Swayze v. State Farm Mut. Auto. Ins. Co. - 2014-1899 ( La. 06/30/15), 172 So. 3d 1026

Rule:

Under La. Code Civ. Proc. Ann. art. 4841, the subject matter jurisdiction of city courts is limited by the nature of the proceedings and by the amount in dispute, which amount is determined by the amount demanded.

Facts:

A vehicle driven by Holly D. Swayze (plaintiff) was struck on the passenger side by a vehicle driven by Brittany Miles (tortfeasor). Plaintiff filed a petition for damages for injuries to her back and neck against the tortfeasor and the tortfeasor's liability insurer in Monroe City Court which has a jurisdictional limit of $30,000. Plaintiff then supplemented and amended her petition to set forth a claim against her uninsured motorist (UM) insurer, Shelter Mutual Insurance Company, because, as alleged by plaintiff, the tortfeasor's liability insurer carried a policy limit of $25,000.00, which was insufficient to cover her entire claims. Subsequently, plaintiff filed an ex parte motion to transfer her case to the district court, alleging her claims now presented an amount in dispute which exceeded the city court's jurisdiction." In her motion, plaintiff also indicated that she had reached a settlement with the tortfeasor and the tortfeasor's liability insurer. The city court granted the motion to transfer. Within the next week, plaintiff executed a settlement agreement with the tortfeasor and the tortfeasor's liability insurer for the limits of the liability policy, $25,000. A few days later, plaintiff filed a motion to dismiss these two defendants with prejudice, as well as a motion to vacate the transfer order, both of which were granted by the city court, allowing the case to remain in city court. The UM insurer then moved for summary judgment, urging that the $25,000 settlement amount and the voluntary $5,000 medical payment by the UM insurer to plaintiff exhausted the city court's jurisdictional limit. The city court dismissed the UM insurer’s motion, and the matter proceeded to trial in the city court. Plaintiff was then awarded damages in the amount of $22,700.04. On appeal, the appellate court concluded that the city court did not have subject matter jurisdiction in this case because the "amount in dispute" exceeded the city court's $30,000 jurisdictional limit. Plaintiff sought review. 

Issue:

Did the city court have subject matter jurisdiction over the plaintiff insured’s action? 

Answer:

Yes.

Conclusion:

Because the settlement amount no longer constituted part of the amount in dispute for purposes of La. Code Civ. Proc. Ann. art. 4, 4841, and 4843, the city court's jurisdiction over the uninsured motorist claim was to the full extent of the city court's jurisdictional limit. Given the insured's stipulation that the value of her claim against her uninsured motorist insurer did not exceed the city court's jurisdiction, the city court had subject matter jurisdiction over the insured's action.