Payne v. State Farm Mutual Automobile Insurance Co.

• Decision Date: 30 April 1959
• Docket Number: No. 17497.,17497.
• Citation: 266 F.2d 63
• Parties: Clarence PAYNE, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

266 F.2d 63 (1959)

Clarence PAYNE, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellee.

No. 17497.

United States Court of Appeals Fifth Circuit.

April 30, 1959.

Frank S. Bruno, New Orleans, La., for appellant.

F. Carter Johnson, Jr., of Porteous & Johnson, New Orleans, La., for appellee.

Frederick J. Gisevius, Jr., Robert F. Shearman, John G. Discon, George M. Leppert, Peter J. Compagno, New Orleans, La., Amici Curiae.

Before RIVES, JONES and WISDOM, Circuit Judges.

WISDOM, Circuit Judge.

This appeal presents two questions: (1) In a suit for damages for personal injuries, brought against an insurer alone, is the jurisdictional amount controlled by the limitation of liability in the policy on which the plaintiff sues or by the amount of the alleged damages? (2) In a suit brought by the father as natural tutor, may a claim for property damage to a child's clothing and a claim for damages for personal injuries suffered by the child be aggregated in order to make up the requisite jurisdictional amount?

John Payne, a nine year old boy, was crossing a street in Covington, Louisiana, when he was hit by an automobile driven by Ashiel Duturich. John's father, Clarence Payne, as natural tutor of his minor son, sued State Farm Mutual Automobile Insurance Company, Duturich's insurer, under the Louisiana Direct Action Statute, LSA-R.S. 22:655, permitting a direct action against an insurer alone. Payne claimed $50,000 for personal injuries to his son and $865.68 for medical expenses. State Farm Mutual Automobile Insurance Company moved to dismiss the complaint on the ground that its liability was limited to $10,000 for personal injuries. Payne then filed an amended complaint in which he asked for property damages in the amount of $15 for damages to the child's clothing, hoping thereby to overcome the jurisdictional barrier.¹ The district court dismissed the suit on the ground that the matter in controversy did not exceed $10,000, the required jurisdictional amount in diversity cases. Public Laws, 85-554, 85 Cong., July 25, 1958, 72 Stat. 415, 28 U.S.C.A. § 1332. We affirm.

I.

The sum a plaintiff claims usually controls the jurisdictional amount. If, however, it appears to a legal certainty that the claim is for less than the jurisdictional amount, the complaint should be dismissed. The test of legal certainty is stated in Barry v. Edmunds, 1886, 116 U.S. 550, 559, 6 S.Ct. 501, 506, 29 L.Ed. 729, as follows:

"* * * It might happen that the judge, on the trial or hearing of a cause, would receive impressions amounting to a moral certainty that it does not really and substantially involve a dispute or controversy within the jurisdiction of the court. But upon such a personal conviction, however strong, he would not be at liberty to act, unless the facts on which the persuasion is based, when made distinctly to appear on the record, create a legal certainty of the conclusion based on them. Nothing less than this is meant by the statute when it provides that the failure of its jurisdiction, on this account, `shall appear to the satisfaction of said Circuit Court\'."

As pointed out in St. Paul Mercury Indemnity Co. v. Red Cab Co., 1937, 303 U. S. 283, 288, 58 S.Ct. 586, 590, 82 L.Ed. 845: "The intent of Congress drastically to restrict federal jurisdiction in controversies between different states has always been rigorously enforced by the courts * * * If, from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed * * * the suit will be dismissed."

If there is one situation where the amount of a claim can be determined with legal certainty, it is in a case when a claim is asserted on an insurance policy limiting liability. Thus, in Schacker v. Hartford Fire Insurance Company, 1876, 93 U.S. 241, 23 L.Ed. 862, the Court affirmed dismissal of a complaint for lack of jurisdiction, because of a policy limitation to $1400, although the plaintiff's allegations of damage satisfied the jurisdictional amount. In Colorado Life Co. v. Steele, 8 Cir., 1938, 95 F.2d 535, 536, the court looked to the recovery limitations in the disability clauses of a life insurance policy to determine jurisdictional amount. What the court said there applies equally well here:

"If from the nature of the case as stated in the petition there could not legally be a judgment for an amount necessary to the jurisdiction, jurisdiction cannot attach even though the damages be laid * * * at a sum larger than the jurisdictional amount * * * Therefore, while the prayer here is for an amount far above the jurisdictional requirement, this court

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