United States District Court, E.D. Pennsylvania
September 2, 2004.
FEDERAL KEMPER LIFE ASSURANCE COMPANY.
The opinion of the court was delivered by: JUAN SANCHEZ, District Judge
MEMORANDUM AND ORDER
Plaintiff Kakkadasan Sampathachar, M.D., claims Federal
Kemperer Life Assurance Company and American General Life
Insurance Company failed to pay the proceeds of two $1 million
policies insuring the life of his wife, Pannathpur Sampathachar,
M.D., after she drowned in the Ganges River on November 7, 2001.
Dr. Sampathachar alleges breach of contract and a violation of
Pennsylvania's bad faith statute.*fn1
Four motions are before this court: Plaintiff's motion to
remand for lack of subject matter jurisdiction; Defendant's
motion to dismiss or grant summary judgment as to Count II, the
bad faith claim; Defendant's motion to compel Devang B. Parikh to comply
with a subpoena; and, Plaintiff's motion to quash or stay
Defendant's motion to compel. We deny Plaintiff's motion to
remand and Defendant's motion to dismiss the bad faith claim. We
grant in part and deny in part the motion to compel compliance
with a subpoena duces tecum and deny as moot Plaintiff's motion
to quash or stay.
In June 1995 Dr. P. Sampathachar applied to Federal Kemper for
a $500,000 life insurance policy with Dr. K. Sampathachar as the
beneficiary. In August 1996, Dr. P. Sampathachar purchased a $1
million life insurance policy from American General Life
Insurance Company with Dr. K. Sampathachar as the beneficiary. In
March, 1999 Dr. P. Sampathachar increased her coverage with
Kemper to $1 million. When she purchased both policies, Dr. P.
Sampathachar listed her address as 6366 Sherwood Road,
In his complaint, Dr. K. Sampathachar avers that Dr. P.
Sampathachar drowned in the Ganges River in India on November 7,
2001. The defendant insurance companies deny that Dr. P.
Sampathachar died, deny that they have failed to pay proceeds
owed, and deny that they have acted in bad faith. Three other
suits relating to five more insurance policies are consolidated
in state court in Philadelphia County under the caption Reassure
America Life Insurance Company v. Kakkadasan Sampathachar, et
al., August Term 2003, No. 03-4322.
Plaintiff initially filed suit in the Court of Common Pleas of
Philadelphia County on September 19, 2003, verifying that he was
a citizen of the United States residing at 931 Burdette Drive,
Downingtown, PA 19335. After Defendant insurers removed the state
court action to federal court, Dr. K. Sampathachar filed an
amended complaint in which he (1) removed his address from the caption but retained the averral "Dr. K. Sampathachar is a
United States citizen with a residence as set forth in the
caption;" and, (2) averred "this Court has jurisdiction under
28 U.S.C. § 1332, because there is diversity of citizenship and the
amount in controversy exceeds $75,000." Amended Complaint,
Paragraphs 2 and 5.
The first question is whether this court has jurisdiction. Dr.
K. Sampathachar claims that he is not domiciled in Pennsylvania
and has not been so since April, 2001, when he and his wife
retired from their medical practices and returned to India. As
evidence, Dr. Sampathachar claims he has lived exclusively in
Bangalore, India since 2001, that he owns no property in
Pennsylvania and pays no taxes here, that he stays with nephews
in Pennsylvania and Louisiana and that he has no intention of
returning to Pennsylvania.
Defendant insurers, after discovery limited to the question of
jurisdiction, present evidence that Dr. Sampathachar retains a
Pennsylvania driver's license, that his Social Security benefits
are deposited in a Pennsylvania bank account with the Downingtown
address, that he resides in India on a six-month tourist visa,
that he omitted any address from his U.S. passport, and that he
did not notify any insurance company of any change of address.
Dr. Sampathachar testified that he is not sure where he will end
It is black letter law that "that the jurisdiction of the Court
depends upon the state of things at the time of the action
brought, and that after vesting, it cannot be ousted by
subsequent events." Mollan v. Torrance, 22 U.S. 537, 539 (1824)
(Marshall, C.J.). Residence does not determine citizenship.
Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30,
48, 109 S.Ct. 1597, 1608 (1989). Domicile is established by
physical presence in a place in connection with a certain state of mind concerning one's intent to remain there.
Mississippi Band of Choctaw Indians, 490 U.S. at 48,
109 S.Ct. at 1608 (citing Texas v. Florida, 306 U.S. 398, 424,
59 S.Ct. 563, 576, 83 L.Ed. 817 (1939)). In the absence of a clear intent
to reside elsewhere at the time the action was brought, this
Court will hold Dr. Sampathachar to his own verification that he
is a citizen of Pennsylvania in his complaint in state court and
his averment of diversity of jurisdiction in his amended
complaint in this Court.
The second prong of Dr. Sampathachar's argument on jurisdiction
is whether the case at hand should, for reasons of judicial
economy, be consolidated with the cases in state court. The
Supreme Court has held that "[g]enerally, as between state and
federal courts, the rule is that the pendency of an action in the
state court is no bar to proceedings concerning the same matter
in the federal court having jurisdiction." Colorado River Water
Conservation Dist. v. U.S., 424 U.S. 800, 817, 96 S.Ct. 1236,
1246 (1976). The Colorado River case resulted in a doctrine
which holds that only exceptional circumstances warrant
abstention. The determination does "not rest upon a mechanical
checklist, but on a careful balancing of the important factors as
they apply in a given case, with the balance heavily weighted in
favor of jurisdiction." Worldcom Technologies, Inc. v. Intelnet
Intern., Inc., 2001 WL 118957, 4 (E.D.Pa. 2001 Bechtle, J.).
This case presents no exceptional circumstance warranting
The second issue is Defendant insurer's motion to strike Count
II of the complaint, the bad faith claim. Since this is a
diversity case, this Court is required to apply the same
substantive law as would be applied by a Pennsylvania court.
Erie Railroad Company v. Tompkins, 304 U.S. 64, 78,
58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938).
Defendant insurers argue that Dr. Sampathachar does not have
standing to raise a bad faith claim under Pennsylvania law because he is not an insured in
accordance with the statute. The plain language of the statue
requires "in an action arising under an insurance policy, if the
court finds that the insurer has acted in bad faith toward the
insured . . . [,]" then the remedies apply. 42 Pa.C.S. § 8371.
There is no need for this Court to participate in the semantic
hair-splitting that Defendant insurers propose because it is
clear Dr. Sampathachar would have standing to bring a claim as a
representative of Dr. P. Sampathachar's estate. See Horowitz v.
Federal Kemper Life Assur. Co., 57 F.3d 300, 303 (3d Cir. 1995).
Dr. Sampathachar also has standing as the beneficiary of the
policy in question. See Rottmund v. Continental Assur. Co.,
813 F.Supp. 1104, 1111 (E.D. Pa. 1992) (stating the controlling
question is whether "this is an action under an insurance policy"
for the purposes of 42 Pa.C.S. § 8371).
The third issue raised by the outstanding motions is this case
is the time span covered by Defendant insurers' subpoena duces
tecum to Dr. Sampathachar's accountant, Devang B. Parikh.
Defendants claim they need documents dating back to 1994. Dr.
Sampathachar counters that the state court judge hearing the
parallel cases, limited discovery to documents relating to the
five years preceding the claimed death of Dr. P. Sampathachar, or
1996. In this case, the first policy was purchased in 1995. This
Court will, therefore, include the year 1995 in the documents Mr.
Parikh should produce, but not the year 1994.
In accord with the foregoing, we enter the following: ORDER
And now this 2nd day of September, 2004, it is hereby
ORDERED that Plaintiff's motion to remand for lack of subject
matter jurisdiction (Document 13) is DENIED. Defendant's motion
to dismiss or grant summary judgment as to Count II (Document 10)
is DENIED. Defendant's motion to compel Devang B. Parikh to
comply with a subpoena (Document 26) is GRANTED in part and
DENIED in Part: Devang B. Parikh is directed to supply documents
from 1995 to 2001. Plaintiff's motion to quash or stay
Defendant's motion to compel (Document 25) is DENIED as moot.