Privilege Underwriters Reciprocal Exchange v. Grayson

Filing 99

ORDER DISMISSING CASE without prejudice for lack of subject matter jurisdiction. Accordingly, Defendant's motion for attorneys fees (Doc. 96) is DENIED. In addition, Defendant's motion to strike (Doc. 90), Defendant's request for ex tension of time (Doc. 88), Defendant's motion in limine (Doc. 73), Plaintiff's motion for summary judgment (Doc. 78), Plaintiff's motion for discovery (Doc. 82), and Plaintiff's motion to compel (Doc. 75) are DENIED as moot. Signed by Magistrate Judge Sonja F. Bivins on 1/16/2014. (mjn)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
PRIVILEGE UNDERWRITERS
:
RECIPROCAL EXCHANGE,
:
:
Plaintiff,
:
:
vs.
: CIVIL ACTION NO. 12-00734-B
:
PETER GRAYSON,
:
:
Defendant.
:
ORDER
The action is before the Court on review of the Court’s
subject matter jurisdiction.

Plaintiff, Privilege Underwriters

Reciprocal Exchange (“PURE”), filed this declaratory judgment
action on December 5, 2012, on the basis of federal diversity
jurisdiction.1

(Doc. 1 at 1).

In an order dated January 8,

2014, the Court observed that contrary to the allegations in
Plaintiff’s complaint, it does not appear that federal diversity
jurisdiction exists in this case.
1

(Doc. 94).

The Court thus

As stated in the Court’s order dated January 8, 2014,
Plaintiff had the obligation, as an entity filing suit as an
unincorporated association, to indicate in its complaint the
citizenship of each and every one of its members. See Federated
Mut. Ins. Co. v. Eternal Servs., Inc., 2010 U.S. Dist. LEXIS
14323, *3, 2010 WL 582072, *1 (M.D. Ala. 2010) (unpublished)
(citing Xaros v. U.S. Fidelity & Guar. Co., 820 F.2d 1176, 1181
(11th Cir. 1987)).
Plaintiff failed to do so, alleging,
instead, that it was “a Florida domiciled insurance exchange”
and that Defendant, Peter Grayson, was “an individual over the
age of nineteen (19) [who] resides in Mobile County, Alabama.”
(Doc. 1 at 1).
These allegations are wholly insufficient to
establish subject matter jurisdiction on the basis of diversity.

instructed Plaintiff to show cause as to why the case should not
be dismissed due to lack of complete diversity.2

(Id.).

On January 15, 2014, Plaintiff filed a response to

the

Court’s show cause order conceding that the Court lacks subject
matter jurisdiction in this case.

(Doc. 98 at 1).

Plaintiff

stated that PURE “is a reciprocal exchange and based on the
authority referenced by this Court in its Show Cause Order, PURE
has

now

(Id.).

determined

that

there

is

not

complete

diversity.”

Accordingly, in light of the Plaintiff’s concession,

this case is

hereby DISMISSED without prejudice for lack of

subject matter jurisdiction.
In addition, on January 14, 2014, Defendant Peter Grayson
filed a motion for attorney’s fees claiming that he was entitled
to such an award based on the “conduct and trickery” of the
Plaintiff.

(Doc. 96).

The Court finds, however, that Defendant

himself bears much of the responsibility for this unjustified
expense of judicial resources because Defendant, like Plaintiff,
failed

to

conduct

even

the

simplest

2

research

to

determine

As discussed in the Court’s order dated January 8, 2014,
“[b]ecause a federal court is powerless to act beyond its
statutory grant of subject matter jurisdiction, a court must
zealously insure that jurisdiction exists over a case, and
should itself raise the question of subject matter jurisdiction
at any point in the litigation where a doubt about jurisdiction
arises.” Smith v. GTE Corp., 236 F.3d 1292, 1299 (llth Cir.
2001).

2

whether the Court had subject matter jurisdiction in this case,
despite noting in his Answer and Counterclaim that “Defendant
admits the Complaint purports to invoke jurisdiction based on
diversity of citizenship based on 28 U.S.C. § 1332, but the
remaining allegations of ¶5 of the Complaint are denied.”
46

at

1)

(emphasis

added).

Defendant’s

admission

(Doc.

that

the

complaint “purports” to invoke federal jurisdiction certainly
seems to suggest that at the very least defense counsel had
reason to question whether federal jurisdiction actually existed
in this case.

However, Defendant has not pointed to a single

step

defense

taken

by

counsel

to

determine

whether

federal

jurisdiction actually existed.

Having failed to undertake any

investigation

issue,

regarding

this

Defendant

cannot

now

complain about the unjustified expenditure of resources.
Accordingly,

upon

consideration

of

the

foregoing,

Defendant’s motion for attorneys fees (Doc. 96) is DENIED.

In

addition, Defendant’s motion to strike (Doc. 90), Defendant’s
request for extension of time (Doc. 88), Defendant’s motion in
limine (Doc. 73), Plaintiff’s motion for summary judgment (Doc.
78), Plaintiff’s motion for discovery (Doc. 82), and Plaintiff’s
motion to compel (Doc. 75) are DENIED as moot.
ORDERED this 16th day of January, 2014.
/s/ SONJA F. BIVINS
UNITED STATES MAGISTRATE JUDGE

3