Bell v. Preferred Life Assur Soc of Montgomery, Ala, No. 17

CourtUnited States Supreme Court
Writing for the CourtBLACK
Citation88 L.Ed. 15,64 S.Ct. 5,320 U.S. 238
Docket NumberNo. 17
Decision Date08 November 1943
PartiesBELL v. PREFERRED LIFE ASSUR. SOC. OF MONTGOMERY, ALA., et al

320 U.S. 238
64 S.Ct. 5
88 L.Ed. 15
BELL

v.

PREFERRED LIFE ASSUR. SOC. OF MONTGOMERY, ALA., et al.

No. 17.
Argued Oct. 12, 13, 1943.
Decided Nov. 8, 1943.

Page 239

Messrs. R. K. Wise, of Columbia, S.C., and Warren E. Miller, of Washington, D.C., for petitioner.

Mr. Richard T. Rives, of Montgomery, Ala., for respondents.

Mr. Justice BLACK delivered the opinion of the Court.

The question here is whether petitioner's complaint was properly dismissed on the ground that the matter in controversy did not really and substantially exceed $3,000 as required by §§ 24 and 37 of the Judicial Code.1

Filed in the federal court for the Middle District of Alabama, petitioner's complaint alleged that he had been induced to purchase an insurance certificate through fraudulent misrepresentations of respondents' agent bear-

Page 240

ing upon its actual value, and claimed $200,000 as actual and punitive damages.2 The record shows that at the time of the dismissal petitioner had paid only $202.35 on his certificate, and that its maximum potential value was only $1,000. From this the District Court declared that it was 'apparent to a legal certainty', St. Paul Mercury Indemnity Co. v. Red Cab Company, 303 U.S. 283, 289, 58 S.Ct. 586, 590, 82 L.Ed. 845, that petitioner could in no event be entitled to more than $1,000, and therefore concluded that the requisite $3,000 was not really and substantially involved. The Circuit Court of Appeals affirmed3 holding that the claim of $200,000 damages was 'entirely colorable for the purpose of conferring jurisdiction' since it was 'legally inconceivable' that petitioner's allegations could justify an award in excess of the value of his $1,000 certificate.

Where both actual and punitive damages are recoverable under a complaint each must be considered to the extent claimed in determining jurisdictional amount. 4 Therefore even though the petitioner is limited to actual damages of $1,000, as both courts held, the question remains whether it is apparent to a legal certainty from the complaint that he could not recover, in addition, sufficient punitive damages to make up the requisite $3,000. If the controlling law is that of South Carolina, where the

Page 241

alleged fraudulent misrepresentations are said to have occurred, petitioner clearly might recover an award exceeding $3,000.5 Respondents urge however that the law of Alabama, where the insurance certificate was issued and mailed, must control. We need not pass upon this question for we are satisfied that under the law of Alabama as well as that of South Carolina petitioner's allegations of fraud if properly proved might justify an award exceeding $3,000.

Respondents assert that petitioner's complaint does not allege that type of 'gross fraud' essential for an award of punitive damages under Alabama law. The Supreme Court of Alabama has declared that in an action for deceit 'gross fraud' which will support punitive damages may be defined as 'representations made with a knowledge of their falseness (or so recklessly made as to amount to the same thing), and with the purpose of injuring the plaintiff.' Southern Building and Loan Association v. Dinsmore, 225 Ala. 550, 552, 144 So. 21, 23. In the instant case the complaint alleges that the fraudulent representations 'were false, and were known to be false when made and uttered with a reckless disregard for the truth'; that petitioner...

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345 practice notes
  • Naegele v. Albers, Civil Action No. 03-2507 (RMU).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • January 3, 2005
    ...are properly considered as part of the amount in controversy. Hartigh, 485 F.2d at 1072 (citing Bell v. Preferred Life Assurance Soc'y, 320 U.S. 238, 240, 64 S.Ct. 5, 88 L.Ed. 15, (1943)). In considering punitive damages to satisfy the jurisdictional minimum in a diversity case, the court m......
  • In re No. Dist. of Cal." Dalkon Shield" IUD Products, No. C-80-2213 SW.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • November 5, 1981
    ...of Inglewood v. City of Los Angeles, 451 F.2d 948, 952-53 (9th Cir. 1971). 109 Id. at 952. 110 Bell v. Preferred Life Assurance Society, 320 U.S. 238, 64 S.Ct. 5, 88 L.Ed. 15 111 See note 4 supra. 112 Even assuming the success of all 1800 claimants at their individual trials, a $10,000 puni......
  • City of Milwaukee v. Saxbe, No. 76-1163
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • November 12, 1976
    ...Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938); see also Bell v. Preferred Life Assur. Society, 320 U.S. 238, 64 S.Ct. 5, 88 L.Ed. 15 (1943), is not applicable in the present case. The basic reasons for a different approach in injunction suits has been st......
  • Payne v. Government of Dist. of Columbia, No. 74-1861
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • June 15, 1977
    ...and punitive damage claims are generally to be considered in this determination, Bell v. Preferred Life Assurance Co., Page 827 320 U.S. 238, 240, 64 S.Ct. 5, 88 L.Ed. 15 (1943), and the amount of the latter need not have any necessary relation to the former. Wardman-Justice Motors v. Petri......
  • Request a trial to view additional results
345 cases
  • Naegele v. Albers, Civil Action No. 03-2507 (RMU).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • January 3, 2005
    ...are properly considered as part of the amount in controversy. Hartigh, 485 F.2d at 1072 (citing Bell v. Preferred Life Assurance Soc'y, 320 U.S. 238, 240, 64 S.Ct. 5, 88 L.Ed. 15, (1943)). In considering punitive damages to satisfy the jurisdictional minimum in a diversity case, the court m......
  • In re No. Dist. of Cal." Dalkon Shield" IUD Products, No. C-80-2213 SW.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • November 5, 1981
    ...of Inglewood v. City of Los Angeles, 451 F.2d 948, 952-53 (9th Cir. 1971). 109 Id. at 952. 110 Bell v. Preferred Life Assurance Society, 320 U.S. 238, 64 S.Ct. 5, 88 L.Ed. 15 111 See note 4 supra. 112 Even assuming the success of all 1800 claimants at their individual trials, a $10,000 puni......
  • City of Milwaukee v. Saxbe, No. 76-1163
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • November 12, 1976
    ...Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938); see also Bell v. Preferred Life Assur. Society, 320 U.S. 238, 64 S.Ct. 5, 88 L.Ed. 15 (1943), is not applicable in the present case. The basic reasons for a different approach in injunction suits has been st......
  • Payne v. Government of Dist. of Columbia, No. 74-1861
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • June 15, 1977
    ...and punitive damage claims are generally to be considered in this determination, Bell v. Preferred Life Assurance Co., Page 827 320 U.S. 238, 240, 64 S.Ct. 5, 88 L.Ed. 15 (1943), and the amount of the latter need not have any necessary relation to the former. Wardman-Justice Motors v. Petri......
  • Request a trial to view additional results

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