T he H on . J an e A
. R est ani , C hi efJudg e, U ni t ed St at es Cour t of I nt er nat i onal T r ade, si t t i ng b y * d e s i g n a ti o n . NO T RE CO MM EN DE D FO R FU LL -T EXTPU BL IC A TI ON Fi le N ame: 07a0071n .06 Fi led : Jan uar

y 29, 2007 No . 05-2530 UNITED STA

TES COURT OF A PPE A LS FO R TH E SI XTH C IR CU IT JON HALL, o n be half

of himse lf and all others s imi lar ly

si tuate d, Pl ain ti ff-A ppel lan t, v. STATE FA RM M UTU AL AU TOMO BI LE IN SU RA NCE COM PA NY, Defendant -A ppel lee
. ) ) ) ) ) ) ) ) ) ) ) ON APPEAL F RO M THE U NI TED ST AT ES DIST RICT COURT F OR THE EASTER N DI STRIC T OF MI CH IGAN

Before: D AU GH TREY and CO LE, Ci rc uitJu dg es, and RE STANI , Ju dg e. * PER CURIAM. T he plaintif f , Jon Hall, app eals the orde r of the district court dism issing his com plaintfor failure to state a claim un der Fed eral Rule of Civ il Procedu re 12( b) (6 ), i n a putat iv e clas s acti on s uitag ain st defendant St ate F ar m Ins urance Compan y that w as re mo v e d fro m s t a t e c o u rtb y m o t i o n o f t h e d e fe n d a n tu n d e r t h e C l a s s A ct i on Fai rn ess Act ( CA FA) , 28 U. S.C . § 1453( b)
. Al thoug h H all di d notoppos e re mov al, did not mov e to re mand, an d di d noti mmediat ely appeal the dis tr ict cour t’ s d eter minat ion of jur is dicti on, h e now

co ntends thatthe dis tr ict c our t l ack ed jur is dicti on to r ule on t he mer it s of his cl aim becau se the s tate cour t c omplai nt was filed before CAF A’ s effect iv e dat e. ThatNo. 05-2530

Hall v. State Farm Insuranc e Co.

- 2 - proposi ti on depe nds upon a deter minat ion thatan a mended s tate cour t com pla int subs ti tuti ng H all as the new named par

ty , f il ed af

ter CAFA took ef fect, rel ated back

to the pre-CAFA f iling of

t he o rig inal com plaint . Th e de fend antargues thatund er state law Hall w as not a par

ty to the ori g ina l compl ain t, that sta te law precl udes rela ti on back in thi s c ase, tha t the district court the refore ha d jurisdiction to rule on the merits, an d th a t the district cour t di d s o c or re ctl y . W e ag re e and aff ir m.

I. FACTUA L A ND PROCEDUR A L BACKGROUND The ju ris dicti onal dis pute dates back to Dec ember 29, 2004, the date on w hic h a Mi chi g an woman named Han a Dj elj ev ic filed a putat iv e cl ass acti on i n s tate cour t al leg ing in a single coun t tha t Sta te Farm had comm itted a breach of contractbyfailing to ensure proper i nspecti ons of seat bel ts and s eat b eltsyste ms in v ehi cl es of it s ins ureds that had bee n involv ed in collisions. T he comp laint conten ded tha t Sta te Farm had breach ed th is obl ig ati on to Djeljev icand “a ll othe rssi mil ar ly si tuate d.” W hil e St ate F ar m’s m o ti on for summar y di spos it ion and Dj elj ev ic ’s moti on for cl ass cert ific ati on were pendi ng , t he s tate trial court judge prop osed t o recuse h erself base d on the disclosu re of a pote ntial con f lict of inte re st w it h pl ain ti ff Djeljev ic
. Immedia tel y after the jud g e’s di sc losu re , c ounse l for Dj elj ev icmade an oral moti on to “file a sec ond amended Complai nt w hic h woul d s ubst it ute a dif feren t class represen tative, elimina t[ing] . . . Dejeljev ic[] all togethe r[ sic],” and maki ng re cus al unnec ess ar

y . This oral moti on was g ra nted and an amended c omplai nt was filed on Ju ne 1 , 200 5, sub stitutin g Jon Hall as na me d plain tif f . Hall’s claim, like Dj eljevic’ s,No. 05-2530

Hall v. State Farm Insuranc e Co.

