Opinion
Civil No. 03-2194 (HL).
April 16, 2004
REPORT AND RECOMMENDATION
Plaintiffs brought a wrongful death action against defendant Municipality of Arecibo and ACE Insurance Company for damages stemming from a motor vehicle accident which caused the death of Mr. Johnny Torres-Martínez while he was driving his car on a portion of an Arecibo's municipality community road. Plaintiffs have invoked this Court's diversity jurisdiction under 28 U.S.C. § 1332.
The Municipality of Arecibo has filed a Motion to Dismiss for Failure to Meet Jurisdictional Amount. ( Docket Entry # 11). Plaintiffs filed a Reply to the Motion to Dismiss. ( Docket Entry #13). The Municipality of Arecibo has filed a Surreply to Reply to Motion to Dismiss. ( Docket Entry # 19). The Motion to Dismiss has been referred by the Honorable Court to the undersigned Magistrate Judge for a Report and Recommendation ( Docket entry #23).
According to 28 U.S.C. § 1332, federal "district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs," and there is diversity of citizenship. 28 U.S.C. § 1332(a). Where there are multiple plaintiffs, each must allege a claim that is in excess of $75,000. Stewart v. Tupperware Corporation, 356 F.3d 335, 337 (1st Cir. 2004). When several plaintiffs with separate and distinct demands join together in a single suit premised on diversity jurisdiction, each plaintiff must independently satisfy the amount in controversy requirement. McCulloch v. Vélez, ___ F.3d ___, 2004 WL 720239.
See, Zhan v. Int'l Paper Co., 414 U.S. 291, 294 (1973);Clark v. Paul Gray Inc., 306 U.S. 583, 589 (1939).
The statute that provides for federal court diversity jurisdiction, 28 U.S.C. § 1332(a), requires that the "matter in controversy" exceeds the jurisdictional minimum. Based on this language, "[t]he traditional judicial interpretation . . . has been from the beginning that the separate and distinct claims of two or more plaintiffs cannot be aggregated in order to satisfy the jurisdictional amount requirement." Snyder v. Harris, 394 U.S. 332, 335 (1969).
In this case, there is no question that diversity of citizenship exists. Rather, the dispute turns on whether the damages exceed $75,000 per plaintiff.
Since plaintiffs seek to invoke federal diversity jurisdiction, they have the burden of showing that their claims meet the amount-in-controversy requirement. Spielman v. Genzyme Corp., 251 F.3d 1, 4 (1st Cir. 2001). The longstanding test for determining whether a party has met the amount-in-controversy states that:
The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938).
When applying this test, a court must look at the circumstances at the time the complaint is filed. Spielman, 251 F.3d at 5. It has long been the rule that a court decides the amount in controversy from the face of the complaint, "unless it appears or is in some way shown that the amount stated in the complaint is not claimed in `good faith.'"Coventry v. Dworkin, 71 F.3d 1, 4 (1st Cir. 1995) (quotingHorton v. Liberty Mutual, 367 U.S. 348, 353, 81 S.Ct. 1570 (1961)). Plaintiffs' "general allegation of damages that meet the amount requirement suffices unless questioned by the opposing party or the court." Id. (citing Dep't of Recreation Sports v. World Boxing Ass'n, 942 F.2d 84, 88 (1st Cir. 1991)). If the opposing party questions the damages allegation, then "`the party seeking to invoke jurisdiction has the burden of alleging with sufficient particularity facts indicating that it is not a legal certainty that the claim involves less than the jurisdictional amount.'" Id. "A party may meet this burden by amending the pleadings or by submitting affidavits." Id. Further, if, from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed, or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount, . . . the suit will be dismissed. St. Paul, 303 U.S. at 289.
Plaintiffs raise two causes of action for the wrongful death allegedly caused by the negligence of the Municipality of Arecibo, namely: one for mental and emotional anguish over the death of Mr. Torres-Martínez (husband and father of plaintiffs) in a sum of no less that $500,000 for each plaintiff; and another for economic loss as recipients of the income of Mr. Torres-Martínez in an amount of $93,053.49.
