United States District Court, D. South Dakota, Southern Division
AMENDED MEMORANDUM OPINION AND ORDER DENYING
DEFENDANT'S MOTION TO DISMISS
LAWRENCE L. PIERSOL UNITED STATES DISTRICT JUDGE.
before the Court is Defendant's Motion to Dismiss the
Amended Complaint pursuant to Federal Rule of Civil Procedure
12(b)(1) lack of subject matter jurisdiction. Doc. 18. The
Court has considered all filings and for the following
reasons, Defendant's motion is denied.
of 2014, a hailstorm damaged numerous homes and other
property in and around Sioux Falls, South Dakota. Soon
thereafter, Plaintiffs ("the Jordans") submitted a
claim for hail damage sustained on their home to Defendant,
State Auto Insurance Company ("State Auto"). In
September of 2014, Ryan Van Gilder, an authorized agent of
State Auto, inspected the Jordans' home and found that
there was no visible hail damage to the roof. In October of
2014, the Jordans requested a re-inspection. Mr. Van Gilder
conducted the re-inspection and again found there to be no
damage. In May of 2015, State Auto retained Robert Danielson
of Haag Engineering Company to inspect the Jordans' roof
for a third time. In June of 2015, Mr. Danielson concluded
that there was hail damage to the Jordans' shingles.
Based on Mr. Danielson's report, State Auto prepared an
estimate of $3, 265.71 to repair the damage.
January of 2016, the Jordans provided State Auto with an
estimate from Great Plains Roofing ("Great Plains")
which indicated that the Jordans' roof required complete
replacement. The replacement estimate totaled approximately
$13, 948. In February of 2016, State Auto informed the
Jordans that it would not consider the Great Plains estimate
and insisted that the Jordans retain another expert to
inspect the roof.
April of 2016, the Jordans filed a lawsuit in federal court
against State Auto alleging breach of contract, bad faith,
punitive damages, and vexatious refusal to pay. Doc. 1. State
Auto filed a Motion to Dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(1). Doc. 6. State Auto argued that the
Jordans had failed to adequately allege that damages exceeded
the jurisdictional amount in controversy of $75, 000.
Id. This Court filed a Notice allowing the Jordans
to respond and noted that "on the basis of the current
Complaint the Court is dubious that there is a jurisdictional
amount claimed in this case." Doc. 7. The Jordans filed
a Brief in Opposition to State Auto's Motion to Dismiss
wherein they requested, as an alternative to dismissal,
"to amend the Complaint to assert the factual details
necessary for establishing the amount in controversy."
Doc. 8 at 19, n.15. The Court allowed the Jordans to file an
amended complaint. See Docs. 14-16.
August of 2016, the Jordans filed an Amended Complaint
wherein they allege $10, 682.29 in contractual damages, $80,
000 in emotional distress damages, $725, 458.32 in punitive
damages, and $100, 000 in attorney's fees. Doc. 17. State
Auto filed the current Motion to Dismiss the Amended
Complaint pursuant to Federal Rule of Civil Procedure
12(b)(1). Doc. 18.
courts are courts of limited jurisdiction[, ]"
adjudicating only those suits arising under the Constitution
and laws of the United States or suits between citizens of
different states. Kokkonen v. Guardian Life Ins.
Co., 511 U.S. 375, 377 (1994); 28 U.S.C. § 1331
(federal question jurisdiction); 28 U.S.C. §1332
(diversity jurisdiction). "Subject matter jurisdiction .
. . is a threshold requirement which must be assured in every
federal case." Turner v. Armontrout, 922 F.2d
492, 493 (8th Cir. 1991).
motion to dismiss under Rule 12(b)(1) of the Federal Rules of
Civil Procedure challenges the court's subject matter
jurisdiction. FED. R. Civ. Pro. 12(b)(1); see also
Aerostar, Inc. v. Haes Grain & Livestock, Inc., 2012
WL 1030446, at *5 (N.D. Iowa Mar. 27, 2012) (citations
omitted) (explaining that "Rule 12(b)(1) of the Federal
Rules of Civil Procedure provides for a pre-answer motion to
dismiss for lack of subject matter jurisdiction. Such a
motion to dismiss may be based on insufficient amount in
controversy."). "A party challenging subject matter
jurisdiction under Rule 12(b)(1) must attack either the
facial or factual basis for jurisdiction."
Middlebrooks v. United States, 8 F.Supp.3d 1169,
1173 (D.S.D. 2014) (citing Osborn v. United States,
918 F.2d 724, 729 n.6 (8th Cir. 1990)). "A facial
challenge requires the court to examine the complaint and
determine if the plaintiff has sufficiently alleged a basis
for subject matter jurisdiction, and the nonmoving party
receives the same protections as it would if defending a
motion to dismiss under Rule 12(b)(6)." Id.
"A factual attack challenges the factual basis for
subject matter jurisdiction, and the court considers matters
outside the pleadings without giving the nonmoving party the
benefit of the Rule 12(b)(6) safeguards." Id; see
also Drevlow v. Lutheran Church, Missouri Synod, 991
F.2d 468, 470 (8th Cir. 1993) ("The district court has
the authority to consider matters outside the pleadings on a
motion challenging subject matter jurisdiction under Federal
Rule of Civil Procedure 12(b)(1)."). The party seeking
to establish federal jurisdiction has the burden of proving
that jurisdiction exists. V S Ltd. P'ship v.
Dep't of Hous. and Urban Dev., 235 F.3d 1109, 1112
(8th Cir. 2000) ("The burden of proving subject matter
jurisdiction falls on the plaintiff").
Auto asserts in its motion to dismiss that the Jordans have
failed to sufficiently allege a basis for subject matter
jurisdiction because they have failed to plead an amount in
controversy exceeding $75, 000. State Auto's challenge to
the Jordans' Amended Complaint is thus a facial one. As a
result, in evaluating State Auto's motion to dismiss, the
Court must accept all facts in the complaint as true and view
the complaint in the light most favorable to the Jordans, the
present case, subject matter jurisdiction is premised on
diversity jurisdiction which requires "complete
diversity of citizenship among the litigants" and
"an amount in controversy greater than $75, 000."
OnePoint Solutions, LLC v. Borchert, 486 F.3d 342,
346 (8th Cir. 2007); see also Kopp v. Kopp, 280 F.3d
883, 884 (8th Cir. 2002) (quoting 28 U.S.C. § 1332(a))
("When the two parties to an action are citizens of
different states ... a federal district court's
jurisdiction extends to 'all civil actions where the
matter in controversy exceeds the sum or value of $75, 000,
exclusive of interests and costs.'"). While the
Court finds that there is complete diversity of citizenship
between the parties,  the question is whether the amount claimed
in the Amended Complaint exceeds the jurisdictional threshold
of $75, 000.