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Peck v. Country Preferred Insurance Co.

United States District Court, E.D. Missouri, Eastern Division

November 19, 2019

SARAH PECK; J.P., by and through her Next Friend, SARAH PECK; and S.P., by and through his Next Friend, SARAH PECK, Plaintiffs,
v.
COUNTRY PREFERRED INSURANCE COMPANY, Defendants.

          MEMORANDUM AND ORDER

          RONNIE L. WHITE, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the Motion to Remand to State Court by Plaintiffs Sarah Peck and minors J.P. and S.P. by and through their Next Friend Sarah Peck (collectively "Plaintiffs")- (ECF No. 8) The motion is fully briefed and ready for disposition.

         I. Background

         On February 11, 2010, Plaintiffs filed a Petition in the Circuit Court of the City of St. Louis against Defendant Country Preferred Insurance Company ("Country Preferred"). (Pet., ECF No. 4) Plaintiffs allege Breach of Contract for Underinsured Motorist Benefits and Vexatious Refusal to Pay underinsured motorist benefits stemming from a vehicle accident that resulted in the death of Plaintiff Sarah Peck's husband, Adam Peck. Each Plaintiff seeks an amount for individual damages not to exceed $75, 000. (Id. at ¶¶ 19, 21, 23) Plaintiffs also seek declaratory judgment that the policy at issue provides coverage.

         Defendant Country Preferred removed the case to federal court on February 28, 2019, invoking this Court's jurisdiction pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. (Notice of Removal, ECF No. 1) Country Preferred asserts that the Court has diversity jurisdiction because Plaintiffs are citizens of Missouri, and Defendant is an insurance corporation organized and existing under the laws of the State of Illinois with its principal place of business in Bloomington, Illinois. (Id. at ¶¶ 9-10) Further, Country Preferred contends that the damages sought by Plaintiffs are in excess of $75, 000, exclusive of interest and costs. (Id. at ¶ 11)

         On April 1, 2019, Plaintiffs filed a Motion to Remand to State Court, asserting that none of the individual claims seeks an amount greater than $75, 000. Plaintiffs claim Country Preferred has failed to meet its burden of proving that the amount in controversy exceeds $75, 000. Thus, Plaintiffs argue federal diversity jurisdiction is absent in this cause of action such that the case should be remanded to the Circuit Court of the City of St. Louis, Missouri.

         II. Discussion

         In removal cases, the Court reviews the state court petition and the notice of removal in order to determine whether it has jurisdiction. Branch v. Wheaton Van Lines, Inc., No. 4:14-CV-01735-AGF, 2014 WL 6461372, at *1 (E.D. Mo. Nov. 17, 2014) (citing 28 U.S.C. § 1446(c)(2)(A)(ii)). Diversity jurisdiction exists where a civil action is between citizens of different states, and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a). Defendant has the burden of proving that the prerequisites to jurisdiction are satisfied. Branch, 2014 WL 6461372, at * 1. "A case must be remanded if, at any time, it appears that the district court lacks subject matter jurisdiction." Hrastich v. Advance Auto Parts, Inc., No. 4:14-CV-22-JAR, 2014 WL 3341121, at *1 (E.D. Mo. July 8, 2014) (citing 28 U.S.C. § 1447(c)).

         "To meet its burden with regard to the jurisdictional amount, the removing party must prove by a preponderance of the evidence that the amount in controversy exceeds $75, 000." Id. at *2 (citations omitted). "Removal statutes are strictly construed and all doubts about the propriety of removal must be resolved in favor of remand." Jackson v. Fitness Resource Grp., Inc., No. 4:12 CV 986 DDN, 2012 WL 2873668, at *2 (E.D. Mo. July 12, 2012) (citations omitted).

         In removal cases, "the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy, except that the notice of removal may assert the amount in controversy if the initial pleading seeks nonmonetary relief; or a money judgment, but the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded." 28 U.S.C. § 1446(c)(2)(A). Where, as here, "the state court petition seeks an unspecified amount of damages, the court must make a factual inquiry into the amount-in-controversy issue." Jackson, 2012 WL 2873668, at *2 (citations omitted).

         In Plaintiffs' motion for remand, memorandum in support, and reply memorandum, Plaintiffs argue that Country Preferred has failed to show by a preponderance of evidence that the amount in controversy exceeds $75, 000. However, Country Preferred contends the policy limit is $100, 000, and in an action for declaratory judgment, the amount in controversy is measured by the object of the litigation. Further, Country Preferred claims that Plaintiffs' separate claims for less than $75, 000 for each Plaintiff may be aggregated to satisfy the jurisdictional amount. Thus, Country Preferred asserts that it has met its burden of proving diversity jurisdiction.

         Plaintiffs, on the other hand, argue their individual claims may not be aggregated because each claim is personal to each Plaintiff. Further, Plaintiffs contend Count III of the Petition is merely seeking declaratory judgment as to whether Country Preferred's uninsured motorist policy affords coverage.

         First, the Court finds Country Preferred has not met its burden of showing that the amount in controversy exceeds $75, 000 with respect to its argument that the value of the object of the litigation, or $100, 000, is the amount in controversy. Country Preferred asserts Plaintiffs' request for a declaration of the amount of coverage demonstrates the amount in controversy would be the $100, 000 policy limit. However, the Court notes "[i]t is not axiomatic that the amount in controversy is met if the policy limit exceeds $75, 000. If the substance of the declaratory judgment seeks to determine whether an insurance policy itself is valid, then the policy limit is, essentially, the value of the object of the litigation." Hartford Ins. Co. of Midwest v. Wyllie, No. 4:04 CV 1537 DDN, 2005 WL 902776, at *2 (E.D. Mo. Mar. 28, 2005) (citing Home Ins. Co. of N.Y. v. Trotter, 130 F.2d 800, 803 (8th Cir. 1942)). On the other hand, where an action for declaratory judgment seeks to determine whether an occurrence is covered under the policy, the court must look to the underlying claim. Id. at *3.

         Review of Plaintiffs' claim demonstrates they seek a declaration as to whether the policy provides coverage, and if so, the amount of coverage. (ECF No. 4 pp. 10-11) Plaintiffs do not seek a declaration regarding the validity of the policy. Reviewing the underlying claims in this matter, the Court finds each individual Plaintiff seeks an amount not to exceed $75, 000. Therefore, Count III of the Petition seeking declaratory judgment does not satisfy the amount-in-controversy requirement simply by virtue of the $100, 000 policy limit. See Wylie, 2005 WL 902776, at *3 ("To reason that the policy limit reflects the amount in controversy would essentially "federalize" any action concerning an insurance policy with limits greater than $75, 000 regardless of the claim for damages. Such a holding is incongruous with the principle of limited jurisdiction in federal courts."); see also Fainer v. State Farm Mut. Auto. Ins. Co., No. 4:08CV1536 AGF, 2009 WL 911724, at *2 (E.D. Mo. Apr. 1, 2009) ("[T]he coverage limit of ...


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