BENTON – Chad Schwarz of O’Fallon and his counsel Grey Chatham of Belleville must pursue a coverage petition against West Bend Mutual in U.S. district court rather than St. Clair County, District Judge Staci Yandle ruled on April 6.
Yandle denied a motion to remand the petition, finding the controversy exceeded a $75,000 minimum for federal jurisdiction.
She found Schwarz claimed a loss of $1,015,646.30, for which West Bend made payments totaling $369,307.52.
The dispute involves freezing and bursting of pipes in Schwarz’s home at 11 Brandonwood Drive on Feb. 19, 2021.
His policy provided that if the parties failed to agree on the amount of a loss, either party might demand an appraisal.
Each party would choose an appraiser and the appraisers would choose an umpire.
If the appraisers couldn’t agree on an umpire, either party might request that a judge of a court in the state of the residence would choose.
The appraisers would separately set an amount and if they didn’t agree, they would submit their differences to the umpire.
According to a petition for appointment of an umpire that Chatham filed for Schwarz in St. Clair County last year, each party selected an appraiser.
“After exchanging potential umpire candidates, the appraisers were unable to agree on an umpire,” Chatham wrote.
He claimed Schwarz proposed Eugene Menges and former judge Lloyd Cueto.
West Bend removed the petition to district court in August, asserting diverse citizenship as a Wisconsin business.
West Bend counsel Matthew Ponzi of Chicago also claimed the controversy exceeded $75,000.
Ponzi followed up on removal by filing a counter claim for selection of an umpire.
He claimed West Bend identified Newel Anderson as appraiser and that Anderson proposed five possible umpires.
He claimed Schwarz’s appraiser, Leo Stephan of O’Fallon, rejected all five.
He claimed Anderson rejected Menges and Cueto.
Chatham moved to remand in September, quoting Supreme Court precedent that a plaintiff’s evaluation of the stakes “must be respected.”
He claimed a defendant might voluntarily waive the right of removal, which could be shown by a contractual provision.
He claimed that because West Bend didn’t attach the whole policy, Schwarz didn’t know if that language was present.
He claimed West Bend started the process by demanding appraisal and knew the facts it relied on to remove the case.
Ponzi’s colleague Thomas Orlando responded, “Schwarz seeks remand of this action to state court although the grounds for remand are not entirely clear from his motion.”
He claimed Schwarz didn’t dispute that the parties are diverse or that the controversy exceeded $75,000.
“This court is clearly a court of record in Illinois where Schwarz’s property is located,” Orlando wrote.
Yandle decided to keep the petition.
“Schwarz argues to no avail that West Bend has not established the requisite amount in controversy by a preponderance of the evidence,” Yandle wrote.
She found West Bend’s removal notice needed to contain only a plausible allegation that the amount in controversy exceeded $75,000.
In a conference two days later, Yandle ordered Chatham and Orlando to file briefs in support of their umpire candidates by April 22.