Summary
rejecting that Plaintiff's complaint was barred by issue preclusion where first action was dismissed for failure to meet the amount in controversy and new complaint included second claim, which aggregated with previous claim, met the jurisdictional requirement
Summary of this case from Dicion v. Mann Mortg., LLCOpinion
Case No. CV 12-01068 DDP (JCx)
04-09-2014
DERRICK HOWARD, Plaintiff, v. FARMERS INSURANCE COMPANY, et al.,; Defendants.
ORDER DENYING IN PART AND
GRANTING IN PART DEFENDANTS'
MOTION TO DISMISS
[Dkt. Nos. 17, 27]
Before the court is a Motion to Dismiss filed by Defendant Mid-Century Insurance Company ("Mid-Century"). (Dkt. No. 17.) Defendant Farmers Insurance Company ("Farmers") has joined Mid-Century's Motion. (Dkt. No. 27.) The matter is fully briefed and suitable for adjudication without oral argument. Having considered the parties' submissions, the court adopts the following order.
I. Background
In this action, Plaintiff in pro per, Derrick Howard, who is currently incarcerated in the State of Florida, alleges Farmers Insurance Company and Mid-Century Insurance failed to pay benefits to him under two "Landlord Protector" insurance policies covering properties in St. Louis, Missouri. According to the Complaint, the first policy, No. 92838-63-11 ("the '11 policy"), insured a property at 4423 Kossuth Avenue. The second policy, No. 92564-27-03 ("the '03 policy"), insured a property at 4433 Kossuth Avenue. (Compl. ¶¶ 1-4, Dkt. No. 3.)
This is the second lawsuit filed by Plaintiff arising from the same alleged loss under the '11 policy. In the earlier suit, Plaintiff filed a claim in the Southern District of West Virginia on December 3, 2010, alleging that Defendant Farmers Insurance Company ("Farmers") wrongfully denied his claim under the '11 policy for losses resulting from vandalism committed on July 15, 2006 by a tenant at 4423 Kossuth Avenue. (See Motion Ex. 2 ¶¶ 8, 10-12.) The Complaint alleged that Farmers wrongfully denied the claim on the ground that the property was vacant 30 days prior to the damage. (Id. ¶ 13-16.) Within a week of its filing, the action was ordered transferred to the Eastern District of Missouri. (See id. Ex. 3.)
Following the transfer, on August 9, 2011, Judge Henry Edward Autrey ordered Plaintiff to show cause why the action should not be dismissed for lack of jurisdiction and ordered Farmers to file a brief as to whether diversity jurisdiction was present. (See id. Ex. 5.) Farmers filed a response attaching the insurance policy at issue, which, according to Farmers, limited claims for property loss to $60,000. (See id. Ex. 6 at 2, 4-17.) Plaintiff did not respond substantively to the court's order to provide evidence regarding jurisdiction. (Exs. 4, 7.)
On August 6, 2011, Judge Autrey issued an order stating that (1) "complete diversity is absent" and (2) "Defendant has also shown that the maximum value of this case to plaintiff is $60,000." (Id. Ex. 8 at 5.) Accordingly, Judge Autrey dismissed the case for lack of subject matter jurisdiction. (See id. Exs. 8-9.) On April 24, 2012, the Eighth Circuit Court of Appeals affirmed the dismissal. (See id. Exs. 10-11.)
On February 13, 2012, Plaintiff filed the instant Complaint against Farmers, Mid-Century, and 17 individual defendants who are alleged to be corporate officials of the insuring entities. (Dkt. No. 3.) As in the earlier suit, Plaintiff alleges that Defendants wrongfully denied his claim under the '11 policy for losses resulting from the act of vandalism on July 15, 2006 by a tenant at 4423 Kossuth Avenue. (Compl. ¶¶ 1-4, 7-9.) As in the earlier suit, Plaintiff alleges that the claim was denied improperly on the grounds that the property was vacant 30 days prior to the damage. (Id. ¶ 9-16.)
Unlike the earlier suit, however, the instant Complaint also includes claims alleging that Farmers and Mid-Century wrongfully denied benefits under the '03 policy that insured the nearby property at 4433 Kossuth Avenue. (Compl. ¶¶ 28-33.) The Complaint does not clearly explain the basis for the claim; it is unclear whether it relates to losses arising from the same alleged act of vandalism as the '11 policy claim or from a different loss. Plaintiff alleges that on or about December 1, 2007, Farmers and Mid-Century fraudulently refused to process Plaintiff's claim on the false ground that the policy had been canceled. (Id. ¶ 32.)
The Complaint alleges causes of action for (1) breach of fiduciary duty; (2) negligence; (3) breach of constructive trust; (4) breach of contract under the '11 policy; (5) breach of contract under the '03 policy; and (6) vexatious refusal under Mo. Stat. §§ 375.296 and 375.420. He asserts complaints for damages of $250,000. (Compl. at 19.)
Defendants Mid-Century and Farmers now moves to dismiss the Complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). Defendants also move to dismiss claims against the individual defendants who are alleged to be corporate officers of the insuring entity pursuant to Rule 12(b)(6).
