Insurance disputes often are tried in federal court. The usual reason is that federal courts have jurisdiction over controversies where parties are from different states and there is a sufficient monetary amount in controversy. I have often questioned the logic of allowing insurance companies voluntarily licensed in a state to remove disputes from that state court and into federal court. If an insurer agrees to do business in a particular state and accept regulation by that state, it is only fair that it should not be able to remove itself from that state’s legal system.
David Pettinato recently had such a situation. Rather than accepting the federal jurisdiction, David filed a Motion for Remand, asking the federal court to remand the lawsuit back to state court. The defendant, Liberty Mutual Fire Insurance Company, filed a response, arguing that the amount in controversy was “more likely than not” met. The court was not convinced of Liberty Mutual’s position and issued an Order remanding the lawsuit back to state court.
Sometimes, policyholders would rather fight their insurance coverage disputes in state court. Where appropriate, motions for remand, similar to the one David filed, should be filed immediately. Federal Courts will closely examine the basis for jurisdiction and remand these matters much more often than many think.