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Country Mutual Insurance Company v. Decker

United States District Court, W.D. Kentucky, Paducah

July 11, 2018




         This matter is before the Court on a Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), [R. 21], by the United States Department of Health and Human Services for Medicare and Medicaid Services (“CMS”). Responses were filed by Defendants Carl Heisner, Larry Trovillion, and Mary Trovillion, [R. 26]; Plaintiff Country Mutual Insurance Company (“Country Mutual”), [R. 36]; and Defendant Viola Heisner, [R. 37]. This matter is now ripe for adjudication. For the reasons stated herein, CMS's Motion to Dismiss, [R. 21], is GRANTED.


         The factual allegations as set out in the Amended Interpleader Complaint, [R. 1-1], and taken as true are as follows.[1] On or about August 13, 2016, a motor vehicle accident occurred involving vehicles driven by Viola Heisner and Edward Decker, [R. 1-1 at 3 (Amended Interpleader Complaint). There were three passengers riding in the car with Viola Heisner: Carl Heisner, Larry Trovillion, and Mary Trovillion. [Id. at 4.]

         On or around February 19, 2018, Country Mutual brought an action for interpleader against Edward Decker, Viola Heisner, Carl Heisner, Larry Trovillion, Mary Trovillion, and CMS in McCracken Circuit Court. [R. 1-1 at 3-7.] On April 6, 2018, CMS removed the action to this Court pursuant to 28 U.S.C. §§ 1441, 1442. [R. 1 (Notice of Removal).] On May 8, 2018, CMS filed the Motion to Dismiss that is currently before the Court. [R. 21 (CMS Motion to Dismiss).]


         Pursuant to Federal Rule of Civil Procedure 12(b)(1), a party may assert by motion the defense of “lack of subject-matter jurisdiction.” Fed.R.Civ.P. 12(b)(1). “A Rule 12(b)(1) motion can either attack the claim of jurisdiction on its face, in which case all allegations of the plaintiff must be considered as true, or it can attack the factual basis for jurisdiction, in which case the trial court must weigh the evidence and the plaintiff bears the burden of proving that jurisdiction exists.” DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004). Because the parties here do not request that the Court make any factual determinations in ruling on the motion to dismiss, but rather dispute only the sufficiency of Country Mutual's complaint, the Court “will treat this as a ‘facial' 12(b)(1) motion.” Id. “A facial attack on the subject-matter jurisdiction alleged in the complaint questions merely the sufficiency of the pleading.” Gentek Bldg. Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007). “If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed.R.Civ.P. 12(h)(3); see also Bauer v. RBX Indus. Inc., 368 F.3d 569 (6th Cir. 2004).

         A defendant may also move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To that end, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In order to survive a motion to dismiss under Rule 12(b)(6), a party must “plead enough ‘factual matter' to raise a ‘plausible' inference of wrongdoing.” 16630 Southfield Ltd. P'ship v. Flagstar Bank, F.S.B., 727 F.3d 502, 504 (6th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). However, “[a] motion under Fed.R.Civ.P. 12(b)(1) questioning subject matter jurisdiction must be considered before other challenges since the court must find jurisdiction before determining the validity of a claim.” Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445, 450 (6th Cir. 1988) (citing Bell v. Hood, 327 U.S. 678, 682 (1946)).


         CMS moves the Court to dismiss it from the current action on two grounds. First, CMS argues that Country Mutual has not alleged that CMS waived its sovereign immunity. [R. 21 at 6.] Second, CMS asserts that no party to this action has exhausted its administrative remedies pursuant to 42 U.S.C. § 405(g). The Court will address each argument in turn. [Id. at 7.]

         A. Sovereign Immunity

         CMS asserts that Country Mutual's claims against it should be dismissed due to Country Mutual's failure to demonstrate a waiver of sovereign immunity. [Id. at 6.] There were three responses to CMS's Motion to Dismiss. First, Defendants Carl Heisner, Larry Trovillion, and Mary Trovillion respond that they asserted no claims against CMS and, therefore, have no objection to the dismissal of claims against CMS. [R. 26 at 1 (Heisner and Trovillion Response).] However, the defendants object to the dismissal or remand of the remaining claims to state court prior to Pekin Insurance answering Larry Trovillion and Mary Trovillion's Third Party Complaints, [R. 43, 44]. [R. 26 at 1.] Second, in Defendant Country Mutual's Response, Country Mutual requested the Court enter an order granting it leave to deposit funds or, alternatively, decree in an order granting CMS's Motion to Dismiss that “Country Mutual has no ongoing obligation to CMS once it deposits its policy proceeds in this matter.” [R. 36 at 2.] Lastly, Defendant Viola Heisner responded that she has no objection to CMS's Motion to Dismiss. [R. 37 at 1.] The Court agrees with CMS, finding that Country Mutual failed to demonstrate a waiver of sovereign immunity.

         “‘The United States, as sovereign, is immune from suit save as it consents to be sued . . ..' This principle extends to agencies of the United States as well, which are immune absent a showing of a waiver of sovereign immunity.” Whittle v. United States, 7 F.3d 1259, 1262 (6th Cir. 1993) (internal citations omitted). “A waiver of the Federal Government's sovereign immunity must be unequivocally expressed in statutory text, and will not be implied.” Lane v. Pena, 518 U.S. 187, 192 (1996) (internal citations omitted). Furthermore, “waiver of the Government's sovereign immunity will be strictly construed, in terms of its scope, in favor of the sovereign.” Id. Here, Country Mutual failed to allege that the Secretary of CMS waived sovereign immunity. [See generally R. 1-1.] Thus, CMS's Motion to Dismiss, as it relies on Country Mutual's failure to demonstrate a waiver of sovereign immunity, is GRANTED. See Black v. Doe, No. 11-25-DLB-JGW, 2011 WL 1642540, at *3 (E.D. Ky. May 2, 2011) (holding that defendant Medicare should be dismissed from the lawsuit when plaintiff failed to allege that the Secretary waived sovereign immunity); Madden v. Wagers, No. 08-318-GFVT, 2009 WL 10676841, at *3 (E.D. Ky. Jan. 12, 2009) (same); Truett v. Bowman, 288 F.Supp.2d 909, 911 (W.D. Tenn. 2003) (granting the Secretary's motion to dismiss due to defendants' failure to demonstrate sovereign immunity was waived).

         B. ...

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