Employers Casualty Co. v. Kline Oldsmobile, Inc.

210 F. Supp. 269, 1962 U.S. Dist. LEXIS 3428
CourtDistrict Court, D. Minnesota
DecidedNovember 16, 1962
DocketNo. 4-62-Civ. 168
StatusPublished
Cited by5 cases

This text of 210 F. Supp. 269 (Employers Casualty Co. v. Kline Oldsmobile, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Employers Casualty Co. v. Kline Oldsmobile, Inc., 210 F. Supp. 269, 1962 U.S. Dist. LEXIS 3428 (mnd 1962).

Opinion

DEVITT, Chief Judge.

This is an action for a Declaratory Judgment brought by Employers Casualty Company, a Texas corporation, the principal place of business of which is in Texas, against Kline Oldsmobile, Inc., and Gary Marler, both citizens of Minnesota.

The parties have stipulated all of the pertinent facts.

Plaintiff issued a policy of liability insurance to defendant Kline Oldsmobile on April 1, 1961, which contained the fob lowing Exclusions:

This policy does not apply:
(f) * * * any obligation for which the insured or any carrier as his insurer may be held liable under [270]*270any workmen’s compensation, unemployment compensation or disability benefits laws, or under any similar law;
(g) « * * except with respect to liability assumed by the insured under a contract as defined herein, to bodily injury to or sickness, disease or death of any employee of the insured arising out of and in the course of his employment by the insured * * *

It appears from the Stipulation of Fact that on April 23, 1962, while the insurance policy was in force, defendant Marler, then a prospective customer of defendant Kline Oldsmobile, was driving a vehicle owned by Kline. James D. Smith, a car salesman for Kline Oldsmobile, who was then in the course of his employment, was riding in the car with Marler. The vehicle was involved in an accident and Smith allegedly sustained personal injuries. Smith commenced a civil action in the Hennepin County District Court against Marler and Kline alleging negligence on the part of Marler and ownership of the vehicle by Kline.

Plaintiff has refused to defend the state court action, claiming that the provisions of the policy set out above exempt it from liability. Plaintiff now brings this action in the federal court for a declaration of no liability on its part.

It is well settled that the Declaratory Judgments Act does not of itself create jurisdiction; it merely adds an additional remedy where the district court already has jurisdiction to entertain the suit. Wells v. United States, 280 F.2d 275, 277 (9th Cir., 1960). And as it must be in every federal case, the threshold inquiry here is whether we have such jurisdiction. “This question the court is bound to ask and answer for itself, even when not otherwise suggested * * * ” Mansfield, C. & L. M. Ry. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 511, 28 L.Ed. 462 (1884). The Federal Rules of Civil Procedure require us to dismiss an action “whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction * * * ” Federal Rules of Civil Procedure, rule 12(h) (2). Our superiors in commission on the Court of Appeals constantly enjoin us to be attentive to a satisfaction of the jurisdictional requirements in all cases. See, e. g., National Farmers Union Property & Casualty Co. v. Fisher, 284 F.2d 421, 423 (8th Cir., 1960). They readily direct dismissal of a case lacking the jurisdictional requirements when it is discovered at the appellate level. Kern v. Standard Oil Co., 228 F.2d 699 (8th Cir., 1956).

Here, as this is a diversity case, in addition to satisfying ourselves that an actual diversity in the citizenship of the parties exists (it apparently does), we must also be satisfied that the amount in controversy is in excess of $10,000 as required by the statute. 28 U.S.C.A. § 1332.

While the answers admit the allegations that the sum in controversy is in excess of $10,000 and the fact stipulation of the parties so provides, the court is not thereby bound to accept jurisdiction as a matter of course. While the value claimed in the complaint is a usual test for determining the jurisdictional amount, St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938) we need not accept such assertion of the proper jurisdictional amount without proof. Kaufman v. Liberty Mutual Ins. Co., 245 F.2d 918 (3rd Cir., 1957).

The plaintiff seeks this jurisdiction. It must prove its entitlement to it. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936). In McNutt the court said that the prerequisites to the exercise of jurisdiction “are conditions which must be met by the party who seeks the exercise of jurisdiction in his favor.” Further therein it is said that the court may “insist that the jurisdictional facts be established or the case be dismissed, and for that purpose the court may demand that the party alleging ju[271]*271risdiction justify his allegations by a preponderance of evidence.”

In dealing with the “jurisdictional amount” aspect of the problem, it must be remembered that the “in excess of $10,000” requirement is of recent origin. Prior to 1958, the amount required was $3,000. This smaller sum presented relatively few jurisdictional difficulties because it was the rare case, especially in the personal injury field, in which the evidence, viewed prospectively, would not support a valid claim for $3,000. Today, however, the $10,000 requirement affords us a more accurate basis for discriminating between the real and the spurious federal case. Many cases are filed in which the provable damages are obviously far below $10,000 and yet an amount in excess of that figure is alleged for the sole purpose of qualifying the suit for Federal District Court jurisdiction. The federal courts have become responsive to this. It has resulted in the dismissal of those cases in which the invocation of jurisdiction was found to be “colorable.” See, e. g., Matthiesen v. Northwestern Mutual Ins. Co., 286 F.2d 775 (5th Cir., 1961). Our own Circuit Court of Appeals has stated:

“We shall appreciate it if the trial judges will carefully scrutinize * * those allegations of the pleadings which are essential to establish federal diversity jurisdiction.”

National Farmers Union Property & Casualty Co. v. Fisher, 284 F.2d 421, 423 (8th Cir., 1960). Adhering to this admonition, this Court has recently dismissed, on its own motion, a number of cases in which a careful examination of the pleadings, affidavits, medical reports, depositions and interrogatories satisfied the Court that the claim in excess of $10,000 was “colorable.” See, e. g., Hahn v. Eslinger, 4-62-Civ-230 (D.Minn. 1962); Nomeland v. Miller, 4-62-Civ-107 (D.Minn.1962); Cotton v. De-Freeuw, 4-61-Civ-332 (D.Minn.1962); Gunness v.

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210 F. Supp. 269, 1962 U.S. Dist. LEXIS 3428, Counsel Stack Legal Research, https://law.counselstack.com/opinion/employers-casualty-co-v-kline-oldsmobile-inc-mnd-1962.