Keck v. Fidelity and Casualty Company of New York, 15337.
| Decision Date | 06 April 1966 |
| Docket Number | No. 15337.,15337. |
| Parties | Richard B. KECK, Plaintiff-Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
John J. Enright, William J. Costello, Chicago, Ill., for appellant. Arvey, Hodes & Mantynband, Chicago, Ill., of counsel.
Donald N. Clausen, Jacob T. Pincus, Clausen, Hirsh, Miller & Gorman, Chicago, Ill., for appellee.
Before CASTLE and SWYGERT, Circuit Judges, and GRANT, District Judge.
The plaintiff, Richard B. Keck, appeals from the dismissal of a complaint seeking relief under the Declaratory Judgment Act, 28 U.S.C. § 2201, for its failure to meet the $10,000 jurisdictional requirement in diversity actions, 28 U.S.C. § 1332.
The defendant, Fidelity and Casualty Company of New York, a New York corporation, issued a health and accident insurance policy to the plaintiff, a citizen of Illinois, in 1955. The policy provided benefits for accidental bodily injury resulting in either "total" or "partial" disability.1 If the insured suffered total disability, the policy provided for payments of $50 per week as long as the disability continued for a period not to exceed 200 weeks. If the total disability continued for 200 consecutive weeks and the insured was still totally and permanently disabled, the insurance company was obliged to make a lump-sum payment of $30,000 to the insured. If the period of total disability did not continue for 200 weeks but was followed by a period of partial disability, the policy made provision for smaller weekly payments for a maximum period of 52 weeks, depending upon the degree of partial disability.
The plaintiff's complaint, filed February 4, 1965, alleged that the plaintiff sustained accidental injuries on August 25, 1962 which rendered him totally disabled; that the defendant began making total disability payments of $50 per week and continued to do so until April 29, 1963; that thereafter the defendant, claiming that plaintiff was only partially disabled, made smaller partial disability payments for a total of 52 weeks;2 and that on April 28, 1964, the defendant terminated all payments, claiming that all benefits stemming from the plaintiff's injury had been exhausted. The complaint prayed for a declaration that the plaintiff was, is, and would be totally disabled for the rest of his life and that the total and permanent disability provisions of the policy were still in effect and would be in effect at the end of 200 weeks (to reinstate the plaintiff's eligibility for the $30,000 terminal payment). The complaint concluded with a demand for a money judgment in the amount of the benefits due under the total disability provisions of the policy.
The district court granted a motion by the defendant to dismiss the complaint on the ground that the matter in controversy did not exceed the $10,000 jurisdictional requirement in diversity cases under section 1332 of the Judicial Code, 28 U.S.C. § 1332. The court stated that the sum in controversy, as alleged in the complaint, was limited to the difference between the amount of the partial disability payments which the plaintiff had received and the amount which the plaintiff would have received under the total disability provisions of the insurance policy to the date of suit, an amount far below the jurisdictional minimum.3 The court held that no actual controversy subject to declaratory relief under section 2201 of the Judicial Code, 28 U.S.C. § 2201, existed with respect to future benefits which might become due if the plaintiff's contention of total disability was sustained.
The decision of the district court was correct. Future benefits payable under a contract of insurance may be used to compute the sum in controversy for jurisdictional purposes only when the validity of the insurance...
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