United States District Court, C.D. Illinois, Springfield Division
MYERSCOUGH UNITED STATES DISTRICT JUDGE.
matter is before the Court on the Motion to Dismiss or, in
the Alternative, to Transfer Action (d/e 29) filed by
Defendants Stevan and Shelly Schmelzer. The Motion is DENIED.
Venue is proper in the Central District of Illinois, and the
Schmelzers have failed to show that transfer to the Southern
District of Illinois is clearly more convenient or in the
interest of justice.
September 2016, Plaintiff Great West Casualty Company filed a
Complaint for Declaratory Judgment (d/e 1) against Defendants
Transport Services of Sullivan, IL, LLC (Transport Services),
Ross Wilson Trucking, Mark J. Muncy, and the Schmelzers.
Plaintiff seeks a declaration that Plaintiff has no duty to
defend or indemnify Transport Services, Ross Wilson Trucking,
or Muncy for an underlying motor vehicle accident at issue in
Stevan Schmelzer and Shelly Schmelzer v. Mark J. Muncy,
Ross Wilson Trucking, Inc., and Transport Services of
Sullivan, IL, LLC, United States District Court for the
Southern District of Illinois, Case No. 3:16-CV-0290 (the
complaint in the Underlying Lawsuit alleges that Defendant
Muncy was an agent, servant, or employee of Defendant Ross
Wilson Trucking and Transport Services. See Compl.,
Ex. 1, Am. Compl. for Bodily Injury (d/e 1-2). On January 14,
2016, while acting in the scope of his agency or employment,
Muncy operated a 2012 Peterbilt semi-tractor owned by Ross
Wilson Trucking on Route 130 in Richland County,
Illinois. Muncy was towing a semi tanker trailer
that was owned by Transport Services. Muncy attempted to back
his semi-tractor and trailer from Route 130 into a private
drive and did so in a fashion that the tanker trailer was
completely blocking the southbound lane of the roadway.
Stevan Schmelzer was operating a vehicle on Route 130 and
collided with the semi tanker trailer. The Schmelzer alleges
that Muncy was negligent and his negligence caused injury and
damage to the Schmelzers.
Complaint in the instant action alleges that Transport
Services was a party to a contract between Ross Wilson
Trucking and Transport Services. Compl. ¶ 13; see
also Ex. 2, Independent Contractor Agreement For
Owner-Operator (d/e 1-3). The Independent Contractor
Agreement provided that Ross Wilson Trucking would lease to
Transport Services certain motor vehicle equipment together
with operating personnel. Compl., Ex. 2, at 1, ¶ 1. The
Agreement also contained a provision requiring Ross Wilson
Trucking to carry certain insurance coverage, including
commercial automobile coverage. Id. at 4 ¶ 7G;
issued a Non-Trucking Use Policy of Commercial Auto Insurance
to the “Independent Contractors of Transport Services
of Sullivan, IL, LLC, ” for the policy period November
1, 2015 to November 1, 2016. Compl. ¶ 16; Ex. 3, Policy
(d/e 1-4) (showing an address for the insured in Sullivan,
Illinois). Transport Services, Ross Wilson Trucking, and
Muncy have requested that Plaintiff defend and indemnify them
in the Underlying Lawsuit. Compl. ¶ 22. Plaintiff denies
that it has any obligation to defend or indemnify. Plaintiff
asserts that (1) the subject loss falls outside the
non-trucking coverage grant; (2) the subject loss is an
excluded trucking loss; (3) Transport Services is not an
insured; and (4) Transport Services is not entitled to
supplemental payments toward its defense.
the Defendants have answered the Complaint and raised
affirmative defenses. See d/e 30, 32. On January 13,
2017, the Schmelzers filed their Motion to Dismiss or, in the
Alternative, to Transfer Action.
Court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1332(a) (requiring complete
diversity and an amount in controversy in excess of $75, 000
exclusive of interest and costs). Based on the allegations in
the complaint and other documents, complete diversity exists
between Plaintiff and Defendants. Howell v. Tribune
Entm't Co., 106 F.3d 215, 217 (7th Cir. 1997)
(complete diversity requires that “none of the parties
on either side of the litigation may be a citizen of the
state of which a party on the other side is a
Plaintiff is a Nebraska corporation with its principal place
of business in South Sioux City, Nebraska. Compl. ¶ 2.
Defendant Transport Services of Sullivan IL, LLC, is an
Illinois limited liability company with its principal place
of business in Sullivan, Illinois. Id. ¶ 3. The
individual members of Transport Services are Jon C. England
and Roger L. Bragg, both citizens of Sullivan, Illinois.
Id. Defendant Ross Wilson Trucking is a corporation
organized under the laws of Illinois with its principal place
of business in Shelby County, Illinois. Id. at 4.
Defendant Mark J. Muncy is a citizen of Richland County,
Illinois. Id. at 5.
the Complaint only identifies the residence (as opposed to
citizenship) of Defendants Stevan and Shelly Schmelzer, the
Schmelzers admit in their Brief in support of the Motion that
they are citizens of Kentucky. See Brief at 2-3 (d/e
29-1); see also Compl. Ex. 1, Am. Compl. For Bodily
Injury in the Underlying Action (d/e 1-2) (alleging that the
Schmelzers are citizens of Kentucky); see also Meyerson
v. Harrah's E. Chi. Casino, 299 F.3d 616, 617 (7th
Cir. 2002) (noting that “residence and citizenship are
not synonyms” and citizenship is what matters for
amount-in-controversy requirement is also satisfied. In a
declaratory judgment action, “the amount in controversy
is measured by the value of the object of the
litigation.” Hunt v. Wash. State Apple Ad.
Comm'n, 432 U.S. 333, 347 (1977). The object of the
litigation is the pecuniary result that would flow to the
plaintiff or the defendant from the court granting the
declaratory judgment. Am.'s MoneyLine, Inc. v.
Coleman, 360 F.3d 782, 786 (7th Cir. 2004). In this
case, the value of the underlying lawsuit and the cost of
defending the underlying lawsuit count toward the
jurisdictional amount. See Meridian Sec. Ins. Co. v.
Sadowski, 441 F.3d 536, 539 (7th Cir. 2006); Midland
Mgmt. Co. v. Am. Alt. Ins. Corp., No. 15 C 6203, 2015 WL
9582987, at *4 (N.D. Ill.Dec. 31, 2015).
Court finds that the amount in controversy exceeds $75, 000.
In the underlying lawsuit, the Schmelzers seek in excess of
$75, 000 for damages that include traumatic brain injury,
multiple facial fractures, and loss of income for Stevan
Schmelzer and loss of consortium for Shelly Schmelzer.
Defense costs will also likely be substantial. Therefore, the
Court finds the amount-in-controversy requirement satisfied.
See Back Doctors Ltd. v. Metro. Prop. & Cas. Ins.
Co., 637 F.3d 827, 830 (7th Cir. 2011) (noting that
“unless recovery of an amount exceeding the
jurisdictional minimum is legally impossible, the case
belongs in federal court”).
the parties are diverse and the amount in controversy exceeds
$75, 000, this Court has jurisdiction.
Schmelzers move to dismiss this action for improper venue
pursuant to Federal Rule of Civil Procedure 12(b)(3) or, in
the alternative, transfer to the United States District Court
for the Southern District of Illinois pursuant to 28 U.S.C.