Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Nautilus Insurance Co. v. Purdy

May 9, 2006


The opinion of the court was delivered by: Harold A. Baker United States District Judge


Defendants Richard and Monica Purdy ("the Purdys") own and operate a motor vehicle salvage yard in Oakland, Coles County, Illinois. Nautilus Insurance Company ("Nautilus") covered the Purdys' business pursuant to a Commercial General Liability insurance policy ("CGL policy"). The insurance coverage was in effect at all relevant times.

Harold C. Snyder ("the decedent") had an arrangement with the Purdys to work at their salvage yard; in exchange, the decedent and his family lived, rent free, in a home adjacent to the salvage yard. On or about November 15, 2003, while the decedent was working at the salvage yard pursuant to this arrangement, a vehicle fell off a motor vehicle lift, fatally injuring the decedent.

On July 14, 2004, defendant Dawn Snyder ("Mrs. Snyder") filed a negligence complaint against the Purdys. That complaint is pending before the Circuit Court of the Fifth Judicial Circuit, Coles County, Illinois.

Nautilus filed this complaint for declaratory judgment, stating that it has no duty under the CGL policy to defend or indemnify the Purdys on the underlying claim. Nautilus argues that the CGL policy does not cover the decedent's injuries because he was (1) an employee; (2) a volunteer; or (3) an independent contractor performing services for the Purdys. Injuries of employees, volunteers and independent contractors are specifically excluded from the terms of the policy.

Mrs. Snyder filed a motion to dismiss the complaint for declaratory judgment for lack of subject matter jurisdiction, and on the basis of forum non conveniens. The Purdys were granted a motion for extension of time to file a response, and after failing to respond, Nautilus filed a motion for entry of default against them. Finally, counsel entered an appearance for the Purdys and filed a motion to adopt Mrs. Snyder's motion to dismiss. Also filed was a motion to set aside any and all default.*fn1



The defendants argue that the complaint must be dismissed for lack of subject matter jurisdiction. Nautilus filed its complaint pursuant to 28 U.S.C. § 1332.*fn2 Nautilus is incorporated in the State of Arizona, with its principal place of business in Scottsdale, Arizona. The complaint alleges the Purdys are residents of Illinois, and the decedent's estate (with Mrs. Snyder as administrator) is pending before the Circuit Court in Coles County, Illinois. In her memorandum of law supporting her motion, Mrs. Snyder states she is a resident of Florida. Nowhere in the pleadings have the parties established that they are of diverse citizenship. It is well-established that residency is not the same as citizenship. Meyerson v. Harrah's East Chicago Casino, 299 F.3d 616, 617 (7th Cir. 2002). However, it appears probable that none of the defendants is a citizen of the State of Arizona, as is the plaintiff. The defendants have not raised this issue in their motion to dismiss. The court will assume that diversity of citizenship exists in this case.*fn3

The basis for the motion is the amount in controversy. Nautilus seeks a declaratory judgment rather than monetary damages. The defendants argue that since Nautilus does not seek damages, there is no amount in controversy; thus, the court lacks subject matter jurisdiction.

In an action of this sort, the amount in controversy is determined when the insurer's action begins. Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 538 (7th Cir. 2006). The duty to defend "depends on what the plaintiff [in the underlying suit] alleges, while indemnity is limited to what the plaintiff proves[;] . . . a declaratory judgment that the insurer need not defend means that it need not indemnify either, whether or not the plaintiff makes good on his contentions." Meridian, 441 F.3d at 539. Consequently, the potential outlay for indemnification counts toward the jurisdictional minimum. Meridian, 441 F.3d at 539.

The underlying suit alleges an amount in controversy in excess of $50,000, as required by Illinois Supreme Court Rule 222. However, negligence resulting in a fatal injury gives rise to a claim potentially worth considerably more than that. The court concludes that the value of the claim exceeds the jurisdictional minimum of $75,000. The motion to dismiss for lack of subject matter jurisdiction is denied.


The defendants also argue that this case should be dismissed pursuant to the doctrine of forum non conveniens. The doctrine is codified in 28 U.S.C. § 1404(a), which allows a district court, "for the convenience of parties and witnesses, in the interest of justice, . . [to] transfer any civil action to any other district or division where it might have been brought." Thus, the court has discretion to transfer (not dismiss) an action to another federal (not state) court. 28 U.S.C. § 1404(a); Nemanich v. Dollar Rent-A-Car Services, Inc., 413 N.E.2d 178,181 (Ill. App. Ct. ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.