Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Kidd v. Prudential Insurance Company of America

January 15, 2008

LINDA GAYLE KIDD, PLAINTIFF
v.
PRUDENTIAL INSURANCE COMPANY OF AMERICA, DEFENDANT



The opinion of the court was delivered by: Magistrate Judge Blewitt

MEMORANDUM AND ORDER

I. Background

Plaintiff, Linda Gayle Kidd, filed a Complaint in May 2005, in the Court of Common Pleas of Lackawanna County, Pennsylvania, against Defendant Prudential Insurance Company of America ("Prudential"), asserting a breach of contract claim and a bad faith claim with respect to Defendant's denial of Plaintiff's demand for the death benefit for William P. Kidd ("decedent"), under decedent's Prudential term life insurance policy. (Doc. 1, Ex. A). On June 13, 2005, Defendant filed a Notice of Removal of this action to this Court pursuant to 28 U.S.C. § 1441 and §1332(a)(1), since Plaintiff is a Pennsylvania resident and Defendant is a New Jersey corporation.*fn1 (Doc. 1).

In her Complaint, Plaintiff alleges that the life insurance policy which Defendant issued to decedent had a death benefit in the amount of $35,000.00. Plaintiff alleges that Defendant breached the insurance contract and that Defendant acted in bad faith with respect to its denial to pay her decedent's death benefit. Defendant asserted in its Notice of Removal that the diversity jurisdictional threshold of $75,000 was satisfied since Plaintiff seeks $35,000 on her breach of contract claim and she seeks in excess of $50,000 on her bad faith claim. We find, in considering the amount sought by Plaintiff with respect to her bad faith claim, that the diversity jurisdictional threshold of $75,000 was satisfied for purposes of § 1332(a). In our case, the policy's death benefit is alleged to be only $35,000. However, if Plaintiff were to succeed on her breach of contract and bad faith claims, it is possible that she would receive more than the diversity jurisdictional threshold amount.

Prior to addressing the merits of Defendant's Summary Judgment Motion and Plaintiff's cross-Summary Judgment Motion, we are compelled to discuss whether federal jurisdictional requirements have been met. The Court in James v. Electronic Data Systems Corp., 1998 WL 404817 * 2 (E.D. Pa.), stated:

In order to remove a case from state court to the district court, federal jurisdictional requirements must be met. Medlin v. Boeing Vertol Co.,, 620 F.2d 957, 960 (3d Cir. 1980). It is the responsibility of the district court to inquire, sua sponte, into the question of subject matter jurisdiction. Id. The district court has removal jurisdiction where there is diversity of citizenship among the parties and the amount in controversy exceeds the sum or value of $75,000, exclusive of costs and interests. [FN5]

28 U.S.C. §§ 1332 and 1441 (1994).

FN5. 28 U.S.C. § 1332(a) provides in pertinent part: "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between - - (1) citizens of different states . . . ."

In the present case, diversity is not questioned. Rather, at issue, which we raise sua sponte, is the damages amount alleged in the Complaint and whether it meets the $75,000 jurisdictional threshold. We find that it sufficiently does.

In its Notice of Removal, Defendant asserted that this Court has jurisdiction over the case based on diversity jurisdiction, under 28 U.S.C. § 1332 (a)(1), since it is a citizen of New Jersey and Plaintiff is a citizen of Pennsylvania. (Doc. 1, p. 2). The Defendant also stated that the amount in controversy exceeds the jurisdictional amount of $75,000.00, because Plaintiff is requesting $35,000 in her breach of contract claim and in excess of $50,000 on her Pennsylvania bad faith claim, along with interest, punitive damages, costs and attorney's fees. Defendant thus relies, in part, on Plaintiff's bad faith damages claim to support its removal notice and its determination that the jurisdictional threshold amount has been met.

The Court in The Bachman Co. v. MacDonald, 173 F. Supp. 2d 318, 322 (E. D. Pa. 2001), stated the removal standard as follows:

In general, a party is able to remove a civil action filed in state court to federal court if the federal court would have had original jurisdiction to hear the matter. Lumbermans Mut. Cas. Co. v. Fishman, No. 99-0929, 1999 WL 744016, at *1 (E.D. Pa. Sept. 22, 1999) (citing 28 U.S.C. § 1441(b) (1999); Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991)). Once the case has been removed, however, "the federal court may remand if there has been a procedural defect in removal." Kimmel v. DeGasperi, No. 00-143, 2000 WL 420639, at * 1 (E.D. Pa. Apr. 7, 2000) (citing 28 U.S.C. § 1447(c) (West 1994)). Remand is mandatory if the court determines that it lacks federal subject matter jurisdiction.

Id. (citing 28 U.S.C. § 1447(c) (West 1994)). "When a case is removed from state court, the removing party bears the burden of proving the existence of federal subject matter jurisdiction." Id. (citing Boyer, 913 F.2d at 111). "Removal statutes are strictly construed by Courts and all doubts are resolved in favor of remand." Id. (Citations omitted).