- 3 - all eg edl y arose out o f a col li si on involv ing a v ehi cl e ins ured by Stat e Far m and c ontai ned a s ing le cl aim for breach of contract
. On t he s ame day thatH all fil ed th is amended com plaint , Stat e Farm rem oved the suit to fede ral district court und er CAFA, w hich ex pands federal di v ersi ty j ur is dicti on ov er

cl ass acti ons by

creati ng an e x cept ion to the g eneral re q uirement of c omplete d iversi ty and by al low ing cl ass acti on pl ain ti ffs t o ag g re g ate thei r cl aims to meet the amount in co ntrov ersy req uirement. See28 U .S.C . § 1332( d)
. By it s terms, CA FA does not a ppl y retroact iv ely

but, rather , “ to an y

ci v il acti on commenc ed on or

after the date of [it s] enact ment,” Febr uar y 18, 2005. C las s A cti on Fai rn ess Act of 2005, Pub. L. 109- 2, § 9, 11 9 St at. 14 ( 2005)
. Hal l did not oppos e or

othe rw is e q uest ion remov al w hen i t was ini ti all y appl ied for and obt ain ed, b ut t he di str ict c our t di d, sua sponte . Not ing thatthe “[t]wo C ircui t C our ts of Appeal s [to] hav e c onsi dered the meanin g of the word ‘ commenc ed’ under
. . . C AFA

[had b]oth hel d tha t t he te rm . . . re fers to the ini ti al fili ng of t he cl ass act ion in sta te cour t,” and cit in g Pritchett v. Office Dep ot, In c. , 4 0 4 F
. 3 d 1 2 3 2 , 1 2 3 7 - 3 8 ( 1 0 t h C i r . 2005) , am ended a n d su per seded by 420 F. 3d 1090 ( 10th Ci r. 2005) , and K n u ds e n v

. L i b e r t y Mutual Ins ur ance Co. , 411 F .3d 8 05 (7th Ci r. 2005), the dis tr ict cour t ordered State F ar m “ to s how caus e i n w ri ti ng . . . as to w hy th[ e] c ase shoul d notbe re manded t o s tate cour t for lac k o f subje ct ma tter jurisdiction .” Res pondi ng to the o rd er t o s how

ca use, Sta te F ar m arg ued t hat t he amended compl ain t nami ng H all as pl ain ti ff was a “ new

co mplai nt” that “commenc ed a new acti on”No. 05-2530

Hall v. State Farm Insuranc e Co.

- 4 - and , the refore, “trigg er[ed ] the app licability of CAFA” and fede ral jurisdiction th ereu nde r. The di str ict c our

t ac cept ed th is respo nse and proc eeded to ex erci se jur is dicti on ov er the cas e w it hout obj e ct io n f ro m Ha ll , w ho was leg all y enti tl ed to se ek re mand and to an int er loc utor

y rev iew of the deni al of a motion t o remand, see28 U .S.C . § 1453, but d id not do s o. St a te Fa rm n e xt m o ved t o d ism iss t h e c o m p la in t, a rgu in g t h a t Ha ll fa ile d to al le ge two of the element s neces sar y to a breac h of

contractclai m – breac h and damag es. The dis tr ict c our

t g ra nted thi s moti on, conc lud ing thatH all had “s uffered no damag es” and that the re had bee n “no brea ch of contract .” H all now seeks review of both the district cou rt’s subj ectmatte r jur is dicti on and it s d is mis sal of the c ase. II. D ISC US SION W e rev iew

determi nati ons of subj ectmatte r jur is dicti on de n ovo . See W ittstock v. Mark A. Van Sile, Inc. , 3 3 0 F
. 3 d 8 9 9 , 9 0 1 (6 t h Ci r. 2 0 0 3 ). L ik e wis e , “[w] e re vie w d e n o vo the district court’s order to dism iss pursuan t to Fed .R.Civ .P. 12 (b)(6).” Evan s v . Pe ar son Enter., Inc. , 434 F .3d 8 39, 8 46 ( 6th C ir . 200 6) ( ci tati on omi tted)
. A . Juris diction Under the Statut e CA FA appl iesto act ion s “ commenc ed on or after” Feb ru ar

y 18, 2005, but d oes not define t he te rm “c ommence.” C las s A cti on F air ness Act of 2005, Pub. L. 109- 2, § 9, 11 9No. 05-2530

Hall v. State Farm Insuranc e Co.

