Travelers Indemnity Company of Connecticut et al v. Centex Homes et al

Filing 29

ORDER REQUESTING ADDITIONAL BRIEFING. The Court hereby ORDERS Plaintiffs to submit to the Court, within fourteen (14) days of the signature date of this order, a supplemental brief of not more than ten (10) pages explaining how the amount in cont roversy requirement can be met in this case. Defendants may submit a supplemental response brief on this issue within ten (10) days of Plaintiffs' submission. Signed by Judge Samuel Conti on November 17, 2014. (sclc1, COURT STAFF) (Filed on 11/17/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court

For the Northern District of California

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TRAVELERS INDEMNITY COMPANY OF
CONNECTICUT; and ST. PAUL FIRE
AND MARINE INSURANCE COMPANY,

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Plaintiffs,
v.
CENTEX HOMES; and CENTEX REAL
ESTATE CORPORATION,

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Defendants.
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) Case No. 14-cv-02378
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) ORDER REQUESTING ADDITIONAL
) BRIEFING
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Now pending before the Court is Defendants' motion to dismiss

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Plaintiffs' First Amended Complaint, ECF No. 20 ("FAC"), for lack

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of subject-matter jurisdiction and failure to state a claim.

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No. 21 ("Mot.").

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and Defendants have replied.

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subject-matter jurisdiction asserted in the FAC is diversity

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jurisdiction under 28 U.S.C. Section 1332.

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invests federal district courts with original jurisdiction over

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civil actions in which the parties are diverse and the amount in

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controversy exceeds $75,000.

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not dispute that diversity exists, but they claim that the amount

ECF

Plaintiffs have opposed the motion, ECF No. 22,
ECF No. 25.

The only basis for

FAC ¶ 6.

28 U.S.C. § 1332(a).

That statute

Defendants do

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in controversy does not exceed $75,000.
The amount in controversy in this case will be defined almost

underlying lawsuit in California state court.

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that the amount in controversy does not exceed $75,000 because, at

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the time the suit was filed, "Travelers had not paid anything in

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defense fees and costs, and the total defense fees and costs

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United States District Court

exclusively by the fees and costs incurred by Defendants in an

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For the Northern District of California

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incurred by Centex Homes and Centex Real Estate were only

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$6,304.33 . . . ."

Mot. at 16.

Defendants argue

Plaintiffs retort that they expect

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the fees in the underlying action to exceed $300,000 before that

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case is concluded.

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cast doubt on that assertion.

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Opp'n at 18.

However, Plaintiffs' pleadings

One of Plaintiffs' claims is for equitable reimbursement.

FAC

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¶¶ 36-40.

The parties agree that, to state a claim for equitable

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reimbursement, an insurer must defend a third-party action in its

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entirety.

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action is ongoing, but Plaintiffs assert that their duty to defend

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ceased upon Defendants' alleged breach of the insurance contract.

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Therefore, Plaintiffs claim, they have honored their duty to

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defend.

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its entirety when it defends until either "the underlying lawsuit

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is concluded or at any time when it can be shown that there is no

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potential for coverage under the particular policy or policies."

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Opp'n at 14 (emphasis added).

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their FAC that "[a]s a result of CENTEX's breach of the insurance

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policies . . . , TRAVELERS' duty to defend CENTEX has now ceased

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and any payments made to CENTEX for fees incurred from the date of

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tender until the date of CENTEX's breach constitute an entire

See Mot. at 13; Opp'n at 13.

The underlying state

According to Plaintiffs, an insurer defends an action in

To that end, Plaintiffs plead in

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defense."

FAC ¶ 38 (emphasis added).

the amount in controversy and the duty to defend can be consistent.

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On one hand, Plaintiffs allege that their duty to defend has ceased

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and that there is no potential for coverage under any of

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Defendants' policies.

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incurred from the date of tender until the date of the alleged

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United States District Court

It is unclear to the Court how Plaintiffs' arguments regarding

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For the Northern District of California

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breach constitute an entire defense.

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Plaintiffs' sole argument for subject-matter jurisdiction depends

They also assert that the fees and costs

On the other hand,

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upon fees and costs that will be incurred in the future -- after

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Plaintiffs' duty to defend has ceased, after the point at which

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there is no potential for coverage, and after Plaintiffs have

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honored their duty to provide an entire defense.

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that Plaintiffs have already honored their duty to defend the

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underlying litigation in its entirety, the Court does not

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understand how the amount in controversy could possibly exceed the

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approximately $6,304.33 incurred to date.

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If it is true

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Neither party has briefed this issue.

Accordingly, the Court

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hereby ORDERS Plaintiffs to submit to the Court, within fourteen

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(14) days of the signature date of this order, a supplemental brief

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of not more than ten (10) pages explaining how the amount in

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controversy requirement can be met in this case.

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submit a supplemental response brief on this issue within ten (10)

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days of Plaintiffs' submission.

Defendants may

United States District Court

For the Northern District of California

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IT IS SO ORDERED.

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Dated: November 17, 2014

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UNITED STATES DISTRICT JUDGE

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