State Farm Mut. Auto. Ins. Co. v. Dyer
| Decision Date | 15 March 1994 |
| Docket Number | No. 89-8074,89-8074 |
| Citation | 19 F.3d 514 |
| Parties | STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff-Appellee, v. Teddy Ray DYER; City of Green River, Wyoming; Glenn Dodgion; Bryan Lee Butler; Amanda Colleen Butler; Kayla Dawn Butler; Judy Butler, Defendants, and Alice Ione Halstead Colley, as personal representative of Jody Glenn Dodgion, deceased, and as administratrix of the Estate of Jody Glenn Dodgion, deceased, and on behalf of Alice Ione Halstead, as guardian and guardian-ad-litem for Jordan Jody Halstead, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Daniel M. Hesse of Meyer and Williams, Jackson, WY, for defendants-appellants.
Frederick J. Harrison, Rawlins, WY, for plaintiff-appellee.
Before TACHA and HOLLOWAY, Circuit Judges, and BRETT, * District Judge.
The plaintiff-appellee, State Farm Mutual Automobile Insurance Company (State Farm), brought this declaratory judgment action to determine its coverage obligations arising out of an automobile accident. 1 The accident was a single vehicle collision in which the driver Teddy Ray Dyer (Dyer) survived but the passenger Jody Glenn Dodgion was killed. After the defendant-appellant Alice Ione Halstead Colley (Colley) 2 brought a wrongful death action against Dyer in state court, State Farm initiated this action in federal district court. A motion to dismiss was denied and later, on cross motions for summary judgment, the district judge granted summary judgment for State Farm and denied the defendants' motion. 3
Dodgion was fatally injured on September 24, 1985, when the pickup he was riding in as a passenger struck a cable strung across the road at a municipal landfill in Green River, Wyoming. Dyer was driving the truck. At the time of the accident both Dyer and Dodgion were acting in the scope of their employment with Rock Springs Roofing Company, which was partially owned by Steven Boyd, the owner of the pickup truck. 4 The truck was covered by a State Farm liability insurance policy 5 issued to Steven and Jeanne Boyd (the Boyds), husband and wife.
It was in September 1987 that Colley brought the wrongful death action against Dyer and the City of Green River in her capacity as personal representative of Dodgion and as administratrix of his estate, and on behalf of Judy Butler, the mother of Jody Glenn Dodgion, deceased; Glenn Dodgion, father of Jody Glenn Dodgion, deceased; Bryan Lee Butler, half-brother of Jody Glenn Dodgion, deceased; Amanda Colleen Butler, half-sister of Jody Glenn Dodgion, deceased; and Kayla Dawn Butler, half-sister of Jody Glenn Dodgion, deceased; and as guardian and guardian-ad-litem for Jordan Jody Halstead, the minor son of Jody Glenn Dodgion. I R.Doc. 1 Exhibit B. In May 1988 State Farm filed the instant suit for declaratory relief in the federal district court seeking a judicial determination that it did not have a duty to defend Dyer in the wrongful death action or to afford indemnity on any judgment which might be entered against Dyer. Colley moved to dismiss the declaratory judgment action on the grounds that the controversy was not ripe for declaratory relief; that State Farm had failed to join Dyer, an indispensable party; and that State Farm had failed to state a claim for relief.
The district judge denied Colley's motion to dismiss. He concluded that State Farm faced more than a hypothetical dilemma and thus there was a live controversy. Although Colley's motion asserted lack of subject matter jurisdiction, this argument was articulated as lack of a justiciable controversy, not an absence of diversity of citizenship. Nevertheless, the district judge's order states that Colley also contended that State Farm had not shown diversity of citizenship (which was alleged in the complaint). It was undisputed that State Farm was an Illinois corporation. However, because State Farm had not been able to locate Dyer, Colley argued Dyer's domicile was unknown and thus it could be Illinois. The judge rejected the claim of lack of a showing of diversity of citizenship. The judge noted that at the hearing, State Farm stated Dyer was obviously in Wyoming at the time of the accident, he had an Oregon driver's license, and his last known domicile was in Oregon. The judge found that Dyer was domiciled in Wyoming or Oregon and that no evidence indicated he was domiciled in Illinois. I R.Doc. 31, Order Denying Motion to Dismiss at 5.
That order also rejected Colley's contention that State Farm failed to properly join Dyer, an indispensable party. The judge held that the Wyoming long-arm statute was properly used to obtain jurisdiction of Dyer. The contention that State Farm failed to state a claim was dismissed as it was based on the two other contentions, which were rejected.