The Municipality of Arecibo has questioned plaintiffs' allegation that the damages for each plaintiff exceeds $75,000. The Municipality of Arecibo claims that under section 4704 of the Autonomous Municipality Act, 21 L.P.R.A. § 4704, the Municipality of Arecibo's maximum liability in this case is capped by statute at a maximum of $75,000 for each plaintiff, subject to an overall maximum of $150,000 for all plaintiffs. Accordingly, the Municipality of Arecibo claims that, due to the cap of $150,000 for all claims for all plaintiffs, the most plaintiffs would recover is $150,000 to be distributed at a pro-rata basis among the three plaintiffs for similar damages that would yield a compensation of $50,000 per plaintiff, which does not satisfy the jurisdictional amount under 28 U.S.C. § 1332. Consequently, the Municipality of Arecibo contends that this case must be dismissed.
This Section of the Autonomous Municipality Act reads, in pertinent part, as follow s:
Claims against municipalities for personal or property damages caused by the fault or negligence of the municipality, shall not exceed the amount of seventy-five thousand (75,000) dollars. When damages are claimed by more than one person in a single cause of action or omission, or when a single claimant, is entitled to several causes of action the compensation shall not exceed the sum of one hundred and fifty thousand dollars ($150,000). If the court finds the damages to each of the persons exceed one hundred and fifty thousand dollars ($150,000), the court shall proceed to distribute or prorate said amount among the plaintiffs, on the basis of the damages suffered by each of them.
21 L.P.R.A. § 4704.
The Municipality of Arecibo argues in its Surreply that there are four plaintiffs, thus amounting to a possible compensation of $37,500 per plaintiff. See paragraphs 6-7 of Surreply. Nonetheless, a review of the Amended Complaint show that there are three plaintiffs, to wit, Lilliam Vega-Torres per se and in representation of her two minor sons Anthony Torres-Vega and Johnny Torres-Vega.
The Municipality of Arecibo's argument fails because the standard to fulfill the amount in controversy requirement is not whether the damages will ultimately meet the jurisdictional amount. Instead the requirement asks whether, at this stage, it is a legal certainty that the damages will not meet the requisite amount. More important, the damages sought is the amount in controversy. "[T]he sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify a dismissal." St. Paul, 303 U.S. at 288-89; Stewart, 356 F.3d at 337.
Plaintiffs claim in the Amended Complaint in excess of $500,000 in damages for pain and suffering for each one of them for the wrongful death of plaintiffs' spouse and father; and $93,053.49 for loss of income. The Municipality of Arecibo has not questioned plaintiffs' good faith and there is nothing on the record to question plaintiffs' good faith. Therefore, it is facially apparent that a wrongful death claim, including mental anguish, terror in anticipation of death, loss of companionship and loss of income, exceeds the jurisdictional amount. Accordingly, in the case at hand, plaintiffs' injuries could reasonably be thought to justify an award of damages greater than $75,000. In an action sounding in damages it is not within the province of the court, before a verdict, to determine that there could not be damages awarded sufficiently to bring the cause within its jurisdiction, and that if such damages were awarded it would be bound to set the verdict aside as excessive. Barry v. Edmunds, 6 S.Ct. 501, 116 U.S. 550, 29 L.Ed. 729 (1886).
See, Collazo-Santiago v. Toyota Motor Corp., 957 F. Supp. 349, 358 (D. Puerto Rico 1997) (the determination whether the amount in controversy requirement has been satisfied is made as of the moment when the suit was filed, rather than after the jury has rendered its verdict. In the case at hand, the plaintiff's facial injuries when airbag deployed in accident could reasonably have been thought to justify an award of damages greater than $50,000); Knickerbocker v. Chrysler Corp., 728 F. Supp. 460, 463 (E.D.Michigan 1990) (this being a wrongful death action, the amount is controversy clearly exceeds $50,000); Brandt v. Weather Channel, Inc., 42 F. Supp.2d 1344, 1345 (S.D. Fla. 1999) (in the present wrongful death case, it is undisputed that the amount in controversy exceeds the jurisdictional amount of $75,000).
