United States District Court, N.D. Alabama, Southern Division
E. Ott Chief United States Magistrate Judge.
Charles Brewster, Jr. (“Plaintiff”) filed this
suit, invoking this court's diversity jurisdiction under
28 U.S.C. § 1332(a), asserting he is entitled to
underinsured motorist benefits from GEICO General Insurance
Company (“GEICO”). (Doc. 1-7
(“Complaint”)). GEICO filed a motion to dismiss
contending this court lacks subject matter jurisdiction.
(Doc. 7). Plaintiff responded by filing an opposition to
GEICO's motion. (Doc. 11). GEICO has filed a reply to
Plaintiff's opposition. (Doc. 12). Upon consideration,
the courtconcludes that it lacks subject matter
jurisdiction and that the complaint must be dismissed.
filed this action on March 7, 2017. (Doc. 1). The material
allegations of the pleading are as follows: On or about May
31, 2011, the vehicle Plaintiff was driving was rear-ended at
a red light by another driver (hereinafter
“Tortfeasor”). (Id. ¶ 5). At the
time of the accident Plaintiff had a contract for automobile
insurance with GEICO which provided coverage for claims where
a tortfeasor was uninsured or underinsured. (Id.
¶ 4). This policy was in the amount of $75, 000.
(Id. at ¶ 19). Tortfeasor also had automobile
liability insurance at the time of the accident in the amount
of $100, 000. (Id. at ¶¶ 8, 22). Following
the accident, Plaintiff filed suit against Tortfeasor.
(Id. at ¶ 12). Plaintiff and Tortfeasor
ultimately settled the case for $55, 000. (Doc. 1 ¶ 12).
GEICO's position was that there was no uninsured motorist
exposure stemming from the accident. (Id. at
on the foregoing allegations, Plaintiff asserts in his
one-count complaint that GEICO is liable under Alabama law
for breach of contract in regard to uninsured motorist
benefits. In response to Plaintiff's complaint, GEICO
filed a motion to dismiss on May 26, 2017. (Doc. 7). GEICO
argues this court does not have subject matter jurisdiction
under 28 U.S.C. § 1332(a) because the amount in
controversy does not exceed $75, 000. (Id. at p.
2.). Specifically, GEICO argues that because the
full amount of potential underinsured motorist coverage under
the policy is limited to $75, 000, the amount in controversy
cannot exceed the jurisdictional limit.
9, 2017, Plaintiff filed an opposition to GEICO's motion
to dismiss. (Doc. 11). In his brief, Plaintiff argues he is
not required to first exhaust liability under the
tortfeasor's insurance policy before being able to
collect under his own uninsured motorist policy, though he
admits that GEICO is entitled to a set-off in the full amount
of the tortfeasor's liability coverage. (Id. at
p. 3). Further, Plaintiff contends that in calculating amount
in controversy under 28 U.S.C. § 1332(a), the court
should consider what is actually in controversy as opposed to
how much he is likely to recover. (Id. at p. 4). He
asserts that, because his damages are in excess of $100, 000,
the fact that he can only recover $75, 000 under his policy
does preclude the amount in controversy from being more than
$75, 000. (Id. at p. 4-6).
Plaintiff's opposition to its motion to dismiss, GEICO
filed a response to Plaintiff's opposition on June 16,
2017. (Doc. 12). GEICO admits that Plaintiff could be
entitled to underinsured motorist benefits despite settling
for only $55, 000 of Tortfeasor's $100, 000 liability
coverage and GEICO further agrees it would be entitled to
set-off the full amount of Tortfeasor's liability
coverage. (Id. at ¶ 1). GEICO disputes,
however, Plaintiff's contention concerning the impact of
underlying policy limits and argues the cases he relies upon
are not on point. (Id. at ¶ 3). GEICO asserts
that Tortfeasor's coverage limit does not establish the
amount in controversy and instead submits that what is at
issue is Plaintiff's uninsured motorist claim which is
limited to $75, 000.00, one penny below the jurisdictional
order for a district court to have jurisdiction under the
diversity statute, a plaintiff must establish that the amount
in controversy “exceeds the sum or value of $75, 000,
exclusive of interest and costs . . . .” 28 U.S.C.
1332(a). In actions seeking enforcement of an insurance
policy, the amount available under the policy may be relevant
to the amount in controversy. See Koester v. State Farm
Mut. Ins., Co., 2012 WL 5265783, at *4 (N.D. Ala. Oct.
