Long v. CUNA Mutual Insurance Society

Filing 22

ORDER Defendant's Motion to Dismiss (Doc. 9 ) and Plaintiffs' Motions to Continue (Docs. 14 , 15 ) are dismissed as moot. The Clerk of Court is directed to remand this matter to Yavapai County Superior Court. Signed by Judge G Murray Snow on 1/20/2012. (Attachments: # 1 Remand Letter)(KMG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Nancy Long,
Plaintiff,

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vs.

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CUNA Mutual Insurance Society,
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Defendant.
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No. CV-11-8112-PHX-GMS
ORDER

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Pending before the Court is Defendant CUNA’s Motion to Dismiss, and two motions

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by Plaintiff Nancy Long to “Continue the Action (Not Dismiss)” and “Continue Case—Not

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Dismiss.” (Docs. 9, 14, 15). Because the Federal Court has no subject-matter jurisdiction

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over this matter, it is being remanded to Yavapai County Superior Court.

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BACKGROUND

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In February of 2010, after receiving an advertisement from Defendant CUNA Mutual

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Insurance Society (“CUNA”), Plaintiff contacted Defendant and purchased a $100,000

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accident and dismemberment insurance policy. Defendant attempted to convince Plaintiff to

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pay her $11 monthly premium in four $33 quarterly installments, but Plaintiff insisted that

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she pay $11 each month instead. She received a letter a few weeks later from Defendant

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stating that it would be withdrawing $33 per month from her checking account. She called

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Defendant and again confirmed that her account would be debited only $11 per month.

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Upon contacting her bank on March 3, 2011, she discovered that Defendant had

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attempted to debit her account by $33. Since she only had $19 in her account at the time, she

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should have had $8 after the $11 debit, but instead was penalized by the bank for

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overdrawing her account. She called Defendant, a representative contacted the bank while

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she remained on the line, and she was assured that the penalty would be removed from her

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account. She asked that the error be corrected immediately, or at the very least before March

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9, when an automatic withdrawal was scheduled from her account. Defendant’s

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representative stated that the penalty would be removed and the $8 credited by March 8, but

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in fact it was not credited until March 9. Her automatic withdrawal was not affected.

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Defendant again withdrew $11 from Plaintiff’s account on March 14, but in April

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stopped using the automatic withdrawal and instead sent Plaintiff a bill for $33 for a quarterly

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premium.

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Plaintiff is seeking $1,000,000 for breach of contract, intentional tort, and fraud.

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Defendant removed the action to federal court, stating that the parties are diverse and

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that the amount in controversy exceeds $75,000. Defendant has filed a motion to dismiss for

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failure to state a claim. (Doc. 9).

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DISCUSSION
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Legal Standard

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The Court may consider whether it has subject-matter jurisdiction sua sponte, and if

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it “determines at any time that it lacks subject matter jurisdiction, the court must dismiss the

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action.” FED. R. CIV. P. 12(h)(3) (emphasis added).

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The Court has diversity jurisdiction over cases between citizens of different states

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involving claims greater than $75,000 pursuant to 28 U.S.C. § 1332, which provides:

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“The district courts shall have original jurisdiction of all civil actions where the matter in

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controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is

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between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1) (2006). “The party asserting

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jurisdiction has the burden of proving all jurisdictional facts.” Indus. Tectonics, Inc. v. Aero

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Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990) (citing McNutt v. Gen. Motors Acceptance Corp.,

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298 U.S. 178, 189 (1936)); see Fenton v. Freedman, 748 F.2d 1358, 1359, n.1 (9th Cir.
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1994). When determining whether a claim meets the amount in controversy requirement, the

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amount claimed by the plaintiff ordinarily controls: “[i]t must appear to a legal certainty that

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the claim is really for less than the jurisdictional amount to justify dismissal.” St. Paul

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Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). The Ninth Circuit has

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defined such a “legal certainty” to mean “when a rule of law or limitation of damages would

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make it virtually impossible for a plaintiff to meet the amount-in-controversy requirement.”

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Pachinger v. MGM Grant Hotel-Las Vegas, Inc., 802 F.2d 362, 364 (9th Cir. 1986).

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Moreover, “in a case that has been removed from state court to federal court . . . on the basis

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of diversity jurisdiction, the proponent of federal jurisdiction—typically the defendant in the

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substantive dispute—has the burden to prove, by a preponderance of the evidence, that

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removal is proper.” Geographic Expeditions, Inc. v. Estate of Jason Lhotka, 599 F.3d 1102,

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1107 (9th Cir. 2010).

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2.

Analysis

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Defendant is an Iowa corporation and Plaintiff is an Arizona citizen, so the diversity

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of citizenship prong of § 1332(a) is satisfied. Plaintiff states that her claim is for $1,000,000,

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and upon that ground Defendant has removed this action to the District of Arizona.

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The only actual damages claimed by Plaintiff are for the loss of $8 for six days—from

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March 3, when she noticed the loss, until March 9, when it was refunded. She does not allege

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that she lost any opportunities or suffered any other penalties beyond the loss of access to her

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funds for those six days; notably, she admits that her automatic payment, which she feared

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would be impaired by Defendant’s action, was made on time and she incurred no penalty.

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She does state that she suffered “pain and suffering” and that Defendant “need[s] to realize

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that when they enter personal bank accounts to steal money, that it [sic] wrong!” (Doc. 1, Ex.

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1 at 5).

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Even assuming that this last statement evinces a desire to pursue punitive damages,

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it appears to a legal certainty that she cannot assert any claim over the required amount in

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controversy. The United States Supreme Court has noted that “[t]he Due Process Clause of

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the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary
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punishments on a tortfeasor.” State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416

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(2003). In that case, the Court found that a punitive damages award of 145 times the actual

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damages awarded by a jury was prohibited by the Due Process Clause. Id. at 429. Were

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Plaintiff to receive a full judgment of $8 in actual damages (even though the $8 was

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reimbursed after six days), and to be awarded pain and suffering of 145 times that amount,

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and an additional punitive award of 145 times the original amount, her total award would be

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$2,328, substantially less than the $75,000 amount in controversy requirement. Here, it is

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plain from the face of the complaint that “a rule of law or limitation of damages would make

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it virtually impossible for a plaintiff to meet the amount-in-controversy requirement.”

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Pachinger, 802 F.2d at 364.

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CONCLUSION

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The complaint does not satisfy the amount-in-controversy requirement necessary to

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grant the court jurisdiction in this matter, and is remanded to Yavapai County Superior Court.

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IT IS THEREFORE ORDERED:

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1.

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Defendant’s Motion to Dismiss (Doc. 9) and Plaintiffs’ Motions to Continue

(Docs. 14, 15) are dismissed as moot.

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2.

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Superior Court.

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The Clerk of Court is directed to remand this matter to Yavapai County

DATED this 20th day of January, 2012.

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