Insured Can’t Claim Damages in Proof of Loss Were “Puffed” Up to Avoid Federal Jurisdiction: Federal Court Deems Damages Demand in Sworn Proof of Loss Submitted to Insurer More Credible than Complaint’s Unsworn Estimate

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On October 10, 2018, a Florida federal court ruled that an insured’s precise damages estimate, set out in an exhibit to his complaint against his insurer, of $73,963.19, was less credible than his pre-suit demand in his proof of loss form of $100,709.34.

The insured, Roger Ulloa, sued his insurer, Integon National Insurance Company, alleging it failed to fully pay his property damage claim in the wake of Hurricane Irma. Integon removed the case to federal court on the basis that Ulloa’s pre-suit estimate of damages in his proof of loss was for over $100,000. Ulloa moved to remand his case back to state court, arguing that his complaint provided a precise damages estimate of less than $75,000. Ulloa asserted that his pre-suit demand in the proof of loss was nothing more than “puffing and posturing” and was not a reasonable assessment of his claim’s value. Integon countered with the fact that Ulloa’s proof of loss form was signed under penalty of perjury, meaning his action exceeded the amount in controversy for diversity jurisdiction.

The court agreed with Integon. The Southern District of Florida ruled that the insurer had met its burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeded $75,000. The court concluded that, adding in the value of his attorney’s fees at the time of removal, Ulloa’s damages were at least $74,723.19. That fact by itself would mean his damages did not meet the amount in controversy. However, the court emphasized the additional fact that Integon had based its removal on a sworn piece of evidence – the proof of loss form, which was sworn under oath – whereas Ulloa had not sworn to his revised estimate of $73,963.19. This made the proof of loss form more credible, even though the proof of loss form did not mean Ulloa would absolutely recover more than $75,000.

The case is Ulloa v. Integon National Ins. Co., No. 18-23069-Civ-WILLIAMS/TORRES (S.D. Fla. Oct. 10, 2018).