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September 13, 2004.

AMERICAN ECONOMY INSURANCE COMPANY, an Indiana corporation, Plaintiff,
WHOLESALE LIFE INSURANCE, BROKERAGE, INC., an Illinois corporation, and STONECRAFTERS, INC., an Illinois corporation, Defendants.

The opinion of the court was delivered by: RONALD GUZMAN, District Judge


Plaintiff American Economy Insurance Company ("AEIC") seeks a declaratory judgment regarding its duty to indemnify and defend its insured, Wholesale Life Insurance Brokerage, Inc. ("Wholesale"), in a state court action. Defendants Wholesale and Stonecrafters, Inc. ("Stonecrafters") have both moved pursuant to Federal Rule of Civil Procedure ("Rule) 12(b)(1) to dismiss the complaint, contending that AEIC has failed to establish that the amount in controversy exceeds $75,000. For the reasons set forth below, the Court grants the motions to dismiss.


  The following facts of the complaint are assumed to be true for purposes of this motion to dismiss. Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188, 191 (7th Cir. 1993). AEIC is an Indiana corporation with its principal place of business in Seattle, Washington. (Compl. ¶ 3.) AEIC issued insurance policy no. 02-BP-005779-1 (the "Policy") to Wholesale. (Id. ¶ 15.) Wholesale is an Illinois corporation with its principal place of business in Batavia, Illinois. (Id. ¶ 4.) The Policy provides, in part:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury", "property damage", "personal injury" or "advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury", "property damage", "personal injury" or "advertising injury" to which this insurance does not apply. We may at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result.
The Policy then defines the words and phrases in quotation marks.

  Stonecrafters is an Illinois corporation with its principal place of business in Lakemoor, Illinois. (Id. ¶ 5.) On June 12, 2003, Stonecrafters filed a class action complaint against Wholesale in the Circuit Court of the 19th Judicial Circuit, McHenry County, Illinois, under the caption, Stonecrafters, Inc., v. Wholesale Life Insurance Brokerage, Inc., Case No. 03 CH 435. (Id. ¶ 6.) The complaint alleges that on or about November 20, 2002, Wholesale transmitted by telephone facsimile machine an unsolicited advertisement to a facsimile machine owned by Stonecrafters, violating Illinois and federal statutory prohibitions against the transmittal of unsolicited facsimiles. (Id. ¶ 7a.) The complaint alleges three counts against Wholesale for violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 ("TCPA"), the common law of conversion, and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILL. COMP. STAT. § 505/2. (Compl. ¶¶ 8, 11, 13.) The complaint seeks unspecified damages including, but not limited to, $500 per violation of the TCPA. (Id. ¶ 10.)

  In the instant action, Plaintiff seeks a declaratory judgment adjudicating its rights and liabilities with respect to the insurance policy, including its duty to indemnify and defend its insured. (Id. Prayer ¶ A.) AEIC argues that the underlying lawsuit does not allege "bodily injury," "personal injury," or "advertising injury" as the terms are defined in the Policy. (Id. ¶¶ 24-26.) Furthermore, AEIC states that although "property damage" may be alleged in the underlying lawsuit, any such "property damage" is not covered under the Policy because it did not arise out of an "occurrence" as defined in the Policy. (Id. ¶ 27.)


  Wholesale and Stonecrafters argue that diversity jurisdiction is lacking because the threshold amount in controversy is not satisfied. See 28 U.S.C. § 1332(a) (2004). Defendants also contend that the complaint is premature, i.e., unripe, and should be dismissed pursuant to Rule 12(b)(1).

  When moving to dismiss pursuant to Rule 12(b)(1), a defendant may opt for a facial attack, i.e., a challenge of the court's subject matter jurisdiction based on the sufficiency of the complaint's allegations, or a factual attack, i.e., a challenge of the factual basis for the court's subject matter jurisdiction. Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993). If a defendant makes a facial attack, the "allegations are taken as true and construed in a light most favorable to the complainant." Id. "If the Rule 12(b)(1) motion denies or controverts the pleader's allegations of jurisdiction, however, the movant is deemed to be challenging the factual basis for the court's subject matter jurisdiction." Id. When making a factual attack, "the allegations in the complaint are not controlling, and only uncontroverted factual allegations are accepted as true for purposes of the motion." Id. (citations omitted). "The court may weigh the evidence in order to satisfy itself that jurisdiction exists; as such, disputes over material facts will not preclude the court from deciding jurisdictional issues." Bd. of Trs. of Pipe Fitters' Welfare Fund Local 597 v. Adams, No. 97 C 5592, 1998 WL 259543, at *2 (N.D. Ill. May 7, 1998). Diversity jurisdiction is governed by 28 U.S.C. § 1332. 28 U.S.C. § 1332 provides in pertinent part: "The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000. . . ." Dismissal of a complaint based on a failure to satisfy the amount in controversy is proper only if it appears to a legal certainty that less than $75,000 is at issue. See, e.g., Target Mkt. Publ'g, Inc., v. ADVO, Inc., 136 F.3d 1139, 1141-42 (7th Cir. 1998).

