MEMORANDUM AND ORDER
HUYETT, District Judge.
Plaintiff, Robert Houck (Houck), filed this action in the Court of Common Pleas of Philadelphia County, Commonwealth of Pennsylvania, against defendant, The Travelers Insurance Company (Travelers). Travelers removed the action to this court pursuant to 28 U.S.C. § 1441(a), in accordance with the provisions of 28 U.S.C. § 1446. The claim to federal jurisdiction is based upon diversity of citizenship, 28 U.S.C. § 1332(a). Plaintiff has filed a motion to remand claiming that the amount in controversy does not exceed ten thousand dollars ($10,000) exclusive of interest and costs.
Plaintiff seeks the rescission ab initio of a group insurance policy, the reimbursement of premiums with interest, punitive damages and costs. He seeks to pursue it as a class action, representing all employees of Honeywell, Inc. Industrial Division, Fort Washington, Pa. who are or were beneficiaries of group insurance policy No. GA765651, offered and sold by Travelers.
The suit is based upon a claim that defendant induced plaintiff and other employees of Honeywell, Inc. to purchase a group insurance policy through fraud and misrepresentation.
Defendant invoked federal jurisdiction by removing the case from state court. It, therefore, has the burden of establishing that the jurisdictional amount requirement is satisfied. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S. Ct. 780, 80 L. Ed. 1135 (1936); Hartridge v. Aetna Cas. & Sur. Co., 415 F.2d 809 (8 Cir. 1969).
Plaintiff in his complaint does not allege a specific sum as the damages due from defendant. It is not contested that the amount recoverable for premiums paid and interest thereon would not equal one thousand dollars ($1,000) for plaintiff or for any other individual member of the class. Travelers, in order to invoke the jurisdiction of this Court, must support its allegation of sufficient amount in controversy by competent proof to a preponderance of the evidence. McNutt v. General Motors Acceptance Corp., supra 298 U.S. at 189, 56 S. Ct. 780. In Nelson v. Keefer, 451 F.2d 289 (3 Cir. 1971), the Third Circuit Court of Appeals encouraged trial courts to use permissible discretion prior to trial to determine whether the amount in controversy failed to satisfy the required amount to "a legal certainty." In the present case, defendant has made no offer of proof to support its bare contention that the award of punitive damages could raise the damages to the required minimum. In the absence of such demonstration, together with plaintiff's own assertion that his claim is for less than one thousand dollars ($1,000), we are firmly convinced that Houck cannot recover an amount above the jurisdictional amount for his individual claim.
Plaintiff, however, seeks to pursue this action on behalf of a class. It is necessary, therefore, to determine whether the individual claims of members of the proposed class may be aggregated in order to satisfy the jurisdictional amount requirement.
It has long been the law that individual claims can be aggregated when plaintiffs join to assert common and undivided rights against defendant. Pinel v. Pinel, 240 U.S. 594, 596, 36 S. Ct. 416, 60 L. Ed. 817 (1916). In accord with this doctrine aggregation of claims was permitted in "true" but not in "hybrid" or "spurious" class actions under pre-1966 Fed. R. Civ. P. 23. Fuller v. Volk, 351 F.2d 323, 327 (3 Cir. 1965). The Supreme Court, in Snyder v. Harris, 394 U.S. 332, 89 S. Ct. 1053, 22 L. Ed. 2d 319 (1969), held that the current Fed. R. Civ. P. 23, adopted in 1966, could not and did not change the requirement that rights of the different class members be common and undivided if claims were to be aggregated. 394 U.S. at 336, 89 S. Ct. 1053. The rule permitting aggregation in class actions remains that the claims be joint, common and undivided, and not "separate and distinct".
The primary question is whether the right asserted in the present action is one which can be asserted by individual members of the class or whether it is a class right which does not give rise to causes of action by individual members. Weiss v. Sunasco Inc., 316 F. Supp. 1197, 1201 (E.D. Pa. 1970). In Weiss, plaintiff, on behalf of a class of stockholders, sought to compel defendant corporation to specifically perform its promised undertaking, contained in a proxy statement, to make a favorable transfer of securities to preferred shareholders. Plaintiff also sought certain equitable relief which would permit performance. Judge Fullam held that any cause of action which arose out of the failure to perform was individual to each shareholder. The proper focus, he stated, is the right asserted, which in Weiss was the individual right of each shareholder to make the favorable purchase. 316 F. Supp. at 1201. The court stated that the equitable relief sought was "merely a means of redressing the individual claims of the class members". 316 F. Supp. at 1201.
In the present action members of plaintiff class are beneficiaries of a group insurance plan issued by Travelers to Honeywell. Each employee was issued a certificate which evidenced his participation in the plan. Houck, on behalf of the class, claims that the acceptance of the plan was induced by fraud and misrepresentation, and he seeks rescission of the contract, reimbursement of premiums paid by class members and interest, punitive damages and costs.
In Kentucky Home Mut. Life Ins. Co. v. Duling, 190 F.2d 797 (6 Cir. 1951), the court ruled that the interests of beneficiaries of a group life insurance policy were separate, not joint. See, Alvarez v. Pan Am. Life Ins. Co., 375 F.2d 992, 993-994 (5 Cir. 1967); Andrews v. Equitable Life Assur. Co., 124 F.2d 788, 791 (7 Cir. 1941). The suit sought to recover excess premiums paid under the contract due to the insurer's breach of provisions concerning premiums. In deciding that the interests were separate, the very crux of the aggregation question, the court cited the following factors:
"He may continue or terminate his insurance without affecting the insurance of other members. The disability . . . benefits are paid or refused according to the facts pertaining to his individual situation. Termination of his employment affects his insurance only." 190 F.2d at 802.