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Toller v. Sagamore Insurance Co.

September 26, 2007

GWENDOLYN TOLLER, ON BEHALF OF HERSELF AND ALL OTHER SIMILARLY SITUATED PERSONS PLAINTIFF
v.
SAGAMORE INSURANCE COMPANY DEFENDANT



The opinion of the court was delivered by: J. Leon Holmes United States District Judge

OPINION AND ORDER

Gwendolyn Toller commenced this action in the Circuit Court of Phillips County, Arkansas, on behalf of herself and other similarly situated persons, against Sagamore Insurance Company, alleging breach of contract and seeking declaratory and injunctive relief as well as an accounting. Toller alleges that defendant has consistently issued automobile liability insurance policies without providing no-fault coverages or obtaining waivers of such coverage as required by Arkansas law. Sagamore removed the action to this Court. Toller has moved to remand the action to the circuit court, arguing that the amount in controversy requirements of 28 U.S.C. § 1332(a) and (d) have not been met, so this Court lacks subject matter jurisdiction.

I.

Sagamore Insurance Company issued an automobile liability insurance policy to Gwendolyn Toller in December 2006. Toller alleges that the Arkansas Code requires every automobile insurance policy issued in Arkansas to provide uninsured motorist coverage, underinsured motorist coverage, medical benefits, and income disability benefits or accidental death benefits ("no-fault coverages") unless the insured waives the coverage in writing. See ARK. CODE ANN. §§ 23-89-202-03, 209 (2004); 23-89-403-04 (2004 & Supp. 2007). Toller alleges that at the time of her application for insurance, she was not made aware of the availability of such no-fault coverages as required by Arkansas law and was likewise not given the opportunity to reject such coverage.

On February 27, 2007, Toller was injured in a car accident. She alleges that she incurred medical expenses in excess of $48,000, for which she made a claim under her policy with Sagamore. She alleges that Sagamore wrongfully denied her claim. Toller also alleges that she has claims for underinsured motorist benefits and on disability benefits, as provided by the Arkansas statutes cited above. These are the only statements in the complaint regarding the damages that Toller herself suffered; nowhere in the complaint does she specify the amount of damages that she seeks; and nowhere in the complaint does she limit her damages to less than $75,000.

Toller seeks, on behalf of herself and others, attorneys' fees and any applicable penalties for Sagamore's breach of contract; declaratory and injunctive relief that would find Sagamore's conduct in violation of Arkansas's law and enjoin them from such conduct in the future; and an accounting of all persons who were deprived of uninsured or underinsured coverage including notification that those in an accident while covered by such insurance may have a claim that went unpaid. While Toller does not specify the amount sought by herself or the class, she states that the amount in controversy will not exceed the sum or value of $4,999,999, and she specifically waives any amount of compensatory damages, restitution, interest, costs, and attorneys' fees above that amount.

Sagamore removed this action under 28 U.S.C. § 1441. Sagamore argues that the Court has diversity jurisdiction on two grounds. First, Sagamore argues that the parties are of diverse citizenship and that the amount in controversy exceeds $75,000, so this Court has jurisdiction pursuant to 28 U.S.C. § 1332(a). Second, Sagamore argues that this case is a class action, that the class has more than 100 members, that the amount in controversy exceeds $5,000,000, and that minimal diversity exists, so this Court has jurisdiction pursuant to the Class Action Fairness Act, codified at 28 U.S.C. § 1332(d).

Toller has moved to remand. She argues that Sagamore has not met its burden to demonstrate that the amount in controversy meets the minimum amount under either 28 U.S.C. § 1332(a) or (d).

II.

It is undisputed that Toller and most, if not all, of the members of class that she seeks to represent are citizens of Arkansas who have purchased insurance from Sagamore and that Sagamore is an Indiana corporation with its principal place of business in Indiana. "Minimum diversity," requiring only one plaintiff and one defendant to be diverse, is met. See 28 U.S.C. § 1332(d)(2)(A) (Supp. V 2005). The complaint asserts that there are "hundreds, if not thousands" of Arkansans insured by Sagamore who are members of the class; thus, the class number requirement of 100 under 28 U.S.C. § 1332(d)(5) has also been met. Toller does not allege specific amounts of damages as to her own claims (e.g., disability benefits, underinsured insurance claim, medical expenses), nor does she allege a specific amount in controversy for the class other than her attempt to limit the amount in controversy to less than $4,999,999.*fn1 The parties disagree as to whether the amount in controversy on Toller's individual claim exceeds the minimum jurisdictional amount of $75,000 under 28 U.S.C. § 1332(a), and likewise they disagree as to whether the amount in controversy for the protective class exceeds the jurisdiction threshold of $5,000,000 provided in 28 U.S.C. § 1332(d).

In reviewing a motion to remand, the Court must resolve all doubts in favor of remand to state court. In re Business Men's Assurance Co. of America, 992 F.2d 181, 183 (8th Cir. 1993). The amount in controversy is determined by examining "the situation at the time of removal." The United States Supreme Court has held that: where the other elements of jurisdiction are present and at least one named plaintiff in the action satisfies the amount-in-controversy requirement, [28 U.S.C.] § 1367 does authorize supplemental jurisdiction over the claims of other plaintiffs in the same Article III case or controversy, even if those claims are for less than the jurisdictional amount specified in the statute setting forth the requirements for diversity jurisdiction.

Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 549, 125 S.Ct. 2611, 2615, 162 L.Ed. 502 (2005) (allowing aggregation of plaintiffs' claims when one plaintiff meets the amount in controversy requirement for diversity). Thus, if Sagamore can show that the amount in controversy on Toller's claim is at least $75,000, then the action is removable. See id.; see also 28 U.S.C. § 1332(a). Alternatively, the action is removable if Sagamore can show that the amount in controversy for the class, when aggregated together, exceeds $5,000,000. 28 U.S.C. § 1332(d).

A. BURDEN OF PROOF

The party seeking to invoke federal jurisdiction has the burden of proving that the requisite amount in controversy has been met. Hatridge v. Aetna Cas. & Surety Co., 415 F.2d 809, 814 (8th Cir. 1969). When the complaint "alleges no specific amount of damages or an amount under the jurisdictional minimum," the removing party must prove by a preponderance of the evidence that the amount in controversy requirement is met. In re Minnesota Mut. Life Ins. Co. Sales Practices Litigation,346 F.3d 830, 834 (8th Cir. 2003); see also James Neff Kramper Family v. IBP, Inc., 393 F.3d 828, 831 (8th Cir. 2005); Trimble v. Asarco, Inc., 232 F.3d 946, 959 (8th Cir.2000); Haynes v. Louisville Ladder Group, LLC,341 F. Supp. 2d 1064, 1066-67 (E.D. Ark. 2004); Moriconi v. AT&T Wireless PCS, LLC, 280 F. Supp.2d 867, 878 (E.D. Ark. 2003); Gilmer v. Walt Disney Co., 915 F. Supp. 1001, 1007 (W.D. Ark. ...


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