American Family Mutual Insurance Company et al v. Zurn Industries, LLC

Filing 20

ORDER denying 7 Motion to Dismiss (Written Opinion). Signed by Senior Judge David S. Doty on 7/5/2012. (PJM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 12-224(DSD/JSM)
American
Company,
Casualty
National

Family Insurance
State Farm Fire and
Company, and Western
Mutual Insurance Company,
Plaintiffs,
ORDER

v.
Zurn Industries, LLC, f/k/a
Zurn Industries, Inc.,
Defendant.

Steven Theesfeld, Esq., Anamarie Reyes Kolden, Esq. and
Yost & Baill, LLP, 2050 U.S. Bank Plaza South, 220 South
Sixth Street, Minneapolis, MN 55402, counsel for
plaintiffs.
Margaret A. Mullin, Esq., Dale O. Thornsjo, Esq. and
Johnson
&
Condon,
P.A.,
7401
Metro
Boulevard,
Minneapolis, MN 55439, counsel for defendant.

This matter is before the court upon the motion to dismiss by
defendant Zurn Industries, LLC (Zurn).

Based on a review of the

file, record and proceedings herein, and for the following reasons,
the court denies the motion.

BACKGROUND
This product-liability action arises from the manufacture of
brass

fittings

by

Zurn

for

residential

plumbing

systems.

Plaintiffs American Family Insurance Company (American Family),
State Farm Fire and Casualty Company (State Farm) and Western

National Mutual Insurance Company (Western National) assert claims
as subrogees based on payments provided to numerous individual
policyholders.

Compl. ¶¶ 9-11.

American Family, State Farm and

Western National allege damages in the amount of $142,503.86,
$180,662.30 and $11,030.72, respectively.1
On

January

negligence,

27,

failure

2012,
to

plaintiffs

warn,

breach

warranties and strict liability.

of

Id. ¶ 12.
filed

suit

express

and

alleging
implied

Defendants move to dismiss for

lack of subject-matter jurisdiction.

DISCUSSION
Federal

courts

are

courts

of

limited

jurisdiction,

and

subject-matter jurisdiction is a threshold inquiry for all actions.
See Thomas v. Basham, 931 F.2d 521, 522 (8th Cir. 1991); see also
Fed R. Civ. P. 12(h)(3).

Diversity jurisdiction under 28 U.S.C.

§ 1332 requires that the matter in controversy exceed $75,000,
exclusive of interest and costs, and that complete diversity of
citizenship exist between the parties.2

“Although the sum claimed

by the plaintiff in good faith is usually dispositive, it does not
control

where

it

appears

to

a

legal

certainty

[that]

the

plaintiff’s claim is actually for less than the jurisdictional

1

Western National does not allege damages in excess of the
jurisdictional amount, and agrees to dismissal and remand to state
court. Pls.’ Mem. Opp’n 2 n.1.
2

Zurn does not dispute that complete diversity exists.
2

amount.”

Schubert v. Auto Owners Ins. Co., 649 F.3d 817, 822 (8th

Cir. 2011) (citations omitted).
Zurn

first

argues

that

two

or

more

plaintiffs

may

not

aggregate claims for purposes of satisfying the jurisdictional
amount unless their claims share a common and undivided interest.
See Ahmed v. GCA Servs., Inc., 249 F.R.D. 322, 325 (D. Minn. 2008)
(citation omitted).

Here, however, American Family and State Farm

do not attempt to aggregate their claims.

Rather, each subrogee

insurer

in

individually

jurisdictional

amount,

pleaded
and

damages

thus

the

excess

reasoning

of

of

the

Ahmed

is

inapplicable in the present action.
Zurn next cites Lynch v. Porter, 446 F.2d 225, 226-27 (8th
Cir. 1971), for the proposition that a plaintiff may not aggregate
claims when suing in different capacities.

Lynch is inapposite,

however, because plaintiff insurers are not attempting to sue in
different capacities.

See id. (explaining that plaintiff could

join two derivative claims, but not a derivative claim and a claim
on his own behalf as beneficiary).

Instead, each plaintiff brings

claims in only one capacity - that of a subrogee.

Moreover, a real

party in interest “may join, as independent or alternative claims,
as many claims as it has against an opposing party.”

Fed. R. Civ.

P. 18(a). In other words, a subrogee insurer may aggregate its own
claims to satisfy the amount-in-controversy determination.

Nat’l

Asbestos Workers Med. Fund v. Philip Morris, Inc., 74 F. Supp. 2d

3

221, 238 (E.D.N.Y. 1999) (citing United States v. Aetna Cas. Surety
Co., 338 U.S. 366, 379 (1949)) (collecting cases).
Zurn next argues that aggregation is improper because a
subrogee is entitled to no greater rights than the subrogated. See
Emp’rs Liab. Assurance Corp. v. Morse, 111 N.W.2d 620, 624 (Minn.
1961).

This principle, however, is best applied in the context of

substantive claims, as opposed to procedural rights.

See, e.g.,

State Farm Mut. Auto. Ins. Co. v. Hyundai Motor Co., No. 01-627,
2001 WL 1640044, at *2 (D. Minn. Nov. 20, 2001) (“In other words,
State Farm

gains

only those

Lindgren potentially

had

claims against

against

Hyundai.”)

Hyundai

that Mr.

(emphasis

added);

Schwickert, Inc. v. Winnebago Seniors, Ltd., 680 N.W.2d 79, 87
(Minn. 2004) (“Generally, where an insured has provided a full
release to the tortfeasor before the insured makes payment under
the policy, the insured’s right of subrogation is eliminated.”
(citation omitted));

Emp’rs Liab. Assurance Corp., 111 N.W.2d at

624 (“[I]f liability to [subrogated] was excluded by the lease,
[subrogee] has no greater rights to recover than [subrogated]
had.”).

Therefore, plaintiffs may aggregate their claims to

satisfy the jurisdictional amount.3

3

Zurn argues that even if subject-matter jurisdiction exists,
courts have discretion to disaggregate claims in the interest of
administrative efficiency. At this stage in the proceedings, such
a determination is not possible.
4

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that
defendant’s motion to dismiss [ECF No. 7] is denied.
Dated:

July 5, 2012
s/David S. Doty
David S. Doty, Judge
United States District Court

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