II. Subject Matter Jurisdiction
Federal courts are courts of limited jurisdiction. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). Federal district courts have "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Alternatively, district courts may exercise diversity jurisdiction when there is complete diversity between the parties and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. Complete diversity means that each of the plaintiffs must be a citizen of a different state than each of the defendants. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). When subject matter jurisdiction is at issue, the plaintiff bears the burden of establishing the jurisdiction it asks the court to invoke. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994).
Defendants assert that Plaintiff cannot establish that this court has subject matter jurisdiction over the instant dispute on the ground that any assertion by Plaintiffs as to compliance with the amount in controversy requirement is barred under the doctrine of issue preclusion.
"The doctrine of issue preclusion prevents relitigation of all issues of fact or law that were actually litigated and necessarily decided in a prior proceeding. . . . The issue must have been actually decided after a full and fair opportunity for litigation." Robi v. Five Platters, Inc., 838 F.2d 318, 322 (9th Cir. 1988) (quotation marks and citation omitted). Issue preclusion applies to an earlier court's determination of an issue related to the existence of subject matter jurisdiction. See Hohu v. Hatch, 940 F. Supp.2d 1161, 1170 n.4 (N.D. Cal. 2013)(quoting Wrigh, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4436)("Although a dismissal for lack of jurisdiction does not bar a second action as a matter of claim preclusion, it does preclude relitigation of the issues determined in ruling on the jurisdiction question"); see also McNeil v. USPS, 2010 WL 3371751, at *10 (C.D. Cal. July 27, 2010).
The court agrees with Defendants that Plaintiff is precluded from arguing that the value of the '11 claim exceeds $60,000. The issue was decided in the earlier case before Judge Autrey of the Eastern District of Missouri after Plaintiff was given a full and fair opportunity to litigate the issue. (See id. Ex. 3.)
However, this conclusion does not mean that the court does not have subject matter jurisdiction over the instant Complaint. It is well established that a single plaintiff may aggregate two or more claims against a single defendant to satisfy the amount in controversy requirement. See Snyder v. Harris, 394 U.S. 332, 335 (1969). Here, Plaintiff's assertion that the amount in controversy requirement is met is based upon the combined alleged damages for the '11 and '03 policy claims.
"Where the plaintiff originally files in federal court, the amount in controversy is determined from the face of the pleadings. . . . The amount in controversy alleged by the proponent of federal jurisdiction--typically the plaintiff in the substantive dispute--controls so long as the claim is made in good faith." Geographic Expeditions, Inc. v. Estate of Lhotka ex rel Lhotka, 599 F.3d 1102, 1106 (9th Cir. 2010) (quotation marks and citation omitted). Plaintiff seeks damages in relation to his claims under the '11 and '03 claims in the amount of $250,000, which significantly exceeds the jurisdictional requirement. (Compl. at 19-20.) Having reviewed the Complaint and Plaintiff's explanation of his assertions related to the amount in controversy, (Opp. at 411), the court is persuaded that Plaintiff's alleged damages are made in good faith. When the alleged damages for the '03 claims are added to those of the '11 claim, it is not "obvious that the suit cannot involve the necessary amount." Geographic Expeditions, 599 F.3d at 1106 (quoting St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 292 (1938).
III. Claims Against Individual Defendants
A complaint will survive a motion to dismiss when it contains "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint need not include "detailed factual allegations," it must offer "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678. Conclusory allegations or allegations that are no more than a statement of a legal conclusion "are not entitled to the assumption of truth." Id. at 679. In other words, a pleading that merely offers "labels and conclusions," a "formulaic recitation of the elements," or "naked assertions" will not be sufficient to state a claim upon which relief can be granted. Id. at 678 (citations and internal quotation marks omitted).
"When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief." Id. at 679. Plaintiffs must allege "plausible grounds to infer" that their claims rise "above the speculative level." Twombly, 550 U.S. at 555. "Determining whether a complaint states a plausible claim for relief" is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.
Defendants move to dismiss the seventeen individual Defendants, who are alleged to be officers of Mid-Century and Farmers. The court agrees that dismissal is appropriate. All of Plaintiff's claims arise from the alleged breach of contracts Plaintiff entered into with the two entity Defendants. (See Compl. ¶¶ 26, 41.) However, Plaintiff has not alleged any facts indicating that any contract existed between Plaintiff and any of the individual Defendants. Nor has Plaintiff offered in his Opposition any explanation as to why the individual Defendants were included in the Complaint. Accordingly, Plaintiff has failed to state a plausible claim against the individual Defendants and their dismissal from this action is warranted under Rule 12(b)(6).
III. Conclusion
For the reasons stated above, Defendants' Motion is DENIED insofar as Defendants assert that Plaintiff has failed to establish the existence of federal subject matter jurisdiction. Defendants' Motion is GRANTED with respect to the seventeen individual Defendants, who are hereby dismissed from this case. IT IS SO ORDERED.
DEAN D. PREGERSON
United States District Judge