Case No. 1:06-CV-892.
October 29, 2007
Plaintiff Amerisure Mutual Insurance Company ("Amerisure") issued a commercial automobile insurance policy to defendant Carey Transportation, Inc. ("Carey") effective July 20, 2004 through July 20, 2005. See Comp, Ex. B.
The body of the complaint states that the policy was effective from July 20, 2004 through the same date, July 20, 2004. This is obviously a typographical error, because the policy's declaration page lists the effective period as July 20, 2004 through a date about one year later, July 20, 2005. The court invites the plaintiff to correct this error in the amended complaint.
In May 2005, a company called February Fourteen, Inc. ("FFI"), which is not a party to this action, hired Carey to transport goods from Michigan to Florida. While Carey was transporting the goods in a vehicle that it owned, the vehicle's front steer bearings failed, causing a fire that spread and damaged FFI's trailer and the goods. Great West Insurance Company, as subrogee of FFI, sued Carey in this court, alleging that the fire was caused by Carey's negligent failure to maintain its vehicle ("the underlying coverage action"). See Comp., Ex. A (Comp. filed Feb. 10, 2006 in Great West Cas. Co. v. Carey Transp., Inc., No. 1:06-cv-106 (W.D. Mich.) (Enslen, J.)) ¶¶ 7-15.
The plaintiff there, Great West, moved for summary judgment, as did third-party defendant FFI. On August 20, 2007, Judge Enslen issued an order denying both summary-judgment motions. A settlement conference is scheduled to be held before Magistrate Judge Carmody on November 14, 2007.
Amerisure filed the instant action seeking, inter alia, a declaration that it does not have a duty to defend or indemnify Carey in the underlying coverage action. For the reasons that follow, the court determines that Amerisure has not satisfied its burden of pleading facts sufficient to establish federal jurisdiction, and the complaint will accordingly be dismissed without prejudice, with leave to amend within a specified time to correct the deficiency.
Apparent Absence of Federal-Question Jurisdiction.
Title 28 U.S.C. § 1331 provides that the district courts "have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." This court may exercise such federal-question jurisdiction only if the well-pleaded allegations of the complaint, not any potential defenses, arise under federal law — this is the so-called well-pleaded complaint rule. Mikulski v. Centerior Energy Corp., ___ F.3d ___, ___, 2007 WL 2372301, *3 (6th Cir. Aug. 21, 2007) (en banc) (Batchelder, J., joined by Griffin, J., et al.) (citing Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6 (2003)).
Amerisure's three-count complaint does not assert any cause of action even arguably arising under federal law. Counts two and three seek restitution and relief from unjust enrichment, both of which are claims under state common law. See Comp. ¶¶ 15-21.
Count one seeks a declaration that "Amerisure has no duty to defend or indemnify any Defendant with respect to any claim made in the underlying action, and further declaring that Amerisure has no liability, and that no coverage exists, under the commercial general liability policy issued by Amerisure to Defendant Carey . . . for any and all claims in the underlying action. . . ." Comp. ¶ 14. The federal Declaratory Judgment Act, 28 U.S.C. § 2201, "[i]n a case of actual controversy within its jurisdiction . . . any court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." But it is well established that § 2201 does not create an independent cause of action. Davis v. US, ___ F.3d ___, ___, 2007 WL 2323853, *3 (6th Cir. Aug. 16, 2007) (Gilman, Griffin, D.J. Ackerman) (citing Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950) (holding that by passing the Declaratory Judgment Act, "Congress enlarged the range of remedies available in the federal courts but did not extend their jurisdiction.")). A federal court must have jurisdiction on some other basis before a plaintiff can invoke the Declaratory Judgment Act. Davis, 2007 WL 2323853 at *3 (citing Toledo v. Jackson, 485 F.3d 836, 839 (6th Cir. 2007)). Thus, Amerisure's invocation of the Declaratory Judgment Act in count one, on its own, cannot provide a basis for federal-question jurisdiction.
There are two relevant exceptions to the well-pleaded complaint rule of federal-question jurisdiction. One exception provides that federal-question jurisdiction exists "`when a federal statute wholly displaces the state-law cause of action through complete preemption.'" Mikulski, ___ F.3d at ___, 2007 WL 2372301 at *3 (quoting Beneficial Nat'l Bank, 539 U.S. at 8). Another exception provides that federal-question jurisdiction exists "`where the vindication of a right under state law necessarily turns on construction of federal law.'" Mikulski, ___ F.3d at ___, 2007 WL 2372301 at *3 (citing Franchise Tax Bd. v. Const. Laborers Vacation Trust, 463 U.S. 1, 9 (1983)). Neither the complete-preemption exception nor the substantial-federal-question exception to the well-pleaded complaint rule appears to apply here. Insufficient Factual Allegations to Determine Existence of Diversity Jurisdiction
There is a third exception to the well-pleaded-complaint rule of federal-question jurisdiction, but it applies only in the removal context. Under the artful-pleading doctrine, "plaintiffs may not `avoid removal jurisdiction by artfully casting their essentially federal law claims as state-law claims.'" Mikulski, ___ F.3d at ___, 2007 WL 2372301 at *3 (quoting Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 397 n. 2 (1981)). Amerisure originally filed this case in this court; it was not removed here from state court.
