Heavner v. STATE AUTOMOBILE INS. CO. OF COLUMBUS, OHIO

• Decision Date: 15 March 1972
• Docket Number: Civ. A. No. 70-C-82-R.
• Citation: 340 F. Supp. 391
• Parties: James HEAVNER, Plaintiff, v. STATE AUTOMOBILE INSURANCE COMPANY OF COLUMBUS, OHIO, Defendant.
• Court: U.S. District Court — Western District of Virginia

340 F. Supp. 391

James HEAVNER, Plaintiff, v. STATE AUTOMOBILE INSURANCE COMPANY OF COLUMBUS, OHIO, Defendant.

Civ. A. No. 70-C-82-R.

United States District Court, W. D. Virginia, Roanoke Division.

March 15, 1972.

F. Rodney Fitzpatrick, Roanoke, Va., for plaintiff.

Daniel S. Brown, Hazlegrove, Carr, Dickinson, Smith & Rea, Roanoke, Va., for defendant.

OPINION AND ORDER RULING ON DEFENDANT'S MOTION TO DISMISS

DALTON, District Judge.

This action raises an interesting problem in the area of uninsured motorist coverage. On March 18, 1967 the plaintiff was injured in an automobile accident in Franklin County, Virginia, while riding in a car owned by Madison M. Gray, a citizen of Delaware, and driven by Gray's son-in-law, Ralph Leo Buckle, Jr. The accident was caused by another car driven by one Larry Dean Fisher, against whom the plaintiff has obtained a judgment in this court for $27,946.65 with interest at 6% per annum and his costs in the proceeding. Fisher was an uninsured motorist and the judgment remains unsatisfied. The present action seeks to recover on this unsatisfied judgment against State Automobile Mutual, which insured two cars owned by the plaintiff's mother.

At the time of the accident the plaintiff was 22 years old and a resident of Maryland, living in his mother's household. During most of the year, however, he was a student at the University of Georgia. State Automobile Mutual issued in Maryland a policy insuring two automobiles owned by the plaintiff's mother. The plaintiff used one of these cars, a 1957 Triumph, and it was noted on the face of the policy that the vehicle would be "principally garaged" in the State of Georgia. Maryland law did not require automobile insurance policies to include uninsured motorist coverage and no premium was paid to gain the benefits of this coverage, although on the face of the policy the coverage was clearly available.

In contrast to the law of Maryland, Georgia Code Ann. § 56-407.1 provides in part:

No automobile liability policy ... shall be issued or delivered in this State, upon any motor vehicle then principally garaged or principally used in this State, unless it contains an indorsement or provisions undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within limits exclusive of interests and costs which shall be no less than $10,000 because of bodily injury to or death of one person in any one accident ...

State Automobile Mutual is an insurer licensed to do business in the State of Georgia. It is contended that the statute overrides the provisions of the policy and accords uninsured motorist coverage to the plaintiff.

The defendant has challenged the jurisdiction of this court on the ground that the amount in controversy is not in excess of $10,000 as required by 28 U.S. C.A. § 1332(a). On the pleadings this court preliminarily overruled the defendant's motion to dismiss but granted it leave to renew the motion, which the defendant has done.

The plaintiff sues for $27,946.65 plus interest and cost which is the amount of the judgment obtained against the uninsured motorist. Normally, the amount claimed in good faith by the plaintiff is the amount in controversy. In this case, however, the amount of recovery, if any, is determined exclusively by the Georgia statute and there are no unliquidated damages to be assessed.

The court of appeals for this circuit has held that while good faith is a salient factor, it alone does not control; for if it appears to a legal certainty that the plaintiff cannot recover the jurisdictional amount, the case should be dismissed for lack of jurisdiction. McDonald v. Patton, 240 F.2d 424 (4th Cir. 1957); Nixon v. Loyal Order of Moose Lodge No. 750, 285 F.2d 250 (4th Cir. 1960).

When the potential liability of an insurer is less than the jurisdictional amount, the case against it must be dismissed. Doucet v. Travelers Insurance Co., 362 F.2d 263 (5th Cir. 1966); Payne v. State Farm Mutual Automobile Insurance Co., 266 F.2d 63 (5th Cir. 1959). This court concludes, therefore, that if it interprets the Georgia statute to require something less than the jurisdictional amount, the defendant's motion to dismiss should be sustained. The interpretation of a statute is a question of law for the court and the potential maximum recovery will therefore be a "legal certainty."

If it is assumed that the defendant can be subjected by Georgia law to a greater obligation than was contracted for under Maryland law, it seems clear that the defendant's obligation cannot be made greater than the law of Georgia would actually require. The Georgia statute requires the insurer "to pay the insured all sums which he shall be legally entitled to recover as damages ..., within limits exclusive of interests and costs which shall be no less than $10,000 because of bodily injury to or death of one person in any one accident ..." The inquiry, then, is whether the requirements of this provision satisfy the federal jurisdictional prequisite.

Of course, the general rule is that interest and costs are not included in determining the amount in controversy. 28 U.S.C.A. § 1332(a). When the action is upon a judgment which awarded costs, however, the costs are included in the amount in controversy. Cf. Richie v. Richie, 186 F.Supp. 592 (E.D.N. Y.1960). The amount of the costs is settled by the judgment and, unlike interest awarded subsequent to judgment, the amount does not increase with time. The concern, of course, is that the plaintiff will allow interest to accumulate on the original amount in controversy to reach the jurisdictional amount. Consequently, the question arises whether the Georgia statute imposes liability on the insurer for the costs incurred by the insured in his action against the uninsured tortfeasor.

The case of Matthews v. Allstate Insurance Co., 194 F.Supp. 459 (E.D.Va. 1961), which has been cited by the plaintiff to substantiate his position, is not persuasive for two reasons. Although that case held the insurer liable for interest on the judgment against the uninsured motorist, the decision was reached on the basis of interpreting a policy on which the uninsured motorist coverage premium had been paid. In the case at bar, however, the plaintiff is compelled to rely solely on the requirements of the Georgia statute. Secondly, Matthews held the insurer liable for interest on the judgment against the uninsured motorist by applying the "Supplementary Payments" provision to the uninsured motorist endorsement. More recently the court of appeals for this circuit held that the "Supplementary Payments" provision was not applicable to uninsured motorist coverage. Bryant v....