Navia v. State Farm Fire and Casualty Company

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:25-cv-00302-MR-WCM
JUAN CARLOS NAVIA, )
)
Plaintiff, )
) MEMORANDUM OF
vs. ) DECISION AND ORDER
)
STATE FARM FIRE AND CASUALTY )
COMPANY, )
)
Defendant. )
_______________________________ )
THIS MATTER is before the Court on the Plaintiff’s Motion to Remand
[Doc. 28].
I. BACKGROUND
On July 30, 2025, the Plaintiff filed a Complaint in the Superior Court
of Yancey County, North Carolina, asserting claims for breach of contract,
bad faith, and unfair claim settlement practices against the Defendant
regarding the Defendant’s denial of insurance coverage for damage to the
Plaintiff’s property allegedly caused by Hurricane Helene. [Doc. 1-1]. On
September 5, 2025, the Defendant timely filed Notice of Removal to this
Court. [Doc. 1]. On May 20, 2026, the Court granted the Defendant’s motion
for partial judgment on the pleadings and dismissed the Plaintiff’s bad faith
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 1 of 10

2
and unfair claim settlement practices claims. [Doc. 26]. On June 8, 2026,
the Plaintiff filed the instant Motion to Remand, which has been fully briefed.
[Docs. 28-30]. The Plaintiff’s motion is therefore ripe for disposition.
II. STANDARD OF REVIEW
A defendant may remove a civil action from a state court if the action
is one “of which the district courts of the United States have original
jurisdiction.” 28 U.S.C. § 1441(a). “If removal of a civil action is sought on
the basis of the jurisdiction conferred by section 1332(a), the sum demanded
in good faith in the initial pleading shall be deemed to be the amount in
controversy.” Id. § 1446(c)(2). However, “the notice of removal may assert
the amount in controversy if the initial pleading seeks . . . a money judgment,
but the State practice either does not permit demand for a specific sum or
permits recovery of damages in excess of the amount demanded.” Id.
§ 1446(c)(2)(A). When a Defendant relies on an alleged amount in
controversy in a notice of removal, rather than on the sum demanded in the
initial pleading, removal is proper only “if the district court finds, by the
preponderance of the evidence, that the amount in controversy exceeds the
amount specified in section 1332(a).” Id. § 1446(c)(2)(B).
The party seeking removal has the burden of “establishing federal
jurisdiction.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 2 of 10

3
(4th Cir. 1994). “[A] defendant's notice of removal need 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). “If the plaintiff contests the defendant’s allegation . . . both sides
submit proof and the court decides, by a preponderance of the evidence,
whether the amount-in-controversy requirement has been satisfied.” Id. at
88.
III. DISCUSSION
Federal courts have original jurisdiction over all civil actions between
diverse parties when the amount in controversy “exceeds the sum or value
of $75,000.” 28 U.S.C. § 1332(a). “In most cases, the ‘sum claimed by the
plaintiff controls’ the amount in controversy determination.” JTH Tax, Inc. v.
Frashier, 624 F.3d 635, 638 (4th Cir. 2010) (quoting St. Paul Mercury Indem.
Co. v. Red Cab Co., 303 U.S. 283, 288 (1938)). “The black letter rule ‘has
long been to decide what the amount in controversy is from the complaint
itself, unless it appears or is in some way shown that the amount stated in
the complaint is not claimed in “good faith.”’” Choice Hotels Int'l, Inc. v. Shiv
Hosp., L.L.C., 491 F.3d 171, 176 (4th Cir. 2007) (quoting Horton v. Liberty
Mut. Ins. Co., 367 U.S. 348, 353 (1961)). Therefore, when the parties are
completely diverse and the plaintiff alleges damages in excess of $75,000,
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 3 of 10

