Gammon v. McLain et al

Filing 50

ORDER & REASONS granting 34 Motion to Dismiss for Lack of Jurisdiction. Party GEICO General Insurance Company and Safeco Insurance Company of Indiana dismissed. Signed by Judge Sarah S. Vance on 9/9/2016. (mmm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
VIRGINIA GAMMON,
INDIVIDUALLY AND O/B/O HER
MINOR CHILD, SOPHIE GAMMON

CIVIL ACTION

VERSUS

NO: 14-1184

LAWRENCE MCLAIN, ET AL.

SECTION: “R” (3)

ORDER AND REASONS
Plaintiff Virginia Gammon sues both defendant Safeco, Lawrence
McLain’s auto insurer, and defendant GEICO, plaintiff’s insurer, for
damages arising out of an automobile accident. GEICO moves to dismiss the
complaint for lack of subject matter jurisdiction because there is not
complete diversity between the parties. For the following reasons, the Court
GRANTS GEICO’s motion.

I.

BACKGROUND
This lawsuit arises out of a car accident that occurred on or about May

31, 2013. 1

1

According to the complaint, at approximately 12:00 p.m.,

R. Doc. 1 at 3 ¶ 6.

plaintiffs Virginia Gammon and her daughter Sophie Gammon were
passengers in a car driven by Sophie’s father and Virginia’s husband, Sean
Gammon.2 Lawrence McLain was driving behind the Gammon vehicle.
When the car in front of the Gammon vehicle abruptly stopped, Sean
Gammon applied his brakes, but could not slow down enough to avoid hitting
the bumper of the vehicle in front of his. 3 Plaintiffs allege that McLain was
traveling at a high rate of speed behind their vehicle and then crashed into
their stopped vehicle.4 Plaintiffs allege that McLain’s negligence caused the
accident, as well as their ensuing injuries. 5
Plaintiffs filed this lawsuit on May 23, 2014, with diversity as the basis
for jurisdiction.6 Plaintiffs sued McLain, McLain’s auto insurer, Safeco, 7 and
GEICO, who is Sean Gammon’s auto insurer. Plaintiffs’ complaint asserts
two claims against GEICO. The first arises under the Louisiana direct action
statute, asserting that GEICO would be liable to them in the event that Sean

Id.
Id. at 3 ¶¶ 9-10.
4
Id. at 4 ¶ 12.
5
Id. at 5 ¶ 17.
6
R. Doc. 1.
7
Plaintiffs initially sued Liberty Mutual Insurance Co., which
owned Safeco at the time of the accident. Plaintiffs have since voluntarily
dismissed their claims against Liberty Mutual. R Doc. 25.
2
2
3

Gammon is found liable for any of plaintiffs’ injuries.8 See La. Stat. Ann. §
22:1269(B)(1)(d). The second is brought under the terms of Sean Gammon’s
policy with GEICO, in which GEICO agreed to insure Virginia and Sophie
Gammon against injuries caused by an uninsured motorist, in the event that
McLain’s insurance policy is insufficient to cover their injuries. 9
Defendants answered plaintiffs’ complaint, 10 and the case proceeded
through the trial preparation stages with a two or three day jury trial
scheduled for November 14, 2016.11 On June 21, 2016, defendant GEICO
filed this Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction, arguing that there is not complete diversity between the
opposing parties.12 GEICO’s motion focuses on its own citizenship for the
purposes of diversity. Defendant Safeco supported GEICO’s motion, and
also focused on the domicile of defendant Lawrence McLain to argue that

8
9
10
11
12

R. Doc. 1 at 6 ¶ 20.
Id. at 6-7 ¶¶ 22-23.
See R. Doc. 12 (GEICO’s answer); R. Doc. 19 (Safeco’s answer).
R. Doc. 33.
R. Doc. 34.
3

complete diversity is lacking. 13 Plaintiffs filed their response in opposition
on June 28, 2016,14 and defendants both replied on July 5, 2016. 15

II.

LEGAL STANDARD
Federal courts are courts of limited jurisdiction and possess power over

only those cases authorized by the United States Constitution and federal
statutes. Coury v. Prot, 85 F.3d 244, 248 (5th Cir. 1996). If a district court
lacks jurisdiction over the subject matter of a plaintiff's claims, dismissal is
required. See Fed. R. Civ. P. 12(b)(1). The lack of subject matter jurisdiction
may be raised at any time during pendency of the case by any party or by the
court. See Kontrick v. Ryan, 540 U.S. 443, 456 (2004) (“A litigant generally
may raise a court's lack of subject-matter jurisdiction at any time in the same
civil action, even initially at the highest appellate instance.”); McDonal v.
Abbott Labs., 408 F.3d 177, 182 n. 5 (5th Cir. 2005) (“[A]ny federal court
may raise subject matter jurisdiction sua sponte.”). Finally, “the citizenship
of a party at the commencement of the action is controlling for purposes of
determining diversity jurisdiction and subsequent actions do not affect the

