Hhc v. New York Ins. Co.

• Citation: 994 F.Supp. 717
• Decision Date: 18 February 1998
• Docket Number: No. 4:97CV99.,4:97CV99.
• Parties: HHC, A VIRGINIA GENERAL PARTNERSHIP, Plaintiff, v. YORK INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

994 F.Supp. 717

HHC, A VIRGINIA GENERAL PARTNERSHIP, Plaintiff, v. YORK INSURANCE COMPANY, Defendant.

No. 4:97CV99.

United States District Court, E.D. Virginia, Newport News Division.

February 18, 1998.

Gregory Lane Sandler, Epstein & Sandler, P.C., Norfolk, VA, for HCC, A Virginia General Partnership, plaintiff.

George Janis Dancigers, Heilig, McKenry, Fraim & Lollar, P.C., Norfolk, VA, Thomas Saunders Berkley, Heilig, McKenry, Fraim and Lollar, Norfolk, VA, for York Insurance Company, defendant.

OPINION AND ORDER

MILLER, United States Magistrate Judge.

Both plaintiff HHC and defendant York Insurance Company (York) have consented to proceed before an United States Magistrate Judge pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73. HHC originally filed this action at law in the Circuit Court of the City of Hampton on August 19, 1997. York brought the case here by filing a Notice of Removal with this Court on August 19, 1997 pursuant to 28 U.S.C. § 1446(a); and by filing a copy of that Notice of Removal with the Hampton Circuit Court pursuant to 28 U.S.C. § 1446(d). Presently pending before this Court are three motions:

1. HHC's motion to remand the case to the Hampton Circuit Court based on a lack of original federal jurisdiction over the underlying claim, filed August 27, 1997; and

2. York's motion to enjoin the Hampton Circuit Court from hearing York II pursuant to the federal Anti-Injunction Statute, 28 U.S.C. § 2283;¹ and

3. York's motion for summary judgment ("MSJ") pursuant to Fed.R.Civ.P. 56, filed December 31, 1997.

The Court held oral argument on HHC's motion to remand on February 9, 1998. After reviewing the parties' written memoranda and considering their oral argument, the Court, for the reasons given in this opinion, GRANTS HHC's motion to remand because this Court lacks original federal subject matter jurisdiction over the underlying claim. Having remanded the case, the Court further DENIES York's motion to enjoin HHC's suit in the Hampton Circuit Court under 28 U.S.C. § 2283.

Because the Court decides that it does not have jurisdiction to decide the case, it cannot reach York's MSJ.

I.

HHC owns a piece of improved commercial real estate in Hampton, Virginia. HHC contracted with York to ensure the property and the building on the property. On or about December 10, 1995, severe weather conditions damaged the roof of the building on HHC's property. HHC filed an insurance claim asking York to pay for the damage under the insurance contract. York refused to pay for the damage, so HHC sued York in the Hampton Circuit Court on September 20, 1996 for breach of their insurance contract. HHC demanded $511,875.00. See HHC v. York Insurance Co., At Law No. 96-35238, Motion for Judgment (Hampton Circuit Court) (York I).

York removed York I to this Court on September 12, 1996. This Court, pursuant to 28 U.S.C. § 1441 and 28 U.S.C. § 1332, tried the case. On April 2, 1997, this Court found that York was liable to HHC in the amount of $358,312. York I, Transcript of Proceedings, Vol. II, at 351-352 (E.D.Va. April 2, 1997). On May 30, 1997, both parties filed a Satisfaction of Judgment in this Court indicating that York had paid the judgment of $358,312 in full. Therefore, York has fully satisfied the York I judgment.

HHC has now filed a second action in the Hampton Circuit Court against York for reimbursement of costs spent in temporarily repairing the roof when HHC first discovered the damage. HHC v. York Insurance Co., At Law No. 97-36778, Motion for Judgment (Hampton Circuit Court filed August 19, 1997) (York II). In York II, HHC is asking for $18,500. York removed York II here by filing its Notice of Removal on August 19, 1997. HHC objected to York's removing the case to federal court and moved to remand the case to the Hampton Circuit Court on August 27, 1997. York filed its MSJ on December 31, 1997.

II. ANALYSIS

York may properly invoke this Court's jurisdiction over HHC's state action in one of two ways. First, it could remove this case here pursuant to 28 U.S.C. § 1441. Removal under § 1441 would be proper only if this Court would have had original jurisdiction over the action had HHC initially decided to bring it in the federal forum. See 28 U.S.C. § 1441(a). There are only two bases for original federal jurisdiction: federal question jurisdiction, 28 U.S.C. § 1331; and diversity jurisdiction, 28 U.S.C. § 1332. These are the only two bases on which this Court may exercise its removal jurisdiction over York's claim. See 28 U.S.C. §§ 1441(a) and (b). Therefore, the Court must examine whether HHC could have brought its action originally in this Court to determine if York's removal was proper.

