Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_07-cv-00684/USCOURTS-alsd-1_07-cv-00684-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

EMPLOYERS MUTUAL CASUALTY )

COMPANY, etc., )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 07-0684-WS-B

 )

PARKER TOWING COMPANY, INC., )

et al., )

 )

Defendants. )

ORDER

This matter is before the Court on the individual defendants’ motion to dismiss

and, in the alternative, motion to stay. (Doc. 23). The plaintiff has filed a response, (Doc.

27), the movants declined the opportunity to reply, (Doc. 24), and the motion is ripe for

resolution. After carefully considering the foregoing and other relevant materials in the

file, the Court concludes that the motion to dismiss is due to be granted and the motion to

stay is due to be denied as moot. 

The movants are the plaintiffs in a state court action brought against the corporate

defendants and several others for damages resulting from the alleged occupation and

clearing of the plaintiff’s undeveloped land in Clarke County. The state complaint seeks

compensatory damages and punitive damages but does not identify the elements of

compensatory damages and does not identify a sum demanded, other than one in excess

of the state court’s jurisdictional threshold of $10,000. (Doc. 1, Exhibit A).

The plaintiff herein issued a policy of insurance to the two corporate defendants. 

(Doc. 1, Exhibit B at 3, 11). The plaintiff brings this action seeking a declaration that it

does not owe its insureds a duty to defend or to indemnify. (Doc. 1 at 6). Subject matter

jurisdiction is based on diversity of citizenship, (id. at 4), and there appears to be no

dispute that the plaintiff is not a citizen of any state of which any of the defendants is a

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citizen. Instead, the movants argue that the plaintiff has not met its burden of establishing

that the amount in controversy exceeds $75,000, exclusive of interest and costs. (Doc. 23

at 3-6).

The complaint alleges generally that the amount in controversy exceeds this figure. 

(Doc. 1 at 2-3, ¶ 10). The complaint then explains that this conclusion is based on “the

nature of the claims and allegations of damages” in the underlying lawsuit, plus the

plaintiff’s costs of defense of that lawsuit. (Id. at 3-4, ¶¶ 11-13). In its brief, the plaintiff

adds the argument that its policy limits are $1,000,000, easily dwarfing the jurisdictional

threshold. (Doc. 27 at 3).

“[W]here jurisdiction is based on a claim for indeterminate damages, ... the party

seeking to invoke federal jurisdiction bears the burden of proving by a preponderance of

the evidence that the claim on which it is basing jurisdiction meets the jurisdictional

minimum.” Federated Mutual Insurance Co. v. McKinnon Motors, LLC, 329 F.3d 805,

807 (11th Cir. 2003). This principle applies to declaratory judgment actions brought in

federal court by an insurer. Id. In such cases, the raw conclusion of the plaintiff that the

amount in controversy exceeds the jurisdictional amount does not keep the damages

sought from being indeterminate. Id. at 808 (a prayer for damages is indeterminate for

purposes of this rule if the complaint “‘does not allege a specific amount of damages’”)

(quoting St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998)). 

Because the complaint does not seek a specific amount of damages but includes

only a raw conclusion that the amount in controversy exceeds the jurisdictional amount,

the plaintiff has the burden of proving by a preponderance of the evidence that the

amount in controversy exceeds that threshold. As noted, to meet this burden the plaintiff

has relied only on the allegations of the state complaint, its costs of defense, and the limits

of its policy. As discussed below, these are insufficient to carry the plaintiff’s burden.

“When a plaintiff seeks injunctive or declaratory relief, the amount in controversy

is the monetary value of the object of the litigation from the plaintiff’s perspective.” 

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Federated Mutual, 329 F.3d at 807 (internal quotes omitted). While a low policy limit

may be relevant in showing that the monetary value of the action to the insurer does not

reach the jurisdictional threshold, id. at 808, a high policy limit does not establish a large

amount in controversy for the simple reason that the underlying plaintiff’s claim may be

for far less than the policy limit. E.g., Hartford Insurance Group v. Lou-Con, Inc., 293

F.3d 908, 911 (5th Cir. 2002) (“[I]n declaratory judgment cases that involve the

applicability of an insurance policy to a particular occurrence, the jurisdictional amount in

controversy is measured by the value of the underlying claim - not the face amount of the

policy.”) (internal quotes omitted); accord Toler v. State Farm Mutual Automobile

Insurance Co., 25 Fed. Appx. 141, 144 (4th Cir. 2001); Farmers Insurance Co. v.

McClain, 603 F.2d 821, 823 (10th Cir. 1979).

As noted, the allegations of the underlying complaint are very generalized. There

is nothing within them to show the amount or range of any probable award, and the

plaintiff offers nothing to supply the deficiency. While the costs of defense are an

appropriate element in calculating the amount in controversy, Stonewall Insurance Co. v.

Lopez, 544 F.2d 198, 199 (5th Cir. 1976), the plaintiff has not attempted to quantify those

costs. Under these circumstances, the plaintiff has failed to meet its burden of

establishing by a preponderance of the evidence that the amount in controversy more

likely than not exceeds $75,000.

For the reasons set forth above, the movants’ motion to dismiss for want of subject

matter jurisdiction is granted. The movants’ motion to stay is denied as moot. This

action is dismissed without prejudice.

DONE and ORDERED this 27th day of December, 2007.

s/ WILLIAM H. STEELE

UNITED STATES DISTRICT JUDGE

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