- 5 - Stat . 14 (2 005)
. Beca use there i s n o bas is other than CAF A upon w hic h to ass ert federal jurisdiction in this case, in orde r to determ ine w het her there is such jurisdiction , w e mu st det ermin e as an initial mat ter w hen t he action “com me nced .” On f irst considera tion, this q uest ion appears rel ati v ely straig htforward, and Hall mai ntai ns that iti s, in fact, v er y si mple. Rel y ing on M ic hig an C our t Rul e 2.10 1( B) , w hic h, l ik e F ederal Rul e of Ci v il Procedu re 3, provides that“[a] civ il action is comm ence d by filin g a c o m p la int w ith the court,” Hall ass erts that an acti on c an onl y co mmence on ce and t h a t this ru le alo ne i s s uff ic ien t t o answer the q uest ion before the c our t. Ac cordin g to Hal l, the act ion “ commenc ed” w hen Dj elj ev icfil ed th e or ig ina l compl ain t i n s tate cour t before C AFA ’s enactment. Hal l’ s framing of the i ss ue, h ow ev er , beg s the q uest ion
. Cl ear ly , w hen D jeljev icfil ed her co mplai nt t he acti on c ommenced as to he r, but the q uest ion now before us is w hether Dje lje vic’s f ili n g alsoco mmenced t he s uitas to Hal l. Cf
. Br aud v . T ra nsp. Ser

v. Co. , 445 F.3 d 8 01, 8 04 ( 5th C ir . 200 6) ( “[ T]he i ss ue i s n ot w hether C AFA sh oul d appl y

to sui ts ‘c ommenced’ before Febr uar y 18, 2005, b ut w hether the addi ti on of a new defendant ‘c o m m e n c e s ’ a n e w s u it
. ”)
. T h is q u e s t io n , a s itt u rn s o u t , m u s tb e a n s we re d b y st a t e la w. See Prim e Care, LL C v. Hum ana Ins. Co , 447 F .3d 1 284, 1286 (1 0th Ci r. 2006)( “w hether an a me ndm entis distinct eno ugh to g ive r ise to a ne w comm ence me nt da te is prope rlyNo. 05-2530

Hall v. State Farm Insuranc e Co.

T h i s ru l e h a s a p p a re n tl yb e e n a d o p te d b y e v e ry c o u rt th a t h a s a d d re s s e d th e q u e s ti o n . See , e. g. , 1 Braud v. Transp. Ser v. C o. , 44 5 F
. 3d 80 1, 80 3 ( 5th C i r. 20 06 ) (“ w he n an ac t i on i s c om m en c ed i n s t ate c ou rt i s d e te rm i n e d b a s e d o n th e s ta te ’ s o w n r u l e s o f p ro c e d u re ” (f o o tn o te a n d c i ta ti o n o m i tte d )) ; P hilli ps v. F ord M ot or C o. , 435 F. 3d 7 85, 787 ( 7t h Ci r . 2006) (“ Si nce t he quest i on f ordeci si on . . . i s w het heradd i ng n am ed p l a i n ti ff s c o m m e n c e s a n e w s u i t in s tate c ou rt , t h e a n s w e r s h o u l d d e p e n d o n s ta te p ro c e d u ra l l a w .”); Knudsen v. Li bert y Mut
. I ns. C o. , 435 F. 3d 7 55, 757- 58 ( 7t h Ci r . 200 6) ( r el y i ng o n st at e r el at i on b ack l aw t o de t er m i ne w h e th e r a d d i ti o n o f a c l a i m c o m m e n c e d n e w l i ti g a ti o n fo r p u r p o s e s o fC A F A ); P lu b e ll , 434 F. 3d at 107 1 (“ [s ]ta te l a w d e te rm i n e s w h e n a s u i t i s c o m m e n c e d i n s ta te c o u rt”) ; Bush v. C heaptickets, I nc. , 425 F
. 3d 6 83, 686 ( 9t h Ci r . 200 5) ( “ [ I ] t i s ‘ cl eart hat a f eder al cour t m ust honor st at e cour t r ul es gov er ni ng co m m encem ent ofci v i l act i ons when an act i on i s f i r st br ought i n st at e cour t and t hen r em ov ed t o f eder al cour t
. . . . ’ ” ( quot i ng C annon v. Kroger

C o. , 8 3 7 F .2 d 6 6 0 , 6 6 4 ( 8 th C i r. 1 9 8 8 )) ); N atale v. Pf i z er , I nc. , 42 4 F
. 3d 43 , 44 -45 (1s t C i r. 2005) ( appl y i ng st at e l aw t o de t er m i ne when sui t com m enced f or pur poses ofC AF A ( ci t i ng P fi ze r, In c . v . L o tt , 4 1 7 F .3 d 7 2 5 , 7 2 6 (7 th C i r. 2 0 0 5 )) ); P fi ze r, In c . v . L o tt , 417 F. 3d 7 25, 726 ( 7t h C i r . 2005) ( det er m i ni ng when s u i t “c o m m e n c e d ” fo r p u rp o s e s o f C A F A b yre fe re n c e to s ta te l a w e x c lu s i v e l y ); I n r e Methyl

