Safeco Insurance Company of Illinois v. Witt et al

Filing 11

MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that defendants' motion to dismiss for lack of subject matter jurisdiction [Doc. # 8 ] is denied.. Signed by District Judge Carol E. Jackson on 2/28/17. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
SAFECO INSURANCE COMPANY
OF ILLINOIS,
Plaintiff,
vs.
MATTHEW WITT and SANDRA WITT,
Defendants.

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Case No. 4:16-CV-1872 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on defendants’ motion to dismiss for lack of
subject matter jurisdiction. Plaintiff has filed a response in opposition.
I.

Background

On June 13, 2014, defendants Matthew Witt and Sandra Witt were involved
in a two-vehicle accident while riding a motorcycle operated and owned by Matthew
Witt. Sandra Witt sustained multiple injuries, including fractures of her cervical
spine, ribs, jaw, and wrist. She suffered a concussion and was later determined to
have sustained a traumatic brain injury. Her medical bills exceeded $100,000. Oct.
25, 2016 demand letter [Doc. # 10-2].
At the time of the accident, the defendants were insured under two policies
(the “Ford” policy and the “Chevrolet” policy) issued by plaintiff Safeco Insurance
Company of Illinois. Each policy provided underinsured motorist coverage limits of
$50,000 for each person and $100,000 for each accident. The driver of the other
vehicle involved in the accident was insured under an automobile policy with
liability coverage limits of $250,000 per person and $500,000 per accident. In

September 2014, defendants submitted claims for underinsured motorist coverage.
Plaintiff initially denied their claims, citing in part the definition of “underinsured
motorist coverage.” Plaintiff now concedes that defendant Sandra Witt is entitled to
the $50,000 underinsured motorist coverage limit.
In a letter dated February 3, 2016, counsel asserted on behalf of Matthew
Witt that the policies were ambiguous with respect to whether underinsured
motorist coverage was available to him. Counsel advised that failure to pay
coverage would result in a lawsuit for vexatious refusal to pay. [Doc. # 10-1]. On
October 25, 2016, counsel made a demand on behalf of Sandra Witt for “stacked”
underinsured motorist coverage under the Ford policy in the amount of $100,000.
Again, counsel warned that failure to provide coverage would result in a suit for
vexatious refusal to pay. [Doc. # 10-2]. Plaintiff rejected the demand, but offered
to tender $50,000 “unstacked” coverage. On November 21, 2016, defendant
Sandra Witt responded with a demand for $150,000, based on the assertion that
the Ford policy covered three vehicles and that she was entitled to stack the
coverages. She again asserted that she would file a claim for vexatious refusal to
pay and seek statutory damages and attorney’s fees. [Doc. # 10-3]. On November
28, 2016, plaintiff filed this action for declaratory relief, seeking a declaration that
the Ford and Chevrolet policies provide no coverage to Matthew Witt on his claim
for underinsured motorist coverage; that the payment of $50,000 exhausts
plaintiff’s obligations under the policies for Sandra Witt’s claim for underinsured
motorist coverage; and that the underinsured motorist coverages in the two policies
do not stack.
II.

Legal Standard

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A motion to dismiss for lack of subject matter jurisdiction is authorized by
Rule 12(b)(1) of the Federal Rules of Civil Procedure. “In order to properly dismiss
for lack of subject matter jurisdiction under Rule 12(b)(1), the complaint must be
successfully challenged on its face or on the factual truthfulness of its averments.”
Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). When a factual challenge is
mounted, the court has authority to consider matters outside the pleadings. Osborn
v. United States, 918 F.2d 724, 728 n.4 (8th Cir. 1990). When a district court
engages in a factual review, it inquires into and resolves factual disputes. Faibisch
v. Univ. of Minn., 304 F.3d 797, 801 (8th Cir. 2002). Considering evidence beyond
the complaint does not convert a Rule 12(b)(1) motion to a Rule 56 motion for
summary judgment. Osborn, 918 F.3d at 730. Here, plaintiff has submitted, and
the Court has considered, correspondence the parties exchanged before suit was
filed.
III.

Discussion

Federal courts have original jurisdiction where the parties are citizens of
different states and the amount in controversy exceeds $75,000, exclusive of
interests and costs. See 28 U.S.C. § 1332(a). The party invoking jurisdiction bears
the burden of proof that all prerequisites to jurisdiction are satisfied, including the
requisite federal jurisdictional amount in controversy. Bell v. Hershey Co., 557 F.3d
953, 956 (8th Cir. 2009). “If the defendant challenges the plaintiff’s allegations of
the amount in controversy, then the plaintiff must establish jurisdiction by a
preponderance of the evidence.” Kopp v. Kopp, 280 F.3d 883, 884 (8th Cir. 2002).
“When federal subject matter jurisdiction is based on diversity and amount in
controversy, the amount in controversy must be determined from an examination

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of the complaint at the time it was filed.” Iowa Lamb Corp. v. Kalene Indus., Inc.,
871 F. Supp. 1149, 1155 (N.D. Iowa 1994) (citing Horton v. Liberty Mut. Ins. Co.,
367 U.S. 348, 353 (1961) (other citations omitted)). And, “subsequent events
cannot destroy the court’s jurisdiction once it has been acquired.” McGuire v. J.B.
Hunt Transp., Inc., 2010 WL 2399550, at *3 (E.D. Mo. June 10, 2010) (citation
omitted). Here, the evidence in the record establishes that plaintiff filed suit after
receiving a demand from Sandra Witt for $150,000, based on her contention that
the Ford policy provided for stacked coverage, a contention that plaintiff refutes.
Thus, plaintiff has met its burden to show that the jurisdictional amount is satisfied.
In support of their motion, defendants submit a document signed by their
attorney. The document, titled “Stipulation Regarding Amount in Controversy,”
states that, “based upon information currently known,” the defendants stipulate
that “at this time” their claims against plaintiff are “not in excess of $75,000 each,
exclusive of interests and costs.” [Doc. # 8-1]. Courts have held that an irrevocable
stipulation as to the amount in controversy is sufficient to establish the
jurisdictional amount. See, e.g., Workman v. Kawasaki Motors Corp., U.S.A., 749 F.
Supp. 1010, 1011 (W.D. Mo. 1990). A stipulation sufficient to settle the dispute
over the jurisdictional amount must irrevocably state “that the amount of damages
claimed . . . in this action ‘is and will forever be less’ than [$75,000] exclusive of
interest and costs.” Id. The document submitted here falls far short of this
standard. First, it is signed by counsel rather than the defendants and is not signed
under penalty of perjury. And, far from irrevocably waiving their right to damages
in excess of the jurisdictional amount, the conditional language of the document

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suggests that defendants wish to preserve the possibility of recovering more than
that amount.
Accordingly,
IT IS HEREBY ORDERED that defendants’ motion to dismiss for lack of
subject matter jurisdiction [Doc. # 8] is denied.

CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE

Dated this 28th day of February, 2017.

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