Sharnese v. Liberty Mutual — Demand letter and treble damages trigger federal jurisdiction; motion to remand denied

Reported / Citable

Case: Sharnese v. Liberty Mutual Personal Insurance Company
Court: U.S. District Court for the Northern District of Texas (Dallas Division)
Date Decided: February 13, 2026
Docket No.: 3:25-cv-03503-B-BN
Topics: Diversity jurisdiction; Amount in controversy; Removal; Treble damages; Demand letters
Source: Read the full opinion

Background

Nylondajazz Sharnese filed suit against Liberty Mutual Personal Insurance Company in Texas state court on May 27, 2025. Her Original Petition sought “monetary relief of $250,000 or less” without specifying an exact amount. Liberty Mutual answered. Sharnese subsequently filed a First Amended Petition containing identical damage language, and later a Second Amended Petition alleging $69,700 in actual damages plus punitive, treble, and additional damages totaling $234,700. Between the First and Second Amended Petitions, on December 10, 2025, Sharnese sent Liberty Mutual a settlement demand letter requesting $234,700, itemizing $200,000 for punitive damages.

On December 22, 2025—six days after Sharnese filed her Second Amended Petition—Liberty Mutual removed the case to federal court based on diversity jurisdiction, arguing the amount in controversy exceeded the $75,000 threshold under 28 U.S.C. § 1332(a). Sharnese moved to remand, contending the amount in controversy was limited to her actual damages of $69,700.

The Court’s Holding

The magistrate judge recommended denying Sharnese’s motion to remand and retaining federal jurisdiction. The court found that under Fifth Circuit precedent, post-complaint demand letters constitute “other papers” under 28 U.S.C. § 1446(b) that can give a defendant notice the case is removable. Sharnese’s December 10 demand for $234,700 triggered removability, making Liberty Mutual’s December 22 removal timely and proper.

The court also held that when calculating the amount in controversy, a federal court may include punitive damages, treble damages, and statutory damages—not merely actual damages. Texas Insurance Code § 541.152 authorizes treble damages in insurance cases. Accordingly, even viewing Sharnese’s Second Amended Petition as operative, it facially seeks $234,700 in total relief (actual damages plus treble and punitive damages), exceeding the federal threshold. Liberty Mutual met its burden of proving by preponderance of evidence that the amount in controversy exceeded $75,000. The court also found complete diversity of citizenship between the parties was undisputed.

Key Takeaways

A plaintiff’s post-complaint demand letter stating a specific settlement demand can constitute an “other paper” triggering removability even if the operative pleading uses indeterminate language like “monetary relief of $250,000 or less.”

Punitive damages, treble damages, and statutory damages are properly included in calculating the amount in controversy for federal diversity jurisdiction purposes.

Texas pleading rules allowing plaintiffs to state damages as a range (e.g., “relief of $250,000 or less”) create indeterminate damage allegations that do not by themselves establish federal jurisdictional thresholds; defendants must prove removability through additional evidence or demand letters.

A case remains removable under diversity jurisdiction even when actual damages fall below $75,000, provided available statutory or punitive damages push the total above the threshold.

Why It Matters

This decision clarifies the mechanics of removal for Texas litigants and defense counsel. Many Texas plaintiffs plead damages in the alternative or use the Texas Rule of Civil Procedure 47(c) range format to avoid triggering federal jurisdiction. However, the court held that such pleading tactics do not insulate a case from removal when a plaintiff’s demand letter (a routine step in settlement negotiations) discloses a damages figure exceeding $75,000. Defense counsel should treat settlement demand letters as potential jurisdictional evidence; plaintiffs should be aware that substantial damage demands—especially those including punitive or treble damages authorized by statute—may render state suits removable regardless of how actual damages are pleaded.

The holding also reinforces that statutory damages mechanisms like treble damages under the Texas Insurance Code count toward the amount in controversy. Insurers facing claims involving available treble-damages statutes should carefully assess total potential exposure, including statutory multiples, when evaluating removal strategy.

Background

The Court’s Holding

Key Takeaways

Why It Matters

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