Tertiar y But yl Ether Prods. Liab. Liti

g. , N o . 1 :0 0 - 1 8 9 8 , M D L 1 3 5 8 ( S A S ) , M 2 1 - 8 8 , 2 0 0 6 W L 1 0 0 4 7 2 5 , a t * 4 ( S .D .N .Y . A p r il 17, 2006) ( “ A cour t m ust l ook t o st at e l aw t o det er m i ne when a l awsui t was i ni t i al l ycom m enced f orpur poses o f C A F A .”(c i ta ti o n fo o tn o te o m i tte d )) ; W er ne r v . KPMG L LP. , 415 F. Supp. 2d 688, 695 - 96 ( S. D
. T ex. 200 6) ( “ T h e c o u r ts o fa p p e a ls e x a m in in g t h e i s s u e h a v e h e ld th a t a f e d e r a l c o u r t d e te r m in e s w h e n a la w s u it is
‘ c om m en c ed ’ for t he p urp os e o f C A F A by l oo k i ng t o s t ate l aw . M os t di s t ri c t co urt s i n o t he r ci rcu i t s ha ve a g re e d w i th t h is a p p ro a c h .” (c i ta ti o n s a n d fo o tn o te s o m i tte d )) ; W eekley v. G uidant C or p. , 392 F. Supp. 2d 1066, 106 7 n. 1 ( E. D
. Ar k
. 200 5) ( “ St at e l aw gov er ns when a ci v i l act i on i s com m enced for p urp oses o f r em ov al
. ” ( ci t i ng W inkels v. G eor ge A. H or

m el & C o. , 8 7 4 F .2 d 5 6 7 , 5 7 0 (8 th C i r. 1 9 8 9 )) ); I n r e Expedia Hot el Taxes & Fees Liti

g. , 3 7 7 F
. S u p p . 2 d 9 0 4 , 9 0 6 ( W .D
. W a s h
. 2 0 0 5 ) ( “ in r e m o v a l c a s e s , ‘c o m m e n c e m e n t’ is g o v e rn e d b yth e l a w o f th e s ta te i n w h i c h th e a c ti o n o rig i n a te d ” (q u o ta ti o n m a rk s a n d c i ta ti o n s o m i tte d ))
.

- 6 - gauged by the forum state ’s law g o ve rn in g the relation-b ack of plead ing amen dm ent s”) (citation s omitt ed). 1 Al thoug h the par

ti es ag re e tha t s tate law co ntrols , t hey

v ig orousl y

di spu te ( 1) w hether H all was a par

ty to the s tate act ion at the t ime Dj elj ev icfil ed i t and , i f not, ( 2) w hether the amended c omplai nt ne v erthel ess rela ted b ack , neg ati ng co mmencement of a new l awsui t. B. Party Status in Class Action SuitsNo. 05-2530

Hall v. State Farm Insuranc e Co.

- 7 - Hal l arg ues that ev en i f amended pl eadi ng s h av e the pote nti al to recommenc e an a ct io n , t h e am e n d m e n t a t is su e he re di d no t d o s o b e ca u se i t m a d e n o s u b st a n ti ve ch a n ge to the suit. He cites Cowles v. Bank West (Cowles I) , 687 N.W .2d 6 03 (Mich. App. 2 004 ), par ti all y v acated Cowles v. Bank West (Cowles II) , 719 N.W .2d 94, 111 ( Mi ch. 2006) , for the p ro posi ti on th at “ under M ic hig an l aw , members o f a putative cla ss a s outl ine d i n a com plaintare not‘new parties’ to th e actio n w hen they becom e na me d pa rties.” If th is cont enti on i s c or re ct, we need not reach re lat ion -b ack anal y si s, for if

