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United States District Court, E.D. Pennsylvania

September 2, 2004.


The opinion of the court was delivered by: JUAN SANCHEZ, District Judge


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, Philadelphia, Pennsylvania.

  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 up living.

  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 abstention.

  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.

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