Freeland v. Liberty Mutual Fire Insurance
2011 U.S. App. LEXIS 2177
| 6th Cir. | 2011Background
- Freelands insured a Pontiac Trans Sport; minivan loaned to Freeland Jr. and family.
- On 3/7/2007 Freeland Jr. ran a red light and collided with a police cruiser, killing Freeland and his wife; three children injured.
- Policy provides UM/UIM coverage up to $12,500 per person and $25,000 per accident; deceased son was uninsured, so Liberty Mutual offered $25,000 per accident.
- Freelands argued a 1999 selection was invalid under Linko, asserting they acquired $100,000 UM/UIM by operation of law.
- Liberty Mutual removed to federal court asserting diversity and $100,000 controversy; district court granted summary judgment for Liberty Mutual.
- Court remanded for lack of jurisdiction because the amount in controversy is exactly $75,000 short of the $75,000 threshold, excluding interest and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case satisfies the amount-in-controversy requirement | Freelands seek $100,000 UM/UIM; exceeding threshold | Controversy is only $75,000 more than baseline | No jurisdiction; amount in controversy is $75,000 (one penny short) |
| Whether future claims under a reformed policy affect jurisdiction | N/A | Future claims speculative; cannot meet amount in controversy | Remand still required; speculative future claims do not count |
| Whether removal was proper under §1332 in a declaratory judgment action | N/A | Diversion and valid jurisdiction required; court lacks jurisdiction | Remand to state court; lack of federal jurisdiction |
| Whether the district court erred by granting summary judgment given jurisdictional defect | N/A | Court lacked authority due to lack of jurisdiction | Vacate district court judgment and remand to state court |
| Whether interest and costs affect the amount in controversy | Plaintiffs seek interest and costs in state court | Affects none of the jurisdictional amount; exclusive of interest and costs | Amount in controversy remains $75,000; penny short |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. Narvaez, 149 F.3d 1269 (10th Cir. 1998) (limit to underlying incident amounts in controversy)
- State Farm Mut. Auto. Ins. Co. v. Powell, 87 F.3d 93 (3d Cir. 1996) (declaratory judgment amount based on consequences of litigation)
- Snyder v. Harris, 394 U.S. 332 (1969) (original jurisdiction limits; amount in controversy principle)
- Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333 (1977) (amount in controversy measured by value of relief)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts' limited jurisdiction; need proper basis)