Ross v. Inter-Ocean Ins. Co.
| Decision Date | 18 November 1982 |
| Docket Number | No. 82-1249,INTER-OCEAN,82-1249 |
| Citation | 693 F.2d 659 |
| Parties | Frances Louise ROSS, Plaintiff-Appellant, v.INSURANCE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
David R. Hultgren, Stansell, Critser & Whitman, Monmouth, Ill., for plaintiff-appellant.
Robert T. Park, Katz, McAndrews, Durkee, Balch & Lefstein, Rock Island, Ill., for defendant-appellee.
Before CUDAHY, Circuit Judge, SWYGERT, Senior Circuit Judge, and POSNER, Circuit Judge.
The plaintiff, a citizen of Illinois, brought suit in an Illinois state court against the defendant, an out-of-state insurance company, complaining that it had refused to honor its commitments to her under a cancer insurance policy. The defendant removed the case to federal district court under 28 U.S.C. Sec. 1441, and later moved for summary judgment. The motion was granted and the complaint dismissed, and the plaintiff has appealed to this court.
At no time has either party, or the district court, questioned the existence of federal jurisdiction over the subject matter of this action. But we have a responsibility to determine independently, in every case, whether we have subject-matter jurisdiction, and to dismiss the case if we find we do not.
For a case to be within the diversity jurisdiction of the federal courts the amount in controversy between the parties must exceed $10,000, exclusive of interest and costs. 28 U.S.C. Sec. 1332. The complaint in this case asked for damages of $16,454, exclusive of interest and costs; and if that was a reasonable estimate of the value of the plaintiff's claim if she prevailed, the amount in controversy requirement was satisfied and the case was removable. It is tempting to argue that so long as the complaint asks for more than $10,000, then however outlandish the request in the circumstances known to the parties the defendant ought to be allowed to take the request at face value and remove the case. But the argument has no basis in the removal statute, which allows a case to be removed only if it could have been brought originally in federal court, 28 U.S.C. Sec. 1441(a); and it would invite collusive invocations of federal jurisdiction. A plaintiff who wanted to be in federal court but knew that he could not in good faith ask for more than $10,000 in damages might ask for more anyway, hoping that the defendant also wanted to be in federal court and would therefore remove the case without unmasking the fictitious request. There is a long history of using fictitious allegations to confer jurisdiction. See, e.g., 3 Blackstone, Commentaries on the Laws of England 42-43, 45-46, 59-60 (1768). Especially in a period when the federal courts are staggering under an unprecedented caseload, they must be careful to prevent litigants from evading Congress's policy of keeping petty cases involving issues purely of state law out of these courts. The danger of evasion has been thought sufficiently great to call forth an express statutory prohibition against collusive invocations of federal jurisdiction. See 28 U.S.C. Sec. 1359; 14 Wright, Miller & Cooper, Federal Practice and Procedure Sec. 3637 at p. 83 (1976).
The complaint states that the plaintiff submitted proof of loss to the defendant before bringing suit. Although the proof of loss is not in the record, the plaintiff's pretrial statement, filed five months after the complaint, is, and it contains an itemized statement of medical expenses for which the plaintiff contended the defendant was obligated to reimburse her. Those expenses add up to only $9,003; and we think it a fair inference that the proof of loss, which the defendant had received sometime before the complaint was filed and therefore before the case was removed, must have been no greater. The defendant should therefore have known that the case might not be removable despite the ad damnum in the complaint. Furthermore, in the pretrial order, filed just six weeks after the plaintiff's pretrial statement, the parties stipulated that the plaintiff's total medical expenses for cancer treatment were $7,644. The fact that this was less than the plaintiff had requested in her pretrial statement suggests the defendant must have had irrefragable evidence to support the lower figure; and it must have had it when the proof of loss was filed or shortly after--at any rate before the complaint was filed or the case removed.
However, the complaint also requested attorney's fees (at oral argument the plaintiff's counsel stated that the $16,454 figure in the complaint had been calculated by adding an estimate of his fees to the medical expenses); and where a litigant has a right, based on contract, statute, or other legal authority, to an award of attorney's fees if he prevails in the litigation, a reasonable estimate of those fees may be included in determining whether the jurisdictional minimum is satisfied. Batts Restaurant, Inc. v. Commercial Ins. Co. of Newark, 406 F.2d 118, 120 (7th Cir.1969).
Nowhere in the filings in this matter is there any suggestion of a contractual, statutory, or other source for the plaintiff's request for attorney's fees. We can rule out contract as a source, because the insurance policy contains no reference to attorney's fees; we can rule out federal common law, because the right to attorney's fees in a diversity suit is governed by state law, Tryforos v. Icarian Development Co., S.A., 518 F.2d 1258, 1265 and n. 27 (7th Cir.1975); and we can rule out the common law of Illinois, because there is no right to attorney's fees under the common law of Illinois, Whirlpool Corp. v. Bank of Naperville, 97 Ill.App.3d 139, 52 Ill.Dec. 215, 421 N.E.2d 1078 (1981); Tryforos, supra, 518 F.2d at 1266. As for possible statutory bases for an award of attorney's fees in this case, one, Ill.Rev.Stat.1981, ch. 110, Sec. 2-611, is limited to cases of "allegations and denials, made without reasonable cause and...
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...approach creates other costs--particularly the evasion of jurisdictional lines drawn by Congress. Ross v. Inter-Ocean Insurance Co., 693 F.2d 659, 661 (7th Cir.1982). Policing the border of federal jurisdiction is a necessity in any system having both limited (national) and general (state) ......
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...ability to force the parties back to square one in the state court, even post-judgment and even on appeal (Ross v. Inter-Ocean Ins. Co., 693 F.2d 659, 663 (7th Cir.1982)). In still another variant on the scenario, if a plaintiff deliberately seeks to recover less than the jurisdictional amo......
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