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Stephenson v. New Hampshire Insurance Company

United States District Court, M.D. Alabama, Northern Division

March 18, 2019

MICHELLE PEEL STEPHENSON, Plaintiff,
v.
NEW HAMPSHIRE INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          GRAY M. BORDEN, UNITED STATES MAGISTRATE JUDGE.

         Pending before the court is the Partial Motion to Dismiss filed by Defendant New Hampshire Insurance Company (“NHIC”). Doc. 39. Plaintiff Michelle Stephenson asserts claims for underinsured motorist (“UIM”) benefits, breach of contract, and wrongful death[1]relating to a motor vehicle accident involving her husband, Gerald W. Stephenson, who is deceased. Docs. 1 & 22. NHIC has moved to dismiss the breach of contract claim for lack of subject matter jurisdiction. Doc. 39 at 1. After careful consideration of the parties' filings and the relevant law, and for the reasons stated below, the court concludes that the Partial Motion to Dismiss (Doc. 39) is due to be GRANTED.

         I. JURISDICTION AND VENUE

         The court has jurisdiction over the claims in this lawsuit pursuant to 28 U.S.C. § 1332. The parties do not contest personal jurisdiction, nor do they contest that venue is proper in the Middle District of Alabama. The court finds adequate allegations to support both jurisdiction and venue.

         II. FACTUAL AND PROCEDURAL BACKGROUND

         The following is a recitation of the facts as alleged in the complaint and amendment to complaint. On February 24, 2017, Gerald Stephenson was driving southbound on County Road 49 in Geneva County near a four-way stop. Doc. 1 at 2. At the same time, Donald Harry Rhein was driving eastbound at an unlawful speed. Doc. 1 at 2. Rhein failed to halt at the stop sign and collided with Stephenson's vehicle, causing Stephenson's vehicle to be struck by another vehicle driven by Lindsay Sparks. Doc. 1 at 2. All three vehicles caught on fire. Doc. 1 at 2. The collision seriously injured Stephenson and he ultimately died as a result of his injuries. Doc. 1 at 2.

         At the time of the collision, Gerald Stephenson was employed by GroSouth, Inc. (“GroSouth”), a company located in Montgomery, Alabama, and was driving a vehicle issued to him by his employer. Doc. 1 at 3. That vehicle was covered by NHIC under an insurance policy issued to GroSouth. Doc. 1 at 4. The NHIC policy included both uninsured and UIM coverage. Doc. 1 at 4. Rhein was insured by Geico Insurance Company, which entered into a settlement with Plaintiff Michelle Stephenson, Gerald Stephenson's wife, and has since tendered its policy limits. Doc. 1 at 4. NHIC acquiesced to that settlement and waived any subrogation claim. Docs. 1 at 5 & 6 at 4.

         Plaintiff Michelle Stephenson commenced this action as the administrator of Gerald Stephenson's estate. Doc. 1 at 2. She alleges that her damages exceed the available UIM coverage, and that NHIC has breached its contract by failing to tender its UIM policy limits in a timely manner. Docs. 1 at 5 & 22 at 4. NHIC challenges Stephenson's breach of contract claim, arguing that it is unripe because Rhein's liability and Stephenson's damages have not been established. Doc. 39 at 5.

         III. STANDARD OF REVIEW

         A motion filed under Federal Rule of Civil Procedure 12(b)(1) challenges the district court's subject matter jurisdiction and takes one of two forms: a facial attack or a factual attack. A facial attack challenges subject matter jurisdiction without disputing the facts alleged in the complaint. Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990). When evaluating a facial attack, the court considers the allegations in the plaintiff's complaint as true. Id. “Such protections do not attach when the district court's jurisdictional decision is based upon the court's resolution of disputed facts.” Eaton v. Dorchester Dev. Inc., 692 F.2d 727, 731-32 (11th Cir. 1982). A factual attack challenges the factual allegations underlying the assertion of subject matter jurisdiction. Lawrence, 919 F.2d at 1529. When evaluating a factual attack, there is no presumption in favor of the plaintiff and the court may weigh the evidence and consider “matters outside the pleadings, such as testimony and affidavits.” Id. “Under a factual attack, the court may hear conflicting evidence and decide the factual issues that determine jurisdiction.” Kuhlman v. United States, 822 F.Supp.2d 1255, 1257 (M.D. Fla. 2011) (citing Colonial Pipeline Co. v. Collins, 921 F.2d 1237, 1243 (11th Cir. 1991)).

         “Because ripeness pertains to a federal court's subject matter jurisdiction, it is appropriately analyzed under Rule 12(b)(1).” Graves v. City of Montgomery, 807 F.Supp.2d 1096, 1100 (M.D. Ala. 2011). “A dismissal for lack of subject matter jurisdiction is not a judgment on the merits and is entered without prejudice.” Stalley ex rel. U.S. v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008).

         IV. DISCUSSION

         A plaintiff need not establish liability against a UIM before bringing a claim against her insurance carrier to recover UIM benefits. Ex parte State Farm Mut. Auto. Ins. Co., 893 So.2d 1111, 1115 (Ala. 2004). But a breach of contract action is different from a claim for UIM benefits. “Alabama law holds that such a claim is premature before the fact and extent of the insurer's payment obligation has been satisfactorily established.” Collins v. Nationwide Mut. Ins. Co., 2017 WL 1901630, at *1 (S.D. Ala. May 9, 2017). “Without a determination of whether liability exists on the part of the underinsured motorist and the extent of the plaintiff's damages, ” a breach of contract claim is not ripe for adjudication. Id. (citing Pontius v. State Farm Mut. Auto. Ins. Co., 915 So.2d 557, 564 (2005)). That is because there can be no breach of a UIM contract unless the insured first proves that she is legally entitled to recover damages under the UIM policy. Pontius, 915 So.2d at 564; Quick v. State Farm Mut. Auto. Ins. Co., 429 So.2d 1033, 1035 (Ala. 1983). To demonstrate that she is legally entitled to recover, a plaintiff must show (1) fault on the part of the UIM, (2) that the fault gives rise to damages, and (3) the extent of those damages. Collins, 2017 WL 1901630, at *2. For the reasons stated below, the court concludes that the extent of Stephenson's damages is not established, making the breach of contract claim unripe.

         A. Whether Subject Matter ...


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