Opinion
00 Civ. 1999 (HB)
January 16, 2001
OPINION and ORDER
Plaintiff brings this action for a declaratory judgment that defendant is liable for monthly payments under a disability insurance policy. Defendant moves to dismiss this action pursuant to F.R.C.P. 12(c) on the grounds that plaintiff has not satisfied the amount in controversy requirement of $75,000 pursuant to 28 U.S.C. § 1332. For the following reasons, I find that the defendant's motion to dismiss should be granted.
I. BACKGROUND
Plaintiff alleges in his complaint that he was a member of the New York Mercantile Exchange in 1997 when defendant U.S. Life issued a group long term disability income insurance policy. Plaintiff apparently was eligible for the long term benefits when, on August 15, 1998, he became disabled due to a progressive hearing loss. Defendant paid the plaintiff income benefits for the first twelve months of his disability, however defendant disputes plaintiffs entitlement to further payments. The policy apparently provides that after the first twelve months plaintiff is entitled to a $4000 a month benefit until he reaches the age of 65, but only if he is unable to perform the material duties of any gainful job for which he is reasonably fit by training, education, or experience.
As plaintiff was 48 years old at the time he filed the complaint, plaintiff claims that he is entitled to approximately 15 years of monthly payments of $4,000.
II. ARGUMENT
A. Standard of Review
In a motion to dismiss, the court is required to accept as true all of the fact alleged in the complaint and draw all reasonable inferences in the plaintiff's favor. See Madonna v. United States, 878 F.2d 62, 65 (2d. Cir. 1989). A motion to dismiss should be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99 (1957).
B. The Amount in Controversy Requirement Under 28 U.S.C. § 1332 28 U.S.C. § 1332 provides that federal district courts have diversity jurisdiction over "all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and [when the action] is between citizens of different States. . .". 28 U.S.C. § 1332(a).
Here, defendant argues that plaintiff has not satisfied amount in controversy requirement since at the time the plaintiff instituted this action, the actionable sum was only approximately $16,000, i.e. the four months of missed payments of $4000 each. Plaintiff does not dispute the fact that at the time he filed the complaint $16,000 was the only actionable amount. Rather, plaintiff argues that a declaratory judgment by this Court will result in future payments by the defendant that would eventually exceed the jurisdictional amount. Thus, the issue is whether the amount in controversy is determined by the defendant's liability at the time the action is brought by the defendant's future liability.
This Court is not aware of any Second Circuit case directly addressing this issue. However, the prevailing view is that, when an insured is seeking benefits accrued under a policy, the amount in controversy is determined by the amount recoverable at the time of the action. See Budget Rent-A-Car, Inc. v. Higashiguchi, 109 F.3d 1471, (9th Cir. 1997), Beaman v. Pacific Mut. Life Ins. Co., 396 F.2d 653, (4th Cir. 1966), Keck v. Fidelity Cas. Co. of New York, 359 F.2d 840 (7th Cir. 1966); Brauner v. Provident Life Cas. Ins. Co., No. 97-CV-3556, 1998 WL 812612 (S.D.N.Y. March 24, 1998). I find this view convincing.
Turning to New York law, it is well-established that a plaintiff cannot recover anticipatory breach benefits under a disability insurance policy. See Romar v. Alli, 501 N.Y.S.2d 877 (N.Y.App.Div. 1986); see also Leventhal v. Franzus Co., No. 88 CIV 3547, 1988 WL 132868, at *3 (S.D.N Y Dec. 6, 1988). Thus, the amount recoverable by the plaintiff is limited to defendant's alleged missed payments. Calculating the missed payments at the time of plaintiffs filing of the complaint (and even at the time of the scheduled February 2001 trial), plaintiff clearly fails to satisfy the $75,000 statutory requirement.
III. CONCLUSION
For the above reasons, plaintiff has failed to meet the statutory requirement of § 1332 for diversity jurisdiction and the defendant's motion to dismiss is GRANTED. The complaint is dismissed without prejudice to be re-filed in state court. The Clerk is instructed to close the case.