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Great West Casualty Co. v. Trucking

United States District Court, C.D. Illinois, Springfield Division

February 21, 2017

GREAT WEST CASUALTY COMPANY, Plaintiff,
v.
ROSS WILSON TRUCKING; TRANSPORT SERVICES OF SULLIVAN, IL, LLC; MARK J. MUNCY; STEVAN SCHMELZER; And SHELLY SCHMELZER, Defendants.

          OPINION

          SUE E. MYERSCOUGH UNITED STATES DISTRICT JUDGE.

         This 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.

         I. BACKGROUND

         In 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 Underlying Lawsuit).

         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.[1] 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.

         Plaintiff's 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; ¶ 8A.

         Plaintiff 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.

         All of 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.

         II. JURISDICTION

         This 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 citizen.”).

         Specifically, 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.

         Although 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 diversity jurisdiction).

         The 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).

         The 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”).

         Because the parties are diverse and the amount in controversy exceeds $75, 000, this Court has jurisdiction.

         III. ANALYSIS

         The 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. ...


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