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Ohio Casualty Insurance Co. v. Hoffee

October 2, 2006

OHIO CASUALTY INSURANCE COMPANY, PLAINTIFF,
v.
CARL O. HOFFEE, AS TRUSTEE AGENT OF THE FRED WANLESS ESTATE, JOE WILLIE EDWARDS, AND ALGERINE NORRIS, DEFENDANTS.



The opinion of the court was delivered by: Richard Mills, U.S. District Judge

OPINION

This case is before the Court on the motion of Defendant Carl O. Hoffee, as Trustee Agent of the Fred Wanless Estate, to dismiss for lack of subject matter jurisdiction.

I. BACKGROUND

In support of his motion, Hoffee first notes that his co-Defendants in this case, Joe Willie Edwards and Algerine Norris, filed suit against him as Trustee Agent of the Fred Wanless Estate, as owners of certain property located in Springfield, Illinois, which Mr. Edwards and Ms. Norris were renting. That suit was filed on November 28, 2005 in the Circuit Court of the Seventh Judicial Circuit, Sangamon County, Illinois. The underlying complaint includes counts alleging, inter alia, breach of contract, negligence and breach of warranty, in connection with alleged mold in the property in question. Hoffee gave timely notice to Ohio Casualty Insurance Company, the Plaintiff in this case, which began defense of that action.

On April 20, 2006, Ohio Casualty filed this action seeking a declaratory judgment that it was not required to provide defense of the Edwards and Norris complaint because of certain policy exceptions. In its complaint, Ohio Casualty alleges, "The amount in controversy exceeds, exclusively with interest and costs, the sum of $75,000." Hoffee contends that the amount in controversy is less than $75,000, and that this case must therefore be dismissed for lack of subject matter jurisdiction.

II. ANALYSIS

A.

A case may be dismissed under Federal Rule of Civil Procedure 12(b)(1) "[w]henever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter." Fed. R. Civ. P. 12(h)(3). Ohio Casualty alleges that the Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a). Federal courts have jurisdiction over cases where there is complete diversity of citizenship and the amount in controversy "exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a).

A case should not be dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction unless it appears beyond doubt that a plaintiff is unable to prove any set of facts that would entitle it to relief. Patel v. City of Chicago, 383 F.3d 569, 572 (7th Cir. 2004). The Court accepts all of the factual allegations of the complaint as true and draws all reasonable inferences in favor of the plaintiff. Id.

In determining whether the amount in controversy has been met, courts accept good-faith estimates by plaintiffs. Benson v. SI Handling Systems, Inc., 188 F.3d 780, 783 (7th Cir. 1999). "It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal." Barbers Hairstyling for Men & Women, Inc. v. Bishop, 132 F.3d 1203, 1205 (7th Cir. 1997).

Hoffee contends that in this case, Ohio Casualty lacks a reasonable good-faith belief that Edwards and Norris could ever recover a sum in excess of $75,000. Hoffee states that the insurance company provided him with a Defense Attorney Report in early 2006, which provided a maximum verdict potential in regard to the Edwards and Norris complaint below the $75,000.01 jurisdictional minimum of the Court. Moreover, Hoffee alleges Ohio Casualty has proposed offers to resolve the Edwards and Norris matter for extremely nominal sums significantly below the jurisdictional minimum. According to Hoffee, Edwards and Norris have also made offers to resolve the matter for sums well below the jurisdictional minimum.

Based on the foregoing, Hoffee asserts that Ohio Casualty may not in the underlying action allege throughout to him that the potential maximum recovery of Edwards and Norris is so dramatically below the jurisdictional minimum of the Court and then allege in this action that the amount in controversy is in excess of $75,000. Because Ohio Casualty cannot prove that the minimum amount in controversy has been met, Hoffee claims that the case must be dismissed for lack of subject matter jurisdiction.

B.

In its response, Ohio Casualty first notes that Edwards and Norris have filed a complaint in the Circuit Court of Sangamon County wherein they allege damages in excess of $50,000, as required under the law in Illinois which prohibits seeking damages for specified dollar amounts. See 735 ILCS 5/2-604. Ohio Casualty claims Hoffee argues that because a settlement demand of $54,200 has been made by ...


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