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Rips, LLC v. Underwriters at Lloyd's London

United States District Court, E.D. Louisiana

May 21, 2015

RIPS, LLC, D/B/A SEAFOOD HAVEN
v.
UNDERWRITERS AT LLOYD'S LONDON, SECTION

ORDER AND REASONS

HELEN G. BERRIGAN, District Judge.

This matter comes to the court on defendants' Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(1). Rec. Doc. 12. The plaintiff opposes. Rec. Doc. 15. Having considered the record, the law, and the submissions of both parties, the Court DENIES defendant's motion.

I. BACKGROUND

This action arises out of a dispute over the amount owed under a policy of insurance for property damage. Plaintiff, Rips, LLC d/b/a/Seafood Heaven ("Seafood Heaven") is a single member Louisiana Limited Liability Corporation (LLC) whose principal place of business is in Gretna, Louisiana. Rec. Doc 1 at 1. Seafood Heaven claims that it suffered severe property damage exceeding $200, 000 from Hurricane Isaac on August 29, 2012, while covered by an insurance policy issued by Underwriter at Lloyd's, London ("Lloyd's"). Id. at 2. According to Seafood Heaven, after it timely reported the loss and filed a claim, Lloyd's "made a cursory examination of the property and promptly denied the claim and has not made payment for the covered loss." Id. On August 28, 2014, Seafood Heaven filed the instant action in this Court, naming Lloyd's as a defendant and claiming jurisdiction under 28 U.S.C. §1332. Id. Lloyd's now brings a motion to dismiss, arguing that the Court lacks subject matter jurisdiction because Seafood Heaven has not sufficiently alleged diversity or shown that the jurisdictional minimum is met. Rec. Doc. 12-1 at 2.

Although the complaint alleges that Lloyd's is a foreign insurer doing business in Louisiana, this characterization is inaccurate. The Fifth Circuit has previously described the unusual nature of Lloyd's operating model, finding that:

Lloyd's of London is not an insurance company but rather a self-regulating entity which operates and controls an insurance market. The Lloyd's entity provides a market for the buying and selling of insurance risk among its members who collectively make up Lloyd's. Thus, a policyholder insures at Lloyd's but not with Lloyd's. The members or investors who collectively make up Lloyd's are called "Names" and they are the individuals and corporations who finance the insurance market and ultimately insure risks.... Each Name is exposed to unlimited personal liability for his proportionate share of the loss on a particular policy that the Name has subscribed to as an underwriter. Typically hundreds of Names will subscribe to a single policy, and the liability among the Names is several, not joint.

Corfield v. Dallas Glenn Hills LP, 355 F.3d 853, 857-58 (5th Cir. 2003) (internal quotations and citations omitted). Because of these features, Lloyd's argues that Seafood Heaven must establish that all individual Names or Members are diverse from all adverse parties, and also that the claim against each individual Name or Member meets the $75, 000 minimum amount in controversy." Rec. Doc. 12-1 at 5. Because it has failed to do so, Lloyd's urges that the action must be dismissed. Id.

II. STANDARD OF REVIEW

Motions filed under Rule 12(b)(1) of the Federal Rules of Civil Procedure enable parties to challenge the subject matter jurisdiction of the district court. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). The party asserting federal jurisdiction bears the burden of proof that jurisdiction does in fact exist. Id. A lack of subject matter jurisdiction may be found in the complaint alone, the complaint supplemented by the undisputed facts evidenced in the record, or the complaint supplemented by the undisputed facts plus the court's resolution of undisputed facts. Id. A motion to dismiss under Rule 12(b)(1) should be granted only if it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle plaintiff to relief. Id.

III. LAW AND ANALYSIS

Under 28 U.S.C. §1332, district courts have original jurisdiction of civil actions where the matter in controversy exceeds $75, 000, exclusive of interests and costs, and is between citizens of different states. In its motion to dismiss, Lloyd's argues that Seafood Heaven has proven neither that the jurisdictional amount is met nor that the parties are diverse.

A. Jurisdictional minimum

In its motion to dismiss, Lloyd's cites to case law from this Court and the Fifth Circuit holding that the amount in controversy must be in excess of the jurisdictional minimum of $75, 000 against each individual Name. Rec. Doc. 12-1 at 5. Seafood Heaven argues that the cases that Lloyd's relies on do not support this proposition. Rec. Doc. 15 at 3.

The Court agrees that several of the cases do not support that the jurisdictional amount must be established as to each Name. See St. Charles Prop. Ass'n v. Certain Underwriters at Lloyd's London, Civ. A. No. 09-2504, 2009 WL 323034, *3 (E.D. La. Oct. 2, 2009) (case dismissed due to a failure to show complete diversity); Walle Bldg. Condo. Ass'n v. Certain Underwriters at Lloyd's London, Civ. A. No. 07-4204, 2008 WL 4412250, *3 (E.D. La. Sept. 18, 2008) (dismissed due to lack of diversity); Johnson v. Certain Underwriterst at Lloyd's London, Civ. A. No. 09-2495, 2009 WL 3232006, *4 (E.D. La. Oct. 2, 2009) (dismissed for lack of diversity); Certain Underwriters at Lloyd's London Subscribing to Policy No. B066421355A04 v. Washington, Civ. A. No. 09-3195, 2009 WL 5215927, *5 (E.D. La. Dec. 28, 2009) (dismissed for lack of diversity); ...


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