Foster v. United Services Automobile Association

• Court: District Court, E.D. Arkansas
• Decided: July 10, 2024
• Docket: 4:24-cv-00021
• Status: Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS CENTRAL DIVISION

CHARLES FOSTER PLAINTIFF

v. Case No. 4:24-cv-00021-LPR

UNITED SERVICES AUTOMOBILE ASSOCIATION (USAA) and ALLCAT CLAIMS DEFENDANTS

ORDER Plaintiff Charles Foster’s home suffered storm damage, and he filed an insurance claim with Defendants in April 2023 seeking payment for a roof replacement.1 When that claim was denied, Mr. Foster initiated this diversity breach-of-contract suit against Defendants seeking $350,000 in damages.2 Before the Court is USAA’s motion to dismiss for lack of subject matter jurisdiction.3 Mr. Foster has not responded to the motion. For the reasons stated below, USAA’s motion to dismiss is GRANTED. Federal courts are courts of limited jurisdiction.4 If the Court lacks subject matter jurisdiction over a case, then the complaint must be dismissed in its entirety.5 Generally speaking, the Court’s subject matter jurisdiction over a case must be based on either federal question jurisdiction or diversity jurisdiction.6 This is such an important prerequisite to the exercise of a

1 Compl. (Doc. 1) at 1–2. 2 Id. 3 Mot. to Dismiss (Doc. 6-1); see FED. R. CIV. P. 12(b)(1) & (h)(3). 4 Wagstaff & Cartmell, LLP v. Lewis, 40 F.4th 830, 838 (8th Cir. 2022) (internal quotation marks omitted). 5 FED. R. CIV. P. 12(h)(3). 6 Arbaugh v. Y&H Corp., 546 U.S. 500, 513 (2006); 28 U.S.C. §§ 1331 (federal question) & 1332 (diversity). federal court’s power that the Court is required to examine the issue sua sponte if the Court has concerns that it might lack jurisdiction over a case.7 Federal question jurisdiction exists if the case arises “under the Constitution, laws, or treaties of the United States.”8 Because Mr. Foster’s claims rest solely on state-law breach-of- contract principles, federal question jurisdiction does not exist.

Diversity jurisdiction exists if the dispute is between “citizens of different states” and the amount in controversy exceeds $75,000.9 Although Mr. Foster seeks a sum that meets the amount- in-controversy requirement, complete diversity is lacking.10 Mr. Foster is a citizen of Arkansas.11 He fails to assert the Defendants’ principal places of business and states of incorporation— prerequisites to establishing corporate citizenship for diversity purposes.12 But we know USAA is a reciprocal insurance exchange with members in all fifty states.13 As such, its citizenship is determined by that of its members.14 And USAA has members in Arkansas.15 That means

7 Thigulla v. Jaddou, 94 F.4th 770, 773 (8th Cir. 2024). 8 28 U.S.C. § 1331. 9 28 U.S.C. § 1332. 10 The diversity statute “contains an important judicial gloss: the parties must be completely diverse from one another. No plaintiff can be a citizen of the same state as any defendant.” M&B Oil, Inc. v. Fed. Mut. Ins. Co., 66 F.4th 1106, 1109 (8th Cir. 2023) (internal citations omitted) (emphases in original). Otherwise, diversity jurisdiction does not exist. Great River Entm’t, LLC v. Zurich Am. Ins. Co., 81 F.4th 1261, 1262–63 (8th Cir. 2023). 11 Compl. (Doc. 1) at 1. Although the Complaint does not expressly include state-of-citizenship allegations, the Complaint does list Mr. Foster’s address as a P.O. Box in Arkansas. Moreover, Mr. Foster’s home at issue in this case is located in Little Rock, Arkansas. Additionally, Defendant USAA asserted that Mr. Foster is a citizen of Arkansas, and Mr. Foster did not challenge this assertion. Br. in Supp. of Mot. to Dismiss (Doc. 7-1) at 1. Finally, Mr. Foster sent Defendant USAA interrogatories from Little Rock. See Interrogatories (Doc. 9) at 1–2. 12 Compl (Doc. 1); see Sanders v. Clemco Industries, 823 F.2d 214, 216 (8th Cir. 1987). 13 Br. in Supp. of Mot. to Dismiss (Doc. 7-1) at 3. 14 Americold Realty Trust v. Conagra Foods, Inc., 577 U.S. 378, 381 (2016) (Diversity for “artificial entities other than corporations . . . depends on the citizenship of ‘all [its] members.’” (internal citations omitted)); see also Baer v. United Servs. Auto. Ass’n, 503 F.2d 393, 395 n.3 (2d Cir. 1974) (“[I]n a reciprocal insurance association[,] the members, by exchanging contracts of insurance, are both the insurers and the insureds.”). 15 Br. in Supp. of Mot. to Dismiss (Doc. 7-1) at 3. Mr. Foster and USAA are not diverse.!® Accordingly, USAA’s Motion to Dismiss (Doc. 6) is GRANTED. This case is DISMISSED without prejudice. IT IS SO ORDERED this 10th day of July 2024.

LEE P. □□ UNITED STATES DISTRICT JUDGE

16 Lewis v. United Servs. Auto. Ass’n, 45 F.3d 433, at *1 (8th Cir. 1994) (per curiam) (unpublished table opinion) (concluding that USAA is a “citizen of the states of each of its members”).