Keystone Klub Keyser Oak, LLC v. Evanston Insurance Company et al

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
KEYSTONE KLUB KEYSER OAK, LLC,
Plaintiff,
v.
EVANSTON INSURANCE COMPANY
and ALBERT ABDA,
Defendants.
CIVIL ACTION NO. 3:25-CV-00505
(MEHALCHICK, J.)
MEMORANDUM
Presently before the Court is Plaintiff Keystone Klub Keyser Oak, LLC’s (“Keystone”)
motion to remand this action to the Court of Common Pleas of Lackawanna County,
Pennsylvania, pursuant to 28 U.S.C. § 1447(c). (Doc. 5). On February 7, 2025, Keystone
initiated this action by filing a complaint in the Court of Common Pleas of Lackawanna
County, Pennsylvania. (Doc. 1-2). On March 19, 2025, Defendant Evanston Insurance
Company (“Evanston”) removed this action to this Court pursuant to 28 U.S.C. § 1332(a).
(Doc. 1, ¶ 19). For the following reasons, Keystone’s motion to remand shall be DENIED.
I. BACKGROUND AND PROCEDURAL HISTORY
The following background is taken from the complaint, and for the purposes of the
instant motion, is taken as true. (Doc. 1-2, at 2-20). This case stems from Evanston’s denial
of insurance coverage for defense costs and liabilities arising from an underlying lawsuit
Keystone is defending. (Doc. 1-2, at 6). In April 2023, Evanston issued Commercial General
Liability Insurance Policy No. 3AA660378 (the “Policy”) to Keystone. (Doc. 1-2, at 6). The
Policy extended from April 6, 2023 to February 26, 2024 and provided that:
[Evanston], will pay those sums that the Insured becomes legally obligated to
pay as damages because of “bodily injury” or “property damage” to which this
insurance applies. We will have the right and duty to defend the Insured against
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any suit seeking those damages.
(Doc. 1-2, at 6).
No exclusion in the Policy applies to exclude coverage for the claim against the Insured
contained in the Complaint. (Doc. 1-2, at 4).
On November 7, 2024, Defendant Albert Abda (“Abda”) filed a complaint against
Keystone and Albert Christian Ceccoli (“Ceccoli”), alleging counts of assault and battery and
intentional infliction of emotional distress against Ceccoli and a count of negligence against
Keystone (the “Abda Matter”). (Doc. 1-2, at 25). The Abda Matter arose out of an incident
in which Ceccoli, an owner and operator of Keystone, initiated a physical altercation with
Abda, during which multiple improperly secured skill game machines fell on Abda causing
injuries. (Doc. 1-2, at 7). Upon receipt of the complaint, Keystone reported the Abda Matter
to Evanston. (Doc. 1-2, at 7). On January 17, 2025, Evanston notified Keystone that Evanston
disclaims coverage and will not provide a defense or indemnification for Keystone’s loss or
on behalf of Ceccoli. (Doc. 1-2, at 10).
On February 7, 2025, Keystone filed a complaint in the Court of Common Pleas of
Lackawanna County. (Doc. 1-2, at 2-20). Therein, Keystone alleges the following Counts:
Count I – Declaratory Relief for Defense against Keystone (Doc. 1-2, at 10-13); Count II –
Declaratory Relief for Indemnification against Keystone (Doc. 1-2, at 13-16); Count III – Bad
Faith against Keystone (Doc 1-2, at 16-18); and Count IV – Breach of Contract against
Keystone (Doc. 1-2, at 18-20).1
On March 19, 2025, Evanston removed the action this Court. (Doc. 1). On April 17,
1 Abda was named a nominal defendant in this coverage action as required by 42 Pa. C.S.
§ 7540. For the purposes of the motion to remand, Keystone does not dispute the citizenship
of Abda.
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2025, Keystone filed the instant motion to remand, along with a brief in support. (Doc. 5;
Doc. 6). On May 1, 2025 Evanston filed its brief in opposition to the instant motion (Doc. 7),
and on May 14, 2025, Keystone filed its reply brief. (Doc. 8). Accordingly, the motion to
remand has been fully briefed and is ripe for disposition.
II. LEGAL STANDARD FOR MOTION TO REMAND
The removal of cases from state courts to federal courts is governed by 28 U.S.C. §§
1441–1455. Under § 1441(a), a defendant may remove “any civil action brought in a state
court of which the district courts of the United States have original jurisdiction . . . to the
district court of the United States for the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441(a). Pursuant 28 U.S.C. 1441(c)(2), the Court may sever
and remand any “claim not within the original or supplemental jurisdiction of the district
court or a claim that has been made nonremovable by statute.”
