Kamash et al v. Underwriters at Lloyd's, London
MEMORANDUM OPINION AND ORDER: it is ORDERED that Dft's Rule 12(b)(1) motion to dismiss is GRANTED, and that this action is DISMISSED without prejudice. Signed by Chief Judge William Keith Watkins on 10/14/2014. (Attachments: # 1 Civil Appeals Checklist) (wcl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
MOHAMED KAMASH and
UNDERWRITERS AT LLOYD’S,
CASE NO. 2:14-CV-695-WKW
MEMORANDUM OPINION AND ORDER
Before the court is a Motion to Dismiss for Lack of Subject Matter
Jurisdiction (Doc. # 8), filed by Defendant Underwriters at Lloyd’s, London.
(Doc. # 8.) Plaintiffs have not responded to the motion. (See Doc. # 10 (Order
setting a response deadline).)
In this action alleging breach of contract under a third-party beneficiary
theory, Plaintiffs bear “the burden of establishing, by a preponderance of the
evidence, facts supporting the existence of federal jurisdiction.” Underwriters
at Lloyd’s, London v. Osting-Schwinn, 613 F.3d 1079, 1085 (11th Cir. 2010).
Defendant raises a facial attack to the existence of subject-matter jurisdiction;
therefore, the issue is whether the Complaint “sufficiently allege[s] a basis of
subject matter jurisdiction.” McElmurray v. Consol. Gov’t of Augusta-Richmond
Cnty., 501 F.3d 1244, 1251 (11th Cir. 2007).
The Complaint does not allege under what statute subject-matter jurisdiction
rests; however, given that the Complaint asserts a breach-of-contract claim and
fails to plead a federal question, it is presumed that Plaintiffs filed this action on
the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332(a). Diversity
jurisdiction exists when complete diversity of citizenship exists between the
adverse parties and the amount in controversy exceeds $75,000.
“Complete diversity requires that no defendant in a diversity action be a citizen of
the same state as any plaintiff.” MacGinnitie v. Hobbs Grp., LLC, 420 F.3d 1234,
1239 (11th Cir. 2005) (per curiam), abrogated on other grounds by Hertz Corp. v.
Friend, 559 U.S. 77 (2010). In Osting-Schwinn, the Eleventh Circuit explained
that “Lloyd’s itself does not insure any risk. Individual underwriters, known as
‘names’ or ‘members,’ assume the risk of the insurance loss,” and “[n]ames
underwrite insurance through administrative entities called syndicates, which
cumulatively assume the risk of a particular policy.” 613 F.3d at 1083. The
Eleventh Circuit held that, based upon this unique structure, Lloyd’s syndicates are
“unincorporated associations for which the pleading of every member’s citizenship
is essential to establishing diversity jurisdiction.” Id. at 1088.
Defendant contends that neither of § 1332(a)’s requirements is satisfied.
First, relying on Osting-Schwinn, Defendant contends that it is considered an
unincorporated citizen for purposes of diversity jurisdiction and that the Complaint
“does not disclose the citizenship of each member that has an interest in the Policy
at issue.” (Doc. # 8, at 2.) It further argues that establishing its citizenship “would
be unworkable given the holding of the Eleventh Circuit . . . requiring the
disclosure of each member that may have an interest in the insurance policy in
question.” (Doc. # 8, at 2.) Second, Defendant asserts that the Complaint does not
establish the requisite amount in controversy because it states only that “damages
are in ‘excess of $50,000,’” which is below the $75,000 threshold required by
§ 1332(a). (Doc. # 8, at 3 (quoting Compl. ¶ 7).)
The Complaint suggests that Plaintiffs are citizens of Alabama but does not
provide any factual allegations divulging Defendant’s citizenship. It fails to allege
the citizenship of each name that subscribes to the policy at issue, and that failure
is fatal to an assertion of diversity jurisdiction under the holding of OstingSchwinn. As one district court aptly recognized, “[h]undreds of names may be
members of a given syndicate,” and “if an [Alabama] citizen is one of the names
participating in any of the syndicates participating” in the relevant policy,
“diversity is destroyed.” Shurr v. A.R. Siegler, Inc., 70 F. Supp. 2d 900, 909 (E.D.
Wis. 1999). With no allegations revealing the citizenship of any, much less all, of
the members’ citizenship, Plaintiffs have not shown that subject-matter jurisdiction
is proper under § 1332(a).
Moreover, Plaintiffs, who have not responded to
Defendant’s motion, have not suggested that a cure exists for the absence of
allegations establishing subject-matter jurisdiction.1
“[O]nce a federal court
determines that it is without subject matter jurisdiction, the court is powerless to
continue.” Osting-Schwinn, 613 F.3d at 1092. Accordingly, dismissal under Rule
12(b)(1) is required.
Based upon the foregoing, it is ORDERED that Defendant’s Rule 12(b)(1)
motion to dismiss is GRANTED, and that this action is DISMISSED without
DONE this 14th day of October, 2014.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
Because the absence of allegations establishing complete diversity of the parties is
dispositive, Defendant’s argument with respect to the amount in controversy need not be
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