22, 2012). However, where the facts alleged in a complaint
cannot legally support a judgment in excess of the
jurisdictional amount, a court cannot have jurisdiction even
if the damages asserted exceed that amount. Payne v.
State Farm Mut. Auto Ins. Co., 266 F.2d 63, 64-65 (5th
Payne, the old Fifth Circuit affirmed a lower
court's dismissal of a case on the ground that the amount
in controversy was not met. Payne, 266 F.2d at 64.
The plaintiff, the father of a nine-year-old boy who was hit
by a car, brought suit against State Farm. Id. The
plaintiff claimed $50, 865.68 worth of damages for his
son's personal injuries and medical expenses.
Id. The insurance policy limited liability to $10,
000 for personal injuries. Id. In coming to its
decision, the court stated that it must consider whether
recovery in a sum in excess of the jurisdictional minimum,
which was then $10, 000, is possible. Id. at 65. The
court determined that because the policy was only for $10,
000, the plaintiff could not recover from State Farm an
amount in excess of the jurisdictional limit even if his
damages from the accident might be $50, 865.68. Id.
courts in this circuit have also considered this issue in the
uninsured/underinsured motorist context. For example, in
Henry v. State Farm Mutual Automobile Insurance
Company, 2013 WL 5178518, at *1 (M.D. Fla. Sept. 13,
2013), the insured brought an action on his policy in state
court, and the defendant insurer sought to remove based on
diversity. Henry, 2013 WL 5178518, at *1. However,
in its notice of removal, the defendant admitted that the
policy limit was at most $75, 000. Id. The defendant
contended that the policy limit did not determine amount in
controversy and asserted that the plaintiff's damages
exceeded $75, 000. Id. The court, however, remanded
the action. Id. While noting that policy limits do
not always determine amount in controversy, the court
distinguished cases in which “the value of the claim
exceeds the value of the policy.” Id. (quoting
Kelly v. Gen. Star Nat'l Indem. Co., No.
8:07-cv-1143-JDW-TGW, 2007 WL 3034654, at *2 (M.D. Fla. Oct.
16, 2007)). Thus, the court held that where the amount a
plaintiff can recover is limited to $75, 000 or less, no
amount of damages above that amount can create jurisdiction
under 28 U.S.C. § 1332(a).
present action, Plaintiff is likewise the holder of a $75,
000 policy for uninsured and underinsured motorist insurance
coverage. (Doc. 1 ¶ 19). Plaintiff settled with
Tortfeasor for $55, 000 of his $100, 000 auto liability
coverage. (Doc. 1 ¶¶ 12, 22). While the court does
not dispute the Plaintiff's assertion that he need not
exhaust the tortfeasor's liability policy before
recovering underinsured motorist benefits, this has no effect
on the amount in controversy where Plaintiff's
underinsured policy limits are below the jurisdictional
limits. The question instead, is whether the facts legally
support a judgment in excess of $75, 000 against GEICO.
Plaintiff asserts he is entitled to damages in excess of the
jurisdictional limit, specifically citing damages in excess
of $100, 000 for pain, mental anguish, and medical expenses.
(Doc. 1 ¶¶ 22-23). Similar to Payne,
however, the Plaintiff's policy limit is less than the
amount of damages sought. Because Plaintiff's policy only
allows recovery up to $75, 000 and no more, the fact that his
total damages from the accident might be above the
jurisdictional limit cannot satisfy the required amount in
controversy. Therefore, the amount in controversy does not
exceed the jurisdictional limit.
contends the court must look to what amount is actually in
controversy in the case, not how much a plaintiff will
ultimately recover, citing Erby v. Pilgrim's
Pride, No. 2:16-cv-0497-VEH, 2016 WL 3548792, at *1
(N.D. Ala. June 30, 2016). (Doc. 11). While the court would
acknowledge the correctness of that proposition,
Erby did not involve an insurance policy. Thus,
there was no question presented with regard to the role that
policy limits might play in determining the amount in
controversy. By contrast, the coverage limit under Plaintiffs
insurance policy establishes the upper limit of the amount in
controversy: $75, 000.00. (Doc. 1 ¶ 19). Because
Plaintiff is legally unable to collect more than the
jurisdictional limit, the ...