Section 1446 of the removal statute further sets forth the procedures for removal,
explaining that a defendant seeking removal of an action must file a petition for removal with
the proper district court that contains “a short and plain statement of the grounds for removal,
together with a copy of all process, pleadings, and orders served upon such defendant or
defendants” in the state court action. 28 U.S.C. § 1446(a). After a case has been removed, a
plaintiff may move to remand the action back to state court under 28 U.S.C. § 1447(c) for
“(1) lack of district court subject matter jurisdiction or (2) a defect in the removal
procedure.” Ramos v. Quien, 631 F. Supp. 2d 601, 607 (E.D. Pa. Nov. 18, 2008) (quoting PAS
v. Travelers Ins. Co., 7 F.3d 349, 352 (3d Cir. 1993)). However, a “motion to remand the case
on the basis of any defect other than lack of subject matter jurisdiction must be made within
30 days after the filing of the notice of removal.” 28 U.S.C. § 1447(c).
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Because federal courts are courts of limited jurisdiction, both the Supreme Court of
the United States and the Third Circuit Court of Appeals have recognized that removal
statutes are to be strictly construed against removal with all doubts resolved in favor of
remand. See, e.g., Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Samuel–
Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004) (citing Boyer v. Snap-on Tools
Corp., 913 F.2d 108, 111 (3d Cir. 1990)).
III. DISCUSSION
Keystone moves to remand the instant matter to state court based on lack of subject
matter jurisdiction. (Doc. 5). Keystone argues that Evanston cannot establish that the amount
in controversy in this lawsuit exceeds $75,000. (Doc. 6, at 2). Keystone contends that it only
seeks defense costs and indemnification for one claim in the Abda Matter that will not exceed
$75,000. (Doc. 6, at 7-8). Keystone also contends that its claim for attorneys’ fees in its
complaint cannot be used to assume that the amount in controversy will exceed $75,000.
(Doc. 6, at 9). Further, Keystone avers that since the parties disagree on the amount in
controversy, the Court must determine by a preponderance of the evidence whether the
amount in controversy requirement has been satisfied. (Doc. 6, at 6-8).
Evanston argues that the amount in controversy is in excess of $75,000 because
Keystone seeks (1) a declaration as to coverage for defense and indemnification in an
underlying action for serious injuries, (2) a declaration as to coverage under a policy with a
$1,000,000 each occurrence limit, (3) recovery for bad faith denial of coverage, including
enhanced interest, punitive damages, and attorney’s fees and costs, and (4) recovery for
breach of contract in which Keystone asserts it sustained damages including the amount paid
and to be paid to resolve the Abda Matter, attorneys fees, litigation and support expenses,
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defense costs, and interest. (Doc. 7, at 1-2). Evanston also contends that because state law did
not limit the claimed amount to less than the federal jurisdiction amount when the action
commenced, remand is only appropriate when it appears to a legal certainty that the amount
cannot exceed $75,000. (Doc. 7, at 7).
Federal courts may only hear cases in which they have subject matter jurisdiction
based on federal question or diversity jurisdiction. 28 U.S.C. § 1441(a). A court has diversity
jurisdiction where the parties are citizens of different States and the amount in controversy
exceeds $75,000. 28 U.S.C. § 1332(a)(1). When removal of a civil action is based on diversity
jurisdiction, the “sum demanded in good faith in the initial pleading shall be deemed to be
the amount in controversy.” 28 U.S.C. § 1446(c)(2). If the complaint seeks nonmonetary relief
or money judgment but the state law does not permit demands for a specific sum or damages
in excess of the amount demanded, the amount in controversy can be asserted in the notice
of removal. 28 U.S.C. § 1446(c)(2)(A). In such a circumstance, the amount in controversy
asserted in the removal is proper if the amount exceeds $75,000 by preponderance of the
evidence. 28 U.S.C. § 1446(c)(2)(B).
Similarly, if the complaint is silent, ambiguous, or does not seek damages in a precise
monetary amount, the court may look to the notice of removal to determine the amount in
controversy. Hamm v. Allstate Prop. & Cas. Ins. Co., 908 F. Supp. 2d 656, 663 (E.D. Pa. 2012)
(citing Morgan v. Gay, 471 F.3d 469, 474 (3d Cir. 2006). In such circumstance, the amount in
controversy asserted in the removal should be accepted when not contested by the plaintiff or
questioned by the court. Dart v. Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 87-88
(2014). Only when a party’s assertion of the amount in controversy is challenged must “both
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sides submit proof and the court decides by the preponderance of the evidence whether the
amount in controversy requirement has been satisfied.” Owens, 574 U.S. at 88.
