United States District Court, N.D. Mississippi, Aberdeen Division
Columbus Light and Water Department ("the
Department") sues Defendant UMR, Inc., the
Deparment's health insurance claims administrator, for
allegedly paying out claims for non-covered persons in breach
of an agreement between the two. UMR filed a motion for
judgment on the pleadings  arguing that the agreement
requires the Department to notify UMR what persons were
covered under the plan, the complaint does not state the
Department informed UMR the persons were no longer covered,
and therefore, the complaint does not allege that a breach
occurred. Having considered the matter, the Court finds the
motion should be granted.
2016, the Department established a self-funded health
insurance plan for its employees and contracted with UMR to
administer the plan. Comp.  ¶ 3. According to the
Department, children of employees were covered under the plan
until their 26th birthday. Id. ¶ 5.
in March 2017, a 26 year old child dependent of one of the
Department's employees made a claim for insurance
benefits under the plan. Id. ¶¶ 7-8. The
claim submission formprovided to UMR by the claimant
contained the claimant's date of birth. Id.
¶ 8. UMR recommended the claim be paid, even though the
claimant was no longer covered under the policy. Id.
Department sought reimbursement from UMR for this claim and
others, which UMR refused to provide. Id. ¶
18-19. The Department brought this action in state court for
1) breach of contract, negligence, and breach of duty against
UMR for recommending the Department pay claims it knew or
should have known were ineligible; 2) conversion for paying
ineligible claims from the Department's self-funded
account and refusing to return those funds to the account;
and 3) breach of good faith and fair dealing for paying
claims UMR knew were ineligible and refusing to reimburse the
Department.UMR timely removed based on diversity
subject matter jurisdiction and filed the present motion. The
Department has responded. The matter is now ripe for review.
it is not readily apparent from the facts of the complaint,
the Court first takes a moment to examine whether it has
jurisdiction to decide this matter. Giannakos v. M/V
Bravo Trader, 762F.2d 1295, 1296 (5th Cir. 1985)
("Therefore, United States District Courts and Courts of
Appeals have the responsibility to consider the question of
subject matter jurisdiction sua sponte if it is not
raised by the parties and to dismiss any action if such
jurisdiction is lacking.") For this Court to have
diversity subject matter jurisdiction, the parties must be
diverse and the amount in controversy must exceed $75, 000.
28 U.S.C. § 1332(a). The Court is satisfied that the
parties are diverse. The Department is a subsidiary of the
city of Columbus, Mississippi. Compl. ¶ 1. As a
political subdivision of the state of Mississippi, it is a
citizen of Mississippi for purposes of establishing diversity
jurisdiction. Moor v. Alameda Cnty., 411 U.S. 693,
717 (1973). UMR is a corporation organized under the laws of
Delaware with its principal place of business in Wisconsin.
Compl. ¶ 2. It is, therefore, a citizen of Wisconsin for
purposes of establishing diversity jurisdiction. See
Hertz Corp. v. Friend, 559 U.S. 77, 80 (2010).
amount in controversy requirement may be satisfied in two
ways. First, it can be established if the removing party
shows that 'it is facially apparent' from the
plaintiffs' complaint that their 'claims are likely
above [$75, 000].'" Garcia v. Koch Oil Co. of
Texas Inc., 351 F.3d 636, 639 (5th Cir.2003) (quoting
Allen v. R & H Oil & Gas Co., 63 F.3d 1326,
1335 (5th Cir. 1995)). It is not facially apparent from the
complaint that the Department's claims exceed $75, 000.
The complaint alleges only one incident where UMR recommended
the Department pay an ineligible claim. Compl. ¶¶
7-15. The complaint does not state the amount of money the
Department paid out for this claim nor the total amount of
money it believes UMR should reimburse it. Thus, UMR must
establish jurisdiction under the second method: "by
setting forth the facts-[either] in the removal petition [or]
by affidavit-that support a finding of the requisite
amount." Allen, 73 F.3d at 1135.
attached to its removal petition two letters from the
Department's counsel claiming that the Department's
damages were "at least" $98, 886.94 and demanding
that UMR pay that amount to the Department or litigation
would ensue. See October 17, 2017 Letter [1-2];
November 1, 2017 Letter [1-3]. Pre-suit demand letters which
demand more than $75, 000 can establish that the plaintiff is
seeking more than $75, 000. St. Paul Reinsurance Co. v.
