The value of the claim at issue, not the value of the policy limit, is considered for purposes of determining the amount in controversy in an insurance coverage class action. That, the Middle District of Florida found, is the law in the Eleventh Circuit.

The plaintiff in Faust v. Maxum Casualty Insurance Company filed in state court a class action against his insurer on behalf of persons covered for Medical Payments coverage under a Florida property, casualty, surety, or marine insurance policy, who were in a covered accident and incurred medical transportation or mileage expenses within the previous five years. Plaintiff alleged the insurer breached the terms of the insurance contract by refusing to pay the insureds their submitted mileage expenses.

The insurer removed the case to federal court, asserting subject matter jurisdiction under CAFA. The insurer asserted the amount in controversy exceeds $5 million because the plaintiff sought “twice the service charge paid,” the policy provides for $5,000 in benefits, and there are “thousands” of class members; thus, if only 2,000 class members are considered, the amount in controversy would be $20 million. The insurance policy is the only evidence the insurer submitted in support of removal.

The plaintiff moved to remand, arguing medical mileage reimbursement claims are generally less than $400. The plaintiff also stated that his claim for “twice the service charge paid” was erroneous, and he amended his complaint to correct the error. The insurer argued the court should consider the policy limit, not the speculative amount of each claim, but the court found that argument contrary to the law in the Eleventh Circuit.

The court noted the plaintiff sought reimbursement for transportation expenses incurred on trips to and from a medical provider, not the value of a policy limit. The court further noted, based on the plaintiff’s proffer that a reasonable mileage rate is approximately $0.56 per mile, an insured would need to drive close to 9,000 miles to reach the $5,000 policy limit, which the court concluded seems unlikely. The court found it is therefore improper to consider the coverage limit as the amount in controversy, that it would be impermissible speculation to hazard a guess on the jurisdictional amount in controversy without the benefit of any evidence on the value of the individual claims, and remanded the case.

Faust v. Maxum Casualty Ins. Co., No. 2:14-cv-674-JES-DNF (M.D. Fla. Apr. 14, 2015).