Reason v. General Motors Corp.

• Decision Date: 17 July 1995
• Docket Number: No. IP 95-0261-C H/G.,IP 95-0261-C H/G.
• Citation: 896 F. Supp. 829
• Parties: Dean REASON and Virginia Reason, Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of Indiana

896 F. Supp. 829

Dean REASON and Virginia Reason, Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.

No. IP 95-0261-C H/G.

United States District Court, S.D. Indiana, Indianapolis Division.

July 17, 1995.

Michael R. Burrow, Wolf & Burrow, Greenfield, IN, for plaintiffs.

Lloyd H. Milliken and Kevin C. Schiferl, Locke Reynolds Boyd & Weisell, Indianapolis, IN, for defendant.

ENTRY ON MOTION TO REMAND

HAMILTON, District Judge.

Plaintiffs Virginia and Dean Reason have moved to remand this case to the Hancock Circuit Court, where they originally filed it before defendant General Motors Corp. removed it to this court. Plaintiffs contend that the amount in controversy here does not exceed $50,000, and that jurisdiction therefore fails. The case presents several issues concerning the aggregation of claims to satisfy the jurisdictional amount in controversy and the burden on the removing defendant to show that federal jurisdiction exists when the plaintiffs challenge jurisdiction. General Motors seeks to satisfy the jurisdictional amount in controversy by (a) aggregating the plaintiffs' claims against General Motors with their claims against a non-party with whom plaintiffs have settled, and (b) aggregating the claims of one spouse for her injuries with her husband's claim for loss of consortium. Neither type of aggregation is appropriate here, and defendant has failed to meet its burden to establish federal jurisdiction. This case will therefore be remanded to state court.

Procedural History: On February 2, 1995, plaintiffs filed suit in the Hancock Circuit Court. They seek damages for injuries Mrs. Reason suffered when the Reasons' General Motors car was in a collision with another car. Plaintiffs allege that Mrs. Reason was wearing her seat belt, that the seat belt was defective, and that she suffered enhanced injuries as a result of the defective seat belt. Mr. Reason seeks damages for the loss of care, comfort, and services of his wife. Plaintiffs' state court complaint did not specify any amount of damages; Indiana Trial Rule 8(A)(2) provides that "in any complaint seeking damages for personal injury or death, or seeking punitive damages, no dollar amount or figure shall be included in the demand."

Pursuant to 28 U.S.C. § 1332 and 28 U.S.C. § 1441(a) & (b), non-resident defendants may remove from the state courts to the federal courts a case in which the parties are of diverse citizenship and the amount in controversy exceeds $50,000, exclusive of interest and costs. On March 2, 1995, General Motors filed a timely petition for removal. The petition states in relevant part: "Based upon the allegations of plaintiffs' Complaint for Damages, if proved, the amount in controversy exceeds Fifty Thousand Dollars ($50,000), exclusive of interests and costs...." According to plaintiffs' complaint and the defendant's petition for removal, plaintiffs are residents of Indiana; neither pleading says anything about their citizenship. Defendant General Motors is a citizen of Delaware and Michigan for diversity purposes. Defendant's petition makes no effort to distinguish between the claims of Mrs. Reason and Mr. Reason for purposes of the amount in controversy. On March 7, 1995, plaintiffs filed an "Objection to Defendant's Petition for Removal," which the court treats as a timely motion for remand pursuant to 28 U.S.C. § 1447(c). Plaintiffs asserted that the amount in controversy did not exceed $50,000, and they submitted an affidavit signed by both plaintiffs stating in part: "Contrary to the assertions contained in defendant's Petition, they are not seeking damages against General Motors in excess of $50,000." Like defendant, plaintiffs made no effort to separate their respective claims for purposes of the amount in controversy. Plaintiffs also said in their affidavit that they had settled their claims with Gloria Thompson, the driver of the other car in the accident, for $42,500. General Motors responded with a short brief claiming that the payment by the driver of the other car should be counted toward the amount in controversy, and that removal was proper unless plaintiffs "are willing to commit or stipulate that they are not seeking in excess of $7,500 from General Motors." After reviewing the parties' submissions, the court raised concerns about the defendant's attempt to aggregate the claims against it and the other driver for purposes of establishing the jurisdictional amount in controversy. The parties each filed a supplemental brief to respond to the court's concerns, and defendant suggested additional grounds for satisfying the jurisdictional requirement. The motion for remand is now ripe for decision.

