UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

TERESA A. TOLER; ROY TOLER, SR., 

Plaintiffs-Appellants,

v.  No. 00-1697

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY, a corporation,

Defendant-Appellee. 

Appeal from the United States District Court

for the Southern District of West Virginia, at Charleston.

Charles H. Haden II, Chief District Judge.

(CA-99-1018-2)

Argued: November 1, 2001

Decided: December 28, 2001

Before LUTTIG, MOTZ, and TRAXLER, Circuit Judges.

Vacated and remanded by unpublished per curiam opinion. 

COUNSEL

ARGUED: Menis E. Ketchum, GREENE, KETCHUM, BAILEY, &

TWEEL, Huntington, West Virginia, for Appellants. Charles S. Piccirillo, SHAFFER & SHAFFER, Charleston, West Virginia, for

Appellee. ON BRIEF: John H. Bicknell, GREENE, KETCHUM,

BAILEY, & TWEEL, Huntington, West Virginia, for Appellants.

Carl L. Fletcher, Jr., SHAFFER & SHAFFER, Charleston, West Virginia, for Appellee. 
Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

This insurance coverage dispute arises out of an automobile accident that injured Teresa Toler. Because we are unable to determine,

on the record before us, whether this civil action satisfies the $75,000

amount in controversy requirement for diversity jurisdiction, we

vacate and remand the case to the district court with instructions to

determine whether subject matter jurisdiction exists pursuant to 28

U.S.C. § 1332. 

I.

The parties have stipulated to the facts. J.A. 19-21. Felicia Johnson

brought her car, which was in need of repair, to M & R Autoworks,

a business owned by Roy Toler, Sr. While at M & R, Johnson’s car

had to be taken to a Huntington, West Virginia dealership for further

repairs. Roy Toler, Sr.’s wife, Teresa Toler, and his daughter-in-law,

Martha Toler, agreed to drive Johnson’s car to the Huntington dealership. During the trip to Huntington, with Martha at the wheel and

Teresa in the passenger seat, a vehicle owned and operated by Paula

K. Adams negligently struck Johnson’s car, injuring Teresa. Adams’

insurer, Dairyland Insurance Company, conceded Adams’ liability

and paid its $20,000 policy limit to Teresa. Johnson’s insurer, State

Farm Automobile Insurance Company, paid Teresa an additional

$25,000 in medical payment coverage. 

Teresa sought additional coverage from two State Farm Mutual

Insurance Company policies: one issued to Martha and her husband

(Roy Toler, Jr.), and one issued to Teresa and her husband (Roy

Toler, Sr.). Each policy provided $25,000 in medical payment coverage and $100,000 in underinsured motorist coverage, and Teresa submitted claims under both coverage provisions. State Farm extended

underinsured motorist coverage under Teresa’s policy, but denied

2 TOLER v. STATE FARM MUTUAL AUTOMOBILE INSURANCE
underinsured motorist coverage under Martha’s policy. J.A. at 7-8.

State Farm also denied Teresa medical payment coverage under both

policies. 

Teresa and Roy Toler, Sr. then filed suit against State Farm in a

West Virginia state court, seeking a declaratory judgment that Teresa

is entitled to: 1) medical payment coverage under Teresa’s policy,

with a limit of $25,000; 2) medical payment coverage under Martha’s

policy, with a limit of $25,000; and 3) underinsured motorist coverage

under Martha’s policy, with a limit of $100,000. J.A. at 6-8; 163-74.

State Farm removed to federal district court, pursuant to 28 U.S.C.

§ 1441, and moved for summary judgment. At summary judgment,

the Tolers conceded that Teresa was not entitled to the $100,000

underinsured motorist coverage under Martha’s policy. Appellant’s

Br. at 4. The district court then granted summary judgment to State

Farm on all three of Teresa’s claims. The Tolers appeal only the district court’s ruling on the two $25,000 medical payment coverage provisions. 

II.

The first issue, which the parties did not discuss, is whether this

case is within the subject matter jurisdiction of the federal courts. This

is a diversity case, and the amount in controversy must exceed

$75,000, exclusive of interest and costs. See 28 U.S.C. § 1332.

Because State Farm removed this case to federal court, it bears the

burden of showing that federal jurisdiction has been properly invoked.

