California Cas. & Fire Ins. Co. v. Brinkman
| Decision Date | 03 June 1999 |
| Docket Number | No. Civ. 98-CV-186-B.,Civ. 98-CV-186-B. |
| Citation | 50 F.Supp.2d 1157 |
| Parties | CALIFORNIA CASUALTY & FIRE INSURANCE COMPANY, Plaintiff, v. Donald BRINKMAN and Connie Brinkman, Defendants. |
| Court | U.S. District Court — District of Wyoming |
Jeffrey J. Gonda, Sheridan, WY, Michael G. Brady, Boise, ID, for plaintiff.
Alan J. Hageman, Laramie, WY, John E. Stanfield, Laramie, WY, R. Michael Vang, Laramie, WY, for defendant.
ORDER ON DEFENDANTS' MOTION TO DISMISS AND PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
This matter comes before the Court on Defendants Donald and Connie Brinkman's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), (b)(3), and (b)(7), and Plaintiff California Casualty & Fire Insurance Company's motion for summary judgment. After reading the briefs, hearing oral argument, and being fully advised of the premises, the Court FINDS and ORDERS as follows:
Background
This case arises from an automobile accident that occurred in the State of Colorado on July 11, 1996. As a result of the accident, the defendants, Donald and Connie Brinkman, required medical treatment. The defendants, who are Wyoming residents, were operating their Wyoming-registered automobile in Colorado under an insurance policy issued by Plaintiff California Casualty. Plaintiff is a California corporation authorized to conduct business in Wyoming.
The Brinkmans have demanded that California Casualty provide to them "nofault" insurance benefits, commonly known as personal injury protection or PIP. Colorado, by statute, requires resident motorists to maintain first-party coverage in the form of PIP protection in the amount of $50,000 for personal injury and $50,000 in the form of rehabilitation benefits, lost wage benefits, and reasonably incurred expenses for essential services. See Colo. Rev.Stat. §§ 10-4-705, 706, 707, 711 (1998). The Brinkmans argue that because the accident occurred in Colorado, their policy was deemed amended to include PIP protection benefits under the out-of-state coverage provision found in Part A of the policy. This provision states as follows:
OUT OF STATE COVERAGE
If an auto accident to which this policy applies occurs in any state or province other than the one in which your covered auto is principally garaged, we will interpret your policy for that accident as follows:
A. If the state of province has:
1. A financial responsibility or similar law specifying limits of liability for bodily injury or property damage higher than the limit shown in the Declarations, your policy will provide the higher specified limit
2. A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts and types of coverage.
California Casualty paid PIP benefits to the Brinkmans for a short time, although it denied that the Brinkmans' policy provided coverage for the benefits. California Casualty eventually ceased these payments.
After the PIP payments stopped, the Brinkmans complained to the Colorado Department of Regulatory Agencies, Division of Insurance. The Colorado Commissioner of Insurance initiated an investigation; California Casualty was faced with possible sanctions including the loss of any right to do business in Colorado if it failed to comply with the Colorado No-Fault Act.
California Casualty then filed the present declaratory judgment action. Plaintiff asks the Court to declare that no coverage is provided to the Brinkmans under the Policy for any PIP coverage mandated by the Colorado No-fault Act, and that coverage is provided to the Brinkmans under Wyoming, not Colorado, law. Defendants filed a counterclaim alleging breach of contract, bad faith, and equitable estoppel. The Court now turns to the parties' pending motions.
Rule 12(b)(1) motions to dismiss for lack of subject matter jurisdiction may take two forms. See Holt v. United States, 46 F.3d 1000, 1002 (10th Cir.1995). First, defendants may make a facial attack on the complaint's allegations that question the sufficiency of the complaint. When reviewing these kinds of allegations, the Court must accept the allegations as true. See id. Second, defendants may go beyond the allegations contained in the complaint and challenge the facts upon which subject matter jurisdiction depends. When reviewing a factual attack, the Court may not presume the truthfulness of the complaint's allegations, but has wide discretion to allow other documents to be considered to resolve disputed jurisdictional facts. See id. at 1003. Only when resolution of the jurisdiction question is intertwined with the merits of the case must the Court convert the 12(b)(1) motion to a Rule 56 summary judgment motion. See id. The party invoking federal jurisdiction, the plaintiff in this case, bears the burden of proof of establishing jurisdiction. See Penteco Corp. v. Union Gas Sys., Inc., 929 F.2d 1519, 1521 (10th Cir.1991).
As an initial matter, the Court must characterize the present action. The parties disagree as to the nature of the case: California Casualty argues that the action is merely a contract dispute between an insurer and insured while the Brinkmans contend this case lies in tort, since it stems from an automobile accident.
