United States District Court, E.D. Missouri, Southeastern Division
MEMORANDUM AND ORDER
STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE.
case comes before the Court on defendant Matthew Rider's
Motion to Dismiss for Lack of Subject Matter Jurisdiction
(#4). The issues are fully briefed and ripe for disposition.
For the following reasons, the motion is denied.
tragic facts of this case stem from a car accident whereby
Matthew Rider (“Rider”) was driving his pregnant
wife Sarah Iler, who was in labor, to a hospital to give
birth. As the first amended petition for damages alleges,
Rider greatly reduced his speed while on the interstate,
resulting in a semi-tractor trailer striking Rider's
vehicle. Sarah Iler was ejected from the vehicle and passed
away. M.S., the child of Sarah Iler, survived but sustained
substantial and permanent brain injuries. M.S., through Sarah
Iler's sister Kasandra Iler, brought the state-court
action against Rider, the driver of the semi-tractor trailer,
and the driver's employer.
case here is a declaratory judgment action in which
plaintiff, Victoria Automobile Insurance Company
(“plaintiff”), seeks clarification of its rights
and responsibilities under a policy of motor vehicle
insurance issued to Bruce Rider, Matthew Rider's father.
In its complaint, plaintiff alleges it has no duty to
indemnify or defend Rider resulting from the accident because
Rider was not covered under the policy. Plaintiff explains
that the 1999 Chevy Blazer driven by Rider was not listed as
a covered auto under the policy and no other coverage
extension offered by the policy applies to the Blazer as to
create coverage for Rider under the policy.
brought this action pursuant to this Court's diversity
jurisdiction under 28 U.S.C. § 1332. The policy at issue
has a “bodily injury” limit of $25, 000 and a
“per accident” limit of $50, 000. Plaintiff
contends that the amount in controversy requirement is
satisfied when the policy limits are aggregated with the
potential costs of defending Rider through trial and any
appeal. Rider filed the instant motion, contending that this
Court lacks subject matter jurisdiction over this action
because the costs of the duty to defend may not be considered
in the determination of the amount in controversy and because
they cannot be considered, the amount in controversy does not
exceed $75, 000.
Rule of Civil Procedure 12(b)(1) provides that a party may
dismiss an action based on lack of subject matter
jurisdiction. In ruling on a motion to dismiss for lack of
subject matter jurisdiction, this Court “must accept
all factual allegations in the pleadings as true and view
them in light most favorable to the nonmoving party.”
Great Rivers Habitat Alliance v. Fed. Emergency
Mgmt. Agency, 615 F.3d 985, 988 (8th Cir. 2010)
(internal citation omitted).
of citizenship jurisdiction exists when the amount in
controversy exceeds $75, 000, exclusive of costs or interest,
and the matter is between citizens of different states.
See 28 U.S.C. § 1332. In this case, only the
amount in controversy is contested. Generally, “the
amount claimed by the plaintiff controls in determining the
existence of diversity jurisdiction.” St. Paul
Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283,
declaratory judgment in which an insurer sues an insured to
determine its obligation to defend and indemnify, as here,
the amount in controversy “ordinarily equals the
probable costs of defense and indemnification of the
underlying litigation.” Scottsdale Ins. Co. v.
Universal Crop Prot. Alliance, LLC, 620 F.3d 926, 932
(8th Cir. 2010) (internal citations omitted). See also
National Union Fire Ins. Co. of Pittsburgh, Pa. v.
Maune, Case No. 4:05-CV-2021 JCH, 2006 WL 587650 at *2
(E.D. Mo. March 10, 2006) (“in declaratory judgment
cases that involve the applicability of an insurance policy
to a particular occurrence, ‘the jurisdictional amount
in controversy is measured by the value of the underlying
claim - not the face amount of the policy.'”)
complaint “that alleges the jurisdictional amount in
good faith will suffice to confer jurisdiction, but the
complaint will be dismissed if it appear[s] to a legal
certainty that the claim is really for less than the
jurisdictional amount.” Scottsdale Ins. Co.,
620 F.3d at 931 (internal citations omitted). “If the
defendant challenges the plaintiff's allegations of the
amount in controversy, then the plaintiff must establish
jurisdiction by a preponderance of the evidence.”
Kopp v. Kopp, 280 F.3d 883, 884 (8th Cir. 2002)
(internal citation omitted). “[I]t appears that the
relevant legal rule is that the proponent of diversity
jurisdiction must prove a negative by a preponderance of the
evidence in order to avoid dismissal of his or her
case.” Id. at 885 (internal citation omitted).
In other words, the proponent of diversity jurisdiction must
show by preponderance of the evidence “that it does not
appear to a legal certainty that the claim for relief is for
less than the statutorily prescribed jurisdictional
amount” to avoid dismissal. Id.
case, the Court finds that plaintiff alleged the
jurisdictional amount in good faith. If Rider is covered
under the policy, plaintiff would have a duty to defend Rider
for all claims against him through any possible trial and
appeal and would have a duty to indemnify up to the policy
limits. Because the state-court action alleges substantial
injuries and damages, it is foreseeable that plaintiff would
expend a significant amount of time and money in Rider's
defense, potentially in excess of $50, 000. And as noted, the
policy contains a “bodily injury” limit of $25,
000 and a “per accident” limit of $50, 000.
Accordingly, the potential costs of defense and
indemnification may well exceed $75, 000 and it does not
appear to a legal certainty that the amount in
controversy is less than $75, 000.
cites Maune in support of his argument that
“the costs of the duty to defend may not be considered
in the determination of the amount in controversy.”
2006 WL 587650 at *3. Although the Maune Court
declined to consider the costs of defense under the
particular facts of that case, the Court expressly noted that
in other cases the “costs of defense, attorney's
fees, and statutory penalties may be considered as part of
the amount in controversy.” Id. at *2
(internal citations omitted). In Maune, defendant
drove a covered vehicle under the applicable insurance policy
and hit his brother's motorcycle, injuring his brother.
Id. at *1. The brother demanded payment of the full
$100, 000 under the policy, but, the policy contained a
“household exclusion” clause that applied to the
brother, denying coverage in excess of the $25, 000 statutory
minimum. Id. Therefore, on the face of the policy,
only $75, 000 was in controversy, which did not
exceed $75, 000. The Court declined to consider the
costs of defense ...