101 F.4th 396
5th Cir.2024Background
- James J. Morgan (d/b/a Morgan & Son Racing Engines) sustained storm damage to two insured properties, prompting a claim with Sentry Insurance.
- Sentry paid $61,026.93 after assessing damages, but Morgan claimed an additional $349,657.22 was owed under the policy.
- The insurance policy required an appraisal process if the amount of loss was disputed, involving the appointment of appraisers by each party and, if necessary, an umpire.
- The parties' chosen appraisers could not agree on an umpire, prompting Sentry to ask the federal district court to appoint one.
- The district court dismissed Sentry's petition, finding it did not satisfy the amount-in-controversy requirement for federal diversity jurisdiction; Sentry appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Amount in controversy for jurisdiction | Amount at dispute exceeds $75,000; the right to appraisal is measured by Morgan's additional demand. | Right to be protected is too speculative as appraisers had yet to submit estimates; no present injury; amount uncertain. | Reversed district court: The disputed $349,657.22 meets the amount-in-controversy requirement. |
| Jurisdiction under Article III (case or controversy) | (N/A; not raised below) | Petition does not present a justiciable controversy. | Remanded for district court to address in first instance. |
| Whether a petition to appoint an umpire is a "civil action" | (N/A; not raised below) | Not a civil action under § 1332. | Remanded for district court to address in first instance. |
| Application of Badgerow v. Walters on looking through to underlying dispute | Jurisdiction proper because petition plainly states amount in controversy. | Badgerow bars reference to underlying substantive dispute for jurisdiction. | No bar here—petition itself reflects the disputed amount at stake. |
Key Cases Cited
- United States v. Ruiz, 536 U.S. 622 (court has power to determine its own jurisdiction)
- Vantage Trailers, Inc. v. Beall Corp., 567 F.3d 745 (burden is on the party invoking federal jurisdiction)
- Hartford Ins. Grp. v. Lou-Con Inc., 293 F.3d 908 (amount in controversy in declaratory relief actions is value of right or injury at stake)
- Settlement Funding, L.L.C. v. Rapid Settlements, Ltd., 851 F.3d 530 (lack of subject matter jurisdiction can be raised any time)
- Montano v. Texas, 867 F.3d 540 (court of appeals sits as a court of review, not first view)
- Osborne v. Coleman Co., 592 F.2d 1239 (remand for factual findings district court has not made)