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Perkins v. Merion Realty Services, LLC

United States District Court, M.D. Alabama, Northern Division

March 6, 2015

KEVIN PERKINS, et al., Plaintiffs,
v.
MERION REALTY SERVICES, LLC, et al., Defendants.

MEMORANDUM OPINION AND ORDER

W. KEITH WATKINS, Chief District Judge.

Before the court is Plaintiffs' motion to remand. (Doc. # 4.) Defendants filed a response in opposition. (Doc. # 7.) For the reasons that follow, the motion to remand is due to be granted.

I. STANDARD OF REVIEW

Federal courts have a strict duty to exercise the jurisdiction conferred on them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). At the same time, "[f]ederal courts are courts of limited jurisdiction." Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Hence, in actions removed from state court to federal court, federal courts must strictly construe removal statutes, resolve all doubts in favor of remand, and place the burden of establishing federal jurisdiction on the defendant. Miedema v. Maytag Corp., 450 F.3d 1322, 1328-30 (11th Cir. 2006).

II. DISCUSSION

Plaintiff Kevin Perkins, along with eleven other adults and thirteen children, filed this action in the Circuit Court of Montgomery County, Alabama. The complaint, sounding exclusively in state law, alleged claims of (1) breach of contract, (2) trespass, (3) conversion, and (4) civil conspiracy against Merion Realty Services, LLC; Merion Realty Management, LLC; Robert M. Dominy; Melissa Daughtery; and Sean Stanford (collectively, "Defendants"). Defendants removed the action, asserting diversity jurisdiction pursuant to 28 U.S.C. ยง 1332. Plaintiffs filed a motion to remand, contending that Defendants failed to show by a preponderance of the evidence that the amount in controversy exceeds $75, 000 as required for a federal court to exercise diversity jurisdiction.[1]

Plaintiffs' complaint alleges that the practices and conditions of the Three Fountains Apartment complex, and its successor, the Green Meadow Apartment complex, violated Defendants' contractual obligations to provide habitable conditions. Specifically, they contend that Defendants (1) refused to repair plumbing leaks permitting lower floor apartments to be flooded with waste water, (2) failed to inspect or repair electrical wiring resulting in shocks, smoking, and sparking from electrical outlets, and (3) failed to maintain or repair apartment units. The complaint also alleges that Plaintiffs' right to the enjoyment of the apartment units was abridged when Defendants or their agents changed the locks on units, effectively evicting tenants without judicial authority, and removed the personal property of leaseholders without permission or authority. Importantly, Plaintiffs do not specify the damages or compensation sought to make them whole. Rather, Plaintiffs demand judgment against Defendants, separately and severally, "for all compensatory and exemplary damages recoverable under Alabama law, plus costs and attorney fees." (Doc. # 1-1, at 15.)

When "a plaintiff makes an unspecified demand for damages in state court, a removing defendant must prove by a preponderance of the evidence that the amount in controversy more likely than not exceeds the... jurisdictional requirement.'" Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061 (11th Cir. 2010) (quoting Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1357 (11th Cir. 1996)). To meet its burden, the removing defendant may present additional evidence to establish that the amount in controversy exceeds $75, 000. Id. ("In some cases, [the removing defendant's] burden requires [it] to provide additional evidence demonstrating that removal is proper." (footnote and citation omitted)). Here, Defendants offer three pieces of evidence in support of their contention that the amount in controversy exceeds the jurisdictional requirement: (1) a pre-mediation settlement letter and a pro tanto settlement produced in related state causes of action; (2) Plaintiffs' complaint; and (3) Plaintiffs' claim for punitive damages.

1. The Pre-Mediation Settlement Letter and Pro Tanto Settlement

A settlement demand letter will not alone establish that the amount in controversy exceeds $75, 000, but "it counts for something." Burns v. Windsor Ins. Co., 31 F.3d 1092, 1097 (11th Cir. 1994). Because "[s]ettlement offers commonly reflect puffing and posturing, " they generally are "entitled to little weight in measuring the preponderance of the evidence." Jackson v. Select Portfolio Servicing, Inc., 651 F.Supp.2d 1279, 1281 (S.D. Ala. 2009) (citing Hall v. CSX Transp., Inc., No. 3:06-CV-37-WKW, 2006 WL 3313682, at *3 n.5 (M.D. Ala. Nov. 14, 2006)). A settlement offer will only be entitled to additional weight when it provides enough specific information to support the plaintiff's claim for damages to indicate that the offer is a reasonable assessment of the value of the plaintiff's claim. See Standridge v. Wal-Mart Stores, Inc., 945 F.Supp. 252, 256-57 (N.D.Ga. 1996) (citing Golden Apple Mgmt. Co. v. Geac Computers, Inc., 990 F.Supp. 1368 (M.D. Ala. 1998)).

The relevant portion of the settlement letter upon which Defendants seek to rely provides as follows:

We have taken into account the Defendants' concerns and, in the spirit of cooperation, we will modify our settlement demand. There are 12 children who were one-year-old or younger when they began living in the apartments. We are prepared to recommend settlement of those minors' claims for $5000.00 each subject to approval by the guardian ad litem and the court. The plaintiff will unilaterally reduce their demand to $190, 000.00 per plaintiff, a reduction of $35, 000.00 per plaintiff from the initial demand, which in light of Alabama case law and results in other mass injury cases is quite modest-especially under the facts of these cases.
We are currently evaluating approximately 30 additional claims (including 10 minors) against these defendants and plan to either resolve these claims or litigate them in a separate [fourth] suit.

(Doc. # 1, at 7.) Defendants argue that the letter establishes that Plaintiffs value the claim of ...


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