Insurance disputes pose a characterization problem because they possess characteristics of both contract and tort. However, because this action involves a first-party coverage dispute between insureds and their own insurer, the Court finds that the action lies in contract. See, e.g., Squillace v. Wyoming State Employees' & Officials' Group Ins. Bd., 933 P.2d 488, 491 (Wyo.1997) (); Chacon v. American Family Mut. Ins. Co., 788 P.2d 748, 750 (Colo. 1990) (same). In essence, California Casualty argues that the Policy does not incorporate the Colorado provisions of the Colorado No-Fault law while the Brinkmans disagree, arguing that the Policy's language clearly contemplates the application of other states' laws in out-of-state accidents. Thus, the Court will treat this case as one of contract interpretation as it turns to Defendants' motion to dismiss.1
Defendants first ask the Court to dismiss this suit pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction. Plaintiff alleges three grounds for subject matter jurisdiction in this case: 28 U.S.C. § 2201, based on the Declaratory Judgment Act, federal question jurisdiction under 28 U.S.C. § 1331, and diversity jurisdiction under 28 U.S.C. § 1332. See Amended Compl. ¶ 3. The Court will address each ground in turn.
California Casualty lists 28 U.S.C. § 2201, the Declaratory Judgment Act, as one ground for jurisdiction in this case. However, the Declaratory Judgment Act, in and of itself, does not confer jurisdiction upon federal courts. See Cardtoons, L.C. v. Major League Baseball Players Ass'n., 95 F.3d 959, 964 (10th Cir.1996). In declaratory judgment actions, the parties' position "is often reversed: the plaintiff asserts a defense to an anticipated action by the declaratory judgment defendant." Id. "It is the character of the impending action, not the [declaratory] plaintiff's defense, that determines whether there is federal question jurisdiction." Id. Therefore, the Court must look to the potential suit by the Brinkmans to determine if jurisdiction exists; California Casualty cannot rely on the Declaratory Judgment Act as a means to obtain jurisdiction.
As mentioned above, in order to establish jurisdiction under § 1331, California Casualty must show that a potential suit brought by the Brinkmans would raise a federal question. In other words, "federal question jurisdiction exists in a declaratory judgment action if the potential suit by the declaratory judgment defendant would arise under federal law." See id. (citing see Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 19, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)). "Accordingly, federal question jurisdiction in this case turns on whether there would be federal question jurisdiction over the well-pleaded complaint" that the Brinkmans may bring against California Casualty. Cardtoons, 95 F.3d at 964.
Because the Brinkmans have filed a counterclaim in this case, the Court need not speculate as to the nature of their well-pleaded complaint. The Court finds that any complaint filed by the Brinkmans would be substantially identical to the counterclaims they filed in the present case. Consequently, the Court need only review the counterclaims to determine if they present a federal question. The Court finds that they do not.
The Brinkmans brought four causes of action in their counterclaim: (1) Breach of contract, (2) bad faith, (3) equitable estoppel, and (4) attorney fees/punitive damages. These claims arise under state law; none of the claims implicate federal law in any manner. As a consequence, Plaintiff California Casualty cannot establish jurisdiction based upon a federal question.2
In order to obtain jurisdiction in federal court under 28 U.S.C. § 1332, California Casualty must prove that the parties are citizens of different states and that the amount in controversy exceeds $75,000, not including interest and costs. See 28 U.S.C. § 1332(a). The parties do not dispute that they reside in different states — Plaintiff in California and Defendants in Wyoming. The Brinkmans, however, contend that the amount in controversy in this case does not exceed $75,000.
In a declaratory judgment action, the amount in controversy is measured by "the value of the object of the litigation." Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d...
To continue reading
Request your trial
-
Robebins v. Bureau of Land Management
...the sufficiency of the complaint, the district court will accept the plaintiffs allegations as true. Cal. Cas. & Fire Ins. Co. v. Brinkman, 50 F.Supp.2d 1157, 1161 (D.Wyo.1999). If, however, the defendant goes beyond the allegations contained in the complaint and challenges the facts upon w......
-
Swartz v. Beach
...the sufficiency of the complaint, the district court will accept the plaintiff's allegations as true. Cal. Cas. & Fire Ins. Co. v. Brinkman, 50 F.Supp.2d 1157, 1161 (D.Wyo.1999). If, however, the defendant goes beyond the allegations contained in the complaint and challenges the facts upon ......
-
Household Bank v. Jfs Group
...814 (E.D.Va.2000); Major League Baseball Properties, Inc. v. Price, 105 F.Supp.2d 46 (E.D.N.Y.2000); California Casualty & Fire Ins. Co. v. Brinkman, 50 F.Supp.2d 1157 (D.Wyo.1999). Plaintiffs essentially argue that these cases stand for the proposition that where a declaratory judgment def......
-
Atrisco Heritage Found. v. N.M. Comm'n for Cmty. Volunteerism
...964 (10th Cir. 1996). Plaintiff cannot rely on the Declaratory Judgment Act to obtain jurisdiction. California Cas. & Fire Ins. Co. v. Brinkman, 50 F. Supp. 2d 1157, 1162 (D. Wyo. 1999). Here, Defendants have already filed a claim against Plaintiff in state court, and Plaintiff merely asks ......