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Anderson v. Wilco Life Insurance Co.

United States District Court, S.D. Georgia, Augusta Division

June 20, 2019

VANESSA ANDERSON, Individually and on Behalf of a Class of Similarly Situated Persons, Plaintiff,


          J. Randal Hall, Chief Judge.

         Before the Court is Plaintiff's motion to remand. (Doc. 21.) Defendant removed this putative class action from the Superior Court of Columbia County based on 28 U.S.C. § 1332. Plaintiff does not dispute the parties are diverse; she only challenges whether the requisite amount in controversy is met. Because the Court finds that Defendant has not carried its burden to prove the amount in controversy exceeds the jurisdiction threshold, Plaintiff's motion to remand is GRANTED.

         I. BACKGROUND

         This putative class action challenges an alleged scheme to improperly raise the cost of insurance rates charged by Defendant Wilco Life Insurance Company ("Wilco") on Georgia universal life insurance policies. (See Compl., Doc. 1-1, ¶ 1.) Named Plaintiff Vanessa Anderson, on behalf of the class, alleges Wilco "unilaterally and massively increased" the monthly cost of insurance deductions from her life insurance account by some 300% between 2004 and 2016, in violation of her policy. (Id. ¶¶ 2, 27.) These increases significantly increased the cost of maintaining coverage, which eventually led to her policy lapsing. (Id. ¶ 40.) Plaintiff seeks damages and reinstatement of her policy. (Id. ¶ 44.)

         A. The Policy

         At issue are "universal" or "flexible premium adjustable" life insurance policies held by Georgia residents. (Compl. ¶¶ 8, 45.) Under these policies, the insured's premiums are deposited into a savings account from which Wilco deducts certain expenses each month. (Id. ¶ 16.) The money in this account is called the "accumulation value," which earns interest at a guaranteed rate. (Id.) The policyholder has the choice to pay her monthly premiums from external funds or use the existing accumulation value to cover Wilco's monthly deductions. (Id. ¶¶ 9-10.)

         The monthly deductions are composed of a cost of insurance ("COI") charge and a nominal monthly expense charge. (Id. ¶ 17.) The COI charge is calculated based on the policyholder's mortality risk, and the terms of the policies allow Wilco to annually adjust the COI charges based on changes in mortality. (Id. ¶ 24.) The policies specify certain factors - sex, attained age, and premium class - that can be used to adjust COI charges; each of these factors relates to the insured's mortality risk. (Id. ¶¶ 21, 23.).

         Plaintiff entered into her policy in 2001 with monthly premiums of $35.00 and a death benefit of $150, 000.00. (Id. ¶ 38; Policy, Doc. 21-1, at 3.) Her policy's maturity date is December 14, 2059, when Plaintiff will be 100 years old. (Policy, at 3.) At the maturity date, Plaintiff will receive the cash surrender value of her policy, and Wilco will no longer have an obligation to pay death benefits. (Id. at 8.)

         B. COI Overcharges

         Plaintiff alleges Wilco increased her COI charges for reasons other than those permitted in the policy, namely to recoup losses stemming from the guarantee interest rates Wilco provided with the policies.[1] (See Compl., ¶¶ 27-34.) Due to the statute of limitations, only the COI charges imposed after December 6, 2012, are at issue in this case. (PL's Br., Doc. 21, at 2.) In 2012, the monthly COI deduction taken from Plaintiff's accumulation value increased from $33.10 to $48.18, a 45.46% increase. (Compl., ¶ 27.) In 2013 and 2014, the COI charges were reduced by 1.13% and 1.55% respectively. (Id.) However, in 2015, Wilco again increased the COI charges by 23.48% and then another 4.9% the following year. (Id.) These increases made Plaintiff's policy unaffordable; by July 2017 her accumulation value had been depleted and her policy lapsed. (Compl., ¶¶ 39-40.) Plaintiff and the class seek "damages and declaratory and injunctive relief requiring Wilco to (i) reverse the unlawful increase in monthly deductions charged through increased COI rates on the Policies, and (ii) reinstate all Policies that were surrendered or lapsed as a result of the COI charges." (Id. ¶ 44.)