Secondly, York could properly invoke this Court's jurisdiction under the Anti-Injunction Act, 28 U.S.C. § 2283, to prevent HHC from litigating York II, which bears some factual relation to York I, in Hampton Circuit Court.

York's pleadings in this action have not made it clear on which exact grounds it is invoking this Court's jurisdiction. 28 U.S.C. 1446(a) requires York to show this Court on the face of York's removal notice a "short and plain statement of the grounds" on which it bases removal. The Court turns, therefore, to York's Removal Notice, where it finds the following grounds for removal:

Now Comes York Insurance Co .... and hereby files this Notice of Removal ... on the grounds that there is complete diversity of citizenship between the plaintiff ... and the defendant.... Additionally, since this case is ancillary to [York I], previously filed in this [C]ourt and which matter was a suit in excess of $511,875.00, the amount in controversy herein exceeds $50,000.00 so that this [C]ourt has original jurisdiction hereof pursuant to 28 U.S.C. § 1332, 1367, and 2283.

York II, Notice of Removal, (E.D.Va. filed August 19, 1997).

28 U.S.C. § 1332 is the diversity of jurisdiction statute, so apparently York is claiming this Court can exercise diversity jurisdiction over this case. 28 U.S.C. § 1367 is the supplemental jurisdiction statute, so apparently York is claiming that this Court may exercise supplemental jurisdiction over this claim. Finally, 28 U.S.C. § 2283 is the Anti-Injunction statute, so apparently York is claiming that this Court should enjoin HHC's suit presently pending in the Hampton Circuit Court.²

Federal courts are courts of limited jurisdiction. York, as the party seeking entry to federal court, must provide this Court with a plain and concise statement on which this Court's jurisdiction rests. It may be supplemental jurisdiction; it may be diversity jurisdiction; and it may be that York is seeking an injunction under the Anti-Injunction Act. The Notice of Removal that York filed in this case is, at best, completely unclear. The Court could read it in many ways. Is York invoking the diversity jurisdiction of this Court? Is it invoking its supplementary jurisdiction? Is it asking for an injunction under 28 U.S.C. § 2283? York recites the litany required to support diversity jurisdiction, and then, in the same sentence, says this Court has jurisdiction "pursuant" to 28 U.S.C. § 2283. The Anti-Injunction Act does not require that HHC and York be diverse before this Court can hear York's case for an injunction.

It appears that York is claiming that this Court has jurisdiction: (a) pursuant to the diversity of citizenship statute under the theory that the Court should aggregate the damages claims in York I and York II to get above the $75,000 threshold of 28 U.S.C. § 1332(a); (b) pursuant to the supplemental jurisdiction statute because the facts of York II are similar to York I;³ and (c) pursuant to 28 U.S.C. § 2283 to issue an injunction to stay HHC's state court action. The Court, by generously reading York's Notice of Removal, will assume that York is claiming all three basis for jurisdiction.

To be precise, the Court will explain its exact methodology for approaching York's various arguments. The Court will first determine whether removal is proper in this case. Doing this will require an analysis of this Court's subject matter jurisdiction over York II on York's theories of diversity of citizenship and supplemental jurisdiction. If subject matter jurisdiction is lacking, then the Court will remand the case to the Hampton Circuit Court pursuant to 28 U.S.C. § 1447. If York II must return to the Hampton Circuit Court, the Court will decide if it should issue an injunction to stay York II pursuant to 28 U.S.C. § 2283.

III. SUBJECT MATTER JURISDICTION

A. Diversity Does Not Provide A Basis For This Court Jurisdiction

The amount in controversy in York II does not exceed $75,000. HHC has demanded $18,500.00 in York II. This amount in controversy is a jurisdictional necessity, see 28 U.S.C. 1332(a), and unless the amount in controversy exceeds this minimum threshold, the federal court may not exercise jurisdiction. See 28 U.S.C. § 1332. Federal courts may aggregate separate claims against the same insurer to satisfy the amount-in-controversy requirement, see, e.g., Bley v. Travelers Insurance Co., 27 F.Supp. 351, 358 (S.D.Ala.1939) (state law consolidating two actions against insurance company into one allowed aggregation of claims to satisfy diversity amount-in-controversy requirement), but York has shown this Court no cases, and this Court has found none, in which a federal court allowed a party to aggregate a claim from a pending lawsuit with one from a previously completed lawsuit to satisfy the $75,000 requirement. Therefore, federal diversity jurisdiction would not have lain in this case had HHC filed its action here. For that reason, the Court holds that it could not have exercised diversity jurisdiction over York II had HHC originally filed York II here. Therefore, York cannot remove the case here on the basis of diversity jurisdiction.

B. Neither Federal Pre-emption Nor Supplemental Jurisdiction Provide Bases for this Court's Jurisdiction in York II

Recall that...