There are several distinct issues here. Those raised by the parties include whether the payment to the plaintiffs by the nonparty may be counted toward the amount in controversy, and whether the two plaintiffs' claims (taken together) against General Motors alone involve an amount in controversy in excess of $50,000. This second issue depends in part on the effect of the postremoval affidavit by plaintiffs to defeat removal. Not raised by the parties is the issue whether the two plaintiffs' claims may be added together for purposes of determining the amount in controversy, and whether a petition for removal is sufficient where it fails to distinguish between multiple plaintiffs' claims. Finally, there is the issue of the effect of the failure of any party to establish plaintiffs' citizenship, as distinct from their residence.

1. Settlement with Non-Party: In its first filing in opposition to remand, General Motors relied on the plaintiffs' $42,500 settlement with non-party Thompson to show that the amount in controversy in the entire case exceeded the jurisdictional amount of $50,000. However, one plaintiff's claims against several defendants may not be aggregated to satisfy the amount in controversy unless the defendants may be held jointly liable to the plaintiff on each claim. Sovereign Camp Woodmen of the World v. O'Neill, 266 U.S. 292, 295-96, 45 S.Ct. 49, 50, 69 L.Ed. 293 (1924); Citizens' Bank v. Cannon, 164 U.S. 319, 322, 17 S.Ct. 89, 90, 41 L.Ed. 451 (1896); Walter v. Northeastern Railroad Co., 147 U.S. 370, 373-74, 13 S.Ct. 348, 349-50, 37 L.Ed. 206 (1893); Jewell v. Grain Dealers Mut. Ins. Co., 290 F.2d 11, 13 (5th Cir.1961).

Defendant cites no cases on point supporting jurisdiction based on aggregating claims against a defendant and a non-party. However, defendant argues that the "policies which motivated the outcome" of these cases would not apply to a decision that would count the payment by non-party Thompson toward the amount in controversy in this case. Defendant points out that the amount is fixed and certain, so there would be no need to resolve the merits to determine jurisdiction and no uncertainty while the plaintiffs' claims against the non-party were valued in some way. This argument is not persuasive. Suppose that Ms. Thompson had actually been named as a defendant in this action (and was not a citizen of Indiana). To establish federal jurisdiction, neither the plaintiffs nor either defendant could add together plaintiffs' claims against the two defendants unless the two defendants could be held jointly liable on claims that satisfied the jurisdictional amount. Sovereign Camp Woodmen, Walter, and Jewell establish that. Plaintiffs' claims against General Motors therefore could not be aggregated with their claims against Ms. Thompson if she were here as a party. There is no reason the outcome should be any different merely because plaintiffs settled with her before they filed suit.¹

Defendant asserts, however, that it would be entitled under Indiana law to have the settlement with Thompson set-off against any jury award against itself. Defendant cites no Indiana law on this point. Indiana law appears to be to the contrary in cases like this one. Plaintiffs are not suing General Motors for causing the accident, but for enhanced injuries as a result of the allegedly defective seat belt. Plaintiffs may recover damages from General Motors only to the extent they can "establish specifically the additional or increased severity of the injuries attributable to" the defective product. Masterman v. Veldman's Equipment, Inc., 530 N.E.2d 312, 317 (Ind.App.1988). In addition, Indiana's comparative fault law in effect at the time this case arose specifically excluded from its coverage strict liability claims for defective products and claims for breach of warranty. Ind.Code § 34-4-33-13 (1992).² Thus, under Indiana law, General Motors and Thompson could not be held liable for the same injuries and damages. General Motors therefore cannot satisfy the amount in controversy requirement by counting plaintiffs' claims against settlement with nonparty Thompson.

2. Plaintiffs' Affidavit: In response to this court's request for a more complete explanation of jurisdiction, General Motors has suggested other grounds for satisfying the amount in controversy requirement. General Motors argues that the court should disregard plaintiffs' affidavit filed after removal asserting that plaintiffs do not seek an amount in excess of $50,000 from General Motors. For purposes of removal, the federal court's jurisdiction must be determined as of the moment the petition for removal is filed. In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir.1992). Ordinarily, the plaintiff's prayer for relief at the time of the removal controls, unless it appears "to a legal certainty" that the claim is necessarily one for less than the jurisdictional amount. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-89, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938). In St. Paul Mercury, the original state court complaint showed that the required jurisdictional amount was in controversy. The defendant removed the case, to this court, as it turned out. As the case proceeded, it became clear that the plaintiff could not recover...