H all was, i n fact, a party to the act ion at the time Djeljev ic f iled her compla int, then his action did com me nce at t hat t ime. St at e F ar m a rg ue s to th e c on trar y tha t H al l w as nota pa rty t o th e acti on a t th e ti me of Dj elj ev ic ’s fil ing but, i nst ead, “was nothi ng more than an unnamed putat iv e member of Djelj e vic’s asser

ted c las s –

a c las s t hat was nev er ce rt ified .” Asa resul t, the d efendant cont ends, before the fil ing of the a m e n d e d acti on on June 1, 20 05, H all di d nothav e a lawsui t pe n d in g ag ain st Stat e F ar m. Thus , t he first is sue before u s i s w hether , und er Mi chi g an l aw , an unnamed member of an uncer

ti fied clas s i s a “ par

ty ” at t he ti me an acti on is first filed
. W e c oncl ude t hat t hisq uest ion mustbe a nswered i n the neg ati v e. The only state law

auth orityHall ci tes in supp ort of his arg um entto the contrary i s Cow les v. Ban k W

est , i n w hic h the M ic hig an C our t of Appeals held that the tri al cour t had improper ly

di smi ss ed a Tru th i n Lendi ng Act c las s a cti on as ti me-ba rred w hen a member of the s peci fical ly

def ine d putati v e clas s w as subs ti tuted in an amended c omplai nt for theNo. 05-2530

Hall v. State Farm Insuranc e Co.

- 8 - origi nal na me d plain tif

f , w hose cla im wa s dem onst rably unt ime ly und er the a pplicab le statu te of

li m it a t io n s . 687 N.W .2d 603 (M ich. Ct. App . 200 4) ( Cow les I ), aff’

d i n par t, vacated in pa rt , 719 N.W .2d 94 (Mich. 200 6) ( C o wle s II ), re h ’ g deni ed , 722 N .W .2d 4 29 (M ic h. 2006 ). I n Cow

les I , t he appe ll ate c our t r ule d tha t t he r unni ng of the s tatut e was tol led by the fili ng of the f irst compl ain t becaus e the newnamed plai nti ff was a member

of the cl ass descr ibe d in the ori g ina l compl ain t and the cl assw as ult imat ely ce rt ified
. Id. at 607- 13. But, in subseq uentl y af firmi ng the int er mediat e c our t’ s d eci si on to ll ing the sta tute of limit a t io n s , the Michig an Su prem e Court f urthe r noted the inte rmed iate co urt’s deter minat ion that the amended TILA cl aim w as improper ly di smi ss ed “ re ste d prim arily on it s c oncl usi on th at t he rela ti on- back doctr in e appl ied to [the subs ti tute pla int iff’s] cl aim. ” Cowles II , 719 N .W .2d a t 102 ( emphasi s a dded)
. Rec og niz ing that“ [t] oll ing under [Michigan Court Rule] 3.5 01(F) .
. . is conce ptu ally d istinct f rom relation b ack und er MCR 2.1 18(D),” the Michigan Sup reme Court v acat ed the very portion of

the Cou rt of

Appe als deci si on upon w hic h H all reli es in thi s c ase. Id. at 111. The M ic hig an Sup re me C our t und oubtedl y

di d s o for g ood reason . The M ic hig an class action rule doe s note xp re s s ly sta te w het her un nam ed m em bers of a class are cons ide re d par

ti es or , i f so, a t w hat p oin t i n the l it ig ati on th ey bec ome par

ti es. SeeM ic h. Cou rtR . 3. 501. H ow ev er , t he l ang uag e and str uct ure of t he ru le seem to sug g est that an unnamed me m b e r o f

a p u tativ e c las s d oes not b ecome a par ty to an acti on i n any

real sens e unt il ce rt ific ati on. See id. Pr ior to c er ti ficat ion the named pl ain ti ff has not y et esta blished itself

as a represe nta tiv e of

the un nam ed p uta tiv e class me mb ers but, rather,No. 05-2530

Hall v. State Farm Insuranc e Co.

- 9 - has merel y

“ cl aim[ ed] t he r ig ht t o a c las s a cti on” ; w hether or not th e p la in tiff

i n fact has suc h a ri g ht remai ns to be deter mined. Cowles II , 719 N .W .2d a t 108 n.10 ; see a lso id. at 104 (describing pre-certif ication action as “‘ prosp ective li tigation’” and un nam ed m em bers of putati v e c las s a s “ potent ial p la in ti f fs” (qu o ti n g Am . Pi

pe & Con str

. Co. v. Ut

ah , 414 U .S. 538, 555 ( 1974) )) ; accord id. at 109. W e thu s c oncl ude t hat i f faced w it h the q uest ion now before us, th e Michigan Supre me Court would f ind th at un nam ed p uta tiv e class me mb ers are n ot te c hn i c al l y pa rti es to an acti on pr i or to c l as s c er ti fi c at i on an d that, as a cons eq uence , H all was not a tr ue par ty at the t ime that Dj elj ev icf il ed suit
. The amended c o mp l a i n t s u b s t i t u t i n g H a l l a s t h e n a me d p l a i n t i ff mu s t t h e re fo re b e a n a lyz ed unde r Michig an’s relatio n-ba ck principles. C. Relat io n Bac k o f Co mp lain ts Add in g NewPar ti es Mi chi g an Cou rt Rul e 2.118( D) prov ide s that “[ a]n amendment that adds a c lai m or a defense re lat es back