4
courts may find subject matter jurisdiction lacking “only if ‘it is apparent, to a
legal certainty, that the plaintiff cannot recover the amount claimed.’” JTH
Tax, Inc., 624 F.3d. at 638 (quoting St. Paul Mercury Indem. Co., 303 U.S.
at 289) (emphasis in original).
When a plaintiff asserts a claim under the North Carolina Unfair and
Deceptive Trade Practices Act (“UDTPA”), treble damages are included in
the sum claimed by the plaintiff for the purpose of determining the amount in
controversy because such damages will be “awarded automatically” if the
claim is successful. Withers v. BMW of N. Am., LLC, 560 F. Supp. 3d 1010,
1017 (W.D.N.C. 2021); see also Gordon v. Nat'l Bus. Consultants, Inc., 856
F.2d 186 (4th Cir. 1988) (unpublished table decision) (concluding that the
amount in controversy was met “because of North Carolina's treble damages
provision” for UDPTA claims).
However, “if some event subsequent to the complaint reduces the
amount in controversy, such as the dismissal of one count based on the
defendant’s answer, the court must then decide in its discretion whether to
retain jurisdiction over the remainder of the case.” Shanaghan v. Cahill, 58
F.3d 106, 112 (4th Cir. 1995). In doing so, “courts should weigh convenience
and fairness to both parties, as well as the interests of judicial economy,”
such as “the time and energy that has already been expended” and “whether
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 4 of 10

5
it might be more efficient to simply retain jurisdiction.” Id. The Fourth Circuit
“leave[s] it to the sound judgment of the district court to decide whether to
exercise jurisdiction over residual liquidated claims under [$75,000], so long
as it was not a legal certainty from the outset” that the plaintiff’s claims could
not exceed the $75,000 threshold. Id. at 112-13; see also Wall v. Fruehauf
Trailer Servs., Inc., 123 F. App'x 572, 577 (4th Cir. 2005) (concluding that
“the District Court had the discretion to retain any residual claims” that were
“made in good faith” even if they did not “satisfy the jurisdictional requirement
of 28 U.S.C.A. § 1332(a)” after the dismissal of one of the plaintiff’s claims).
Here, the Plaintiff contends that the Defendant failed to establish the
amount in controversy requisite for subject matter jurisdiction under
§ 1332(a) at the time of removal and that the Court’s dismissal of the
Plaintiff’s bad faith and unfair claim settlement practices claims “exacerbates
the jurisdictional defect.” [Doc. 28-1 at 13]. The questions before the Court
are therefore whether subject matter jurisdiction existed at the time of
removal and, if so, whether the Court should continue to exercise jurisdiction
over the Plaintiff’s remaining breach of contract claim.
The Defendant’s Notice of Removal alleges that “upon information and
belief, the amount in controversy, exclusive of interest and costs, exceeds
$75,000.” [Doc. 1 at 2]. The Plaintiff’s Complaint, which the Defendant
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 5 of 10

6
attached to the Notice of Removal, asserts a breach of contract claim
causing damages “in excess of $25,000.00,” a bad faith claim causing
damages “in excess of $25,000.00” and seeking punitive damages, and an
unfair settlement practices claim causing damages “in excess of $25,000”
and entitling the Plaintiff “to treble his contract and compensatory damages.”
[Doc. 1-1 at ¶¶ 38, 44-45, 53-54]. It is undisputed that the parties are
completely diverse. [Doc. 28-1 at 2; Doc. 29 at 5 n.1].
The Plaintiff contends that the Defendant failed to establish jurisdiction
at the time of removal because the Defendant failed to offer evidence
sufficient for the Court to find, on a preponderance of the evidence, that the
amount in controversy exceeds $75,000. [Doc. 28-1 at 7-12]. The Plaintiff’s
argument, however, misstates the Defendant’s burden. The Defendant only
needs to submit evidence establishing the amount in controversy if the
Plaintiff contests an amount in controversy alleged by the Defendant that
differs from the sum claimed by the Plaintiff. The Defendant has not done
so here. Instead, the Defendant appears to rely on the allegations in the
Plaintiff’s Complaint, which unambiguously demand a sum in excess of the
jurisdictional threshold. The Plaintiff’s breach of contract claim seeks
damages in excess of $25,000, and the Plaintiff’s UDTPA claim seeks to
treble those damages, thus yielding a sum in excess of $75,000. Moreover,
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 6 of 10

