U.S. District Judge Micaela Alvarez held a hearing May 6, asking Houston attorney Matthew Zarghouni to show cause on why the court should not impose Rule 11 sanctions against him for presenting a less than factual motion.
At the hearing, Zarghouni maintained an honest mistake was made. Judge Alvarez reminded him that carelessness in pleadings has consequences.
Through Zarghouni, plaintiff Mirosalva Cantu filed suit against Allstate and an adjuster on Dec. 17 in Hidalgo County, alleging the insurer refused to compensate her for damages caused by a March 2015 hailstorm.
The inspection report found that damages were below the policy deductible, court records show.
Cantu’s suit shows she seeks more than $200,000 in damages. She further accused the defendants of malice and deceptive practices, entitling her to exemplary damages.
However, when the case was removed to federal court in February, Cantu and her attorney soon filed a motion to remand, arguing the court lacks diversity jurisdiction since the amount in controversy does not exceed $75,000.
Allstate responded to the motion to remand on March 21, pointing out that Cantu seeks recovery of actual, mental anguish, and exemplary damages, and statutory treble damages, attorneys’ fees, and interest.
“Finally Plaintiff, in a statement required under Texas rules, seeks monetary relief of between $200,000 and $1,000,000,” the company's response states.
“On the face of the petition’s allegations … taken together with the relief requested (treble damages, 18 percent per annum pre-judgment interest, exemplary damages, and more), it is apparent with reference only to the petition itself that the amount in controversy exceeds $75,000.”
In the motion to remand, Zarghouni asserted that a binding stipulation filed with the original petition prior to removal was effective to avoid federal jurisdiction.
“As previously noted, this case was removed to this Court on February 19, 2016, yet the referenced stipulation, which was attached to the motion to remand, is dated March 1, 2016,” Alvarez writes in her April 28 order.
“Furthermore, Defendant argues in its response to the motion to remand that the stipulation is in fact a 'postremoval stipulation.' Mr. Zarghouni is reminded that he has an obligation pursuant to Rule 11 of the Federal Rules of Civil Procedure that by presenting a written motion, he certifies that the factual contentions have evidentiary support.”
Two days prior to the hearing, Zarghouni filed a response, claiming was trying to articulate that when any plaintiff files a stipulation, there is no federal jurisdiction; unfortunately the mistake was made at the motion appears to argue that the plaintiff filed such a stipulation with the petition.
“This was an honest mistake and Plaintiff’s counsel had no intention to present an inaccurate statement that Plaintiff filed a stipulation with the original petition.”
Allstate is represented by Rosemary Conrad-Sandoval and Jordan Riley, attorneys for the McAllen law firm Roerig, Oliveira & Fisher.
Case No. 7:16-cv-00084