Opinion ID: 72776
Heading Depth: 2
Heading Rank: 2

Heading: analysis

Text: Subject matter jurisdiction is a question of law that the Court reviews de novo. Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir. 1996) (citation omitted).
At the time Broughton filed this case, federal courts had jurisdiction under 28 U.S.C. § 1332 over state law claims between citizens of different states where the amount in controversy exceeded $50,000, exclusive of interest and costs.2 The parties 2 28 U.S.C. § 1332 has since been amended to require that the amount in controversy exceed $75,000, exclusive of interest and costs. 5 do not dispute that they are citizens of different states. The only issue is whether the amount in controversy exceeds $50,000. We will not dismiss a case for lack of subject matter jurisdiction under the diversity statute “unless it appears to a 'legal certainty' that plaintiff's claim is actually for less than the jurisdictional amount.” Burns v. Windsor Ins. Co., 31 F.3d 1092, 1094 (11th Cir. 1994) (citation omitted). “The determination of whether the requisite amount in controversy exists is a federal question; however, [s]tate law is relevant to this determination insofar as it defines the nature and extent of the right plaintiff seeks to enforce.” Duderwicz v. Sweetwater Sav. Ass'n, 595 F.2d 1008, 1012 (5th Cir. 1979) (internal quotations and citation omitted).3 In his complaint and throughout the proceedings in this case, Broughton has contended that he is entitled to recover not only the $50,000 in unpaid insurance benefits, but also statutory penalties and attorney's fees in the amounts of $12,500 and (at least) $10,000, respectively, under Ga. Code Ann. § 33-4-6. Section 33-4-6 provides that if an insurer in bad faith refuses to pay a valid claim under an insurance policy, “the insurer shall be liable to pay [the policy] holder, in addition to the loss, not more than 25 percent of the liability of the insurer for the loss and all reasonable 3 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this Court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to close of business September 30, 1981. 6 attorney’s fees for the prosecution of the action against the insurer.” Ga. Code Ann. § 33-4-6. Although section 33-4-6 provides for the recovery of the statutory penalty and attorney’s fees against only the insurer, Broughton contends that Ga. Code Ann. § 33-23-41 brings FIU within the section 33-4-6 liability provisions. In support of his argument, Broughton specifically relies on the following language in section 33-23-41: (a) Any person who in this state acts, purports to act, or holds himself or herself out as an agent . . . for an insurer that has not obtained from the Commissioner a certificate of authority then in effect to do business in this state as required by this title or who has not obtained a certificate of authority as required by this article . . . shall pay a sum equal to the state, county, and municipal taxes . . . . Violators of this Code section shall also be personally liable to the same extent as the insurer upon every contract of insurance made by the insurer with reference to a risk having a situs in this state, if the violator participated in the solicitation, negotiation, or making of the contract or in any endorsement to the contract, in any modification of the contract, or in the collection or forwarding of any premium or portion of the premium relating to such contract. This Code section shall have no application to a contract of insurance entered into in accordance with Chapter 5 of this title. Although this section can act to bring entities other than insurers within the section 33-4-6 liability, Ga. Code Ann. § 33-23-1(b)(3) excludes representatives of ocean marine insurers from the definition of agent. Under the facts alleged in this case, FIU acted as a representative of an ocean marine insurer. Section 33-23-41 does not, therefore, bring FIU within the statutory liability provisions of section 33-4-6. 7 Broughton presents no meritorious argument under which FIU could be subjected to the provisions of section 33-4-6. As section 33-4-6 was the sole basis alleged in the complaint under which Broughton contended he could recover in excess of $50,000, and because Broughton has not presented any viable alternative theory under which he could recover in excess of $50,000, we hold that it is clear to a legal certainty that Broughton's claim against FIU did not meet the § 1332 amount in controversy requirement.4
The test for determining the existence of admiralty jurisdiction under 28 U.S.C. § 1333(1) varies depending on the nature of the claim asserted. Broughton's claim plainly is constructed on tort principles. In the complaint, Broughton alleged that FIU was “under a duty not to place coverage with a surplus lines company unless said company was in good financial condition, and had the financial capability to pay its claims;” FIU “breached its duty to [Broughton] by placing [Broughton's] coverage with [Usher], when said insurance company was unsound financially;” and because FIU “breached its duty to the Plaintiff, [FIU] is liable to the Plaintiff for the amount that the Plaintiff was and is entitled to recover from [Usher].” Broughton's subsequent 4 The Court notes that Ga. Code Ann. § 33-5-58, and not Ga. Code Ann. § 33-4-6, appears to be the applicable penalty provision due to Usher's status as an alien insurer. Our resolution of the issues in this case would, however, be the same regardless of which penalty section Broughton cited. 8 filings also indicate that his claim against FIU sounds in tort. For example, the pretrial order submitted by the parties and entered by the district court states that Broughton “contends that the Defendant, Florida International Underwriters, Inc., failed to fulfill its statutory obligation to ascertain that Usher Insurance Company was financially sound, and also failed to notify the Plaintiff that Usher Insurance Company was unsound financially.” “[F]or a tort claim to be cognizable under admiralty jurisdiction, the activity from which the claim arises must satisfy a location test and it must have sufficient connection with maritime activity.” Alderman v. Pac. N. Victor, Inc., 95 F.3d 1061, 1064 (11th Cir. 1996) (citing Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 534, 115 S. Ct. 1043, 1048 (1995)). To satisfy the location test, the tort must have occurred on navigable water or the injury suffered on land must have been caused by a vessel on navigable water. Jerome B. Grubart, Inc., 513 U.S. at 534, 115 S. Ct. at 1048. With respect to the connection test, two issues must be considered: (1) whether, upon assessment of the general features of the type of accident involved, the “incident has a potentially disruptive impact on maritime commerce;” and (2) “whether the general character of the activity giving rise to the incident shows a substantial relationship to traditional maritime activity.” Jerome B. 9 Grubart, Inc., 513 U.S. at 534, 115 S. Ct. at 1048 (internal quotations and citation omitted). In this case, the alleged tort did not occur on navigable water; nor is this a case where an injury on land was caused by a vessel on navigable water. Although there may be some connection between the alleged tort and traditional maritime activity, the location test for admiralty jurisdiction is not satisfied in this case. On this basis, we hold that the district court did not have admiralty jurisdiction.