Moon v. Pacific Mut. Life Ins. Co.

• Decision Date: 06 July 1939
• Citation: 28 F. Supp. 199
• Court: U.S. District Court — Southern District of West Virginia
• Parties: MOON v. PACIFIC MUT. LIFE INS. CO.

28 F. Supp. 199

MOON v. PACIFIC MUT. LIFE INS. CO.

District Court, S. D. West Virginia.

July 6, 1939.

Peyton, Winters & Hereford, of Huntington, W. Va., for plaintiff.

W. Elliott Nefflen and Harry B. Lambert, both of Charleston, W. Va., for defendant.

HARRY E. WATKINS, District Judge.

Plaintiff sued in a state court to recover death benefits under two insurance policies issued by the defendant upon the life of her husband. Thereupon defendant filed its petition in the state court for removal, to which petition the plaintiff demurred. Within a few days prior to the expiration of the time for removal, the state court not having decided the question, defendant filed a transcript of the record in this court. Plaintiff has now moved to remand. Diversity of citizenship is admitted. The petition, duly verified, is not traversed. The sole question here presented is whether or not the allegations of the petition for removal are sufficient to establish jurisdictional amount within the purview of the statute. Jud.Code, § 24(1), 28 U.S.C.A. § 41(1), wherein jurisdiction of this court is defined.

Defendant issued a policy of insurance on the life of C. C. Moon for $7,000, and also as a part thereof issued an accidental total loss benefit policy for $7,000, in both of which policies the plaintiff was named beneficiary. Payment was to be made at the rate of $50 per month under each policy until the full amount, with interest, was paid. Upon death of beneficiary the balance due thereunder was to be paid to the personal representatives or assigns of the deceased beneficiary in a lump sum. The policies required the maintenance of a reserve for the payment of the amount due thereunder.

In this action plaintiff seeks only to recover the sum of $1,100, that being the aggregate amount of the monthly payments due from the time of the death of the assured until the institution of this suit. Under these circumstances the petition alleges that the actual amount in controversy in this suit is $14,000, with interest, the full value of both policies, instead of the sum of $1,100, the installments sued for.

This same question has been raised many times before. In Wright v. Mutual Life Ins. Co., 5 Cir., 19 F.2d 117, the insurance company became liable on a life insurance policy which provided a monthly income of $30 upon proof of death of insured, and double indemnity or monthly income of $60 upon proof that the death occurred by accidental means; the income was payable to continue 20 years in all events. The appellant sued in the state court for $420 upon 7 monthly installments then due on the theory that the death of the insured was accidental. The insurance company filed a petition for removal, which was denied. Certiorari was denied by the Supreme Court of the United States for the reason "that the amount involved is not sufficient to sustain Federal jurisdiction, on the authority" of numerous cases there cited. Mutual Life Ins. Co. v. Wright, 276 U.S. 602, 48 S.Ct. 323, 72 L.Ed. 726.

In Reliance Life Ins. Co. v. Capital National Bank, 38 Ga.App. 349, 143 S.E. 924, suit was brought to collect the first two installments on the life policy payable to beneficiary in 120 equal monthly installments of $1,000 each. The court held that the case was not removable to the federal court because the amount in controversy was less than $3,000.

In the case of Mutual Benefit Health & Accident Association v. Fortenberry, 5 Cir., 98 F.2d 570, 571, an effort was made to rescind and cancel a policy which would entitle the insured to $12,000 if his expectancy should be realized. The law required the company to set up a reserve in excess of $3,000. Because the action was to rescind and cancel the entire policy, the action was held to be removable. In its opinion the court stated: "It must be conceded that if plaintiff had brought suit in a state court to collect instalments amounting to less than $3,000 it would not have been removable."

Stephenson v. Equitable Life Assur. Soc. of the United States, 4 Cir., 92 F.2d 406, was a suit to collect $50 per month under disability provisions of an insurance policy, and for a declaratory judgment for the sums to become due under a $5,000 policy. The court held that the federal court had jurisdiction,...