Further, as the James Court stated:

Initially, the court must look to whether the state court claim was removable on its face. Sfirakis v. Allstate Insurance Co., No. CIV. A. 91-3092, 1991 WL 147482, at *2 (E.D. Pa. July 24, 1991). Where the jurisdictional amount of damages is challenged, the amount alleged by the plaintiff in her complaint controls rather than the amount alleged in the defendant's notice of removal. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938).

James, supra at *2.

In the present case, Plaintiff's pleading on Count I contains a demand of $35,000, and on Count II, a demand in excess of $50,000.00, while the actual loss is alleged to be a total of $35,000.00, together with interest and costs. We find that the Complaint, on its face, does meet the jurisdictional requirement for removal. As stated, Defendant, in its Removal Notice, relied, in part, upon Plaintiff's bad faith claim in making its assessment that the jurisdictional amount has been met in this case. While it is not clear in the present case, even if Plaintiff succeeds, that she will recover more than the amount of her Count I breach of contract claim with respect to her bad faith claim, we are satisfied that the jurisdictional requirement for removal has been met.

In any event, since Plaintiff did not move to remand this case to state court, and since discovery is now complete and dispositive motions have been filed by both parties, the Court will not remand this case to state court despite having the authority to do so, sua sponte, if appropriate.

The Plaintiff's allegations all relate to the way in which Prudential processed her claim for death benefits under a term life insurance policy which it issued to decedent. In her first Count, the Plaintiff alleges that Prudential breached its insurance contract which it issued to decedent by not paying her claim for decedent's death benefit pursuant to the terms of his life insurance policy. Specifically, the Plaintiff alleges that at the time of decedent's death on May 20, 2003, he had a life insurance policy which was issued him by Prudential and that it was in full force and effect. Plaintiff avers that the policy had a death benefit of $35,000.00, and that she demanded Prudential pay her the death benefit as sole beneficiary under the policy. Plaintiff alleges that Defendant Prudential without cause and in violation of the insurance contract, has refused to pay the death benefit owed to her under the policy. Thus, Plaintiff asserts that Defendant has breached the life insurance contract.

In Count II, Plaintiff asserts that Defendant wrongfully and without reasonable cause denied her demand for the death benefit due and owing under the decedent's life insurance policy. Plaintiff avers that Defendant's agent met with her on May 22, 2003, and advised her that the policy was in order and he accepted her request for decedent's death benefit. Plaintiff alleges that Defendant's agent did not indicate that the policy had lapsed when the agent met with her. Plaintiff avers that after Prudential was informed of decedent's death, it advised Plaintiff that the life insurance policy had lapsed and it returned the portion of the premiums which had been paid and accepted by Prudential. Plaintiff alleges in her Count II that Defendant acted with bad faith in refusing to pay her claim for death benefits owed under the policy, and she seeks damages pursuant to 42 Pa. C.S.A. §8371.

Defendant filed its Answer to the Complaint with Affirmative Defenses on June 20, 2005. (Doc. 2).

As mentioned, Plaintiff alleges that she sustained damages with respect to her Count I, breach of contract claim, in the amount of $35,000.00. (Doc. 1, Ex. A). In her second Count, the Plaintiff alleges that Defendant Prudential acted in bad faith by denying coverage of her claim for the death benefit under decedent's policy with Defendant, since it did not have any reasonable basis to conclude that the policy had lapsed and that she was not entitled to the death benefit under the policy, in violation of 42 Pa. C.S.A. § 8371. Defendant asserts that the policy lapsed prior to decedent's death, and that the final premium payment Plaintiff made on the policy was received after the grace period had ended. Thus, Defendant contends that any obligation by it to pay the death benefit under decedent's policy had terminated before decedent's death.

After discovery in this case ended, and following an extension of the scheduling deadlines, on May 31, 2007, Defendant Prudential filed a Motion for Summary Judgment pursuant to Fed.R. Civ. P. 56, with several exhibits attached (Exs. A-P), with respect to both Counts (Breach of Contract and Bad Faith) in Plaintiff's Complaint. (Doc. 24). Plaintiff filed her cross-Summary Judgment Motion on June 1, 2007, also with exhibits attached (Exs. A-E).

(Doc. 26). Both Defendant's Motion and Plaintiff's cross-Motion have been briefed by the parties, and they have opposed each other's Motion. (Docs. 25, 27, 28, 29, 30 and 31).*fn2

As discussed, jurisdiction of this Court is based on diversity pursuant to 28 U.S.C. § 1332(a), as Plaintiff resides in Pennsylvania and Defendant is a New Jersey corporation. (Doc. 1, Ex. A, p. 2).

II. Undisputed Material Facts

We find that for the most part, the material facts in this case are undisputed. Both parties have incorporated their Statements of Material Facts ("SMF") required by Local Rule 56.1, M.D. Pa., in their respective Summary Judgment Motions. (Doc. 24, ¶'s 1.-41. and Doc. 26, ¶'s 1.-30.).*fn3 Also, Plaintiff has responded to Defendant's SMF (Doc. 30, ¶'s 1.-41.) and Defendant has responded to Plaintiff's SMF. (Doc. 28, ¶'s 1.-30.). Plaintiff and Defendant have properly referenced and submitted evidence to support their SMF's.

