JOHN W. SEDWICK, Senior District Judge.
At docket 23, plaintiff Allstate Fire and Casualty Co. ("Allstate") moves for an order compelling the adjudication of competing claims to the proceeds of an insurance policy it issued to Brian and Jodi Schindele. The motion has been fully briefed. As will become clear from the discussion relating to the motion at docket 32, this court is without jurisdiction to entertain the motion at docket 23.
At docket 32, Third-Party Defendants Dylan Schindele, Brian Schindele, and Jodie Schindele (collectively "the Schindeles") moved to dismiss the Third-Party Complaint filed by Scott Purkey and Mary-Jean Jones Purkey (collectively "the Purkeys"). The motion is supported by a memorandum at docket 33. Allstate filed a non-opposition at docket 35. The Purkeys filed an opposition at docket 53. Defendant United States of America ("the United States") filed its amended opposition at docket 54. The Schindeles filed a reply to the United States' opposition at docket 57. The Schindeles filed a reply to the Purkeys' opposition at docket 58. Oral argument was not requested and would not be of aid to the court.
This lawsuit arises out of an automobile accident. On July 23, 2017, Dylan Schindele, who is the son of Brian Schindele and Jodie Schindele, was driving one of his parents' automobiles North on the Parks Highway. The Purkeys were traveling South on the Parks Highway on a motorcycle. There was a collision which injured the Purkeys and damaged the motorcycle.
Dylan was an authorized driver on his parents Allstate insurance policy. The policy limits were $50,000 for each person injured and $50,000 for property damage. Within six months there had been communications between Allstate and the Purkey's lawyer, Yale Metzger, concerning a possible resolution of the Purkey's' claims against the Schindeles. From the materials provided to the court, it appears that the parties were discussing a complete release of all the Purkeys' claims in exchange for payment of Allstate's policy limits plus statutory add-ons. The parties' settlement efforts were complicated by the assertion of a property damage subrogation claim by Geico Insurance Co. and the discovery that the United States might also assert a claim for medical care provided by the Veterans' Administration.
Against that background, Allstate filed the lawsuit at bar. According to the Amended Complaint's First Cause of Action:
Allstate and the Schindeles are entitled to the following relief:
The Second Cause of Action asks to inter-plead the funds by depositing them in the court's registry. Thereafter, the funds would be distributed upon the entry of an order "fully protecting the Schindeles from the claims of all claimants and distributing the Stake to the appropriate claimants [and discharging Allstate] from any and all liability under the [insurance policy]."
The Third Cause of Action asks for a declaratory judgment that the Schindeles are "fully and finally released ad discharged from all claims of all claimants arising from the July 23, 2017, accident."
Of course, a complaint filed in federal court must set out "a short and plain statement of the grounds for the court's jurisdiction."
It will be noted that the complaint avers only federal question jurisdiction. It does not aver diversity jurisdiction. Perhaps Allstate's counsel concluded that the Schindeles were also real parties in interest whose citizenship would destroy complete diversity. Be that as it may, the only jurisdiction Allstate has pled is federal question jurisdiction.
The Purkeys filed a lawsuit in state court against Dylan Schindele on July 18, 2016, six months before the case at bar was filed.
The Schindeles' motion to dismiss the third-party claim is based on the proposition that the court lacks subject matter jurisdiction over that claim. The Purkey's contend that the court can exercise supplemental jurisdiction over their third-party claim pursuant to 28 U.S.C. § 1367. Of course, supplemental jurisdiction may only be exercised if the court has jurisdiction over another of the claims being litigated. The Purkeys do not address the proposition that the court may lack jurisdiction over Allstate's claims.
The United States does address the court's jurisdiction over Allstate's claims: "The basis for 28 U.S.C. § 1331 jurisdiction is the United States' claims to the funds under the FMCRA — claims that exist by operation of law, that predate the filing of this action, that Allstate lists in it complaint, that [the Purkeys] list in their Third-Party Complaint, and that the parties list and describe throughout the pleadings in this matter."
The Schindeles rely on Becote v. South Carolina State Highway Dept.
Whatever the significance of Becote, the fact that the United States elected to pursue its FMCRA rights in state court dooms the argument that because Allstate named the United States as a defendant in this case, federal question jurisdiction exists. No case has been cited to support the proposition that the United States may pursue its FMCRA rights in two courts. This is not surprising considering the provisions of that law.
FMCRA creates a right of subrogation allowing the United States to pursue a third-party or that party's insurer to recover the value of medical care provided to a person injured by the third party.
For the reasons above, this court lacks subject matter jurisdiction over this case. Accordingly, the motion at docket 32 is GRANTED. Furthermore, in the absence of subject matter jurisdiction, the court cannot entertain Allstate's motion at docket 23, which is therefore DENIED.
While it is not clear that Allstate can amend its complaint to aver a proper ground of subject matter jurisdiction, Allstate is afforded an opportunity to file a Second Amended Complaint. Allstate must file its Second Amended Complaint within 14 days. If it does not do so, this case will be dismissed.