Stonewall Ins. Co. v. Lopez, 76-2955

• Decision Date: 16 December 1976
• Docket Number: No. 76-2955,76-2955
• Citation: 544 F.2d 198
• Parties: STONEWALL INSURANCE COMPANY, Plaintiff-Appellee, v. Salome D. LOPEZ, Basilaesa Lopez, and Jesse Reyes Moreno, Defendants-Appellants. Summary Calendar. *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 198

544 F.2d 198

STONEWALL INSURANCE COMPANY, Plaintiff-Appellee, v. Salome D. LOPEZ, Basilaesa Lopez, and Jesse Reyes Moreno Defendants-Appellants.

No. 76-2955

Summary Calendar. ^*

United States Court of Appeals Fifth Circuit.

Dec. 16, 1976.

Warren N. Weir, John F. Scarzafava, San Antonio, Tex., John Petry, H. C. Petry, Jr., Carrizo Springs, Tex., for defendants-appellants.

Stanley M. Kaufman, Herbert Garon, Jr., Dallas, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before COLEMAN, GOLDBERG and GEE, Circuit Judges.

PER CURIAM:

This case arises from an August 23, 1974 automobile accident in which Richard R. Lopez was killed. The deceased's parents, Salome D. Lopez and Basilaesa Lopez, filed a state-court action against Jesse Reyes Moreno, claiming his negligence caused the accident. When Moreno claimed that he was insured by Stonewall Insurance Company, Stonewall brought this declaratory action in federal court, naming the Lopezes and Moreno as defendants. Stonewall claimed that the accident occurred before Moreno obtained the insurance. The district court reached the merits, accepted Stonewall's contention, and rendered judgment accordingly. ¹ On appeal, appellants do not challenge the district court's resolution of the merits but assert solely that the amount in controversy does not exceed the jurisdictional minimum of $10,000. See 28 U.S.C. § 1332. We affirm.

Stonewall's liability for bodily injury under the insurance contract at issue is limited to $10,000 per person. Because this suit involved injuries to only one person, Stonewall's maximum bodily injury liability is $10,000. As appellants correctly note, when the amount in controversy is exactly $10,000, it does not exceed $10,000, and § 1332 does not establish jurisdiction. The controversy here, however, involves not only Stonewall's potential liability for the $10,000, but also Stonewall's obligation to defend the state-court action against Moreno, its insured. If the insurance contract covers the accident in question, Stonewall is obligated, by the contract's terms, to defend Moreno. If, on the other hand, the insurance contract does not apply to the accident in question, Stonewall has no obligation to provide a defense. The pecuniary value of the obligation to defend the separate lawsuit is properly considered in determining the existence of the jurisdictional amount, and the amount in controversy here therefore exceeds $10,000. See Allstate Ins. Co. v. Dillard, 190 F.Supp. 111 (E.D.Pa.1960); Criterion Ins. Co. v. Quillen, 212 F.Supp. 924 (D.Md.1963); cf. Motorists Mutual Ins. Co. v. Simpson, 404 F.2d 511 (7th Cir. 1968), cert. denied, 394 U.S. 988, 89 S.Ct. 1470, 22 L.Ed.2d 763 (1969) (dictum). ²

We affirm.

* Rule 18, 5 Cir., see Isbell...