If there is no jurisdictional dispute of fact and the amount in controversy is determined
in whole or part by applicable law, the Third Circuit looks to whether it is clear to a legal
certainty that the plaintiff cannot recover the amount claimed. Sciarrino v. State Farm Fire and
Cas. Co., 476 F. Supp. 3d 91, 95 (E.D. Pa. 2020) (citing Judon v. Travelers Prop. Cas. Co. of Am.,
773 F.3d 495, 505 (3d Cir. 2014)). If there is a jurisdictional dispute of fact, the Third Circuit
applies the McNutt/Samual-Basset standard, providing that the defendant must “justify his
allegations by a preponderance of the evidence.” Sciarrino, 476 F. Supp. 3d at 95 (citing
McNutt v. General Motors Acceptance Corp. of Ind., 298 U.S. 178, 198 (1936)). When a plaintiff
first challenges the amount in controversy in a motion to remand, the party alleging
jurisdiction must justify its allegations by a preponderance of the evidence. Judon v. Travelers
Prop. Cas. Co. of Am., 773 F.3d 495, 506 (3d Cir. 2014) (citing Samuel-Basset, 357 F.3d at 397;
McNutt, 298 U.S. at 179-80).
An estimate of the amount recoverable should be objective and “not based on fanciful,
‘pie in the sky,’ or simply wishful amounts” as to not frustrate diversity jurisdiction. Judon,
773 F.3d at 506. For declaratory judgment actions, “it is well established that the amount in
controversy is measured by the value of the object of the litigation.” Auto-Owners Ins. Co. v.
Stevens & Ricci Inc., 835 F.3d 388, 397-398 (3d Cir. 2016) (quoting Hunt v. Wash. State Apple
Advert. Comm’n, 432 U.S. 333, 347 (1977)). In an insurance coverage declaratory judgment
action, federal courts look to the “value of the insurance policy and the damages alleged in
the underlying case to determine whether the jurisdictional amount in controversy has been
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met.” Dayton v. Employers Mut. Cas. Co., No. 20-2416, 2021 WL 4786383, at *3 (M.D. Pa. Oct.
13, 2021) (citing Jumara v. State Farm Ins. Co., 55 F.3d 873, 877 (3d Cir. 1995)).
Punitive damages and attorneys’ fees are properly considered in calculating the
amount in controversy. Packard v. Provident Nat. Bank, 994 F.2d 1039, 1046 (3d Cir. 1993);
Suber v. Chrylser Corp., 104 F.3d 578, 585 (3d Cir. 1997). For insurance bad faith claims under
42 Pa. C.S. § 8371, punitive damages and attorney’s fees totaling $75,000 are reasonable and
possible. Barbato v. Progressive Specialty Ins. Co., No. 21-0732, 2021 WL 3033863, at *3 (M.D.
Pa. July 19, 2021); see e.g., Grossi v. Travelers Pers. Ins. Co., 79 A.3d 1441, 1160 (Pa. Super. Ct.
2013) (upholding punitive to compensatory damages ratio of 4:1 or 5:1); Bonenberger v.
Nationwide Mut. Ins. Co., 791 A.2d 378, 379-80 (Pa. Super. Ct. 2002) (affirming award of
$89,160 in attorney’s fees where damages were $79,250).
In its complaint, Keystone seeks declaratory relief and monetary damages. (Doc. 1-2).
While Keystone does not specify the amount in controversy in its complaint, on the
complaint’s civil cover sheet, Keystone claims damages in excess of $50,000 to remain above
the arbitration limit in Lackawanna County. (Doc. 1-2, at 2). Its notice of removal, Evanston
contends that the damages sought by Keystone will exceed $75,000. (Doc. 1, ¶ 52). In its
motion to remand, Keystone contests Evanston’s assertion of the amount in controversy,
arguing that Evanston erred in attributing all injuries and damages pled in the underlying
complaint to Keystone and in attributing all defense costs of the underlying action to
Keystone. (Doc. 8, at 5-8).
Because Keystone contests the amount in controversy asserted in the notice of
removal, there is jurisdictional dispute of fact, and Evanston must show by a preponderance
of the evidence that the amount in controversy will exceed $75,000. Sciarrino, 476 F. Supp.
