2023, Helton was riding his bicycle when he was hit by a car. (Doc. 1-2
at 10.) The driver of that car was insured by non-party State Farm. Based on Helton’s
injuries, State Farm paid Helton the applicable policy limit of $100,000. That amount did
not “adequately compensate [Helton] for his injuries, medical expenses, lost earnings and
general damages.” (Doc. 1-2 at 10.) Helton therefore made a claim for underinsured
motorist benefits under his own policy with USAA. (Doc. 1-2 at 11.) Helton’s underinsured
policy limits were “$100,000/$300,000.” (Doc. 1-2 at 9.) USAA offered Helton $25,000
despite knowing the “contractual benefit it owed [Helton] under his policy [was] more than
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$25,000.” (Doc. 1-2 at 11.) Confusingly, Helton alleges USAA “was willing to pay the full
contractual benefit” which was more than $25,000, but USAA “failed to offer and/or
disclose said amount.” (Doc. 1-2 at 11.)
In September 2025, Helton filed suit against USAA in Maricopa County Superior
Court. Helton requested his suit be classified as “Tier 2.” See Rieke v. ManhattanLife
Assurance Co. of Am., No. CV-20-00724-PHX-GMS, 2020 WL 3056123, at *1 (D. Ariz.
June 9, 2020) (explaining “tier system” in state court). A Tier 2 suit is one of “intermediate
complexity.” Ariz. R. Civ. P. 26.2(b)(2). The tier assignment can be “based on the damages
claimed in the action,” with Tier 2 encompassing those actions “claiming more than
$50,000 and less than $300,000 in damages,” not including “claims for punitive damages,
interest, attorney’s fees . . . and costs.” Ariz. R. Civ. P. 26.2(c)(3), (e). But the basis for tier
assignment is the expected complexity of the case, such as the amount of evidence and
witnesses that will be required, not simply the amount of damages at issue. Ariz. R. Civ.
P. 26.2(b).
Helton’s complaint contains three claims: “declaration of rights”; breach of
contract; and bad faith. (Doc. 1-2 at 11-12.) In terms of relief related to the “declaration of
rights,” the complaint requests a “declaration of the full benefit of the contract.” (Doc. 1-2
at 13.) USAA reads that language to mean Helton’s complaint is seeking the $100,000
policy limit. (Doc. 11 at 4.) Helton claims that language merely indicates he is seeking all
the benefits under the contract that he is entitled to recover, which may or may not be the
policy limit. (Doc. 12 at 2.) Whichever reading is correct, the complaint seeks an
unspecified amount in compensatory damages, punitive damages, and attorneys’ fees.
Based on the Tier 2 designation, the possible compensatory and punitive damages,
as well as the award of attorneys’ fees, USAA concluded more than $75,000 was in
controversy and removed the case to federal court. There is no dispute the parties are
completely diverse, but Helton argues the case must be remanded because USAA has not
established more than $75,000 is in controversy. Given his own pre-suit communications
that he does not disavow, this position has no factual or legal basis.
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II. Analysis
To remove the case from state court, USAA’s notice of removal was required to
“include only a plausible allegation that the amount in controversy exceeds the
jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81,
89 (2014). Now that Helton has disputed the amount in controversy, both parties must
“submit proof” for the court to decide “by a preponderance of the evidence, whether the
amount-in-controversy requirement has been satisfied.” Id. at 88. The relevant “proof” may
include “the reality of what is at stake in the litigation, using reasonable assumptions
underlying the defendant’s theory of damages exposure.” Ibarra v. Manheim Invs., Inc.,
775 F.3d 1193, 1198 (9th Cir. 2015). And “when a statute or contract provides for the
recovery of attorneys’ fees, prospective attorneys’ fees must be included in the assessment
of the amount in controversy.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 (9th
Cir. 2019).
To meet its burden, USAA points to the amount of compensatory damages Helton
demanded before filing suit, the demand in the complaint that can be read as seeking the
$100,000 policy limit, the value of punitive damages, and the value of past and future
attorneys’ fees. Helton’s pre-suit communications outlined compensatory damages that far
exceed $75,000, meaning those compensatory damages alone are sufficient to establish
more than $75,000 is in controversy. The possibility of punitive damages and an award of
attorneys’ fees only provide additional evidence the amount in controversy requirement is
met.
In April 2025, Helton’s counsel sent a demand letter to USAA claiming the accident
resulted in Helton incurring $39,558.42 in medical expenses. (Doc. 11-1 at 6.) The accident
had also caused Helton to miss 36 weeks of work and, when he was able to return to work,
Helton had to take a different position that paid less. Before the accident Helton earned an
average of $3,410 per week, meaning the 36 weeks of lost earnings equaled $102,672.
When he returned to work in May 2024 at a different position, Helton was paid $800/week
less than before the accident. Assuming Helton returned to work on May 1, 2024, there are
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70 weeks between that date and September 3, 2025, the date Helton filed this suit.
Assuming a loss of $800 per week, that is $56,000 in additional lost earnings. Thus, based
on Helton’s own calculations and demands, he experienced at least $198,230.42
($39,558.42 + $102,672 + $56,000) in compensatory damages before he filed suit. Even
accounting for the $100,000 paid by State Farm, there is significantly more than $75,000
in controversy.
Helton does not argue his pre-suit communications were “inflated and not an honest
assessment of damages.” Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002). Nor
has Helton made any “attempt to disavow his [communications] or offer contrary
evidence” calling the amount of his compensatory damages into question. Without Helton
disputing his own estimate of damages, that estimate is sufficient to establish the amount
in controversy. Id. Accordingly, there is no need to assess in detail the possible values of
the punitive damages or attorneys’ fees Helton seeks to recover, but both would add to the
already-sufficient amount in controversy. Cf. Greene v. Harley-Davidson, Inc., 965 F.3d
767, 772 (9th Cir. 2020) (punitive damages can be included “if it is reasonably possible
that [defendant] may be liable for the proffered punitive damages amount”); Fritsch v. Swift
Transportation Co. of Arizona, LLC, 899 F.3d 785, 794 (9th Cir. 2018) (when attorneys’
fees are recoverable by statute the court “must include future attorneys’ fees . . . when
assessing whether the amount-in-controversy requirement is met.”). Helton’s only
argument on attorneys’ fees is that they are too speculative, but the Ninth Circuit has
explicitly rejected that concern. Fritsch, 899 F.3d at 796. A small amount of attorneys’
fees, such as $10,000, is overwhelmingly likely should Helton prevail. That amount only
adds to an amount in controversy that easily exceeds $75,000.
/
/
/
/
/
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Accordingly,
IT IS ORDERED the Motion to Remand (Doc.8) is DENIED.
IT IS FURTHER ORDERED the Stipulation to Stay (Doc. 13) is DENIED AS
MOOT. The parties shall file their Rule 26(f) Joint Case Management as required by Doc.
7 within ten days of this order.
Dated this 17th day of December, 2025.
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