  In support of their motions to dismiss, Defendants make a factual attack on jurisdiction. When a defendant challenges the amount in controversy, the plaintiff must submit "competent proof" that the amount in controversy exceeds $75,000. NLFC, Inc., v. Devcom Mid-America, Inc., 45 F.3d 231, 237 (7th Cir. 1995). Competent proof "has been interpreted to mean a preponderance of the evidence or `proof to a reasonable probability that jurisdiction exists.'" Id. (quoting Gould v. Artisoft, Inc., 1 F.3d 544, 547 (7th Cir. 1993)).

  Both Wholesale and Stonecrafters assert there is no reasonable probability that at least $75,000 is at issue because: (1) there is no present controversy regarding indemnification because the state court action is currently pending and thus does not count toward the amount in controversy; and (2) AEIC has not submitted competent proof that their attorneys' fees will exceed $75,000. AEIC contends the amount in controversy exceeds $75,000 because the underlying lawsuit seeks at least $500 for each member of a potential class numbering more than 1,000 and the Policy's liability limit for the underlying claim is at least $2 million, with an aggregate of $4 million for all "occurrences." Additionally, AEIC asserts it will have to pay a "presumably substantial amount" in lawyers' fee if AEIC is found to have a duty to defend. (Pl.'s Opp'n Br. Wholesale's Mot. Dismiss Compl. Declaratory J. at 3.)

  Illinois courts regularly hold that decisions about indemnity should be postponed until underlying liability has been established. Lear Corp. v. Johnson Elec. Holdings Ltd., 353 F.3d 580, 583 (7th Cir. 2003); see Nationwide Ins. v. Zavalis, 52 F.3d 689, 693 (7th Cir. 1995) ("[T]he duty to indemnify is not ripe for adjudication until the insured is in fact held liable in the underlying suit."); Grinnell Mut. Reins. Co. v. Reinke, 43 F.3d 1152, 1154 (7th Cir. 1995) ("Illinois treats arguments about the duty to indemnify as unripe until the insured has been held liable."); Travelers Ins. Cos., v. Penda Corp., 974 F.2d 823, 833 (7th Cir. 1992) ("[T]he determination of whether [defendant] has a duty to indemnify is not ripe until the underlying litigation is terminated.").

  Here, the state court in the underlying lawsuit has not determined whether Wholesale is liable to Stonecrafters. The indemnification claim, therefore, is premature. See Lear Corp., 353 F.3d at 583. As such, it cannot count toward the amount in controversy as it is not ripe, and may never be ripe, for adjudication. See Solo Cup Co. v. Fed. Ins. Co., 619 F.2d 1178, 1189 (7th Cir. 1980) ("The mere possibility that proceedings might be commenced against an insured regarding an act of the insured's as to which the insurer might contest coverage, is not sufficient to create a controversy within the meaning of either the Declaratory Judgment Act or Article III of the Constitution."); Nat'l Union Fire Ins. Co. v. Cont'l Ill. Corp., 113 F.R.D. 637, 640-42 (N.D. Ill. 1987).

  AEIC incorrectly contends that when a plaintiff seeks declaratory relief, the amount in controversy is the value of the object of the litigation from the perspective of either the plaintiff or defendant. (Pl.'s Opp'n Br. Stonecrafter Inc.'s Mot. Dismiss Compl. at 3.) See Int'l Gateway Communications, Inc., v. Communication Telesystems Int'l, Inc., 922 F. Supp. 122, 124-25 (N.D. Ill. 1996). This rule is only applicable if the court is attempting to evaluate how much an actual case or controversy is potentially worth. As is the case here, if there is no case ...

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