Court Opinion

ID: 996150
Source: CourtListenerOpinion
Date Created: 2013-07-04 00:46:57.764909+00
Date Added: 2024-06-11T11:54:25.481344
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

AGENCY INSURANCE COMPANY OF
MARYLAND, INCORPORATED,
Plaintiff-Appellant,

v.

MICHAEL L. SMITH,
Defendant-Appellee,

and

DAVID L. SEEKFORD; BOBBY RAY
                                                               No. 98-1187
DAVIS, JR., the personal
representative of Brian K. Davis,
deceased,
Defendants,

RONALD SHAWN GORDON, JR.,
Defendant & Third Party Plaintiff,

v.

WILLIAM TOSTEN,
Third Party Defendant.

Appeal from the United States District Court
for the Northern District of West Virginia, at Martinsburg.
W. Craig Broadwater, District Judge.
(CA-97-63-3)

Submitted: July 31, 1998

Decided: September 3, 1998

Before MURNAGHAN and WILLIAMS, Circuit Judges, and
HALL, Senior Circuit Judge.

_________________________________________________________________
Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

Michael Douglas Lorensen, BOWLES, RICE, MCDAVID, GRAFF
& LOVE, P.L.L.C., Martinsburg, West Virginia, for Appellant. D.
Michael Burke, BURKE & SCHULTZ, Martinsburg, West Virginia,
for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Agency Insurance Company of Maryland, Inc. (Agency) appeals
from the district court's order granting Appellee's motion to dismiss,
finding the amount in controversy insufficient to sustain its jurisdic-
tion under 28 U.S.C.A. § 1332 (West Supp. 1998). Finding no revers-
ible error, we affirm.

On July 26, 1995, Ronald Shawn Gordon, Michael Smith, and
David Seekford suffered a variety of injuries and Brian K. Davis died
when the vehicle they occupied was struck by a vehicle owned and
operated by William Tosten. Tosten's vehicle was insured through
Agency and it had policy limits of $20,000 per person and $40,000
per occurrence.*

After the parties were allegedly unable to reach a settlement,
Appellee Smith obtained a default judgment against Tosten in an
amount in excess of $300,000. As Tosten's insurer, Agency moved
_________________________________________________________________
*The parties do not dispute that Tosten was the direct and proximate
cause of the accident.

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in the Circuit Court of Berkeley County, West Virginia to have the
default judgment set aside. The Circuit Court determined that the
motion was untimely and dismissed the motion. Thereafter, Agency
appealed the decision to the West Virginia Supreme Court. This
appeal is now pending.

The district court dismissed this declaratory and interpleader action
upon Smith's motion to dismiss for lack of subject matter jurisdiction,
holding that Agency failed to set forth an amount in controversy in
excess of $75,000. See § 1332. We review the district court's dis-
missal for lack of subject matter jurisdiction de novo. Tillman v. Res-
olution Trust Corp., 37 F.3d 1032, 1034 (4th Cir. 1994). "In actions
seeking declaratory or injunctive relief, it is well established that the
amount in controversy is measured by the value of the object of the
litigation." Hunt v. Washington State Apple Adver. Comm'n, 432 U.S.
333, 347 (1977). The question is whether the "value of the object of
the litigation" in this action is the $40,000 policy limit as the district
court found or the $300,000 default judgment as Agency argues.
Agency relies on this Court's holding in Government Employees Ins.
Co. (GEICO) v. Lally, 327 F.2d 568, 569 (4th Cir. 1964).

We find that Lally supports the district court's conclusion that the
value of the object of this litigation is $40,000. In Lally, GEICO
bought a declaratory judgment action seeking to limit its liability to
$10,000 less medical payments already made. The appellants, how-
ever, in good faith, maintained that the policy limit was $30,000. The
statutory jurisdictional threshold was $10,000. This Court found that
the amount in controversy was determined by GEICO's maximum
liability based on the limits of the policy, including good faith argu-
ments as to the amount of that liability. Because the $30,000 limit as
argued by appellants was above the statutory amount needed for fed-
eral jurisdiction, this Court found that federal jurisdiction existed.

Unlike the Lally case, Agency does not seek to establish the juris-
dictional amount based on its policy, but rather on the underlying
$300,000 judgment. Significantly, we note that in Lally, GEICO's
insured was being sued in state court for an amount far in excess of
the $10,000 jurisdictional amount. See id. at 569. This Court did not
rely on that amount to determine the amount in controversy, however.

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Consequently, we find to a "legal certainty" that the amount in contro-
versy does not satisfy the $75,000 jurisdictional requirement.

We accordingly affirm the district court's order. We dispense with
oral argument because the facts and legal contentions are adequately
presented in the materials before the court and argument would not
aid the decisional process.

AFFIRMED

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