Umbenhower v. Mutual of Omaha Insurance Company, Civ. A. No. 16789-3.

• Decision Date: 19 March 1969
• Docket Number: Civ. A. No. 16789-3.
• Citation: 298 F. Supp. 927
• Parties: John N. UMBENHOWER, Plaintiff, v. MUTUAL OF OMAHA INSURANCE COMPANY, a corporation, Defendant.
• Court: U.S. District Court — Western District of Missouri

298 F. Supp. 927

John N. UMBENHOWER, Plaintiff, v. MUTUAL OF OMAHA INSURANCE COMPANY, a corporation, Defendant.

Civ. A. No. 16789-3.

United States District Court W. D. Missouri, W. D.

March 19, 1969.

Donald L. Slyter, Kansas City, for plaintiff.

John C. Thurlo, James H. McLarney, Swanson, Midgley, Jones, Eager & Gangwere, Kansas City, Mo., for defendant.

MEMORANDUM AND ORDER REMANDING CAUSE TO JACKSON COUNTY CIRCUIT COURT

BECKER, Chief Judge.

This action for damages on an insurance contract and for statutory penalties for vexatious refusal to pay was originally filed in the Circuit Court of Jackson County, Missouri. This action was subsequently removed to this Court on the defendant's petition for removal filed on February 15, 1968. The petition for removal stated that "The issues herein are wholly between citizens of different States and the amount in controversy is in excess of $10,000 exclusive of interest and costs, to-wit, $55,000 exclusive of `a reasonable attorney's fee.'"

The "petition" (equivalent of a complaint, filed in the state court on January 18, 1968) of plaintiff alleges that he sustained a permanent accident injury on or about August 1, 1966, while a policy, insuring against accident, was in effect with defendant insurance company, by the terms of which plaintiff was entitled to benefits of $200 monthly "during the total loss of time, so long as he lived"; that defendant made the $200 monthly payments for four months, from February 1967 to May 1967 and has refused further payments in the face of plaintiff's demands. Plaintiff therefore asks damages in the sum of $50,000 plus 10% thereof for vexatious refusal to settle, a reasonable attorney's fee, and his costs and expenses.

Defendant counterclaims alternatively for $688.40 with interest or $200 with interest and for its costs and expenses herein. Its answer filed on February 19, 1969, challenges the enforceability of the policy because false answers were "knowingly or recklessly and negligently made" upon the plaintiff's application with defendant, and that even if the policy is enforceable, its liability is restricted by the terms thereof to a maximum of $600.

From the foregoing, it is obvious that the petition does not state a claim for relief showing a sufficient amount in controversy to invoke jurisdiction of the federal courts. It is the duty of this Court in this instance to review jurisdiction on its own initiative and to dismiss the case where jurisdiction is lacking. Otherwise, the party invoking federal jurisdiction may contest it after judgment. American Fire & Casualty Co. v. Finn, 341 U.S. 6, 71 S. Ct. 534, 95 L.Ed. 702. Furthermore, the courts of appeals, after trial, as well as the trial courts may remand a case on their own initiative. Colorado Life Co. v. Steele (C.A. 8) 95 F.2d 535; cf. Ringsby Truck Lines, Inc. v. Beardsley (C.A. 8) 331 F.2d 14.

Plaintiff seeks to recover all payments allegedly due under the contract of insurance at the rate of $200 a month from May 1967 and, apparently on the theory of anticipatory breach by repudiation, to the end of plaintiff's life expectancy. But he can recover, at the most, the unpaid installments claimed to have accrued to the date of suit. Under Missouri jurisprudence, the theory of anticipatory breach is not applicable to disability contracts of this nature. Bonslett v. New York Life Ins. Co. (Mo.Sup.) 190 S.W. 870; Allen v. National Life & Accident Ins. Co., 228 Mo.App. 450, 67 S.W.2d 534; Merrick v. Allstate Ins. Co. (C.A. 8) 349 F.2d 279, cert. den. 382 U.S. 957, 86 S.Ct. 435, 15 L.Ed.2d 361; Hawkinson v. Johnston (C.A. 8) 122 F.2d 724, 137 A.L.R. 420; see also 1 Moore's Federal Practice ¶ 0.93 5.-2., p. 854 (1968 ed.). The case at bar is unlike Horton v. Liberty Mutual Insurance Co., ...