Unreported / Non-Citable
Background
Plaintiff Ahmad Allan Shoraka sued Connect Insurance and Costco Insurance Agency in Orange County Superior Court in July 2026. He alleges that after a February 2025 car collision, Connect's adjuster valued his vehicle damage below the two estimates he supplied, that a check of about $11,000 never reached him, and that neither property damage nor personal injury has been paid. Costco's alleged role is sponsoring and marketing Connect's insurance to Costco members. The complaint stated no fixed damages figure in its prayer, but one paragraph cited a medical estimate of around $140,000 for a surgery Plaintiff said he had not decided to undergo. Defendants removed on September 1, 2026, invoking diversity jurisdiction, and Connect answered.
Costco moved to dismiss all seven causes of action against it. While that motion was pending, Plaintiff moved to remand, saying the $140,000 figure was a typographical error for $40,000 and filing a stipulation that the amount in controversy would not exceed $74,999. Costco submitted an email in which Plaintiff told defense counsel he had about $21,500 in property damage and about $71,500 in personal injury, totaling $93,000. The court decided both motions together without a hearing. The crash and claim-handling facts are Plaintiff's allegations, and the court made no findings on them.
The Court’s Holding
The court denied remand. A stipulation filed after removal that reduces the claim does not defeat jurisdiction, and the court considers one only where state pleading rules left the plaintiff no choice but an ambiguous amount, or where it shows the amount at removal was below the threshold. The court knew of no rule preventing Plaintiff from pleading a specific figure. It was concerned the complaint was ambiguous because the $140,000 figure rested on an undecided surgery, so the stipulation mattered only to that ambiguity. But where a complaint is ambiguous, the removing defendant must show by a preponderance that more than $75,000 is at stake. The court found Defendants did so: Plaintiff's own email totaled $93,000, and the shifting figures cast doubt on the typo explanation and the stipulation.
The court granted dismissal of every count against Costco. Breach of contract failed because Plaintiff did not allege he bought insurance from Costco; sponsoring and marketing Connect's policy, even if it prompted the purchase, creates no contract. The implied covenant claim, the bad faith claim and declaratory relief fell with the missing contract, the last also because the Declaratory Judgment Act supplies no cause of action by itself. The UCL claim failed because a reasonable consumer would not expect insurance to always pay what the insured anticipates, and any fraud theory lacked the particularity Rule 9(b) requires. Unjust enrichment failed because the allegations were consistent with all payments going to Connect, not Costco, and the UCL injunctive relief claim fell with the UCL claim.
The dismissal is with leave to amend and is not a final judgment. An amended complaint is due by November 16, 2026; if none is filed, the action against Costco will be dismissed without prejudice for failure to prosecute or comply with the order. The order does not address the claims against Connect, which answered.
Key Takeaways
- A plaintiff's post-removal stipulation to less than $75,000 is considered only in narrow circumstances and does not by itself defeat federal diversity jurisdiction.
- When a complaint is ambiguous about the amount in controversy, the removing defendant must prove by a preponderance that the threshold is exceeded, and a plaintiff's own earlier statements can carry that burden.
- Allegations that a company sponsored and marketed an insurer's policy, without more, do not plead a contract with that company.
- Implied covenant, bad faith and declaratory relief claims that depend on a contract fail when no contract with the defendant is alleged.
- UCL claims sounding in fraud need Rule 9(b) particularity, and unjust enrichment requires a benefit received and unjustly retained by the defendant.
Why It Matters
This is an unreported district court order in a single case, so it carries limited precedential weight. Practically, it shows that a plaintiff who pleads a large damages figure may struggle to escape federal court by later calling it a typo and stipulating to a lower amount, particularly when his own earlier statements exceed the threshold.
On the merits, the order illustrates the pleading gap in suing a marketer or sponsor over an insurer's claim decisions without alleging its own contract, deception, or benefit. Because leave to amend was granted, Plaintiff may try to cure those gaps, and the court has not decided whether he can.