The Municipality of Arecibo's contention that the most plaintiffs can recover from their claims is $150,000 is unconvincing. The liability limits of the Municipality of Arecibo under the Autonomous Municipalities Act do not represent the tort damages suffered by plaintiffs. If plaintiffs can prove the Municipality of Arecibo's liability for damages more than $1,500,000 as claimed in the Amended Complaint, they are entitled to a judgment accordingly. Nonetheless, as a practical matter, plaintiffs may ultimately have to be content with simply recovering the $150,000 pursuant to the cap of the Autonomous Municipalities Act.
See Rogers v. Nathan, 721 F. Supp. 1393 (D. Columbia 1989) (amount in controversy in injured party's action against uninsured motorist for negligence and against injured party's automobile insurer for breach of contract exceeded $50,000, and thus diversity jurisdiction was appropriate, where injured party made claim against uninsured motorist for $500,000, even though there was a $20,000 liability limit for uninsured motorist benefits under automobile policy and, as practical matter, injured party might ultimately have to be content with simply recovering the $20,000 in uninsured motorist benefits); Allstate Ins. Co. v. Miller, 315 Md. 182, 553 A.2d 1268 (1989) ("the limit of uninsured motorist coverage is irrelevant to the issue of the amount of tort damages").
To adopt the Municipality of Arecibo's position in this case would put in jeopardy plaintiffs' rights in general to recover damages in federal court under the Autonomous Municipality Act in cases where there are multiple plaintiffs and the required amount in controversy under 28 U.S.C. § 1332 is challenged. Under the suggested theory, plaintiffs would be prejudiced — for federal jurisdictional purposes — because by distributing pro-rata the overall amount of $150,000 recovered among the plaintiffs, they will probably not reach the required amount in controversy of $75,000 for each plaintiff. Therefore, to adopt the Municipality of Arecibo's position will deprive multiple plaintiffs of their day in court in this kind of cases.
Finally, ACE Insurance Company has been included as a defendant in this case as a liability underwriter for the defendant Municipality of Arecibo for the performance and satisfaction of all relief sought by plaintiffs. See Amended Complaint, paragraph 4.13. ACE Insurance Company is not limited by the cap in liability under the Autonomous Municipality Act. Accordingly, plaintiffs' recovery is not necessarily bound to the cap established by the Autonomous Municipality Act — or to any figure below the amount in controversy requirement. See Ocean Ships, Inc. v. Stiles, 315 F.3d 111, 115 (2nd Cir. 2002). As such, the amount in controversy is met.
In sum, notwithstanding the $150,000 liability limit under the Autonomous Municipalities Act, the total damages which plaintiffs claim against the tortfeasor meet the jurisdictional requirements of 28 U.S.C. § 1332. Therefore, the amount in controversy requirement has been met as it could not be said to a "legal certainty" that the award resulting from plaintiffs' claims for a wrongful death would not exceed the $75,000 jurisdictional minimum.
See Robinson v. Castello, 331 F. Supp. 667, 670 (E.D. Louisiana 1971) (jurisdictional amount was satisfied where the Plaintiff's claim for damages in the amount of $50,000 was brought against the tortfeasor and the insurer).
See Doctor's Associates, Inc. v. Hamilton, 150 F.3d 157, 160 (2nd Cir. 1998) (Franchisor's action to compel arbitration of dispute with franchisee satisfied $75,000 amount in controversy requirement for federal jurisdiction, although arbitration agreement limited damages for claims under franchise agreement to $50,000, where action to compel was brought in response to franchisee's state court action seeking damages of over $1,000,000).
In view of the foregoing, it is recommended that the Municipality of Arecibo's motion to dismiss for lack of subject matter jurisdiction BE DENIED.
IT IS SO RECOMMENDED.
The parties have ten (10) days to file any objections to this report and recommendation. Failure to file same within the specified time waives the right to appeal this order. Henley Drilling Co. v. McGee, 36 F.3d 143, 150-151 (1st Cir. 1994);United States v. Valencia, 792 F.2d 4 (1st Cir. 1986). See Paterson-Leitch Co. v. Mass. Mun. Wholesale Elec. Co., 840 F.2d 985, 991 (1st Cir. 1988) ("Systemic efficiencies would be frustrated and the magistrate's role reduced to that a mere dress rehearser if a party were allowed to feint and weave at the initial hearing, and save its knockout punch for the second round").