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State Farm Fire and Casualty Co. v. Hartman

United States District Court, Tenth Circuit

November 18, 2013

STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff,
v.
DALLAS N. HARTMAN, et al., Defendants.

MEMORANDUM AND ORDER

KATHRYN H. VRATIL United States District Judge

State Farm Fire and Casualty Company brought suit against Dallas N. Hartman, Charles C. Conner, III, Branlyn Finnell as natural guardian and next friend of minor C. M., Jamie N. Bell, Jared M. Wilkinson and The Pantry, Inc. seeking a declaratory judgment that it owes no coverage arising out of an accident and no duty to defend Kenneth Keen, its insured. State Farm’s claims are now resolved with respect to all defendants.[1] In her responsive pleading, however, Bell brought cross-claims against her co-defendants and a third-party action against Keen.

This matter is before the Court on Defendant/Cross-Claim Defendant The Pantry, Inc.’s Motion To Dismiss Jamie Bell’s Cross-Claims And Third-Party Petition (Doc. #41) filed November 16, 2012. Bell has dismissed her third-party complaint.[2] The Court therefore overrules the motion as moot insofar as it seeks dismissal of Bell’s third-party complaint. The Pantry argues that the Court should dismiss Bell’s cross-claims because complete diversity does not exist between Bell and the cross-claim defendants, and that the Court should decline to exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367. For the following reasons the Court overrules the motion.

Legal Standards

Rule 12(b)(1) motions generally take the form of facial attacks on the complaint or factual attacks on the accuracy of its allegations. Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir. 1995) (citing Ohio Nat’l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990)). The Pantry challenges the face of the complaint, so the Court presumes the accuracy of Bell’s factual allegations and does not consider evidence outside the complaint. Id. Courts may exercise jurisdiction only when specifically authorized to do so, see Castaneda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994), and must “dismiss the cause at any stage of the proceeding in which it becomes apparent that jurisdiction is lacking.” Scheideman v. Shawnee County Bd. of County Comm’rs, 895 F.Supp. 279, 280 (D. Kan. 1995) (citing Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974)); Fed.R.Civ.P. 12(h)(3). Because federal courts are courts of limited jurisdiction, the law imposes a presumption against jurisdiction. Marcus v. Kan. Dep’t of Revenue, 170 F.3d 1305, 1309 (10th Cir. 1999). Bell bears the burden of showing that jurisdiction is proper, see id., and must demonstrate that the case should not be dismissed, see Jensen v. Johnson County Youth Baseball League, 838 F.Supp. 1437, 1439-40 (D. Kan. 1993). Conclusory allegations of jurisdiction are not enough. Id.

Supplemental jurisdiction is a matter of judicial discretion. Gus T. Handge & Son Painting Co. v. Douglas State Bank, 543 F.Supp. 374, 376 (D. Kan. 1982). A court may decline to exercise supplemental jurisdiction if (1) the supplemental claim involves a novel or complex issue of state law; (2) the supplemental claim substantially predominates over the original jurisdiction claim; (3) the court has dismissed the original jurisdiction claim; or (4) any other compelling reason exists. 28 U.S.C. § 1367(c).

Procedural Background[3]

Following an accident on September 18, 2011, Bell filed a personal injury petition in Johnson County, Kansas, against Hartman, Keen, Conner and C. M. (through her mother and natural guardian). Two months later, State Farm filed this declaratory judgment suit against Hartman, Conner, C. M., Bell, Wilkinson and The Pantry, alleging that it owed no coverage arising out of the accident and no duty to defend Keen, its insured. Complaint (Doc. #1) filed July 19, 2012. State Farm alleged subject matter jurisdiction under 28 U.S.C. § 1332.

On August 21, 2012, Bell filed cross-claims against C. M., Hartman, Conner and The Pantry, and a third-party complaint against Keen. Answer To Complaint For Declaratory Judgment, Cross-Claims And Third-Party Complaint (Doc. #15). The allegations in Bell’s cross-claim and third-party complaint are substantially similar to those in the petition which she filed in Johnson County, Kansas.

Bell seeks compensation for injuries she received when Keen’s car struck her as she was standing on the sidewalk in front of a convenience store owned by The Pantry. For her cross-claims and third-party claim, Bell alleges supplemental jurisdiction pursuant to 28 U.S.C. § 1367.

Analysis

I. Subject Matter Jurisdiction

The Pantry argues that Bell’s cross-claims and third-party complaint must be dismissed because Bell, C. M., Hartman, Conner and Keen are all residents of Kansas and complete diversity does not exist. The Pantry makes no argument that the original action – State Farm versus Hartman, Conner, C. M., Bell, Wilkinson and The Pantry – should be dismissed for want of jurisdiction, and indeed the State Farm complaint reveals no jurisdictional defect.

The general rule is that jurisdiction depends on the state of things at the time plaintiff files its complaint and cannot be ousted by subsequent events. Price v. Wolford, 608 F.3d 698, 702 (10th Cir. 2010) (quoting Mullan v. Torrance, 22 U.S. (9 Wheat.) 537, 539 (1824)). Supplemental jurisdiction under 28 U.S.C. § 1367(a) permits the addition of claims and parties once federal court jurisdiction exists. “[D]istrict courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). In this case, all of the parties’ claims – the State Farm declaratory judgment action, the negligent entrustment claim asserted in Bell’s cross-claim and third-party complaint and the ...


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