IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 02-30149

Summary Calendar

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HARTFORD INSURANCE GROUP,

Plaintiff-Appellant,

versus

LOU-CON INC.,

Defendant-Appellee.

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Appeal from the United States District Court

For the Eastern District of Louisiana

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June 21, 2002

Before DAVIS, BENAVIDES and CLEMENT, Circuit Judges.

PER CURIAM:

Plaintiff-Appellant The Hartford Insurance Group d/b/a Pacific

Insurance Company (Hartford) appeals the district court’s dismissal

of its action for declaratory judgment against Defendant-Appellee

Lou-Con, Inc. (Lou-Con). After reviewing the record and the

arguments of counsel, we affirm the judgment of the district court.

I.

In September 1998, Murphy Oil USA, Inc. (Murphy Oil), a client

of Lou-Con, was sued by a number of its employees for damages

resulting from asbestos exposure. Lou-Con performed work at Murphy

Oil’s refinery in Meraux, Louisiana during the time period alleged
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in the complaint, and several current and former Lou-Con employees

joined the suit as plaintiffs. Pursuant to certain alleged

contractual agreements between Murphy Oil and Lou-Con, Murphy Oil

demanded that Lou-Con defend and indemnify it for the Lou-Con

employees’ claims.

The complaint against Murphy Oil seeks damages for asbestos

exposure spanning back more than 30 years, and six separate

insurance companies provided coverage to Lou-Con throughout this

period. During the relevant time frame, Hartford had issued LouCon two $1 million general liability insurance policies and two $5

million umbrella liability insurance policies which provided

continuous coverage from May 1996 until May 1998. On August 12,

2001, Lou-Con demanded that Hartford provide defense and indemnity

for the asbestos claims that arose during the policy terms, but

Hartford denied its request.

On September 13, 2001, Lou-Con filed suit for declaratory

judgment in Louisiana state court, seeking a declaration that all

of its insurers, including Hartford, must defend and indemnify it

in the asbestos litigation. Lou-Con later dismissed this action

without prejudice. Shortly before Lou-Con dismissed its petition

for declaratory judgment, Murphy Oil sued Lou-Con in Louisiana

state court asserting breach of contract claims and demanding

defense and indemnity in the asbestos suit. Lou-Con has since

named Hartford as a third party defendant in the state court

action.
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In December 2001, Hartford filed the instant petition for a

declaration that it has no duty to defend or indemnify Lou-Con or

Murphy Oil in the asbestos litigation. The district court

dismissed the case for lack of federal subject matter jurisdiction,

finding that a sufficient amount in controversy did not exist.

Hartford appeals the district court’s judgment.

II.

We review dismissals for lack of subject matter jurisdiction

de novo, applying the same standard as that applied by the district

court. See St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d

1250, 1252 (5th Cir. 1998). As the party invoking federal

diversity jurisdiction, Hartford bears the burden of establishing

the amount in controversy by a preponderance of the evidence. See

id. In considering whether Hartford has met this burden, we must

first examine the complaint to determine whether it is facially

apparent that the claims exceed the jurisdictional amount. See id.

If the amount in controversy is not apparent, we may then rely on

“summary judgment” type evidence. Id. In examining such evidence,

“the jurisdictional facts must be judged as of the time the

complaint is filed . . . .” Id.

III.
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28 U.S.C. § 1332 confers federal diversity jurisdiction on

civil actions where the matter in controversy exceeds the sum or

value of $75,000.00. In an action for declaratory relief, the

amount in controversy is “the value of the right to be protected or

the extent of the injury to be prevented.” Leininger v. Leininger,

705 F.2d 727, 729 (5th Cir. 1983). In the instant lawsuit,

Hartford seeks declaratory judgment regarding the insurance

coverage it may owe to Lou-Con.

The parties disagree on the value of the right that Hartford

seeks to protect. Hartford asserts that it filed the instant suit

to protect itself from liability up to the limits of its general

liability insurance policy. Accordingly, it claims that the amount

in controversy is concurrent with the policy limits, or $1 million.

Lou-Con denies that it seeks to recover the policy limits and

contends that the amount in controversy should be based on the

actual value of the underlying claim. The district court agreed

with Lou-Con, found that the actual claim did not exceed

$75,000.00, and held that the amount in controversy did not exist.

Since Hartford’s petition neither sets forth the policy limits

nor gives any indication of the amount in controversy, the district

court based its determination of the jurisdictional amount on the

information in Lou-Con’s demand letter, which sought a total of

$261.42 from Hartford for defense costs in connection with the

claim of former Lou-Con employee Columbus Tullos (Tullos). Tullos,

who worked for Lou-Con from 1970 to 1997, is the only known
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plaintiff whose claims may be covered by Hartford’s policies that

were in effect from 1996 to 1998. The amount Lou-Con seeks from

Hartford for Tullos’ claim comprises less than 1 percent of the

$30,056.00 in total defense costs that Lou-Con seeks from all its

insurers. Even taking into consideration the possible statutory

penalties and attorney’s fees and the chance that Hartford may

ultimately be liable for 1 percent of the damages in the underlying

asbestos litigation, the district court did not find that Hartford

established by a preponderance of the evidence that this single

claim gives rise to an amount in controversy that meets the

jurisdictional threshold. Hartford now contends that the district

court erred by failing to automatically set the amount in

controversy at the policy limits.

