United States District Court, D. South Carolina, Beaufort Division
ORDER AND OPINION
Richard Mark Gergel, United States District Court Judge.
matter is before the Court on Defendant Shanna Norwood's
motion for the Court to abstain from hearing and to dismiss
this insurance coverage action (Dkt. No. 7). For the reasons
set forth below, the Court denies the motion.
an insurance coverage declaratory action. On December 21,
2014, a dog owned by Defendant Victoria Rogers allegedly bit
Ms. Norwood's daughter while she was at Ms. Rogers's
home, inflicting facial injuries requiring emergency medical
treatment. Ms. Norwood has filed an action in the Beaufort
County Court of Common Pleas against Ms. Rogers, asserting
negligence and strict premises liability claims and seeking
indeterminate actual and punitive damages (the
"Underlying Litigation"). (Dkt. No. 1-1.)
Lighthouse Property Insurance Corporation issued a
homeowner's policy for Ms. Roger's home with a $300,
000 per occurrence liability limit. Lighthouse currently is
defending Ms. Rogers in the Underlying Litigation under a
full reservation of rights. Ms. Roger's policy has an
exclusion for '"Bodily injury' or 'property
damage' caused by any dog . . . owned or kept, including
temporary supervision, by you or any insured, resident,
tenant or guest whether or not the injury occurs on your
premises or any other location." (Dkt. No. 1-2 at 14.)
Lighthouse filed the present action seeking a declaration
that it has no obligation to defend or indemnify Ms. Rogers
in the Underlying Litigation. Ms. Norwood has moved to
dismiss or to remand the complaint.
motion to dismiss for lack of subject-matter jurisdiction
filed pursuant to Rule 12(b)(1) of the Federal Rules of Civil
Procedure challenges the jurisdiction of a court to
adjudicate the matter before it. Arbaugh v. Y & H
Corp., 546 U.S. 500, 514 (2006). A challenge to
subject-matter jurisdiction may contend either 1) that the
complaint fails to allege facts sufficient to establish
subject matter jurisdiction or 2) "that the
jurisdictional allegations of the complaint [are] not
true." Adams v. Bain, 697 F.2d 1213, 1219 (4th
Cir. 1982). Where the sufficiency of the jurisdictional
allegations in the complaint is challenged facially,
"the facts alleged in the complaint are taken as true,
and the motion must be denied if the complaint alleges
sufficient facts to invoke subject matter jurisdiction."
Kerns v. United States, 585 F.3d 187, 192 (2009).
If, however the defendant contends "that the
jurisdictional allegations of the complaint [are] not true,
" the plaintiff bears the burden to prove facts
establishing jurisdiction and the district court may
"decide disputed issues of fact." Id.
jurisdiction based on the presentation of a federal question,
see 28 U.S.C. § 1331, a federal district court
only has "original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of
$75, 000, exclusive of interest and costs, and is between ...
citizens of different States" 28 U.S.C. § 1332(a).
When a defendant bases removal on diversity jurisdiction, the
amount in controversy is determined at the time of removal.
See St. Paul Mercury Indem. Co. v. Red Cab Co., 303
U.S. 283, 292 (1938). In making this determination, the
amount claimed by the plaintiff in his complaint controls
unless the claim is made in bad faith. Dart Cherokee
Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 553
(2014). If the amount claimed in the complaint is
indeterminate or if it is contested on grounds enumerated in
28 U.S.C. § 1446(c)(2)(A), both sides submit proof and
the court decides, by a preponderance of the evidence,
whether the amount-in-controversy requirement has been
Amount in Controversy
Norwood argues the $75, 000 amount-in-controversy threshold
for diversity jurisdiction is not met in this case because
she has made a settlement demand for less than $75, 000 (Ms.
Norwood declines to state the amount of the demand or whether
it has expired). That argument is without merit. A settlement
demand is not a stipulation of damages. See Green v.
Caterpillar Inc., No. 2:14-CV-26-MR-DSC, 2014 WL
4798705, at *3 (W.D. N.C. Sept. 26, 2014) ("When damages
are indeterminate, a party's stipulation can be
enforceable if it is 'a formal, truly binding,
pre-removal stipulation signed by counsel and his client
explicitly limiting recovery.'" (quoting McCoy
v. Erie Ins. Co., 147 F.Supp.2d 481, 485 (S.D. W.Va.
2001))). Moreover, Ms. Norwood cannot defeat jurisdiction by
stipulating to less than $75, 000 in damages now, after the
case has been removed. See St. Paul Mercury, 303
U.S. at 289-90; Covington v. Syngenta Corp., 225
F.Supp.3d 384, 389 (D.S.C. 2016).
Underlying Action, Ms. Norwood alleges a dog attack severely
injured the face of her minor child and she seeks actual and
punitive damages. A "claim for punitive damages alone
makes it virtually impossible to say that the claim is for
less than the jurisdictional amount." See Woodward
v. Newcourt Comm. Fin. Corp., 60 F.Supp.2d 530, 532
(D.S.C. 1999). The Court therefore finds by a preponderance
of the evidence that Lighthouse's potential exposure in
the Underlying Litigation exceeds the $75, 000
amount-in-controversy threshold. Because diversity of the
parties is uncontested and because the amount-in-controversy
requirement is met, the Court has subject-matter jurisdiction
over this action.
Norwood alternatively asks the Court to abstain from
exercising jurisdiction over this declaratory judgment
action, arguing the Nautilus factors weigh against
hearing this action. District courts have discretion to
decline to exercise jurisdiction over declaratory judgment
actions. Wilton v. Seven Falls Co.,515 U.S. 277,
290 (1995). In Nautilus Insurance Company v. Winchester
Homes, Inc., the Fourth Circuit ...