         Plaintiff seeks to certify a class of Georgia residents who, as of December 6, 2012, held universal life insurance policies with Wilco and whose COI deductions were subject to the same overcharging scheme. (Id. ¶ 45.) Wilco calculates there are 581 individuals with the same policy as Plaintiff (CIUL2) whose policies lapsed during the class period and an additional 45 individuals with a similar policy (CUL) who suffered the same outcome. (Decl. of Randy Greenwood ("Greenwood Decl."), Doc. 27-1, ¶ 5.) Those policies have an aggregate face value[2] of $75, 314, 499.00 and $4, 767, 287.00 respectively. (.Ia\) Further, Wilco calculates the total COI charges deducted from Georgia CIUL2 policies between July 1, 2015, and Jan. 11, 2019 - the date of removal - was $3.5 million, but Wilco does not provide the same calculation for the prior portion of the class period. (Id. ¶ 6.)

         C. Procedural History

         On December 5, 2018, Plaintiff filed her Class Action Complaint in the Superior Court of Columbia County, Georgia. (Notice of Removal, Doc. 1, ¶ 1.) Wilco was served on December 12, 2018, and removed the case to this Court on January 11, 2019, thirty days later. (Id. ¶ 4.) Wilco's Notice of Removal asserts two independent bases for jurisdiction, traditional diversity jurisdiction and Class Action Fairness Act ("CAFA") jurisdiction. (Id. ¶ 5.) Shortly after removal, Plaintiff filed a motion to remand challenging Wilco's ability to prove the requisite amount in controversy for diversity and CAFA jurisdiction. (Doc. 21.)


         "Federal courts are courts of limited jurisdiction," so "[i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (internal citations omitted). A civil action may be removed to federal court only if the court would have original jurisdiction over the case. 28 U.S.C. § 1441(a). Original jurisdiction includes diversity jurisdiction, which permits a federal court to hear a case where there is complete diversity among the parties and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a). Original jurisdiction also includes CAFA jurisdiction, which requires at least 100 class members, minimal diversity among the parties, and an amount in controversy that exceeds $5 million. 28 U.S.C. § 1332(d).

         A defendant seeking to remove a case to federal court must file a notice of removal that includes "a plausible allegation that the amount in controversy exceeds the' jurisdictional threshold." Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 135 S.Ct. 547, 554 (2014); see also 28 U.S.C. § 1446(a). Only where the plaintiff contests the allegation must the defendant prove by a preponderance of the evidence that the amount in controversy is sufficient. Dart, 135 S.Ct. at 554; see also Dudley v. Eli Lilly & Co., 778 F.3d 909, 912-13 (11th Cir. 2014). To determine whether the defendant carried its burden, the court may rely on the evidence introduced by defendant and the reasonable inferences and deductions drawn from that evidence. Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 753-54 (11th Cir. 2010). Finally, "removal statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand."[3] Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994).


         Wilco's Notice of Removal offers two theories to satisfy the subject matter jurisdiction requirement. First, it contends there is traditional diversity jurisdiction under 28 U.S.C. § 1332(a). Wilco is incorporated and has its principal place of business in Indiana while Plaintiff is a citizen of Georgia. (Compl. ¶¶ 4-5.) According to Wilco, the amount in controversy requirement is met because Plaintiff's damages, attorney's fees, and injunctive and declaratory relief are more than $75, 000. (Notice of Removal, ¶¶ 8-9.)

         Second, Wilco argues this Court has subject matter jurisdiction under CAFA, 28 U.S.C. § 1332(d). In Wilco's view, the parties' citizenship satisfies the minimal diversity requirement, the proposed class exceeds 100 members, and the amount in controversy is more than $5 million. (Id. ΒΆ 10.) In her motion to remand, ...

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