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3d at 95 (citing McNutt, 298 U.S. at 198) (finding defendant must justify his allegations by a
preponderance of the evidence when there is a dispute of jurisdictional fact); Judon, 773 F.3d
at 506 (citing Samuel-Basset, 357 F.3d at 397; McNutt, 298 U.S. at 179-80) (finding the
removing party must justify the alleged amount in controversy by a preponderance of the
evidence when a plaintiff first challenges the amount in controversy in a motion to remand);
in re Lipitor Antitrust Litig., 855 F.3d 126, 150 (3d Cir. 2017) (finding the removing party has
the burden of proving diversity of citizenship by a preponderance of the evidence). However,
Evanston has shown sufficient evidence that the amount in controversy exceeds $75,000
under both the legal certainty and preponderance of the evidence standards.
In its notice of removal, Evanston has shown that the Policy has a $1,000,000 each
occurrence limit and a $2,000,000 general aggregate limit. (Doc. 1, at 12). Evanston has
shown that Keystone seeks defense and indemnification for the Abda Matter, in which Abda
seeks an excess of $50,000 in damages for his personal injuries including,
acute bilateral low back pain, acute internal derangement of left knee, fractured
nose, head and neck pain, left shoulder pain and a finger laceration involving
tendon, by reason of which [Abda] was forced to undergo mental anguish,
physical pain, embarrassment, and humiliation.
(Doc. 7, at 9; Doc. 1, at 13).
While Keystone argues that Abda only asserts a negligence claim against Keystone
that will not exceed $75,000 in damages, Evanston points out that Abda also alleges that
Keystone is “vicariously liable for the actions of Defendant Ceccoli, as these actions were
committed on the business premises and within the scope of his role as a representative of the
business.” (Doc 7, at 3; Doc. 1-2, at 31). While Keystone disputes its liability for Ceccoli’s
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actions, Keystone seeks for Evanston to be obligated to pay in full Keystone’s legal liabilities
arising out of the Abda Matter. (Doc. 1-2, at 15).
In the affidavit of David E. Edwards, Evanston has shown that the cost of defending
a personal injury case like the Abda Matter would “involve significant discovery, including
several depositions, independent medical exam(s), retention of medical and non-medical
experts both as to liability and damages, a possible site inspection, dispositive motions, and
significant trial preparation,” likely exceeding $30,000.2 (Doc. 7-3, at 3); see, e.g., Stranger v.
Walmart Supercenter, No. 24-CV-01093, 2024 WL 4393508, at *5 (M.D. Pa. Oct. 3, 2024)
(valuing damages for severe injuries, embarrassment, humiliation, severe emotional distress,
pain and suffering, medical services, and treatment of injuries… upwards of $75,000).
Evanston also estimates that a typical budget for insurance coverage actions like this one
typically exceed $25,000. (Doc. 7-3, at 4). Evanston has shown that if it must pay defense
costs and indemnify in the Abda Matter, the damages could exceed $75,000. (Doc. 7, at 10).
In addition to the costs of defense and indemnity for the Abda Matter, Evanston has
shown in its notice of removal and subsequent affidavit that Keystone’s requests for bad-faith
damages, including enhanced interest, attorney’s fees, and punitive damages, could raise the
amount in controversy above $75,000. (Doc. 1, at 13; Doc. 7-3, at 4). Barbato v. Progressive
Specialty Ins. Co., No. 21-0732, 2021 WL 3033863, at *3 (M.D. Pa. July 19, 2021) (finding
punitive damages and attorney’s fees totaling $75,000 are reasonable and possible for
2 Later-filed affidavits can be used to justify the amount in controversy. Willingham v.
Morgan, 395 U.S. 402, 407 n.3 (1969) ("This material should have appeared in the petition for
removal. However, for purposes of this review it is proper to treat the removal petition as if it
had been amended to include the relevant information contained in the later-filed affidavits.);
see 28 U.S.C. § 1653.").
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insurance bad faith claims under 42 Pa. C.S. § 8371); Ciccone v. Progressive Specialty Ins. Co, No.
20-CV-981, 2020 WL 7319777, at *12 (M.D. Pa. Dec. 11, 2020) (holding amount in
controversy exceeds $75,000 by the preponderance of the evidence because attorney’s fees
were available by statute and plaintiff’s individual award could top $125,000, exclusive of
interest and costs). Looking at the value of the insurance policy, damages alleged in the Abda
Matter, and bad faith damages alleged, it is unlikely that the amount in controversy exceeds
$50,000 but falls below $75,000.
IV. CONCLUSION
Considering all relief sought, Evanston has demonstrated by a preponderance of the
evidence that the amount in controversy exceeds the federal jurisdictional minimum of
$75,000. For the foregoing reasons, Keystone’s motion to remand is DENIED. (Doc. 5).
An appropriate Order follows.
BY THE COURT:
Dated: February 7, 2026 s/ Karoline Mehalchick
KAROLINE MEHALCHICK
United States District Judge
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