Bindrum v. American Home Assurance Company, Inc. , 441 F. App'x 780 ( 2011 )

11-961
Bindrum v. American Home Assurance Company, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 29th day of September, two thousand eleven.
5
6 PRESENT: DENNIS JACOBS,
7 Chief Judge,
8 PETER W. HALL,
9 GERARD E. LYNCH,
10 Circuit Judges.
11
12 - - - - - - - - - - - - - - - - - - - -X
13 JEREMIAH BINDRUM,
14
15 Plaintiff-Appellant,
16
17 -v.- 11-961
18
19 AMERICAN HOME ASSURANCE COMPANY, INC.,
20 AMERICAN INTERNATIONAL GROUP, INC.,
21 AIG SPECIALTY CLAIMS SERVICES, INC.,
22 CHARTIS INSURANCE COMPANY,
23
24 Defendants-Appellees,
25
26
27 - - - - - - - - - - - - - - - - - - - -X
28
1
1 FOR APPELLANT: Christopher J. McVeigh
2 McVeigh Skiff
3 Burlington, VT
4
5
6 FOR APPELLEES: Mark F. Werle (John A. Serafino, on the
7 brief)
8 Ryan, Smith & Carbine, Ltd.
9 Rutland, VT
10
11
12
13 Appeal from a judgment of the United States District
14 Court for the District of Vermont (Reiss, C.J.).
15
16 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
17 AND DECREED that the district court’s judgment is AFFIRMED.
18
19 Jeremiah Bindrum appeals the district court’s judgment
20 dismissing his complaint sua sponte for lack of subject
21 matter jurisdiction. We assume the parties’ familiarity
22 with the underlying facts, the procedural history, and the
23 issues presented for review.
24
25 We review de novo a district court’s sua sponte
26 dismissal of a complaint for lack of subject matter
27 jurisdiction. See Digitel, Inc. v. MCI Worldcom, Inc., 239
28 F.3d 187, 190 (2d Cir. 2001). To invoke the diversity
29 jurisdiction of the federal district courts, the amount in
30 controversy must exceed $75,000 in value. 28 U.S.C. §
31 1332(a). As the party seeking to invoke this court’s
32 diversity jurisdiction, plaintiff “has the burden of proving
33 that it appears to a reasonable probability that the claim
34 is in excess of the statutory jurisdictional amount.”
35 Tongkook Am., Inc. v. Shipton Sportswear Co., 14 F.3d 781,
36 784 (2d Cir. 1994) (internal quotation marks omitted).
37 “This burden is hardly onerous, however, for we recognize ‘a
38 rebuttable presumption that the face of the complaint is a
39 good faith representation of the actual amount in
40 controversy.’” Scherer v. Equitable Life Assurance Soc’y of
41 U.S., 347 F.3d 394, 397 (2d Cir. 2003) (quoting Wolde-Meskel
42 v. Vocational Instruction Project Cmty. Servs., Inc., 166
43 F.3d 59, 63 (2d Cir. 1999)). To overcome this presumption,
44 the party challenging jurisdiction must demonstrate “‘to a
2
1 legal certainty’ that the amount recoverable does not meet
2 the jurisdictional threshold.” Id. (quoting St. Paul
3 Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89
4 (1938)).
5
6 [1] Plaintiff argues that the defendants delayed submitting
7 their Medicare Set-Aside (“MSA”) proposal to the Centers for
8 Medicare and Medicaid Services (“CMS”) as required under the
9 terms of the agreement between plaintiff and the defendants
10 settling plaintiff’s workers’ compensation claims. As a
11 result of such delay, plaintiff contends, he was forced to
12 draw monthly advances on the $225,000 settlement amount and
13 use the funds to finance medical expenses that would
14 otherwise have been reimbursable by Medicare. But, as the
15 district court concluded, the maximum amount of damages
16 which plaintiff could have suffered as a result of the
17 defendants’ failure to timely submit their MSA proposal is
18 $49,000, which represents the aggregate amount of advances
19 taken by plaintiff. See Bindrum v. Am. Home Assurance Co.,
20 No. 5:10-CV-116, 2011 WL 474408, at *4 (D. Vt. Feb. 4,
21 2011). This is $26,000 shy of the jurisdictional threshold.
