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White v. National Fire & Marine Insurance

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

May 22, 2019

FRED WHITE, Plaintiff
v.
NATIONAL FIRE & MARINE INSURANCE, Defendant

          MEMORANDUM OPINION AND ORDER TO REMAND

          HERMAN N. JOHNSON, JR., UNITED STATES MAGISTRATE JUDGE

         This action for breach of an insurance contract proceeds before the court sua sponte to assess the basis for subject matter jurisdiction. Because the amount in controversy in this case falls far below the threshold to warrant the exercise of diversity subject matter jurisdiction, the court ORDERS the Clerk of Court to REMAND this case to state court.

         BACKGROUND

         Plaintiff Fred White commenced this action by filing a complaint in the Morgan County Circuit Court. (Doc. 1-1 at 3-5). The complaint alleges a single breach of contract claim, and further declares that White “suffered the loss of his trailer” and “lost the use of his trailer and the income he would have made had he had a trailer.” (Doc. 1-1 at 3). Plaintiff demands “compensatory and punitive damages, in a sum the Court and jury deem just . . . .” (Doc. 1-1 at 4). As indicated, White did not request a specific sum of damages in his complaint. Essentially, White sued the Defendant, National Fire & Marine Insurance, for refusing to pay on an insurance policy covering a conversion trailer, which sustained severe damage while deployed on a farm to haul wheat.

         While the case was pending in state court, National Fire served requests for admissions pursuant to Alabama Rule of Civil Procedure 36. The requests sought admissions to the following assertions:

1. That the Plaintiff seeks damages in this action in excess of $75, 000, exclusive of costs and interest.
2. That the amount in controversy in this action exceeds $75, 000, exclusive of costs and interest.
3. That Plaintiff will request and demand damages in excess of $75, 000 in this action.
4. That Plaintiff intends to request a fact-finder in this case to return a verdict in excess of $75, 000, exclusive of costs and interests.

(Doc. 1-1 at 39). White did not respond to National Fire's requests for admission.

         Shortly after White's failure to answer the requests for admission, National Fire removed this action to federal court. In its Notice of Removal, National Fire invokes the diversity subject matter jurisdiction of this court pursuant to 28 U.S.C. § 1332.[1]The Notice asserts White domiciles in Alabama and identifies National Fire's place of incorporation and principal place of business as Nebraska.[2] National Fire contended the action satisfied the $75, 000 amount-in-controversy requirement because White failed to respond to the requests for admission that his damages exceeded the jurisdictional floor, thus deeming the requests admitted.

         After the parties submitted summary judgment briefs and materials - although White only submitted an eight-page response - the court discerned for the first time that White only paid approximately $19, 000 for the trailer at issue in the dispute, and he only insured it for $19, 000. Therefore, the court issued an Order to Show Cause questioning the exercise of diversity subject matter jurisdiction over this action. National Fire responded with arguments centered on White's failure to respond to the requests for admission, while White did not respond.

         ANALYSIS

         The foregoing background readily establishes the necessity for remand of this case to state court: the evidence in this case conclusively establishes that the amount in controversy in this action constitutes no more than approximately $19, 000, far less than the jurisdiction threshold of $75, 000. For this reason, the court will remand this action to state court.

         “‛Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.'” Dudley v. Eli Lilly & Co., 778 F.3d 909, 911 (11th Cir. 2014) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). As a result, federal courts possess “an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006).

         National Fire invokes diversity jurisdiction as the basis for the court's exercise of subject matter jurisdiction. As reflected previously in describing diversity jurisdiction, 28 U.S.C. § 1332 provides that “district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different States . . . .” 28 U.S.C. § 1332(a)(1). Title 28 U.S.C. ...


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