Greenberg, 134 F.3d 1250, 1254 (5th Cir.1998) (examining
the plaintiffs' pre-complaint demand letters to determine
whether a claim for declaratory relief satisfied the
requisite amount in controversy); Molina v. Wal-Mart
Stores Texas, L.P., 535 F.Supp.2d 805, 808 (W.D. Tex.
2008) (holding pre-suit letter demanding $100, 000 was
evidence that the amount in controversy exceeded $75, 000).
Because these letters show that the Department is seeking
more than $75, 000, the amount in controversy requirement is
met. The Court is satisfied that it has subject matter
jurisdiction over these claims.
Judgment on the Pleadings Standard
the pleadings are closed-but early enough not to delay
trial-a party may move for judgment on the pleadings."
Fed.R.Civ.P. 12(c). A Rule 12(c) motion is governed by the
same standards as a Rule 12(b)(6) motion. See Brown v.
CitiMortgage, Inc., 472 Fed. App'x. 302, 303 (5th
Cir. 2012) (per curiam) (citing St. Paul Mercury Ins. Co.
v. Williamson, 224 F.3d 425, 440 n.8 (5th Cir. 2000)).
"A motion brought pursuant to [Rule] 12(c) is designed
to dispose of cases where the material facts are not in
dispute and a judgment on the merits can be rendered by
looking to the substance of the pleadings and any judicially
noticed facts." Hebert Abstract Co. v. Touchstone
Props., Ltd., 914 F.2d 74, 76 (5th Cir. 1990) (per
curiam) (citing 5A Charles A. Wright & Arthur R. Miller,
Federal Practice and Procedure § 1367, at 509-10
analyzing a 12(b)(6) motion, the court determines whether the
complaint contains 'sufficient factual matter, accepted
as true, to "state a claim to relief that is plausible
on its face." ' " Phillips v. City of
Dallas, Tex., 781 F.3d 772, 775-76 (5th Cir. 2015)
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129
S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting BellAtl Corp.
v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167
L.Ed.2d 929 (2007))). A claim is facially plausible when the
pleaded factual content "allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Iqbal, 556 U.S. at 678,
129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127
S.Ct. 1955). "[P]laintiffs must allege facts that
support the elements of the cause of action in order to make
out a valid claim." Webb v. Morella, 522
Fed.Appx. 238, 241 (5th Cir. 2013) (per curiam) (quoting
City of Clinton, Ark. v. Pilgrim's Pride Corp.,
632 F.3d 148, 152-53 (5th Cir. 2010) (internal quotation
marks omitted)). "[C]onclusory allegations or legal
conclusions masquerading as factual conclusions will not
suffice to prevent a motion to dismiss." Id.
(quoting Fernandez-Montes v. Allied Pilots Ass% 987
F.2d 278, 284 (5th Cir. 1993) (internal quotation marks
omitted)). "Dismissal is appropriate when the plaintiff
has not alleged 'enough facts to state a claim to relief
that is plausible on its face' and has failed to
'raise a right to relief above the speculative
level.' " Emesowum v. Hous. Police
Dep't, 561 Fed.Appx. 372, 372 (5th Cir. 2014) (per
curiam) (quoting Twombly, 550 U.S. at 555, 570, 127
case concerns a contract dispute. Thus, the Court should
first determine what the contract requires in relation to the
claims the Department has made. Under the Department's
insurance plan, children of employees were eligible coverage
until they turned 26. The dispute is ultimately about whether
UMR had an independent duty to deny claims made by an
employee's child who was at least 26 ...