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Wesco Insurance Co. v. Archer Landscape Group, LLC

United States District Court, N.D. Mississippi, Aberdeen Division

August 25, 2017

WESCO INSURANCE COMPANY PLAINTIFF
v.
ARCHER LANDSCAPE GROUP, LLC, GERALD SELLERS, RICHARD STRACHAN, and TIMOTHY BRASFIELD DEFENDANTS

          MEMORANDUM OPINION

          SHARION AYCOCK UNITED STATES DISTRICT JUDGE.

         This declaratory judgment action is before the Court on Defendant Timothy Brasfield's Motion to Dismiss for Lack of Jurisdiction [14]. Plaintiff responded, but Defendant Brasfield declined to file a timely reply.

         Factual and Procedural History

         Wesco Insurance Company filed its Complaint for Declaratory Judgment against Defendants on September 9, 2016. Plaintiff Wesco's request for declaratory judgment relates to a policy of insurance it issued to Defendant Archer Landscape Group, LLC, concerning a claim asserted by Brasfield against Archer Landscape Group, LLC, Sellers and Strachan, which was filed in the Circuit Court of Alcorn County, Mississippi. In that underlying state suit, Brasfield alleges general negligence and “special acts of negligence” related to injuries he suffered while working with Archer Landscape Group, LLC. Brasfield alleges that while working to repair a broken post on a shed, he suffered serious and permanent injuries when his arm was caught in an auger. The incident resulted in amputation of his left arm, removal of his spleen and a hole in his diaphragm. Wesco asserts that the policy issued by Wesco to Archer Landscape Group, LLC contains an exclusion for employer's liability, which would bar Brasfield's claim from policy coverage. Brasfield filed its Motion to Dismiss, arguing that jurisdiction has vested in the state court, leaving the federal district court unable to entertain Wesco's action.

         Motion to Dismiss Standard

         Defendant argues that it is entitled to dismissal for lack of subject-matter jurisdiction and a lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) and (2). “A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case.” Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998) (quotation omitted). When the Court's subject-matter jurisdiction is challenged, the party asserting jurisdiction bears the burden of establishing it. King v. U.S. Dep't of Veterans Affairs, 728 F.3d 410, 413 (5th Cir. 2013). The party who seeks to invoke the jurisdiction of the federal court “must prove by a preponderance of the evidence that the court has jurisdiction based on the complaint and evidence.” Ballew v. Cont'l Airlines, Inc., 668 F.3d 777, 781 (5th Cir. 2012).

         Regarding personal jurisdiction, the plaintiff need not establish jurisdiction by a preponderance of the evidence; a prima facie showing suffices. Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (quoting Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir. 1982)). When determining whether a prima facie case for jurisdiction exists, “[t]he district court is not obligated to consult only the assertions in the plaintiff's complaint . . . [r]ather, the district court may consider the contents of the record at the time of the motion . . . .” Paz v. Brush Engineered Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006). In this regard, all “uncontroverted allegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor.” Gatte v. Dohm, 574 F. App'x. 327, 330 (5th Cir. 2014) (quoting D.J. Investments Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 546 (5th Cir. 1985)).

         Discussion and Analysis

         Defendant fails to articulate its argument regarding the purported lack of personal jurisdiction. In any event, Plaintiff properly alleged personal jurisdiction in its Complaint and Response to Defendant's Motion. All Defendants in this matter are purportedly residents of Alcorn County, Mississippi, and all Defendants were properly served in Mississippi.

         Furthermore, this Court has subject matter jurisdiction over Plaintiff's claims. Diversity jurisdiction, as prescribed by 28 U.S.C. Section 1332, requires that “all persons on one side of the controversy be citizens of different states than all persons on the other side.” Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1079 (5th Cir. 2008) (internal quotation marks omitted). For purposes of diversity jurisdiction, the citizenship of an LLC “is determined by the citizenship of all its members.” Id. at 1079-80.

         According to Plaintiff's Complaint and Response to the Motion to Dismiss, Plaintiff is a corporation organized and existing under the laws of the state of Delaware, with its principal place of business in New York, New York. Defendant Archer Landscape Group, LLC, is a Mississippi limited liability company organized and existing under the laws of the state of Mississippi, with Mississippi residents as its sole members, purportedly Gerald Sellers and his wife. Further, all individual defendants are adult resident citizens of the state of Mississippi. Accordingly, because there is complete diversity of citizenship between the Plaintiff and the Defendants, and the amount in controversy exceeds the sum or value of seventy-five thousand dollars, Plaintiff has met its burden of alleging subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a).

         However, without providing any precedent or legal justification, Defendant moves the Court to enter an order dismissing the action due to a lack of jurisdiction, because jurisdiction was “vested in state court prior to filing in federal court.” Indeed, “[a] case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case.” Home Builders, 143 F.3d at 1010 (internal quotation marks omitted). Motions to dismiss under Rule 12(b)(1) challenge a court's “very power to hear the case, ” and the court may therefore “weigh the evidence and satisfy itself” that subject matter jurisdiction exists. MDPhysicians & Assocs., Inc. v. State Bd. of Ins., 957 F.2d 178, 181 (5th Cir. 1992) (internal quotation marks omitted).

         Article III of the Constitution limits the jurisdiction of federal courts to cases and controversies. U.S. Parole Comm'n v. Geraghty, 445 U.S. 388, 395, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980). Subject-matter jurisdiction to issue a declaratory judgment exists only when there is an “actual controversy” between the parties. See 28 U.S.C. § 2201(a) (2012); see also Texas v. West Publ'g. Co., 882 F.2d 171, 175 (5th Cir. 1989). The “actual controversy” requirement under the Declaratory Judgment Act is identical to the “case or controversy” requirement of Article III of the Constitution. West Publ'g. Co., 882 F.2d at 175. “Whether particular facts are sufficiently immediate to establish an actual controversy is a question that must be addressed on a case-by-case basis.” Orix Credit All., Inc. v. Wolfe, 212 F.3d 891, 896 (5th Cir. 2000).

         “[T]he Declaratory Judgment Act has been understood to confer on federal courts unique and substantial discretion in deciding whether to declare the rights of litigants.” Wilton v. Seven Falls Co., 515 U.S. 277, 286, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995). “In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction ...


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