State Farm and Colley both moved for summary judgment in June 1989. Following a hearing, judgment was granted for State Farm and denied for Colley on July 28, 1989. I R.Doc. 56, Order on Motions for Summary Judgment. That order found that the facts were undisputed: 6 At the time of the accident both Dyer and Dodgion were acting in the scope of their employment for Rock Springs Roofing, a roofing company owned by the Boyds. The vehicle involved was owned by Steven Boyd and insured by State Farm. Colley's motion contended again that diversity was not shown and that personal jurisdiction was not obtained over Dyer, allegedly an indispensable party. These points were rejected for the reasons given when the motion to dismiss was denied.
The Order also rejected a new contention that Wyoming's compulsory insurance laws impose a duty on State Farm to defend Dyer. The State Farm policy was found to comply with the statute and under the policy, Dyer was held to be an additional insured. State Farm contended, however, that policy exclusions in the co-employee and employer-employee provisions eliminated coverage for Dyer. The order rejected Colley's argument that State Farm waived such objections and held that State Farm had reserved its right by a reservation of rights agreement. Therefore declaratory relief was granted for State Farm and denied for Defendants. This appeal followed.
On appeal, Colley argues that the district court erred because there was inadequate proof of diversity jurisdiction; Dyer was an indispensable party who had not been properly served with process; State Farm had waived a defense of noncooperation by Dyer 7; and Wyoming's compulsory insurance and financial responsibility laws override the policy exclusion for bodily injury to a fellow employee.
We turn to the challenge to State Farm's showing of diversity jurisdiction. As noted above, Colley's motion to dismiss argued that there was a lack of subject matter jurisdiction on the theory there was no justiciable controversy. This contention was rejected in the Order Denying Motion to Dismiss. I R.Doc. 31 at 3-4. This Order, however, also states that Colley contended that the district court had no subject matter jurisdiction because plaintiff had not shown diversity of citizenship. In some manner, the diversity issue was suggested to the court, which is proper for a determination under a motion made pursuant to Rule 12(b)(1) Fed.R.Civ.P. That objection was overruled, but the challenge to diversity jurisdiction was renewed in defendant Colley's motion for summary judgment, I R.Doc. 32 at 2, and was argued in Colley's memorandum in support of her motion for summary judgment, Memorandum at 3-6.
In Thompson v. United States, 291 F.2d 67 (10th Cir.1961), we stated:
A motion for summary judgment lies whenever there is no genuine issue as to any material fact. It is not a substitute for a motion to dismiss for want of jurisdiction. If the court lacks jurisdiction it cannot render a judgment but must enter an order dismissing the action. We need not dwell on the improper manner in which the jurisdictional issue was invoked. It is elementary that the court's first duty is to determine its jurisdiction to entertain and decide a case on its merits. It must make this determination regardless of the impropriety of appellee's motion.
Id. at 68. The court vacated the district court's judgment and remanded with instructions to enter a judgment of dismissal. Id. See also Winslow v. Walters, 815 F.2d 1114, 1116 (7th Cir.1987). 8 The assertion of lack of diversity may also be treated as a "suggestion" of lack of subject matter jurisdiction. Fed.R.Civ.P. 12(h)(3). See Walls v. United States, 651 F.Supp. 1049, 1050 (S.D.Ind.1987), aff'd, 832 F.2d 93 (7th Cir.1987); Mayes v. Gordon, 536 F.Supp. 2, 4 n. 1 (E.D.Tenn.1980); Grynberg v. B.B.L. Associates., 436 F.Supp. 564, 565-66 (D.Colo.1977); see generally 25A Wright & Miller, Federal Practice and Procedure: Jurisdiction 2d Sec. 1350 at 209 (1990). A party should suggest lack of subject matter jurisdiction to the court, just as it is the court's duty to challenge assertions of jurisdiction sua sponte. McNutt v. General Motors Acceptance Corporation, 298 U.S. 178, 182, 186-87, 56 S.Ct. 780, 782, 783-84, 80 L.Ed. 1135 (1936).
We observe that the ruling below, upholding diversity jurisdiction, should be reviewed on appeal not on the standard for review of a summary judgment. Instead, the finding here on Dyer's citizenship and diversity jurisdiction, a mixed question which is primarily factual, should be reviewed under the clearly erroneous standard. Uselton v. Commercial Lovelace Motor Freight, Inc., 940 F.2d 564, 572 (10th Cir.1991), cert. denied sub nom. Pepsico, Inc. v. Uselton, --- U.S. ----, 112 S.Ct. 589, 116 L.Ed.2d 614 (1991), and cert. denied sub nom. Alcox v. Uselton, --- U.S. ----, 112 S.Ct. 589, 116 L.Ed.2d 614 (1991).
Once the averment of diversity of citizenship was challenged, the burden was on State Farm as the party invoking federal jurisdiction to show that it exists. Crowley v. Glaze, 710 F.2d 676, 678 (10th Cir.1983). Here the assertion of defendant-appellant Colley is that...
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