Insurance Company Unsuccessful at Seeking Dismissal Based on Jurisdictional Argument Regarding the “Amount in Controversy”

Earlier this month, a Michigan appellate court issued a written opinion in a case involving a woman who was struck by a vehicle that was insured by State Farm in which the alleged damages were just $25,000, but the actual damages were far greater. In the case, Hodge v. State Farm Mutual Automobile Insurance Company, the court determined that the plaintiff proved damages far greater than the $25,000 jurisdictional limit of the court where the case was filed.

Broken Taillight

The Facts of the Case

The plaintiff was struck by a car that was insured by State Farm. The plaintiff filed a lawsuit against State Farm, seeking compensation for her injuries. She filed the lawsuit in District Court, which has a jurisdictional limit of just $25,000. This means that the court cannot hear cases that seek damages in excess of $25,000.

In her pleadings, the plaintiff sought damages of just $25,000. However, she presented evidence indicating that the actual damages incurred were closer to $150,000. State Farm asked the court to prevent the plaintiff from introducing any evidence that would show her damages were greater than $25,000, since that is all that she would be able to recover in the court in which she filed the case.

The court denied State Farm’s request and allowed all of the evidence of the plaintiff’s injuries to come into trial. A jury awarded the woman approximately $85,000, and then the District Court reduced that figure to the jurisdictional limit of $25,000. State Farm filed an appeal, arguing that the court did not have jurisdiction – or the power to hear the case – because the woman pleaded damages in excess of the court’s $25,000 limit.

The court ruled in favor of the plaintiff, noting that it is the amount that is sought by the plaintiff, not the amount that could possibly be proven, that governs.

Jurisdictional Limits in Maryland Courts

In Maryland, the District Courts have exclusive jurisdiction over all cases seeking less than $5,000. This means that these courts are the only avenue for claims less than $5,000. For claims alleging damages between $5,000 and $30,000, both the District Courts and the Circuit Courts have jurisdiction, meaning a plaintiff can choose where to file her case. However, once the damages alleged reach $30,000 or above, the Circuit Courts have exclusive jurisdiction.

These distinctions are important to Maryland personal injury plaintiffs, since a simple misstep in filing can result in months of delay and unnecessary litigation costs, potentially limiting the total recovery available.

Have You Been Injured in a Maryland Auto Accident?

If you or a loved one has recently been injured in any kind of Maryland car accident, you may be entitled to monetary compensation based on the negligence of another party. However, it is likely that you will need to deal with at least one and potentially several insurance companies. Insurance companies are notoriously difficult to deal with, and they may attempt to take advantage of unrepresented accident victims. To make sure that you are treated fairly throughout the process, call 410-6543-3600 to speak with a dedicated Maryland personal injury attorney.

More Blog Posts:

Aggravation of Pre-Existing Injuries in Maryland Car Accidents, Maryland Car Accident Attorney Blog, published June 16, 2016.

Premises Liability Case Dismissed Based on Lack of Foreseeability of Harm, Maryland Car Accident Attorney Blog, published June 2, 2016.

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