Century Surety Company v. Lion Real Estate Group, LLC

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
CENTURY SURETY COMPANY,
Plaintiff,
v.
LION 	REAL 	ESTATE 	GROUP, 	LLC
d/b/a AVERY APARTMENTS,
Defendants.
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No. 3:25-cv-00232
MEMORANDUM OPINION AND ORDER
The Declaratory Judgment Act—28 U.S.C. § 2201—permits courts to declare the rights of
interested parties, but only when subject matter jurisdiction independently exists. That means, for
diversity cases, complete diversity of citizenship and an amount in controversy exceeding $75,000.
28 U.S.C. § 1332(a). Here, Century Surety Company (“Century”) seeks a declaration that it owes
no duty to defend or indemnify Lion Real Estate Group, LLC (“Lion”) in an ongoing state-court
personal injury suit. 	But Century never alleged an amount in controversy, and it essentially
concedes as much. The Court must therefore grant Lion’s motion to dismiss (Doc. No. 11).
I. 	FACTUAL ALLEGATIONS AND BACKGROUND1
Century insures Lion under a commercial liability policy. 	(Doc. No. 1 ¶¶ 6-7). 	In May
2024, a resident of Lion’s apartment complex sued Lion in Davidson County Circuit Court,
alleging injuries from mold exposure. (Id. ¶ 8). Century seeks a declaration that it has no coverage
obligations for the ongoing state-court case. (Id. ¶¶ 10-15).
1 Unless noted otherwise, the Court draws the facts in this section from the Complaint (Doc. No. 1)
and assumes the truth of those allegations to rule on the motion. See Erickson v. Pardus, 551 U.S.
89, 94 (2007).
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II. 	LEGAL STANDARD
“When a motion [to dismiss] is based on more than one ground, the [C]ourt should consider
the Rule 12(b)(1) challenge first since, if it must dismiss the complaint for lack of subject matter
jurisdiction, the other defenses and objections become moot and need not be determined.” J.A. by
& through S.A. v. Williamson Cnty. Bd. of Educ., 731 F. Supp. 3d 938, 945 (M.D. Tenn. 2024).
When a defendant challenges subject matter jurisdiction, “the plaintiff has the burden of proving
jurisdiction in order to survive the motion.” Rogers v. Stratton Indus., Inc., 798 F.2d 913, 915 (6th
Cir. 1986).
“A Rule 12(b)(1) motion for lack of subject matter jurisdiction can challenge the
sufficiency of the pleading itself (facial attack) or the factual existence of subject matter
jurisdiction (factual attack).” 	Cartwright v. Garner, 751 F.3d 752, 759 (6th Cir. 2014) (citing
United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994)). A factual attack challenges the factual
existence of subject matter jurisdiction. Id. 	In the case of a factual attack, the Court has broad
discretion with respect to what evidence to consider in deciding whether subject matter jurisdiction
exists. 	Id. 	This may include evidence outside of the pleadings, and the Court may weigh the
evidence and determine the effect of that evidence on the court's authority to hear the case. 	Id.
Here, Lion makes a facial challenge, so the Court limits its consideration to the allegations of the
Complaint and assumes them to be true.
III. 	DISCUSSION
Lion advances several grounds for dismissal: (1) that Century lacks standing (Doc. No. 12
at 4-5), (2) that Century’s amount-in-controversy allegations are insufficient (id. at 5-7), (3) that
the Court should decline to exercise jurisdiction over this declaratory judgment action (id. at 7-
18), and (4) that Century failed to join a necessary “additional insured” under the policy (id. at 18-
20). The Court need only address Century’s diversity allegations, which fail.
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A. 	Century Has Not Established That the Amount in Controversy Exceeds $75,000
It is well-settled that the party asserting subject matter jurisdiction “bears the burden of
establishing that such jurisdiction exists.” Hale v. Morgan Stanley Smith Barney LLC, 982 F.3d
996, 997 (6th Cir. 2020). The Court “cannot assume that jurisdiction exists.” Chase Bank USA,
N.A. v. City of Cleveland, 695 F.3d 548, 557 (6th Cir. 2012). 	And it has “an independent
obligation to determine whether subject matter jurisdiction exists.” Max Arnold & Sons, LLC v.
W.L. Hailey & Co., 452 F.3d 494, 504 (6th Cir. 2006).
Diversity jurisdiction requires complete diversity among the parties and an amount in
controversy exceeding $75,000. 28 U.S.C. § 1332(a). The plaintiff must demonstrate a reasonable
probability that the amount-in-controversy requirement is satisfied. 	See Charvat v. EchoStar
Satellite, LLC, 630 F.3d 459, 462-63 (6th Cir. 2010). The amount in controversy alleged must be
plausible—i.e., the amount must be “factually or legally supported.” See Bey v. Ally Bank, Inc.,
No. 22-5273, 2022 WL 19765117, at *2 (6th Cir. Nov. 16, 2022).
Here, Century’s diversity allegations are plainly insufficient. The Complaint contains no
amount-in-controversy allegations and offers no facts about damages—the bare minimum to
invoke diversity jurisdiction. The attached state-court complaint, moreover, only alleges damages
“in excess of $25,000.” (Doc. No. 1-1 at 7). Century does not dispute this, instead characterizing
the problem as “technical” and saying it could be “cured through simple amendment.” (Doc. No.
13 at 2). It also requests “leave to amend” to cure the deficiency. (Id.). But Century could have
amended as of right under Rule 15(a)(1)(B) rather than opposing the motion at all. Indeed, Century
has been on notice of this issue since Lion moved to dismiss eleven months ago and still no motion
to amend is before the Court. Century has thus left the Court with no choice but to address this
threshold jurisdictional issue nearly a year into the case, while substantive questions about the
declaratory action go unresolved.
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B. 	The Court Cannot Reach the Discretionary Arguments
The parties devoted substantial briefing to whether the Court should decline to hear this
case under the factors in Grand Trunk W. R. Co. v. Consol. Rail Corp., 746 F.2d 323 (6th Cir.
1984). Those arguments may or may not have merit. But the Declaratory Judgment Act authorizes
relief only in “a case of actual controversy.” 	28 U.S.C. § 2201(a). 	Because Century has not
established jurisdiction, the Court cannot decide whether it should hear the declaratory action. Cf.
W. Bend Mut. Ins., Co. v. Wood Tree Serv., LLC, No. 3:24-CV-00766, 2025 WL 2210753, at *3
(M.D. Tenn. Aug. 4, 2025) (reasoning that district courts have discretion to decline to hear a
declaratory judgment action, but only after the court is satisfied that diversity jurisdiction exists).
IV. 	CONCLUSION
For the foregoing reasons, Lion’s motion to dismiss (Doc. No. 11) is GRANTED. This
case is DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction.
IT IS SO ORDERED.
____________________________________
WAVERLY D. CRENSHAW, JR.
UNITED STATES DISTRICT JUDGE
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