to the d ate o f the or ig ina l ple adi ng i f the c lai m or defense ass erted in the a mended pl eadi ng arose out o f t he condu ct, transacti on, or occ ur re nce setforth , or atte mp ted to be set forth, in t he origi nal plea ding.” Desp ite this broa d langua ge, the rule has b een circumscribed through case s holdin g tha t “[a]ltho ugh an am end me nt gene rally re lat e s b a ckt o the date of the o ri g ina l fili ng i f the new cl aim ass erted a ri ses out of the co n d u ct , tran sacti on, o r occ ur re nce setforth i n the pl eadi ng , t he rela ti on bac k d oct ri ne d o es no t extend to the ad dition of new partie s.” E

m p loy e r s Mu t
. C a s . C o . v

. Pe t ro leu m Equ ip., In c. , 475 N.W .2d 418 (M ich. 19 91) (citation s o mitt ed). Sta te law in this regard isNo. 05-2530

Hall v. State Farm Insuranc e Co.

Al t hough t he M i chi gan C our t of Appeal s has occasi onal l yque st i oned t he r easona bl eness oft hi s r ul e, 2 i t h a s n e v e rth e l e s s re m a i n e d fa i th fu l to i t. See , e. g. , H urt v. Mi chael ’

s Food Ctr. , I nc. , 559 N
. W
. 2d 660, 665 ( M i ch
. Ct
. Ap p. 1 99 7) ( ap pl y i ng t he r ul e bu t n ot i ng t ha t , wer e t he c ou r t n ot“ co ns t r ai ne d t o f ol l ow E m pl oy ers M ut ual , ” i t woul d “ hol d t hat t he r el at i on- back r ul e ext ends t o t he addi t i on ofa new par t y. . . . when an a dded pl ai nt i ff s o u g h t t o j o i n t h e a c t i o n b y m e a n s o f a n a m e n d e d c o m p l a i n t ” )
. The M i c h i g a n Su p r e m e Cour t has n e v e rr u le d to th e c o n tr a r y.

- 10 - so cl ear thati n hi s b ri ef on appeal , H all co ncede s t hat “ Mi chi g an l aw i s different than other jur is dicti ons in that‘re lat ion back’ does not appl y to the a ddi ti on of par

ti es. ” As a resul t, 2 Hal l canno t be cons ide re d to hav e been a party to the u ncer

ti fied c las s a cti on pr ior

to bei ng d e s i g n a t e d a s a na me d pl a i n t i ff. Atth e sa me ti me , h i s s u b s t i t u t i o n a s t h e n a me d p l a i n t i ff in the a mended c omplai nt c onst it uted the “ commenc ement” of a new acti on for pur poses of CAF A bec ause itdi d notrela te ba ck to the fil ing of the o ri g ina l act ion by Djeljev ic
. D. Breach of Co ntract Claim on the Merits From all of

this, it follows tha t the district court had jurisdiction un der CAFA to rule on th e me rits of

Ha ll ’s contract claim . On tha t issue, we ag ree w ith the district court’s deter minat ion thatthe co m p lai nt fail ed to st ate a cl aim for breach of contractand w as the refore subject to dismissal und er Fede ral Rule of Civ il Proced ure 12(b)(6), wh ic h we re vie w de n ovo . See Advo cacy Org. for Pat ients & Provide rs v. Au to Club In s. Ass'n , 176 F. 3 d 31 5 , 3 1 9 (6t h Cir. 19 9 9 ) (ci ti n g Sistrunk v. City of Stron gsville , 99 F. 3d 194, 197 ( 6th Cir.1996 )). In orde r “ [t]o surv iv e a m otion to dism iss unde r Rule 12(b)(6), a ‘comp laint m ust cont ain eith er direct or inferen tial allegation s respe cting all the ma terial elem ent s to susta inNo. 05-2530

Hall v. State Farm Insuranc e Co.