As stated, both parties have filed their SMF's, which are incorporated in their Summary Judgment Motions, as required by Local Rule 56.1, M.D. Pa. (Doc. 24, ¶'s 1.-41. and Doc. 26, ¶'s 1.-30.). Defendant also properly filed a response to Plaintiff's SMF and Plaintiff filed her response to Defendant's SMF. As discussed below, we shall not repeat the SMF's to which both parties agree, and we shall incorporate them herein by reference. We first consider Defendant's SMF as they preceded the filing of Plaintiff's SMF.

We find that Defendant's SMF's, Doc. 24, ¶'s 1.-6., are substantively admitted by Plaintiff, Doc. 30, ¶'s 1.-6. With respect to Defendant's SMF's, Doc. 24, ¶'s 7.-9., 11.-16., Plaintiff, for the most parts admits these ¶'s but states that there is no evidence that Defendant's Life Claim Rules were communicated to Plaintiff and that Plaintiff denies the dates of payment as recorded are the dates they were mailed to Defendant. (Doc. 30, ¶'s 7.-9., 11.-16.). Plaintiff also states that Defendant's conclusions as to the policy's status in the stated ¶'s are conclusions.

With respect to Defendant's SMF, Doc. 24, ¶ 19., Plaintiff admits that she received Defendant's March 19, 2003 letter. As to what the letter said, we find that the letter speaks for itself. (Doc. 24, Ex. E).

With respect to Defendant's SMF, Doc. 24, ¶ 23., Plaintiff admits that Defendant's Ex. G is a copy of the checking account for the relevant period.

With respect to Defendant's SMF, Doc. 24, ¶ 24., Plaintiff admits that she received Defendant's April 16, 2003 letter. As to what the letter said, we find that the letter speaks for itself. (Doc. 24, Ex. H).

With respect to Defendant's SMF, Doc. 24, ¶ 25., Plaintiff admits that the stated language appeared in Defendant's March 19, 2003 and April 16, 2003 letters. As to what the letters said, we find that the letters speak for themselves. (Doc. 24, Exs. E and H).

Plaintiff admits ¶'s 26., 29., 30., 33. and 34. of Defendant's SMF, Doc. 24. (Doc. 30, p. 7).

With respect to Defendant's SMF, Doc. 24, ¶ 27., Plaintiff admits that she received the Defendant's May 12, 2003 Notice of Lapse. As to what the Notice said, we find that the Notice speaks for itself. (Doc. 24, Ex. K).

With respect to Defendant's SMF, Doc. 24, ¶ 31., Plaintiff admits that she mailed a check for two months premiums on May 10, 2003. As stated, we find that Defendant's April 16, 2003 letter speaks for itself. (Doc. 24, Ex. H).

As to ¶'s 35.-36. of Defendant's SMF, Doc. 24, we find that Hartranft's deposition testimony speaks for itself. (Doc. 24, Ex. M, NT 26-27).

Plaintiff admits ¶'s 37., 40. and 41. of Defendant's SMF, Doc. 24. (Doc. 30, p. 8). With respect to Defendant's SMF, Doc. 24, ¶ 39., Plaintiff admits that she received the Defendant's May 21, 2003 letter. As to what the letter said, we find that it speaks for itself. (Doc. 24, Ex. O).

As stated above, we agree with Plaintiff that Defendant's SMF ¶'s 42.-50. are not proper SMF's, and that they are legal arguments and conclusions. (Doc. 30, pp. 8-9).

We now consider Plaintiff's SMF with respect to her breach of contract claim, Doc. 26, ¶'s. 1.-11. Defendant's responses to these ¶'s of Plaintiff's SMF are found at Doc. 28, ¶'s 1.-11.

We find that Plaintiff's SMF, Doc. 26, ¶'s 1.-6., are admitted by Defendant, Doc. 28, ¶'s 1.-6.

Since both parties refer to the deposition testimony of the insurance agent who sold decedent the life insurance policy at issue, Mr. David Hartranft (Doc. 26, ¶'s 7.-8. and Doc. 24, ¶'s 34.-36.), we will repeat his testimony in part. Mr. Hartranft testified as follows:

A: As soon as she [Plaintiff] had called me and said her husband [decedent] had passed away.

Q: And after you did - - you looked at that, the next person you called was - - or in connection with this claim the next person you called was somebody in claims?

A: Customer service, and then they transfer you to claims.

I can't call them directly. And I just called them to be a little excited and, once again, not with glee but just a little excited that -- they always say there's two dates when you start in your business, the starting date and the date you pay your first claim. This would have been my first claim I paid out on a policy I sold, and so I wanted to make sure there was no way -- I was looking for any way to say that we could pay this claim.

Q: And do you recall the name of the woman that you spoke to?

A: No, I do not.

Q: And do you recall what day of the week this was?

A: No, I do not.

Q: And what information - -

A: I do recall that it was the day that Mrs. Kidd called me, though, whatever day that was, it was almost ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.