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Howard v. Farmers Insurance Co.

United States District Court, C.D. California

April 9, 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]

DEAN D. PREGERSON, District Judge.

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 ...


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