- 11 - a recovery

und er som e v iable legal the ory .’” Id. a t 3 1 9 (quo ti n g Sche id v. Fanny F ar m er Cand y Shop s, Inc. , 859 F .2d 4 34, 4 36 ( 6th C ir . 198 8) ( int e rn al q uotat ion mar ks and ci tati ons omitted) ). “ ‘[ M] ore tha n bare as ser tions of leg al conc lus ion s’ ” is req uired to w it hst and di smi ss al, but all well -p lea ded al leg ati ons in the c omplai nt are to be treated as true an d “constru ed in th e lig ht m ost favorable to th e plain tif f .” I d. ( q u o ti n g Sche id , 859 F. 2d at436 (i nter nal ci tati on omi tted) ). Beca use thi s i s a di v ersi ty ca se, w e appl y

Mic hig an s ubst anti v e l aw . Hal l and St ate Farm agree that to plea d a brea ch of cont ract prop erly und er Michig an law , a plaint if f must sta te t hree el ements : (1 ) the ex is tenc e of a c ontractbetween pl ain ti ff and defendant, (2 ) a breach, and (3 ) damag es. See Inr e Br own , 342 F .3d 6 20, 628 ( 6th C ir . 200 3) ( appl y ing M i c h i g a n l a w ) ( c i t a t i o n o mi tt e d )
. T h e p a rt i e s a ls o ag re e t h a ta c o n t ra ctb e tw e e n p l a i n t i ff and defendantex is ted. They di sag re e, how ev er , as to w hether H all proper ly

pl eaded t he re maini ng two el ements
. T he b asis of

the disp ute is a disagreem entabo ut w hatobligations fell o n Sta te Farm und er a single senten ce in the insurance contract at i ssue that read as follows: “W e w ill inc lud e i n the estimat e parts suff ic ien t to rest ore the v ehi cl e to it s p re -l oss co ndi ti on.” Bo th Hall and St ate Farm argue tha t the provi sion is una mb ig u o u s , but th e “una mb iguous” me anin gs asserte d by each are mutu ally exclusiv e. T he section in w h ic h t h e se nte nce app ears professes to limit State Farm’s liability “fo r loss to proper

ty or any par t [ thereof to] the l ow er of: 1. the actua l cas h v alu e; or 2. the cost of repai r or repl acement .” The s ect ionNo. 05-2530

Hall v. State Farm Insuranc e Co.

- 12 - then ex pla insthe methods by w hic h actual cash v alu e and cos t of repai r or repl acement are t o b e d e t e r mi n e d , p ro v i d i n g t h re e me a n s o f c a l c u l a t i n g t h e l a tt e r : ( 1 ) an amount “a g re ed upon ” by

the ins ured and Stat e F ar m, ( 2) “ a c ompeti ti v e bi d approv ed by [St ate Far m],” or

( 3) a w ri tten est imat e tha t i s “ based upon the p re v ail ing co mpeti ti v e pr ic e,” as follows: The prev ail ing co mpeti ti v e pr ic e means pr ic es charg ed by a maj or ity

of the re pai r mark et i n the area w here the car i s t o be re paire d a s d e termine d by a s u r v eym ade byus . I f you ask, w e w ill iden tif y some facilities tha t w ill per form the re pai rsat the prev ail ing co mpeti ti v e pr ic e. W e w il l inc lud e i n the est imat e par

ts suffici ent t o rest ore the ve hic le to itspre- los s c ondi ti on. You ag re e w it h us thatsu ch par ts mayi ncl ude ei ther

par ts furni shed by

the v ehi cl e’smanufacturer or par ts from othe r sources i ncl udi ng non- or ig ina l eq uip ment manufact urers. Hall’s compla int al l eg est hat “State Farm w as ob lig ate d un der the insurance contract to c onduct and /or

pay for p ro per

i nspecti ons o f

s e a t b e lt s a nd s eat b eltsyste ms by qua lif ied tec hni ci ans on v ehi cl es of its i nsureds involv ed i n c oll is ion s[, ]” and that “S tate Far m breache d [this ] obli g ati on.” Hal l cont ends that the s tatement“ W e w il l inc lud e i n the est imat e par

ts suffici ent t o rest ore the v ehi cl e to its p re -lo ss co ndi ti on” obl ig ates Sta te Far m not onl y

to pay for a ll repai rs , butal so “t o ens ure tha t [the] es ti mate i s c omplet e” and “re f le ct [s ] fully

al l damag e or

l oss from t he c oll is ion and the p arts neces sar y to br ing the v ehi cl e to it s p re -l oss , und amag ed s tate ( i. e. , to re pai r all damag e caus ed by the col li si on) .” Stat e F ar m breache d the co ntract , H all alle g es, “by not per forming or

by not ensur ing that

. . . [the est imat ing /repai ri ng ] s hops
. . . perfo rm f u ll a n d proper se atbel t i nspecti ons on Pl ain ti ff ’s v ehi cl e.” Hal l submi ts that “[t]he onl y way thatSta te F ar m can fulfill i ts obl ig ati onNo. 05-2530

Hall v. State Farm Insuranc e Co.

