Mutual Life Ins. Co. of New York v. Moyle

• Decision Date: 14 August 1940
• Citation: 34 F. Supp. 127
• Court: U.S. District Court — District of South Carolina
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. MOYLE et al.

34 F. Supp. 127

MUTUAL LIFE INS. CO. OF NEW YORK v. MOYLE et al.

District Court, E. D. South Carolina, Columbia Division.

August 14, 1940.

Thomas, Cain & Black, of Columbia, S. C., for plaintiff.

Cooper & Maher and Roger M. Heyward, all of Columbia, S. C., for defendants.

WYCHE, District Judge.

This matter comes before me on motion of defendants to dismiss the complaint on the ground that the jurisdictional amount is not involved in the controversy. Plaintiff, insurer, brings the action under the Declaratory Judgment Act of 1934, 28 U. S.C.A. § 400, seeking an adjudication of the respective rights and liabilities of the parties under several insurance policies which carry life and also disability benefits. Under Rule 18, Rules of Civil Procedure, 28 U.S.C.A. following section 723c, the plaintiff may aggregate the several amounts actually in controversy under the policy provisions to make up the jurisdictional amount. Equitable Life Assurance Society of the United States v. Wert, 8 Cir., 102 F.2d 10. But this does not solve the problem. The question is what matters are in actual controversy under these policies and whether the amounts involved total the jurisdictional amount.

The complaint was filed and the summons issued on April 26, 1940, so that the complaint speaks as of that date. It is alleged in the complaint that each of the policies involved is now in full force and effect and is a present and valid obligation of the insurer; that insurer has paid disability benefits on several of the policies up to and including the 1st day of April, 1940, and on the others up to and including the 15th day of March, 1940, and for such periods has likewise waived the payment of all premiums coming due under the policies; that the defendant is no longer totally and permanently disabled within the terms and provisions of the policies of insurance, and the plaintiff has discontinued the allowance of monthly disability benefits since April 1, 1940, and advised the defendant of the discontinuance of the payment of further benefits, and that it would now be necessary for him to pay the future premiums as they become due in order to keep the policies in force; that the defendant contends that he is totally and permanently disabled and is entitled to receive the payments of monthly benefits under the policies of insurance from the date of their discontinuance and likewise contends that he is entitled to waiver of the premiums which will mature and become payable under said policies in the future; that it is without obligation to waive the payment of any premium which may mature under the policies; that it is essential that a determination be now made of its rights and legal relations under its policies of insurance for the purpose that it may now be advised whether the said defendants ought to pay, and whether it is entitled to receive the full premiums as provided in its policies, as a consideration for continuing the policies in force and effect as subsisting obligations, or whether it is required to waive further the payment of the premiums and maintain such policies in force and effect by reason of the total disability of the defendant; that the amount in controversy consists of the value of the rights of the defendant under the policies if he is held entitled to disability payments and waiver of premiums which would already have accrued under said policies and disability payments and waiver of premiums in the future, which said amounts will exceed $3,000 if the defendant lives for a period of sixteen months; and that insurer is required by the Insurance Department of the State of New York to carry reserves for disability benefits, and that in accordance with sound actuarial principles insurer has set up a reserve exceeding $3,000 against insured's claim. The insurance policies are referred to and made a part of the complaint and show that the value at the commencement of the action, of the disability benefits coming due on the several policies after March 15, 1940, and April 1, 1940, amounts to approximately $200. The complaint nowhere suggests that there is any past due premium on any of the policies. The insurer does not claim, before action brought, that any of the policies had lapsed, or that insurer had repudiated liability thereunder, so that the validity of any policy may be held to be now in actual controversy. It will be seen, therefore, that the only real controversy between the plaintiff and the defendant is whether or not the defendant was totally and permanently disabled under the provisions of the policies of insurance between the dates referred to in the complaint. That is the only question that can be determined under the complaint. If he was, the insurance company owes him about $200 in benefits, and a refund of premiums paid under protest. If he was not, the insurance company owes him nothing and may keep the premiums so paid by him on the policies. Under such allegations of the complaint I cannot admit testimony concerning the disability of the defendant or his physical condition after the commencement of the action. Black v. Jefferson Standard Life Insurance Co., 171 S. C. 123, 171 S.E. 617. Under the allegations of fact contained in the complaint, I must conclude that the jurisdictional amount is not involved. Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 57 S. Ct. 461, 81 L.Ed. 617, 108 A.L.R. 1000; Ashwander v. Tennessee Valley Authority et al., 297 U.S. 288, 56 S.Ct. 466, 80 L.Ed. 688; Town of Elgin v. Marshall, 106 U.S. 578, 1 S.Ct. 484, 27 L.Ed. 249; Wright v. Mutual Life Insurance Company, 5 Cir., 19 F.2d 117, affirmed, 276 U.S. 602, 48 S.Ct. 323, 72 L.Ed. 726; New York Life Insurance Co. v. Viglas, 297 U.S. 672, 56 S.Ct. 615, 80 L.Ed. 971; Stephenson v. Equitable Life Assurance Society, 4 Cir., 92 F.2d 406; Aetna Life Insurance Co. v. Williams, 8 Cir., 88 F.2d 929; Stockman v. Reliance Life Insurance Co., D.C., 28 F.Supp. 446; Small v. New York Life Insurance Co., D.C., 18 F.Supp. 820; Berlin v. Travelers Insurance Co., D.C., 18 F. Supp. 126; Edelmann v. Travelers Insurance Co., D.C., 21 F.Supp. 209; Shabotzky v. Massachusetts Mutual Life Insurance Co., D.C., 21 F.Supp. 166; Equitable Life Assur. Soc. v. Wilson, 9 Cir., 81 F.2d 657.

In Bell v. Philadelphia Life Insurance Co., 4 Cir., 78 F.2d 322, 323, Judge Parker, speaking for the Circuit Court of Appeals of this Circuit, said: "It is true, as contended by plaintiff, that the jurisdiction of the court depends upon the amount actually in controversy in the suit and not upon any amount indirectly involved because of the probative effect of the judgment rendered therein (New England Mortgage Co. v. Gay, 145 U.S. 123, 12 S.Ct. 815, 36 L.Ed. 646); but here the policy itself is directly in controversy and its value determines the value in suit. See Pacific Mut. Life Ins. Co. v. Parker 4 Cir. 71 F.(2d) 872, 874; Ginsburg v. Pacific Mut. Life Ins. Co. 2 Cir. 69 F.(2d) 97, 98." And, again in Stephenson v. Equitable Life Assurance Society, 4 Cir., 92 F.2d 406, 410, Judge Parker said: "This amount was not merely the unpaid disability installments, as the judge below erroneously thought, but also the $5,000 double indemnity feature of the policy which the company had declared void, and the $5,000 ordinary life feature, which the company had declared lapsed and for which it had substituted extended term insurance in that amount. Bell v. Philadelphia Life Ins. Co. supra; Pacific Mutual Life Ins. Co. v. Parker 4 Cir. 71 F.(2d) 872, 874. The suit, therefore, involved the validity of the contract for $5,000 of accident insurance and the status of a contract for $5,000 of ordinary life insurance, in addition to the validity of the policy of disability insurance upon which the insured was claiming the past-due installments of disability benefits." It appears from this language that if the validity of the policy had not been involved, it would have been held in that case that the requisite jurisdictional amount was not involved. Equitable Life Assur. Soc. v. Wilson, 9 Cir., 81 F.2d 657, at page 660.

"The federal Declaratory Judgment Act (Jud.Code § 274d, 28...