22
23 [2] Plaintiff next argues that the defendants
24 underestimated his expected medical costs and undervalued
25 the MSA in their initial proposal to CMS. But plaintiff’s
26 claim that the defendants did not adequately fund the MSA
27 cannot possibly lead to recovery. Under the settlement
28 agreement, the defendants were only obligated to fund the
29 MSA up to the amount required for CMS approval, which is
30 precisely what they did. Although CMS rejected the
31 defendants’ initial MSA estimate as inadequate, it then
32 conducted its own independent analysis and determined the
33 appropriate set-aside amount. Therefore, the amount which
34 the defendants ultimately funded was the amount required by
35 CMS, rather than defendants’ initial estimate. This is all
36 that the settlement agreement required. In addition,
37 because (1) the MSA funds are applied only to medical
38 expenses that would otherwise be reimbursable by Medicare,
39 (2) Medicare will cover any additional reimbursable expenses
40 once the MSA fund has been exhausted, and (3) any excess
41 amounts in the MSA account are remitted to the defendants
42 under the settlement agreement, the amount of the set-aside
43 has no bearing on plaintiff’s ability to obtain
44 reimbursement for his work-injury-related medical expenses.
3
1 Any inadequacy in the set-aside would therefore harm only
2 Medicare, not plaintiff. As such, plaintiff cannot
3 establish that he was damaged by any alleged undervaluation
4 of the MSA. See Smith v. Country Vill. Int’l, Inc., 944
5 A.2d 240, 243 (Vt. 2007) (“To prove breach of contract,
6 plaintiff must show damages.”).
7
8 [3] Plaintiff argues that the district court erred by not
9 incorporating the possibility of a punitive damages award
10 into its amount in controversy calculations. Potentially
11 recoverable punitive damages can be considered in
12 determining whether the jurisdictional amount in controversy
13 has been satisfied if punitive damages are allowed under the
14 controlling law. A.F.A. Tours, Inc. v. Whitchurch, 937 F.2d
15 82, 87 (2d Cir. 1991). However, claims for punitive damages
16 merit “closer scrutiny” when calculating the amount in
17 controversy. Zahn v. Int’l Paper Co., 469 F.2d 1033, 1034
18 n.1 (2d Cir. 1972). Under Vermont law, punitive damages may
19 only be awarded against a corporation if the plaintiff
20 establishes “actual malice” and if the challenged act is an
21 act “of the governing officers of the corporation or one
22 lawfully exercising their authority, or, if the act relied
23 upon is that of a servant or agent of the corporation, it
24 must be clearly shown that the governing officers either
25 directed the act, participated in it, or subsequently
26 ratified it.” Shortle v. Cent. Vt. Pub. Serv. Corp., 399
27 A.2d 517, 518 (Vt. 1979). Because the complaint contains no
28 allegation of such involvement by any officers of the
29 defendant insurance companies, the punitive damages claim
30 cannot survive the “closer scrutiny” to which we subject it,
31 and does not merit inclusion in the amount in controversy
32 calculation.
33
34 [4] The complaint also seeks attorney’s fees. The district
35 court held that attorney’s fees could not be considered as
36 part of the amount in controversy, and plaintiff has not
37 contested this holding. See, e.g., Norton v. Sam’s Club,
38 145 F.3d 114, 117 (2d Cir. 1998) (“Issues not sufficiently
39 argued in the briefs are considered waived and normally will
40 not be addressed on appeal”). Moreover, Vermont follows the
41 American Rule that “parties must bear their own attorneys’
42 fees absent a statutory or contractual exception,” and the
43 standard for departing from that rule is “demanding.”
44 Concord Gen. Mut. Ins. Co. v. Woods, 824 A.2d 572, 579 (Vt.
4
1 2003) (internal quotation marks omitted). Plaintiff has not
2 presented any argument to suggest that he would be entitled
3 to attorney’s fees as a matter of right, and therefore we do
4 not consider them in determining whether the jurisdictional
5 threshold has been met. See In re Ciprofloxacin
6 Hydrochloride Antitrust Litig., 166 F. Supp. 2d 740, 755
7 (E.D.N.Y. 2001); see also Givens v. W.T. Grant Co., 457 F.2d
8 612, 614 (2d Cir.), vacated on other grounds, 409 U.S. 56
9 (1972).
10
11 We have considered plaintiff’s remaining arguments and
12 find them to be without merit. For the foregoing reasons,
13 the judgment of the district court is hereby AFFIRMED.
14
15
16
17 FOR THE COURT:
18 CATHERINE O’HAGAN WOLFE, CLERK
19
20
5