13
14
15

R. Doc. 33 at 3.
R. Doc. 36.
See R. Doc. 41 (GEICO’s reply); R. Doc. 43 (Safeco’s reply).
4

court's jurisdiction.” Aetna Cas. & Sur. Co. v. Hillman, 796 F.2d 770, 776
(5th Cir. 1986) (citing Oliney v. Gardner, 771 F.2d 856, 858 (5th Cir. 1985)
(italics in original)).
In ruling on a Rule 12(b)(1) motion to dismiss, the court may rely on
(1) the complaint alone, presuming the allegations to be true, (2) the
complaint supplemented by undisputed facts, or (3) the complaint
supplemented by undisputed facts and by the court's resolution of disputed
facts. Den Norske Stats Oljeselskap As v. HeereMac Vof, 241 F.3d 420, 424
(5th Cir. 2001) (citing Barrera–Montenegro v. United States, 74 F.3d 657,
659 (5th Cir. 1996)). The party asserting jurisdiction generally bears the
burden of establishing that the district court possesses jurisdiction.
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).
When examining a factual challenge to subject matter jurisdiction that
does not implicate the merits of plaintiff’s cause of action, the district court
has substantial authority “to weigh the evidence and satisfy itself as to the
existence of its power to hear the case.” Arena v. Graybar Elec. Co., 669
F.3d 214, 223 (5th Cir. 2012). Accordingly, the Court may consider matters
outside the pleadings, such as testimony and affidavits. See Superior MRI
Servs., Inc. v. All. Healthcare Servs., Inc., 778 F.3d 502, 504 (5th Cir. 2015).
5

A court's dismissal of a case for lack of subject matter jurisdiction is
not a decision on the merits, and the dismissal does not ordinarily prevent
the plaintiff from pursuing the claim in another forum. See Hitt v. City of
Pasadena, 561 F.2d 606, 608 (5th Cir. 1977).

III. DISCUSSION
Defendants raise two possible jurisdictional defects: GEICO’s
citizenship as an insurer in a direct action, and Lawrence McLain’s
citizenship at the time plaintiffs filed suit. Because the resolution of McLain’s
citizenship makes it unnecessary to consider GEICO’s citizenship, the Court
will address only McLain’s citizenship.
In Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806), the Supreme
Court established the rule of complete diversity for cases arising under
diversity jurisdiction. Complete diversity requires “that all persons on one
side of the controversy be citizens of different states than all persons on the
other side.” McLaughlin v. Mississippi Power Co., 376 F.3d 344, 353 (5th
Cir. 2004) (citation omitted). Plaintiff is a citizen of Louisiana. Therefore, if
any defendant is also a citizen of Louisiana, diversity is destroyed, and the

6

Court must dismiss this case for lack of subject matter jurisdiction.
McLaughlin, 376 F.3d at 353; see also Fed. R. Civ. P. 12(b)(1).
As a preliminary matter, the Court notes that Lawrence McLain died
on September 23, 2014, 16 and was dismissed from this lawsuit shortly before
his death.17 But, whether diversity jurisdiction exists is determined at the
commencement of the lawsuit, at which point McLain was a defendant. See
Hillman, 796 F.2d at 776. Therefore, that he is no longer a party does not
affect the resolution of the jurisdictional issue.
As discussed above, when a factual challenge has been made to the
basis of subject matter jurisdiction, this Court may resolve the factual dispute
by considering matters beyond the pleadings, such as testimony and
affidavits. See Superior MRI, 778 F.3d at 504. Plaintiff submits evidence
that McLain was domiciled in Georgia at the time they filed suit, while
Defendant Safeco submits evidence that McLain was actually domiciled in
Louisiana.
For diversity purposes, a person’s citizenship is determined by where
he or she is domiciled. Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir. 1974). A