To restate the issue, the question on appeal is whether, in a

declaratory judgment action concerning the applicability of an

insurance policy to a particular occurrence, the amount in

controversy is to be measured by the policy limits or by the value

of the underlying claim. Hartford asks us to begin our analysis

with C.E. Carnes & Co. v. Employers' Liab. Assur. Corp., Ltd., 101

F.2d 739 (5th Cir. 1939), in which the plaintiff insurer sought

declaratory judgment that its automotive liability policy over the

insured’s truck did not extend to the hauling and unloading of

butane gas. In determining the amount in controversy, the court

held that the “amount involved is not, as appellants contend, what

individual defendants claim by way of damages. . . . The amount in
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controversy is the value of that which is sought to have declared

free from doubt– the policy for $25,000.” We do not read this

case, as Hartford urges, to announce a rule that the policy limits

determine the amount in controversy. Carnes simply held that

numerous individual claims against an insurer may be aggregated to

reach the policy limit.

Carnes has also been cited for the proposition that when a

claim exceeds the policy limits, the policy limits, rather than

the larger value of the claim, determine the amount in controversy.

In other words, if an insurance policy limits the insurer’s

liability to a sum below the jurisdictional threshold, the fact

that a claimant wants more money does not increase the amount in

controversy. See Payne v. State Farm Mut. Auto. Ins. Co., 266 F.3d

63, 65 (5th Cir. 1959) (holding that the jurisdictional amount was

controlled by limitation of liability in policy and not by the

larger amount of damages). In the instant case, although

Hartford’s policy limit is $1 million, Lou-Con seeks a much smaller

amount of damages. Since we are not faced with the possibility

that the claims will likely exceed the policy limits, we do not

find that Carnes and its progeny are dispositive.

We recognize that under certain circumstances the policy

limits will establish the amount in controversy. Specifically, the

policy limits are controlling “in a declaratory action . . . as to

the validity of the entire contract between the parties.” 14B
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CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND

PROCEDURE: JURISDICTION 3D § 3710 (3d ed. 1998); see also Waller v.

Prof’l Ins. Corp., 296 F.2d 545, 547 (5th Cir. 1961) (holding that

when the validity of a contract or a right to property is called

into question in its entirety, the value of the property controls

the amount in controversy). However, in 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.” 14B CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H.

COOPER, FEDERAL PRACTICE AND PROCEDURE: JURISDICTION 3D § 3710 (3d ed. 1998).

We find that the instant case falls into the latter category.

Hartford seeks a judicial declaration that its policy does not

extend to Lou-Con employees who sustained asbestos-related injuries

while working for Murphy Oil. It is not seeking to void the entire

insurance contract. Accordingly, the district court properly

measured the jurisdictional amount in controversy by the value of

the underlying claim.

The most recent case in the Fifth Circuit to address the

amount in controversy in a declaratory judgment action involving

insurance coverage is St. Paul Reinsurance Co., Ltd. v. Greenberg,

134 F.3d at 1250. The plaintiff insurance company in Greenberg

sought a declaration of liability arising from its denial of the

insured’s claim under his homeowner’s policy for loss suffered when
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his home was destroyed by arson. We stated that the amount in

controversy in an action for declaratory judgment is “the value of

the right to be protected or the extent of the injury to be

prevented.” Id. at 1253. We further explained that, when an

insurer seeks a declaratory judgment regarding the coverage

provided by an insurance policy, the “value of the right to be

protected” is the “plaintiff’s potential liability under the

policy,” plus potential attorneys’ fees, penalties, statutory

damages and punitive damages. Id. at 1253 (quotations omitted).

Hartford points out that Greenberg held the insurer’s potential

liability to be equal to the $35,000.00 policy limit. However, we

did not automatically set the amount in controversy at that amount.

Rather, we recognized that Greenberg actually sought to recover

the policy limit. Accordingly, we allowed $35,000.00, attorney’s

fees, and 18 percent per annum statutory damages to be taken into

account for purposes of determining the amount in controversy.

Unlike the insurer in Greenberg which established that it

faced a good faith claim up to its policy limits, Hartford has

provided no evidence that its potential liability is anywhere near

the $1 million limit of its general liability policy. The only

evidence available is (1) that Lou-Con seeks $261.42 in defense

costs from Hartford and (2) that Tullos may be covered by

Hartford’s policy for less than two of the twenty-seven years

during which he worked for Lou-Con and allegedly suffered asbestosrelated injury. Based on this information, we cannot conclude that
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Hartford’s potential liability will meet the jurisdictional

threshold.

IV.

Since Hartford has failed to establish a sufficient amount in

controversy by a preponderance of the evidence, we find that the

district court properly dismissed its petition for lack of subject

matter jurisdiction. Accordingly, the judgment of the district

court is affirmed.

AFFIRMED.