In short, it appears that this court does not have federal-question jurisdiction. Absent federal-question jurisdiction, this court cannot proceed to the merits of the case unless it has diversity jurisdiction. As the plaintiff, Amerisure has the burden of establishing diversity jurisdiction. Certain Interested Underwriters at Lloyd's London v. Layne, 26 F.3d 39, 41 (6th Cir. 1994) (citing , inter alia, FED. R. CIV. P. 8(a) and Ohio Nat'l Life Ins. Co. v. US, 922 F.2d 320, 326 (6th Cir. 1990)).
Title 28 U.S.C. § 1332 authorizes district courts to exercise diversity jurisdiction only when there is complete diversity of citizenship. Probus v. Charter Communications, LLC, No. 06-6188, ___ F. App'x ___, 2007 WL 1451959, *2 (6th Cir. May 16, 2007) (citing Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999)). Complete diversity exists only when no plaintiff and no defendant are citizens of the same state. Curry v. U.S. Bulk Transport, Inc., 462 F.3d 536, 540 (6th Cir. 2006) (citing Jerome-Duncan, Inc. v. Auto-by-Tel, LLC, 176 F.3d 904, 907 (6th Cir. 1999)).
The general rule is that for the purpose of determining diversity jurisdiction and removability, a corporation is deemed to be a citizen both of any state where it is incorporated and the state where it maintains its principal place of business. 28 U.S.C. § 1332(c)(1). According to the complaint, defendant Carey is incorporated in Florida and maintains its principal place of business in Michigan, while defendant Great West Casualty Company ("Great West") is incorporated in Nebraska and has its principal place of business in Nebraska as well. See Comp. ¶¶ 5-6. Thus, Amerisure must allege facts which show that it is not a citizen of Florida, Michigan, or Nebraska.
For purposes of this order only, the court assumes arguendo that the complaint accurately states the principal place of business of the defendants. This order will not prevent the defendants from contending, at a later stage of this case, that their principal places of business are in states other than those alleged by the plaintiff. See generally Century Business Servs., Inc. v. Bryant, 69 F. App'x 306, 313 (6th Cir. 2003) ("`The question of a corporation's principal place of business is essentially one of fact, to be determined on a case-by-case basis, taking into account the character of the corporation, its purposes, the kind of business in which it is engaged, and the situs of its operations.'") (quoting Gafford v. GE Co., 997 F.2d 150, 161 (6th Cir. 1993)); see, e.g., Collins v. Louisville Ladder, Inc., 2007 WL 1973551 (E.D. Ky. July 3, 2007) (applying "total activities" test to determine corporation's principal place of business).
Amerisure's complaint alleges only that it "is a Michigan insurer, authorized to do business in the State of Michigan, and conducting business in Michigan." Comp. ¶ 4. The complaint fails to specify where Amerisure is incorporated and where it maintains its principal place of business. Cf. Sinclair v. Bankers Trust Co. of Calif, N.A., 2005 WL 3434827, *2 n. 1 (W.D. Mich. Dec. 13, 2005) (Quist, J.) ("In her complaint, Sinclair alleges that . . . she is a citizen of Michigan and that Bankers Trust is a California corporation. She does not allege that Bankers Trust's principal place of business is not in Michigan. If Bankers' Trust's principal place of business were in Michigan, then diversity of citizenship would not exist."). On the present record, then, the court cannot rule out the possibility that Amerisure is a citizen of the same state as one or both of the defendants, and the court cannot simply assume that it is not. See Tsesmelys v. Dublin Truck Leasing Corp., 78 F.R.D. 181, 182 (E.D. Tenn. 1976) ("[A]llegations of the citizenships of the parties . . . is of the essence of jurisdiction and, being so essential, their absence can neither be overlooked nor supplied by inference.") (citations omitted).
Indeed, the website of the State of Michigan's Department of Labor and Economic Growth lists Amerisure's "state of domicile" as Michigan and states that it was formerly known as Michigan Mutual Insurance Company. See http://www.cis.state.mi.us/fis/ind_srch/ins_comp/insurance_company_detail.asp?id=0000429.
On the present complaint, then, Amerisure has not carried its burden of establishing the existence of federal jurisdiction, and the case is properly dismissed until and unless Amerisure corrects that defect. See Cooper v. Cianfrocca, 2001 WL 640808 (S.D.N.Y. June 7, 2001) ("The complaint is dismissed sua sponte for failure to allege facts sufficient to establish subject matter jurisdiction. 28 U.S.C. § 1332 requires that the parties be of diverse citizenship, not residence. Plaintiffs may file an amended complaint sufficiently alleging jurisdiction . . . on or before. . . .").