7
even if the Defendant were required to provide evidence establishing the
amount in controversy, the Defendant previously submitted a copy of the
Plaintiff’s estimate of the relevant property damages, which showed total
estimated damages of $64,635.13. [Doc. 6-6 at 16]. Such damages, when
trebled, easily clear the $75,000 threshold imposed by § 1332(a). Therefore,
although the Defendant was entitled to rely on the Plaintiff’s damages
allegations to establish the amount in controversy, the Defendant has also
provided sufficient evidence to establish the amount in controversy.1
Accordingly, the Court concludes that subject matter jurisdiction existed at
the time of removal.
As to whether the Court may continue to exercise jurisdiction over the
Plaintiff’s remaining breach of contract claim, the Plaintiff acknowledges that
the Court’s dismissal of the Plaintiff’s bad faith and unfair settlement
practices claims “does not automatically defeat jurisdiction if jurisdiction
1 The Plaintiff also contends that the Defendant’s denial of the Plaintiff’s insurance claim
on grounds that the Plaintiff’s property damages did not exceed the Plaintiff’s $3,114
deductible is evidence that the amount in controversy falls below the $75,000 threshold.
[Doc. 28-1 at 9; Doc. 30 at 3]. That argument, however, reveals another
misunderstanding of the Defendant’s burden. To the extent that the Defendant needs to
provide evidence establishing the amount in controversy, such evidence needs only to
establish the existence of contested facts that, if resolved in favor of the Plaintiff, could
entitle the Plaintiff to recover in excess of $75,000. The Defendant has done so here by
submitting the Plaintiff’s estimate of his property damages. That the Defendant disagrees
with the Plaintiff’s estimate on the merits is to be expected, and such disagreement is not
a barrier to jurisdiction.
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 7 of 10

8
existed when the case was removed.” [Id. at 12]. Instead, the Plaintiff
contends that “the district court has discretion to retain or decline jurisdiction”
over the breach of contract claim and that the Shanaghan factors guiding the
Court’s discretion “favor remand.” [Doc. 30 at 4-7]. Specifically, the Plaintiff
contends that “the remaining claim is narrow, fact-driven, and governed
entirely by North Carolina law,” and that Yancey County Superior Court has
a “stronger connection to the property, the loss, and the forum Plaintiff
selected.” [Doc. 30 at 5-6].
Regarding Shanaghan’s judicial economy factor, the Court notes that
the Plaintiff, despite principally contesting whether the amount-in-
controversy was established at the time of removal, did not contest federal
jurisdiction for nine months after this case was initially removed. During that
time, the Court has reviewed and ruled on several motions, including a
motion for judgment on the pleadings that disposed of all but the remaining
breach of contract claim in this case. The dispositive motions deadline in
this matter has already passed, and trial is set to begin in under four months,
having been set for November 9, 2026 trial term. The time and energy
heretofore expended by the parties and the Court, and the efficiency of
retaining jurisdiction, therefore weigh heavily in favor of retention.
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 8 of 10

9
The remaining Shanaghan factors do not support a different
conclusion. The Court recognizes that the remaining breach of contract
claim is a state-law claim implicating a North Carolina property, and that the
Plaintiff initially selected a state-court forum. See [Doc. 30 at 6]. State-law
breach of contract claims, however, are common in federal courts, and it will
always be the case that a Plaintiff seeking remand after removal initially
selected a different forum. The Plaintiff has not identified any distinctive
basis meriting remand of this case. For example, while the Plaintiff contends
that the Defendant “identifies no concrete inconvenience that would result
from remand,” [Doc. 30 at 6], neither has the Plaintiff identified a concrete
inconvenience that would result from the denial of remand. Accordingly, the
Court concludes that retaining jurisdiction would not be inconvenient or unfair
to the parties, and that judicial economy weighs strongly in favor such
retention. The Plaintiff’s motion to remand will therefore be denied.
V. CONCLUSION
Subject matter jurisdiction over this case was proper at the time of
removal because the parties are completely diverse and the Plaintiff’s
Complaint alleged an amount in controversy in excess of $75,000. The
Court, in its discretion and in accordance with the Shanaghan factors, will
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 9 of 10

10
continue to exercise jurisdiction over the Plaintiff’s remaining breach of
contract claim. The Plaintiff’s motion to remand will therefore be denied.
O R D E R
IT IS, THEREFORE, ORDERED that the Plaintiff’s Motion to Remand
[Doc. 28] is DENIED.
IT IS SO ORDERED.
Signed: July 11, 2026
Case 1:25-cv-00302-MR-WCM Document 31 Filed 07/13/26 Page 10 of 10