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Jordan v. State Auto Insurance Companies

United States District Court, D. South Dakota, Southern Division

December 13, 2016

CRAIG JORDAN and MICHELE JORDAN, Plaintiffs,
v.
STATE AUTO INSURANCE COMPANIES, d/b/a/ Milbank Insurance Company, Defendant.

          MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS

          LAWRENCE L. PIERSOL UNITED STATES DISTRICT JUDGE.

         Pending 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.

         BACKGROUND

         In June 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.

         In 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.

         In 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.

         In 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.

         LEGAL STANDARD

         "Federal 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).

         A 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. Hues 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.").

         State Farm 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 Farm's challenge to the Jordans' Amended Complaint is thus a facial one. As a result, in evaluating State Farm'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 non-moving party.

         DISCUSSION

         In 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, [1] the question is whether the amount claimed in the Amended Complaint exceeds the jurisdictional threshold of $75, 000.

         Amount ...


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