Freeze-Alton v. State Farm Mutual Automobile Insurance Company
Filing
27
MEMORANDUM AND ORDER denying 14 Motion to Dismiss for Lack of Jurisdiction. Signed by District Judge Monti L. Belot on 8/19/2013. (alm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
TRICIA FREEZE-ALTON,
Plaintiff,
v.
STATE FARM INSURANCE CO.,
Defendant.
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CIVIL ACTION
No.
13-1082-MLB
MEMORANDUM AND ORDER
This case comes before the court on defendant’s motion to
dismiss for lack of subject matter jurisdiction.
(Doc. 14).
motion has been fully briefed and is ripe for decision.1
The
(Docs. 15,
16).
Defendant’s motion is denied for the reasons herein.
I.
Facts
On September 29, 2010, plaintiff was involved in an automobile
accident with Reynolds, an underinsured motorist. Plaintiff suffered
injuries in the accident and received medical treatment.
has incurred $24,223.86 in medical expenses to date.
Plaintiff
At the time of
the accident, Reynolds had an insurance policy with Progressive which
limited its liability to $25,000. Defendant State Farm is plaintiff’s
insurance
provider
and
plaintiff’s
policy
provides
$100,000
in
coverage for underinsured motorists.
On September 12, 2012, plaintiff sent a settlement offer to
defendant in which she requested that defendant approve a settlement
with Progressive in the amount of $25,000.
1
In addition, plaintiff
Defendant failed to file a reply brief and the time for doing
so has now passed.
sought payment on her own policy.
Defendant authorized plaintiff to
settle with Progressive for $25,000 but denied plaintiff’s claim under
her policy.
On February 20, 2013, plaintiff brought this action against
defendant
seeking
damages
pursuant
to
her
insurance
Plaintiff’s complaint seeks damages in excess of $75,000.
policy.
(Doc. 1).
In addition, plaintiff seeks attorney’s fees pursuant to K.S.A. 40-256
and 40-908.
Defendant moves for dismissal of this action on the basis that
plaintiff’s claim fails to meet the amount in controversy.
II.
Analysis
Federal courts are courts of limited jurisdiction, United States
ex rel. Grynberg v. Praxair, Inc., 389 F.3d 1038, 1048 (10th Cir.
2004), and the parties cannot confer jurisdiction where it is lacking.
Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456
U.S. 694, 702, 102 S. Ct. 2099, 2104, 72 L. Ed. 2d 492 (1982).
If the
court lacks subject matter jurisdiction, all rulings are a legal
nullity, lacking any force or effect. See Hart v. Terminex Int’l, 336
F.3d 541, 542 (7th Cir. 2003).
Pursuant to 28 U.S.C. § 1332, diversity jurisdiction lies where
complete diversity of citizenship exists between the parties and the
matter in controversy exceeds $75,000.
28 U.S.C. § 1332.
There is
no dispute that complete diversity of citizenship is present here.
“When federal subject matter jurisdiction is challenged based on the
amount in controversy requirement, [plaintiff] must show that it does
not appear to a legal certainty that [she] cannot recover the
jurisdiction
amount.”
Woodmen
of
-2-
World
Life
Ins.
Society
v.
Manganaro,
342 F.3d 1213, 1216 (10th Cir. 2003).
Plaintiff can meet
this burden “by demonstrating that it is not legally certain that the
claim is less than the jurisdictional amount.”
Id.
When a case is
originally filed in federal court, the plaintiff enjoys a presumption
that the amount claimed in the complaint is accurate for purposes of
diversity jurisdiction.
Martin v. Franklin Capital Corp., 251 F.3d
1284, 1289 (10th Cir. 2001).
Defendant asserts that the amount in controversy cannot be
greater than $75,000 because the policy limits under the insurance
contract are set at $100,000 and plaintiff has already recovered
$25,000 from Progressive.
$75,000 in damages.
Therefore, plaintiff can only recover
Plaintiff responds that, in addition to the
insurance coverage, she is also seeking attorney’s fees pursuant to
K.S.A. 40-256 and 40-908. Plaintiff’s counsel’s affidavit states that
the attorney’s fees, coupled with the underinsured motorist coverage,
exceed $75,000.
(Doc. 16, exh. C).
Defendant cites State Farm Mut. Auto. Ins. Co. v. Narvaez, 149
F.3d 1269, 1271 (10th Cir. 1998), to support its position that in an
action concerning denial of coverage the maximum amount in controversy
is the maximum limit under the policy.
Narvaez, however, did not
discuss a statutory award of attorney’s fees.
The plaintiff in
Narvaez argued that an award of interest on damages should be included
to meet the amount in controversy.
The Tenth Circuit disagreed.
In Woodmen, however, the Tenth Circuit specifically addressed the
issue of attorney’s fees in determining the amount in controversy.
Woodmen held that the district court should consider the plaintiff’s
attorney’s fees in determining whether the plaintiff satisfies the
-3-
jurisdictional amount when the statute at issue allows an award of
attorney’s fees.
See 342 F.3d at 1218; see also Miera v. Dairyland
Ins. Co., 143 F.3d 1337, 1340 (10th Cir. 1998)(“The Supreme Court has
long held that when a statute permits recovery of attorney's fees a
reasonable
estimate
may
be
used
in
calculating
the
necessary
jurisdictional amount. . . .”)
In plaintiff’s complaint, she seeks attorney’s fees pursuant to
two different Kansas statutes which award attorney’s fees to a
successful plaintiff in an insurance action.
40-908.
Defendant
has
not
contended
that
See K.S.A. 40-256 and
these
statutes
are
inapplicable in the present action.
Therefore, the court finds that plaintiff’s attorney's fees may
be included in the damage calculation for purposes of diversity
jurisdiction because the right to such fees is provided by Kansas
statute.
Turning to the amount in controversy, defendant has stated
that plaintiff’s maximum recovery under the contract is limited to
$75,000.
Therefore, in order to meet the amount in controversy,
plaintiff need only have $1 in attorney’s fees.
Considering the
realities of modern law practice, the court finds that plaintiff’s
claim against defendant exceeds $75,000.
III. Conclusion
Defendant’s motion to dismiss is accordingly denied. (Doc. 14).
A motion for reconsideration of this order is not encouraged.
Any such motion shall not exceed 3 double-spaced pages and shall
strictly comply with the standards enunciated by this court in Comeau
v. Rupp, 810 F. Supp. 1172, 1174 (1992).
The response to any motion
for reconsideration shall not exceed 3 double-spaced pages.
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No reply
shall be filed.
IT IS SO ORDERED.
Dated this
19th
day of August 2013, at Wichita, Kansas.
s/ Monti Belot
Monti L. Belot
UNITED STATES DISTRICT JUDGE
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