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May 5, 2003


The opinion of the court was delivered by: Denise Cote, United States District Judge


On December 7, 2001, Thomas R. Conzo ("Conzo") filed this action, alleging only one cause of action for breach of a disability insurance policy by defendant Allmerica Financial Life Insurance and Annuity Company ("Allmerica") based on its denial of Conzo's claim for disability benefits. Conzo seeks a declaratory judgment confirming his right to benefits under the terms of the policy. The defendant Allmerica has moved for summary judgment based on lack of subject matter jurisdiction and, alternatively, the failure by the plaintiff to establish that defendant breached the relevant insurance policy. The defendant argues that the plaintiff cannot satisfy the amount in controversy requirement under 28 U.S.C. § 1332 because the total value of the denied benefits to which Conzo would have been entitled at the time of the filing of the lawsuit is much less than $75,000. The defendant also argues that Conzo has not satisfied a condition precedent under the policy. For the reasons stated below, the motion for summary judgment is granted.


The following facts are as alleged by the plaintiff. On May 5, 1986, Allmerica issued Conzo a disability insurance policy that provides for the payment of disability benefits to Conzo in the event he becomes totally disabled due to injury or sickness. In the event that Conzo becomes totally disabled, he is entitled to a monthly benefit payment of $6,500, for as long as he is totally disabled, until the age of 65. Under the policy, the payment of these benefits begins 90 days after the date when the total disability begins.

On July 16, 2001, Conzo submitted a claim indicating that he had been unable to work at his job as a "day trader" since June 14 due to a stress induced emotional condition. Allmerica denied Conzo's claim on August 30, explaining that the medical reports submitted by Conzo did not sufficiently establish a total or permanent disability. Conzo filed the instant action on December 7, 2001.


Section 1332 of Title 28 provides that federal courts have diversity jurisdiction over "all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and when the action is between citizens of different States. . . ." 28 U.S.C. § 1332 (2002). A party invoking diversity jurisdiction "has the burden of proving that it appears to a `reasonable probability' that the claim is in excess of the statutory jurisdictional amount." Chase Manhattan Bank, N.A. v. American Nat'l Bank and Trust Co. of Chicago, 93 F.3d 1064, 1070 (2d Cir. 1996) (quoting Tongkook America, Inc. v. Shipton Sportswear Co., 14 F.3d 781, 784 (2d Cir. 1994)). The amount in controversy is determined at the commencement of the action. Id. Dismissal is justified only where it "`appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount.'" Id. (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)). The case may, however, be dismissed,

if, from the proofs, the court is satisfied to a [legal] certainty that the plaintiff never was entitled to recover [the] amount [claimed], and that his claim was therefore colorable for the purpose of conferring jurisdiction.
Chase, 93 F.3d at 1070 (citation omitted). Any doubt regarding the right of recovery "should be resolved . . . in favor of the subjective good faith of the plaintiff," id., and the "legal impossibility of recovery must be so certain as virtually to negate the plaintiff's good faith in asserting the claim," Tonghook, 14 F.3d at 785 (citation omitted).

The plaintiff cannot satisfy the amount in controversy requirement. Under the terms of the policy, Conzo would not have received his first monthly pay of $6,500 until approximately September 13, 2001, or ninety days after he first became unable to work. By the date of the commencement of the suit, December 7, Conzo would have only been entitled to, at most, three monthly payments totaling $19,500. The total value of the plaintiff's claim as of the date of the commencement of this action was well below the jurisdictional requirement of $75,000.

The plaintiff's argument that he may rely upon the accrual of withheld or denied benefits up to the date of trial or judgment clearly misconstrues the law. It is well established that, for an action based on a denied disability insurance claim, only the withheld benefits that have accrued up to the date of the commencement of the suit can be relied upon to satisfy the amount in controversy requirement. New York Life Ins. Co. v. Viglas, 297 U.S. 672, 678 (1936); Beaman v. Pacific Mutual Life Ins. Co., 369 F.2d 653, 655 (4th Cir. 1966); Keck v. Fidelity And Casualty Co., 359 F.2d 840, 841 (7th Cir. 1966); Berlly v. U.S. Life Ins. Co., No. 00 Civ. 1999 (HB), 2001 WL 40771, at *2 (S.D.N.Y. Jan. 16, 2001).

The plaintiff's argument that the value of the consequences of the litigation may be considered in the determining the amount in controversy is equally misplaced. A court may only consider the entire value of an insurance policy or other installment contract in its determination of the amount in controversy if the validity of the policy or contract itself is at issue. See, e.g., Beacon Constr. Co., Inc. v. Matco Elec. Co., 521 F.2d 392, 399 (2d Cir. 1975). The plaintiff has not alleged that the insurance policy is itself invalid or that the defendant has repudiated the policy. Indeed, the plaintiff has explicitly rejected such arguments and has assumed the continued validity of the contract. It is therefore clear to a legal certainty that the plaintiff has not met the amount in controversy requirement necessary to establish this Court's subject matter jurisdiction.*fn1


For the reasons stated, the defendant's motion for summary judgment is granted and the complaint is ...

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