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Employers Mutual Casualty Co. v Huff

United States District Court, N.D. Alabama, Southern Division

August 22, 2017




         I. Introduction

         This action is before the court on Defendant Rami Achdut's (“Defendant” or “Achdut”) Motion to Dismiss (Doc. # 10), filed on April 27, 2017. Defendant's motion is fully briefed. (Docs. # 14, 18, 19). For the following reasons, Defendant's Motion to Dismiss (Doc. # 10) is due to be denied.

         II. Background

         Plaintiff, an insurance company incorporated in the state of Iowa, brought this action against Defendants, residents of the state of Alabama and an Alabama corporation, by filing its Complaint for Declaratory Judgment on March 21, 2017. (Doc. # 1). On April 10, 2017, Plaintiff filed its Amended Complaint for Declaratory Judgment. (Doc. # 7). Plaintiff's declaratory judgment action requests that the court determine whether it has a duty to defend and indemnify Defendants Achdut and Mo's Paint and Body Shop, Inc. f/k/a, Highline Imports (“Highline”) in the underlying action Jeff Huff v. Highline Imports, Inc., et al. (“Underlying Action”) -- Alabama docket number CV-2015-903124 -- filed on August 12, 2015 in the Circuit Court of Jefferson County. (Doc. # 7 at 2). The Underlying Action alleges breach of contract, deceit, and fraud claims arising from an alleged employment contract. (Id.).

         Plaintiff contends that subject matter jurisdiction exists pursuant to 28 U.S.C. § 1332. “Under § 1332, a district court has jurisdiction over any civil case if (1) the parties are ‘citizens of different States' and (2) ‘the matter in controversy exceeds the sum or value of $75, 000, exclusive of interests and costs.'” Morrison v. Allstate Indem. Co., 228 F.3d 1255, 1261 (11th Cir. 2000) (citing 28 U.S.C. § 1332). Here, Defendant contests the amount in controversy.

         In its Complaint, Plaintiff alleges that the amount in controversy exceeds the sum of $75, 000. (Doc. # 7 at 3). While Plaintiff's Amended Complaint does not include an ad damnum clause, it alleges the amount in controversy, exclusive of interest and costs, is comprised of salary and benefits owed to defendant Jeff Huff (“Huff”), in addition to the cost of separate defenses for Defendants Achdut and Highline. (Id.)

         In his motion to dismiss, Defendant contends that the amount in controversy is not met. (Doc. # 10 at 1). Specifically, Achdut argues the amount in controversy stated on the face of the Amended Complaint is conclusory and not supported by a preponderance of the evidence. (Id. at 5). Defendant's motion includes exhibits which purport to show that the amount in controversy is less than $75, 000. (Doc. # 10-1)

         Plaintiff attached an affidavit as an exhibit to its response brief, which details the current budget for the defense of Achdut and Highline and the amount it had paid for the cost of defense as of May 15, 2017 (“Exhibit 1”). (Doc. # 14-1 at 3). Additionally, Plaintiff provided redacted attorney correspondence in which counsel for Huff attested Huff had made a demand in the amount of $175, 000 and that he believed “[Huff] will be able to blackboard at least $100, 000 in damages” (“Exhibit 2”). (Doc. # 14 at 7, Doc. # 14-1 at 6). Defendant filed an objection to Exhibit 2 on May 18, 2017. (Doc. # 19).

         IV. Legal Standards For 12(b)(1) Motions

          “The party seeking to invoke federal jurisdiction bears the burden of proving by a preponderance of the evidence that the claim on which it is basing jurisdiction meets the jurisdictional minimum.” SUA Ins. Co. v. Classic Home Builders, LLC, 751 F.Supp.2d 1245, 1248 (S.D. Ala. 2010) (citing Federal Mutial Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir. 2003)). “A federal district court is under a mandatory duty to dismiss a suit over which it has no jurisdiction.” Southeast Bank, N.A. v. Gold Coats Graphics Grp. Partners, 149 F.R.D. 681, 683 (S.D. Fla. 1993) (citing Stanley v. Central Intelligence Agency, 639 F.2d 1146, 1157 (5th Cir. 1991); Marshall v. Gibson's Prods., Inc. of Plano, 584 F.2d 668, 671-72 (5th Cir. 1978[1])).

         A Rule 12(b)(1) motion may present a facial attack or factual attack. Willet v. United States, 24 F.Supp.3d 1167, 1173 (M.D. Ala. 2014) (citing McElmurray v. Consol. Govt. of Augusta-Richmond Cty., 501 F.3d 1244, 1251 (11th Cir. 2011)). “Facial attacks on the complaint ‘require[] the court merely to look and see if [the] plaintiff has sufficiently alleged a basis of subject-matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion.'” Garcia v. Copenhaver, Bell & Assocs., M.D.'s, P.A., 104 F.3d 1256, 1261 (11th Cir. 1997) (quoting Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990)) (other citations omitted). On the other hand, “factual attacks” challenge “the existence of subject-matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered.” Id. In other words, when a party raises a factual attack to subject-matter jurisdiction, the court is not obligated to take the allegations in the complaint as true, but may consider extrinsic evidence such as affidavits. Odyssey Marine Exploration, Inc. v.Unidentified Shipwrecked Vessel, 657 F.3d 1159, 1169 (11th Cir. 2011) (citations omitted).

         When a court is confronted with a factual attack:

[T]he trial court may proceed as it never could under 12(b)(6) or Fed.R.Civ.P. 56. Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction - its very power to hear the case - there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to [P]laintiff's allegations, and the existence of ...

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