Leticia Valdez v. Allstate Insurance Company, an Illinois Corporation Allstate Indemnity Co., an Illinois Corporation

Leticia Valdez appeals from a summary judgment granted in favor of Allstate Insurance Company (Allstate) on her claim under Arizona tort law for breach of the duty of good faith and fair dealing. Be cause the record does not indicate whether the district court properly exercised diversity jurisdiction, we remand.

I.

On December 22, 1997, Valdez’s automobile collided with a vehicle driven by Velvet Sanchez in Yuma, Arizona. After collecting the limit of Sanchez’s insurance, Valdez sought to recover an additional $15,000 from Allstate pursuant to her automobile insurance policy’s underinsured motorist coverage. Allstate initially resisted, leading to an arbitrator award in favor of Valdez for $40,000 in total damages. Allstate paid Valdez $15,000 — the difference between the $40,000 award and the $25,000 Valdez already received. Valdez accepted Allstate’s tender only after Allstate withdrew an accompanying “Release and Acknowledgment of Satisfaction of Award of Arbitrator” and replaced it with a simple “Satisfaction of Arbitrator’s Award.”

Unsatisfied with Allstate’s handling of her claim, Valdez filed suit in Yuma County (Arizona) Superior Court on October 12, 2001. The…