See Mulcahey v. Columbia Organic Chemicals Co., Inc., 29 F.3d 148

(4th Cir. 1994). State Farm is unable to show, on the record before

us, whether the amount in controversy exceeds $75,000, so we vacate

and remand this case to the district court to give State Farm the

opportunity to do so. 

When a plaintiff seeks declaratory relief, the amount in controversy

for purposes of section 1332 is the "value of the object of the litigation." Hunt v. Washington State Apple Advertising Commission, 432

U.S. 333, 347 (1977). We must determine whether Teresa, if granted

declaratory relief on all her claims, would be entitled to recover more

than $75,000 from State Farm. 

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As to the value of Teresa’s claims for medical payment coverage

under the two State Farm policies, the maximum payable under those

provisions is $25,000 each, for a total of $50,000. A court should not,

however, automatically equate the value of Teresa’s claims with the

policy limits of the coverage. Of that $50,000, Teresa could only

recover "reasonable medical expenses" under the medical payment

coverage provisions (if she prevailed on her declaratory judgment

action). J.A. at 36. Teresa alleged, in her state court complaint, that

her medical expenses were "more than $39,000." J.A. at 7. Because

Teresa has already received $25,000 of medical payment coverage

under Felicia Johnson’s policy, J.A. at 20, the "value" of her claims

for medical payment coverage under the two State Farm policies, as

best we can tell from the record, is about $14,000. 

That is not enough for diversity jurisdiction, which makes Teresa’s

now-abandoned claim for uninsured motorist coverage under Martha’s policy crucial to the jurisdictional inquiry. Martha’s underinsured motorist policy covers "damages for bodily injury and property

damage an insured is legally entitled to collect from the owner or

driver of an underinsured motor vehicle." J.A. at 39 (emphasis in

original). Although the policy limit under this provision is $100,000,

there is no evidence or allegations regarding the extent of Teresa’s

"bodily injury" and "property damage" other than her $39,000 in medical bills. Moreover, State Farm has already extended $100,000 of

underinsured motorist coverage to Teresa under Teresa’s policy. J.A.

at 7-8. Hence, in computing the "value" of Teresa’s claim against

Martha’s underinsured motorist coverage, a court must take into

account the $100,000 of underinsured motorist coverage that State

Farm has extended to her. In sum, there is nothing stipulated or even

alleged in the record as to whether the value of Teresa’s claim for

underinsured motorist coverage under Martha’s policy might help this

case meet the jurisdictional minimum amount in controversy. 

There is a further problem in relying on Teresa’s claim against

Martha’s uninsured motorist coverage to establish the requisite

amount in controversy. This claim was so meritless that the Tolers

conceded the point at summary judgment and have not argued this

issue on appeal.* Appellant’s Br. at 4. The district court should have

*Under Martha’s policy, underinsured motorist coverage could only be

paid to an "insured," J.A. at 39, defined as the policyholder, his spouse,

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considered, sua sponte if necessary, whether the Tolers’ repudiation

of this claim, essential to establish subject matter jurisdiction,

required a remand to state court. The parties will have an opportunity

to fully brief and litigate this issue on remand. This is an issue that

must be addressed even if State Farm can show that the "value" of

Teresa’s now-abandoned claim against Martha’s uninsured motorist

coverage, when combined with the "value" of Teresa’s medical payment coverage claims, would establish an amount in controversy

greater than $75,000. 

CONCLUSION

The Tolers filed their initial complaint in state court, so there was

no need for them, at that time, to plead facts regarding the amount in

controversy. State Farm, by removing this case to federal court, bears

the burden of showing this court that the "value of the object of the

litigation" in this declaratory judgment action exceeds $75,000, and

it is unable to do so on the record before us. None of these issues was

litigated or briefed before us, nor addressed by the district court

below, so we vacate and remand the case to the district court with

instructions to determine whether the federal courts have subject matter jurisdiction over this civil action pursuant to 28 U.S.C. § 1332. 

It is so ordered.

any "relative," and certain persons occupying a car owned by the policyholder or being used as a temporary substitute car. J.A. at 40. The policy

defines "relative" as "a person related to [the policyholder or his spouse]

. . . who lives with [the policyholder]. J.A. at 28. Teresa did not reside

with Martha, so Teresa met none of these definitions of "insured" under

Martha’s policy. 

TOLER v. STATE FARM MUTUAL AUTOMOBILE INSURANCE 5