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State Farm Mutual Automobile Insurance Co. v. McWhite

United States District Court, D. South Carolina, Columbia Division

March 28, 2016

State Farm Mutual Automobile Insurance Company, Plaintiff,
v.
DuPont McWhite, Defendant.

ORDER

Joseph F. Anderson, Jr. United States District Judge

I. Introduction

This matter is before the Court on Dupont McWhite’s (“Defendant”) motion to dismiss for lack of subject matter jurisdiction. ECF No. 9. State Farm (“Plaintiff”) seeks a declaratory judgment as to whether it owes Defendant, its insured driver, underinsured motorist (“UIM”) coverage under two policies. Defendant moved to dismiss this suit on the grounds that the parties are not diverse and that the amount in controversy has not been met. The matter has been fully briefed, and the Court held oral argument on Monday, March 14, 2016.

II. Factual and Procedural History

This declaratory judgment action has its factual basis in an underlying state court suit for damages resulting from an automobile accident. There, Defendant was severely injured while driving his Ford Ranger in Lexington County in 2012. He brought suit against the at-fault driver. The at-fault driver’s liability policy (“at-fault policy”) paid out its limits of liability coverage in the amount of $25, 000. Defendant alleges that his damages are in excess of that amount and seeks UIM coverage from his own insurer, Plaintiff.

Plaintiff issued Defendant three automobile insurance policies: 1) a policy on his Ford Ranger (“Ranger policy”) with liability limits of $25, 000 and no UIM coverage; 2) a policy on his Toyota Highlander (“Highlander policy”) with UIM coverage of $50, 000; and 3) a policy on his Toyota CRV (“CRV policy”) with UIM coverage of $50, 000. At the time of the accident, Defendant was driving his Ford Ranger without UIM coverage.

Despite the absence of UIM coverage in the Ranger policy, the language of the policy provides that the insured can receive $25, 000 of UIM coverage from one of the “at home” vehicles’ policies. Thus, pursuant to that language, Plaintiff remitted to Defendant $25, 000 in UIM coverage from the “at home” Highlander policy. This payment was made prior to the initiation of both the state and federal litigation.

In this action, Plaintiff seeks a declaration that no UIM coverage is available under the Ranger policy, that no stacking is permissible beyond that provided for in the policy language, and that if the Ranger policy is reformed to include UIM coverage, recovery be limited to $25, 000 per vehicle. Defendant moved to dismiss for lack of subject matter jurisdiction claiming the amount in controversy is not in excess of $75, 000.

III. Legal Standard

Federal courts are courts of limited jurisdiction and, as such, may only hear and decide cases when given the authority to do so by the United States Constitution and by federal statute. In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998).

In a motion to dismiss pursuant to Rule 12(b)(1), the burden rests with the plaintiff to prove that federal subject-matter jurisdiction is proper. McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). “[T]he absence of jurisdiction may be raised at any time during the case, and may be based on the court's review of the evidence.” Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999); see Gibbs v. Buck, 307 U.S. 66, 72, 59 S.Ct. 725, 83 L.Ed. 1111 (1939).

“Determining the question of subject matter jurisdiction at the outset of the litigation is often the most efficient procedure.” Lovern, 190 F.3d at 654. The “district court may address its lack of subject matter jurisdiction in two ways.” Id. It “may find insufficient allegations in the pleadings, viewing the alleged facts in the light most favorable to the plaintiff, similar to an evaluation pursuant to Rule 12(b)(6), ” or, “after an evidentiary hearing, the court may weigh the evidence in determining whether the facts support the jurisdictional allegations.” Id. (internal citations omitted); see Adams, 697 F.2d at 1219 (same).

IV. The Governing Law

A. Diversity Jurisdiction


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