Darbet, Inc. v. Bituminous Cas. Corp., Civ.A. No. 1:91-0736.

• Citation: 792 F. Supp. 487
• Decision Date: 10 June 1992
• Docket Number: Civ.A. No. 1:91-0736.
• Court: U.S. District Court — Southern District of West Virginia
• Parties: DARBET, INC., a West Virginia Corporation, Plaintiff, v. BITUMINOUS CASUALTY CORPORATION, an Illinois Corporation, Defendant.

792 F. Supp. 487

DARBET, INC., a West Virginia Corporation, Plaintiff, v. BITUMINOUS CASUALTY CORPORATION, an Illinois Corporation, Defendant.

Civ.A. No. 1:91-0736.

United States District Court, S.D. West Virginia, at Bluefield.

June 10, 1992.

Joe Colosi, Welch, W.Va., for plaintiff.

Christopher P. Bastien, Charleston, W.Va., for defendant.

OPINION

FABER, District Judge.

The plaintiff, Darbet, Inc. ("Darbet") a coal mining company, seeks damages in this case from its insurer, Bituminous Casualty Corporation ("Bituminous"), for money Darbet spent to repair the water wells of Virgil Collins and Daisy Murphy, two property owners damaged as a result of Darbet's mining operations.

Darbet's complaint against Bituminous contains two counts. Count One charges a breach of the contract of insurance by Bituminous in refusing to reimburse Darbet for sums paid to repair damage to the wells and for related expenses. According to Count One, Bituminous claimed that damage to the wells was caused by subsidence which was not covered under the contract and persisted in this contention in the face of information supplied by Darbet which Darbet maintains showed the damage was not caused by subsidence. Count One seeks compensatory damages of $18,925.39 plus interest and costs and an additional $20,000 in punitive damages.

Count Two of Darbet's complaint is labeled "Declaratory Judgment" and concludes by asking the court to "declare that the insurance contract aforementioned provides coverage to Darbet, Inc., under the claim of loss of Virgil Collins and Daisy Murphy, that the losses of water by Daisy Murphy and Virgil Collins were not due to `subsidence,' and that the reasonable expectations of the insured should be given effect so that the insuring agreement covers the losses sustained as set forth in this Complaint."

This case was filed originally in the Circuit Court of McDowell County, West Virginia. On July 15, 1991, the last day for the defendant to file a timely answer in state court, Bituminous filed a Notice of Removal and Answer in this court and served them by mail addressed to plaintiff's counsel. The next day, July 16, plaintiff's counsel, not yet in receipt of the Notice of Removal and Answer, took a default judgment in state court for $18,925.39, the amount of the claim for compensatory damages in Count One of the complaint. The day after that, July 17, plaintiff's counsel received in the mail a copy of defendant's Notice of Removal and Answer. A copy of the Notice of Removal was ultimately filed in state court, but not until some time after August 13, 1991.

The pleadings establish that, for purposes of diversity jurisdiction, the plaintiff is a citizen of West Virginia and the defendant is a citizen of Illinois. Defendant's theory that the requisite amount in controversy for federal jurisdiction is met is contained in paragraph 5 of the Notice of Removal which reads in part: "The matter in controversy exceeds, exclusive of costs and disbursements, the sum of Fifty Thousand Dollars ($50,000.00) in that plaintiff sues for declaratory relief on an insurance contract with a policy limit of Seven Hundred Fifty Thousand Dollars ($750,000.00). ..."

Plaintiff filed a timely Motion to Remand asserting that the policy limits of the insurance contract in question are not determinative of jurisdictional amount. Plaintiff also filed a Motion to Dismiss, arguing that the default judgment entered in state court is valid and has resolved all matters in dispute. Defendant has filed a motion asking this court to set the state default judgment aside.

In addressing first plaintiff's Motion to Remand, this court concludes that the requisite jurisdictional amount is lacking and that, as a consequence, this case was removed improvidently and without jurisdiction and must be remanded to the Circuit Court of McDowell County, West Virginia. Since it lacks jurisdiction, this court does not consider the other pending motions.

The controlling principles of law are discussed at 14A Wright, Miller & Cooper, Federal Practice and...