                                                                                                                           Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-15-2008

Liggon-Redding v. Amer Securities Ins
Precedential or Non-Precedential: Non-Precedential

Docket No. 06-1764




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Recommended Citation
"Liggon-Redding v. Amer Securities Ins" (2008). 2008 Decisions. Paper 844.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/844


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                                                  NOT PRECEDENTIAL


         UNITED STATES COURT OF APPEALS
              FOR THE THIRD CIRCUIT


                       No. 06-1764


            ELIZABETH LIGGON-REDDING,

                                  Appellant

                             v.

    AMERICAN SECURITIES INSURANCE COMPANY;
       NATIONAL CITY MORTGAGE COMPANY



        Appeal from the United States District Court
          for the Middle District of Pennsylvania
           (D.C. Civil Action No. 06-cv-00227)
        District Judge: Honorable James M. Munley


         Submitted Under Third Circuit LAR 34.1(a)
                       June 9, 2008

Before: AMBRO, CHAGARES and GREENBERG, Circuit Judges


               (Opinion filed July 15, 2008)




                        OPINION
AMBRO, Circuit Judge

       Elizabeth Liggon-Redding challenges the District Court’s dismissal of her

Complaint for lack of subject matter jurisdiction. We vacate the Court’s order and

remand the case for further proceedings.

       Liggon-Redding alleges the following in her Complaint. Her home was destroyed

in a fire, and her insurance company (American Securities Insurance Company, or

“American”), which had issued a policy in the amount of $149,000, determined that the

home could be repaired for $39,281.23. Her mortgage company (National City

Mortgage, or “National”) agreed to accept the $39,281.23 payment in satisfaction of the

balance due on the mortgage. American then determined that the home was a total loss

and issued two checks to compensate for the loss in the combined amount of $48,711.26.

American, however, sent both checks to National rather than to Liggon-Redding.

Alleging that American should have paid her because National had already accepted the

repair payment in total satisfaction of the mortgage, Liggon-Redding filed suit pro se in

the District Court, demanding (1) that National give her all amounts paid to it in excess of

the initial $39,281.23 payment and (2) that American give her the remainder owed to her

under her $149,000 policy (approximately $60,000 after the payments to the mortgage

company are deducted).

       Before the Summons and Complaint were served on American and National, the

District Court dismissed the Complaint sua sponte for lack of diversity subject matter

jurisdiction. It ruled that the Complaint contained two separate claims against two

                                             2
separate defendants and that neither of the amounts in controversy, on its own, exceeded

the $75,000 amount-in-controversy requirement for federal diversity jurisdiction.1 After

concluding that the amounts could not be aggregated, the District Court dismissed the

Complaint and did not grant leave to amend. Liggon-Redding moved for reconsideration,

but the Court denied the motion. Liggon-Redding then filed this appeal, in which neither

American nor National is participating as an appellee.2

         A district court generally should not dismiss a suit prior to service of process. See

Urbano v. Calissi, 353 F.2d 196, 197 (3d Cir. 1965). Moreover, it should generally

permit amendment of a complaint that is vulnerable to dismissal where a responsive

pleading has not been filed. See Alston v. Parker, 363 F.3d 229, 235–36 (3d Cir. 2004).

         We perceive no exception to these general rules that would apply here. We cannot

conclude that what the District Court did was “harmless,” see Fed. R. Civ. P. 61

(providing that a harmless error will not provide a ground for disturbing a court order), or

that amendment of the Complaint would be “futile,” see Alston, 363 F.3d at 235 (listing

futility as a ground for refusing to grant leave to amend). Without expressing an opinion

on whether the District Court has subject matter jurisdiction (or could have jurisdiction

were the Complaint phrased differently), we note that Liggon-Redding has a colorable

argument that it does. There is a dearth of case law in our Court on aggregation of claims

   1
    In her Complaint, Liggon-Redding listed herself as “homeless” (with a P.O. box in
New Jersey) she alleged that American is a resident of Florida and National is a resident
of Ohio.
   2
       We exercise appellate jurisdiction under 28 U.S.C. § 1291.
                                               3
against multiple defendants, and in any event Liggon-Redding claims to have suffered

well over $75,000 in damages as a result of underpayments to her and diversion of

proceeds to National—damages that one could conceivably attribute to a single defendant

in this case.

       Accordingly, we vacate the District Court’s order and remand the case for further

proceedings. The Court should direct Liggon-Redding to amend her Complaint to state

her claims against each defendant with precision, after which the Complaint and

Summons should be served on each defendant. Finally, we emphasize that nothing in this

opinion should be read to preclude either National or American from moving to dismiss

for lack of subject matter jurisdiction or any other reason.




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