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Scanlan v. United States

September 22, 2010

DARLENE SCANLAN, PLAINTIFF,
v.
UNITED STATES OF AMERICA, STATE FARM INSURANCE COMPANY, AND JOHN KUPIEC, DEFENDANTS.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, COUNTER-PLAINTIFF AND CROSS-PLAINTIFF,
v.
DARLENE SCANLAN, COUNTER-DEFENDANT, AND UNITED STATES OF AMERICA, CROSS-DEFENDANT.



The opinion of the court was delivered by: Magistrate Judge Morton Denlow

MEMORANDUM OPINION AND ORDER

Before the Court is a motion filed by defendants the United States of America and John Kupiec to dismiss Plaintiff's two-count Amended Complaint, both for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6). For the reasons explained below, the Court 1) finds that it has jurisdiction; 2) finds that Count I states a claim for relief against the United States; 3) denies Plaintiff's request for rule 60(b) relief; 4) finds that Count II states a claim against State Farm; and 5) dismisses John Kupiec as a defendant.

I. BACKGROUND FACTS*fn1

This suit is the result of a settlement agreement gone bad in a previously filed action. The original case arose out of a December 12, 2006 car accident in which Defendant John Kupiec ("Kupiec"), a postal worker, struck Plaintiff Darlene Scanlan ("Plaintiff"). Plaintiff filed suit in the Circuit Court of Cook County, Illinois. Although the accident involved Kupiec's personal automobile, he was acting within the scope of his duties as a federal employee when he struck Plaintiff, so the United States removed the case (08 C 1506) to federal court and substituted itself as the party defendant pursuant to 28 U.S.C. § 2679(d). District Judge Blanche M. Manning dismissed that case on June 16, 2008 for Plaintiff's failure to exhaust administrative remedies.

After properly exhausting her administrative remedies, Plaintiff filed a Federal Tort Claims Act ("FTCA") action (08 C 3930) against the United States. On March 24, 2009, Plaintiff and the United States attended a settlement conference supervised by this Court and agreed to settle the FTCA case for $70,000. As a result, this Court dismissed the action in an order that converted to a dismissal with prejudice on June 30, 2009.

Before the settlement conference, however, Plaintiff had also received a $50,000 settlement offer from State Farm Insurance Company ("State Farm"),*fn2 the insurer of Kupiec's private vehicle. On the same day as the settlement conference, Plaintiff's attorney contacted State Farm and informed the insurer that Plaintiff accepted its $50,000 offer. Plaintiff alleges that the United States was aware of this offer when the parties entered into their settlement agreement, though the agreement does not expressly reference the State Farm offer. Now, Plaintiff claims that her settlement with the United States was for $70,000 in addition to the $50,000 offered by State Farm, while the United States argues that it may be entitled to the State Farm settlement money "under a variety of theories, including subrogation . . . ." Mot. to Dismiss ¶¶ 5--6.

Plaintiff filed the present two-count action against the United States, Kupiec, and State Farm in the Circuit Court of Cook County, and the United States removed the action to federal court in accordance with 28 U.S.C. § 1442. The case was referred to this Court, and the parties have consented to magistrate judge jurisdiction pursuant to 28 U.S.C. § 636(c)(1).

The Amended Complaint contains two counts. Count I names the United States as a defendant and requests that this Court adjudicate to zero the United States' interest in the State Farm settlement. In the alternative, Count I seeks Rule 60(b) relief from the judgment that dismissed Plaintiff's FTCA claim. Count II demands payment of $50,000 from State Farm or Kupiec. After the United States filed its motion to dismiss, State Farm filed a Counterclaim/Cross-claim for Interpleader naming Plaintiff and the United States as Counter-Defendant and Cross-Defendant, respectively. The motion to dismiss was directed only at Plaintiff's Amended Complaint, so this opinion does not address the later-filed interpleader action.

II. LEGAL STANDARDS

In ruling on a motion to dismiss, "the district court must accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff." Evers v. Astrue, 536 F.3d 651, 656 (7th Cir. 2008). In a 12(b)(6) motion, the court can only consider the complaint and its attachments, but on a 12(b)(1) motion the district court may look beyond the jurisdictional allegations of the complaint to evidence that has been submitted on the issue to determine whether in fact subject matter jurisdiction exists. Id. at 656--57. When the existence of subject matter jurisdiction is challenged by the defendant as a factual matter, the burden of proving jurisdiction rests with the plaintiff. Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009).

III. DISCUSSION

A. Subject Matter Jurisdiction

In a suit against the United States, the plaintiff must identify both a statute that waives sovereign immunity and a federal law that affirmatively confers subject matter jurisdiction on the district court. Macklin v. United States, 300 F.3d 814, 819 (7th Cir. 2002). As explained below, the federal ...


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