See also Levering Garrigues Co. v. Morrin, 61 F.2d 115, 121 (2d Cir. 1932) (where plaintiff adequately alleged citizenship of individual defendants but not citizenship of defendant labor unions, the Court of Appeals reversed the grant of an injunction and remanded to the district court "with directions to dismiss the complaint without prejudice, for lack of jurisdiction, unless the plaintiffs shall amend to correct the jurisdictional defect."), aff'd o.g., 289 U.S. 103 (1933);
Carnegie, Phipps Co. v. Hulbert, 53 F. 10, 11 (8th Cir. 1892) (where complaint failed to allege citizenship of members of unincorporated-partnership, Court of Appeals reversed judgment in favor of defendants "for want of jurisdiction" and remanded case to district court "with directions to that court to dismiss it unless the plaintiff shall amend its complaint to show jurisdiction").
Accord Century 21 Real Estate, LLC v. San Vicente Real Estate Servs., Inc., 2007 WL 2317093, *1 (S.D. Cal. Aug. 7, 2007) ("Because the complaint does not allege any facts necessary to establish complete diversity as required by 28 U.S.C. § 1332, it is dismissed for lack of subject matter jurisdiction. Plaintiff may amend the complaint by sufficiently alleging the citizenship of each of its members.") (citing 28 U.S.C. § 1653);
Joaquin v. GEICO Gen. Ins. Co., 2007 WL 1821403, *1 (N.D. Cal. June 25, 2007) ("Joaquin fails to adequately allege the citizenship of GEICO. * * * Accordingly, the instant action is hereby dismissed for lack of subject-matter jurisdiction, with leave to amend.");
Leica Microsys., Inc. v. Potter, 2007 WL 1188199, *1 (D. Ariz. Apr. 20, 2007) ("The jurisdictional allegations regarding [three defendants] are inadequate as well since the Complaint only states the residency of each Defendant. * * * Plaintiff's Complaint . . . is dismissed for lack of subject matter jurisdiction, and the Plaintiff shall file an amended complaint properly stating a jurisdictional basis for this action no later than. . . . The Plaintiff's failure to timely comply with this order shall result in dismissal of this action without further notice.");
Quimby v. Dutch Mining LLC, 2006 WL 977752 (D. Or. Apr. 10, 2006) (dismissing complaint without prejudice for lack of diversity jurisdiction and giving plaintiff ten days to file an amended complaint);
Hall v. American Ctr., 1999 WL 387201, *1 (E.D. Pa. May 10, 1999) ("The complaint . . . is dismissed for want of subject matter jurisdiction. If Hall is able to demonstrate that the court has jurisdiction over her claim, she may file an amended complaint.");
Multi-M Int'l, Inc. v. Paige Med. Supply Co., Inc., 142 F.R.D 150, 152 (N.D. Ill. 1992) ("It may be possible for plaintiff to correct the deficiencies noted in its allegation of diversity jurisdiction. * * * The complaint is dismissed sua sponte. Plaintiff is granted leave to file an amended complaint on or before. . . .").
Plaintiff Amerisure MAY FILE an amended complaint that alleges facts sufficient to support federal jurisdiction, if at all, no later than Friday, November 30, 2007.
This does NOT constitute leave to amend the complaint in any other respect; such leave must be sought in the usual fashion.
Third-party-defendant Adriatic Insurance Company's motion for summary judgment [docket #36] is DENIED without prejudice as moot. See Edwards Assocs., Inc. v. Atlas-Telecom Servs. USA, Inc., 2007 WL 30256, *8 (N.D. Tex. Jan. 4, 2007) ("[T]he plaintiff shall amend its petition to properly allege . . . the state(s) of citizenship of the corporate parties, and the basis for subject-matter jurisdiction. * * * All pending Rule 12 motions to dismiss are denied as moot. The defendants shall have leave, however, to reassert their motions. . . .") (emphasis added).
Accord Wexco, Inc. v. IMC, Inc., 820 F. Supp. 194, 205 (M.D. Pa. 1993) ("No later than . . ., Plaintiffs shall amend their complaint to assert jurisdiction under diversity of citizenship. * * * Once the amended complaint has been filed, Defendants are free to submit any appropriate motions under the schedules outlined in the Federal and Middle District Rules.") (emphasis added).
Defendant/counterclaimant/third-party plaintiff Carey Transportation, Inc.'s motion for summary judgment [docket #56] is DENIED without prejudice as moot. See id.
Plaintiff Amerisure Mutual Insurance Company's motion for summary judgment [docket #58] is DENIED without prejudice as moot. See id.
This is a final and appealable order.