- 13 - to pa y for l oss ca used by

co ll is ion i s t o ens ure tha t al l damag e is pro per ly as ses sed
. . . .” Thus, in Hal l’ s v iew , t he i nsuranc e c ontracti ncl udes an i mpli ci t “ g uarantee[ ] t hat t he estim ate w ill be co mp lete a nd co v er all dam age cause d by the collision.” Sta te Farm disput es the plaintif f’s conte ntion thatthe sen ten ce “W e w ill include in the e sti mate par

ts sufficien t to r e st ore the v ehi cl e to it s p re -l oss co ndi ti on” i mposes any dut y to ensu re prop er assessm ent of dam ages, arguing tha t it opera tes sole ly to explain how the cos t of repai r w il l be cal cul ated and to prov ide that“ if the cos t of repai r is bas ed upon an es ti mate,” then the cos t of nec ess ar y par ts w il l als o be inc lud ed w hen c alc ula ti ng the c ost
. As Stat e Far m ex pla ine d to the dis tr ict cour t, the sent ence in q uest ion “ re fers to the factthati f . . . [St ate Far m] incl ud[es ] part s on the est imat e, they are goi ng to be par

ts suffici ent t o res to re the v ehi cl e proper ly ,” thatthe subs eq uent sent ence creates an “a g re e[ment]
. . . thatthos e par ts can be from a v ar iety of sources ,” and that the focus of the c lau se is on “ the n ature of the par ts that are bei ng put on th e c ar [but] s ays n othi ng about
. . . creati ng the est imat e, [ or] doi ng an i nspecti on . . . .” ). It is not un reaso nab le of Hall to conclud e t hatthe sta tem ent“[State Farm] w ill inc lud e i n the es ti mate par ts suffici ent to rest ore the v ehi cl e to it s p re -l oss co ndi ti on” pl aces an o bligation on State Fa rm . W h a tis not reason able , in our judgme nt, is the plaintif f’s apprais al of the c ontours and sc ope of t hat obl ig ati on. The st atement in q uest ion operates in the con tr a ctt o e x pla in one of three means of ass ess ing the “c ostof re pai r or replace me nt” for w hich Sta te Farm is liab le. Th ere are two othe r mea ns of estab lishing thisNo. 05-2530

Hall v. State Farm Insuranc e Co.

- 14 - cos t ( ag re ement an d c ompeti ti v e bi d) , and t he ag re ement t o “ inc lud e . . . par ts suffici ent to resto re the vehicle to i ts pre-loss cond ition” doe s not app ly to these other mean s. Th us, the obligation to include all necessa ry parts is, in fact, a cont ingent oblig ation : It arises on ly i f S t a t e F a r m a s s e s s e s t h e c o s to f re p a i r o r re p l a c e me n tb a s e d o n “ a n e s t i ma t e w r i tten based upon the p re v ail ing co mpeti ti v e pri ce ” (a s opposed to by co mpeti ti v e bi d or ag re ement)
. Howev er , H all has not all eg ed th at S tate Far m’s l ia b ili ty was deter mined base d on an “estim ate w ritten based upo n the
. . . prices charged by a majo rity of the rep air mark et i n the area w here the car is to be repai re d a s deter mined by a s ur v ey made by [S ta te F ar m].” To t he c ontrar y , H all ’s co mplai nt al leg es that he to ok the v ehi cl e to the dea ler fro m whom he had purcha sed th e v ehicle for both the est ima te an d the repairs. Beca use w e c oncl ude t hat H all fail ed proper ly to all eg e the appl ic abi li ty of the p ro v is ion at is sue in thi s c ase, we furt her co ncl ude that he faile d to all eg e that Stat e F ar m commi tted a breach of contractand that the d is tr ict c our t’ s d is mis sal was therefore proper . III . CO NC LU SION Hav ing found thatthe dis tr ict c our t had su bje ct matter jur is dicti on in thi s cas e and hav ing dete rmi ned t hat d is mis sal under Rul e 12( b) (6 ) w as proper for t he reason s s et ou t abo v e, w e prete rmit discussio n of all other i ssues and AFFIRM the judgme nt of the district court on the m erits.