16
17

R. Doc. 36 at 7.
R. Doc. 6.

7

person’s domicile is the “place of his true, fixed, and permanent home and
principal establishment, and to which he has the intention of returning
whenever he is absent therefrom.” Id. (citation omitted). A change of
domicile may be effected “only by a change of two elements: (a) taking up
residence in a different domicile with (b) the intention to remain there.” Id.
(citing Mitchell v. United States, 88 U.S. 350 (1875)). When the domicile of
a party for diversity purposes is in doubt, district courts must evaluate all of
the circumstances and make a determination on a case-by-case basis. 13E
Wright & Miller, Fed. Prac. & Proc. Civ. § 3612 (3d ed.) (collecting cases).
Factors frequently taken into account include: the party’s current residence,
voter registration and voting practices, situs of personal and real property,
location of brokerage and bank accounts, place of employment or business,
driver's license and automobile registration, payment of taxes, as well as
several other aspects of human life and activity. See Coury, 85 F.3d at 251.
No single factor is conclusive. Id.
The Court will consider the evidence on all of the relevant factors and
weigh it to determine where Lawrence McLain was domiciled at the time this
lawsuit was filed. Because Safeco argues that McLain changed his domicile,
it has the burden of proof on that issue, though the ultimate burden on the
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issue of diversity jurisdiction remains with Gammon. See Coury, 85 F.3d at
250.
In support of her position, Gammon argues that McLain actively
maintained a home in Georgia that he allegedly considered his actual
residence.18 To bolster this contention, Gammon submits the accident report
and a receipt from the body shop that repaired McLain’s vehicle after the
accident, both from the day of the accident. 19 The report and receipt show
that when McLain was asked for his home address, he gave a Georgia
address. 20 The accident report also shows that McLain’s vehicle had a
Georgia license plate, it did not have a Louisiana break tag, and that McLain
had a Georgia driver’s license at the time of the accident. 21
In response, Safeco submits evidence dating back to 2009 to show that
McLain intended to leave Georgia and settle in Louisiana permanently. The
evidence shows that in December 2009, McLain divorced his wife. 22 As part
of the divorce settlement, McLain gave his ex-wife exclusive use of their
Georgia home located at 5 Woodbine Point in Newnan, GA, the same home

18
19
20
21
22

R. Doc. 36 at 8.
R. Doc. 36-1 (receipt); R. Doc. 36-2 at 4 (accident report).
Id.
R. Doc. 36 at 12; R. Doc. 36-2 at 4.
R. Doc. 43-1 at 2.
9

that was listed as McLain’s address on the accident report and body shop
receipt.23 Per the divorce agreement, McLain and his wife agreed to sell the
home 36 months after the execution of their divorce agreement. 24
On April 9, 2010, McLain married Judith Elaine Jenkins King in
Louisiana.25 In their marriage contract, both Ms. King and McLain declared
that they are domiciled in St. Tammany Parish, Louisiana. 26 On November
12, 2010, McLain purchased a parcel of land in St. Tammany Parish,27 and
bought a mobile home that was delivered there in May 2011. 28 On March 19,
2013, McLain entered into a short-sale agreement to sell his Newnan,
Georgia property to a bank, and listed 22495 Maurice Taylor Road, Bush, LA
as his home address.29 This was also the address used by McLain when he
filed an insurance claim with Safeco days after the accident. 30 McLain was
issued a Louisiana driver’s license on July 9, 2013 with the same Louisiana

Id. at 6.
Id.
25
R. Doc. 43-7 at 1.
26
Id.
27
R. Doc. 43-2 at 1.
28
R. Doc. 43-3.
29
R. Doc. 43-4 at 8-9.
30
R. Doc. 36-5 at 1. This means that at the time of the accident
McLain was giving both a Georgia address and a Louisiana address when
asked for his home address.
10
23

24

address. 31 Finally, McLain paid Louisiana state income taxes in 2011, 2012,
and 2013. 32
Based on this information, the Court finds that at the time this lawsuit
was filed, Lawrence McLain lived with his wife in Louisiana, owned property
solely in Louisiana, had a Louisiana driver’s license, and paid Louisiana state
income taxes for at least the previous three years. The Fifth Circuit has
recognized that there is a presumption that a person’s current residence is
also his or her domicile. See Slaughter v. Toye Bros. Yellow Cab Co., 359
F.2d 954, 956 (5th Cir. 1966). Although this presumption can be rebutted,
here, the remaining evidence further supports finding McLain’s domicile to
be Louisiana. Therefore, the weight of the evidence indicates that McLain
moved his residence to Louisiana in 2010 and intended to remain here. See
Mas, 489 F.2d at 1399.
Because the Court finds that McLain’s domicile was Louisiana at the
time this suit was filed, the parties lack complete diversity. See McLaughlin,
376 F.3d at 353. Absent diversity, this Court lacks jurisdiction, and the case
must be dismissed. See Fed. R. Civ. P. 12(b)(1).

R. Doc. 43-5.
R. Doc. 43-6 at 1 (2011 tax return); at 6 (2012 tax return); at 10
(2013 tax return).
11
31

32

IV.

CONCLUSION
For the reasons stated above, the Court GRANTS defendant’s Motion

to Dismiss. Accordingly, Gammon’s claims against defendant GEICO and
Safeco are DISMISSED WITHOUT PREJUDICE.

9th
New Orleans, Louisiana, this ___ day of September, 2016.

_______________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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