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Ballantine v. BancorpSouth Bank

United States District Court, N.D. Alabama, Southern Division

January 10, 2018

PHYLLIS H. BALLANTINE, et al., Plaintiff,
BANCORPSOUTH BANK, et al. Defendants.



         Before the court is Phyllis H. Ballantine, Scott Preston Harrison, and Renee Dupont Harrison's (“Harrison Defendants”) “Motion to Alter, Amend, or Vacate” (doc. 5), filed in response to the portion of this court's Remand Order that denied an award of attorneys' fees and costs pursuant to 28 U.S.C. § 1447(c). (Doc. 4). After careful reconsideration of the applicable legal standard for requiring a removing party to pay attorney's fees and expenses, the court finds that it erred in denying the award. Therefore, the court will GRANT the motion, VACATE its Order denying fees and costs, and ORDER BancorpSouth to pay the just costs and actual expenses the Harrison Defendants incurred in filing their Motion to Remand this case to state court.


         Whether to grant a motion to reconsider under Federal Rule of Civil Procedure 59(e) or 60(b) is within the discretion of the trial court. See Smith v. Casey, 741 F.3d 1236, 1241 (11th Cir. 2014). A court may relieve a party from an order for mistake, inadvertence, or any reason that justifies relief. See Fed. R. Civ. Pro. 60(b). A motion to reconsider “must demonstrate why the court should reconsider its prior decision and ‘set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision.'” Fidelity & Deposit of Maryland v. Am. Consertech, Inc., 2008 WL 4080270, at *1 (S.D. Ala. Aug. 28, 2008) (quoting Cover v. Wal-Mart Stores, Inc., 148 F.R.D. 294 (M.D. Fla. 1993)).

         Three grounds justify reconsideration of an order: (1) an intervening change in the law, (2) the availability of new evidence, and (3) the need to correct a clear error or manifest injustice. See, e.g., Sussman v. Salem, Saxon & Nielsen, P.A., 153 F.R.D. 689, 694 (M.D. Fla. 1994).


         For a district court to grant attorneys' fees and costs pursuant to 28 U.S.C. § 1447(c), the court must be convinced that the removing party lacked an “objectively reasonable basis” for the removal. Martin v. Franklin Capital Corp., 546 U.S. 132, 140-41 (2005). But the court may depart from this general rule when unusual circumstances exist, such as when “a plaintiff's delay in seeking remand or failure to disclose facts necessary to determine jurisdiction may affect the decision to award attorney's fees.” Id.

         BancorpSouth removed this action from probate court pursuant to 28 U.S.C. § 1441(a) on the basis of diversity jurisdiction. The Harrison Defendants argued, and this court agreed, that BancorpSouth removed the case more than a year after the state court action began, and thus this court did not have subject matter jurisdiction over the case. BancorpSouth based its removal solely on the theory that the Harrison Defendants' counterclaims and cross claims were a brand new “lawsuit, ” separate from what it considered to be the “administrative proceeding” in which BancorpSouth filed its petition in the probate court. BancorpSouth's theory would not only buy it more time to remove the case, but also establish BancorpSouth as the defendant in the action-therefore allowing it to remove. Thus, the court's decision regarding the Harrison Defendants' request for fees and costs turns on whether Bancorpsouth's theory was objectively reasonable, and if it was not, whether unusual circumstances justify denying the award of fees. A. Whether BancorpSouth's Removal was Objectively Reasonable

         In its Notice of Removal, BancorpSouth stated it was removing a matter that was a completely separate action from that which had been ongoing in the probate court since 2007, and separate from its own Petition for Final Settlement, filed in March 2017. (Doc. 1 at 3). BancorpSouth asserted the Harrison Defendants' filing entitled “Verified Counterclaims and Crossclaims” (doc. 1-1 at 92) in the probate court was actually the original complaint in this new action. (Doc. 1 at 2-3, n.2). BancorpSouth also stated the ongoing action in the probate court was an “administrative proceeding” rather than a judicial proceeding. However, as explained in its Remand Order, this court rejected BancorpSouth's procedural understanding of the case and found that BancorpSouth's position conflicts with Alabama law.

         Alabama clearly recognizes petitions for settlements of trusts as judicial proceedings and allows parties to file counterclaims and cross claims in response to them when appropriate. See Regions Bank v. Reed, 60 So.3d 868 (Ala. 2010) (holding claims against investment advisor relating to trusts subject of final-settlement action must be brought in probate court where the final-settlement petition was the first filed action); Neal v. Neal, 856 So.2d 766 (Ala. 2002) (recognizing party's counterclaim and cross claim against petition for partial settlement of trust). Thus, the Harrison Defendants filed their counterclaims and cross-claims in a judicial proceeding that has been ongoing since 2007, and in a proceeding to which BancorpSouth has been a party at least since it filed a Petition for Final Settlement in April 2017.

         The only way BancorpSouth could have reasonably believed that this case was removable in August 2017-over a year from the time the proceeding began and some four months after BancorpSouth filed its petition-would be if it understood that the Harrison Defendants' filing of counterclaims in the probate court actually constituted a brand new lawsuit. But such a theory has no basis in the law.

         A brief survey of Alabama law clearly reveals that the Harrison Defendants' filing did not initiate a new judicial proceeding, but was a responsive pleading for counterclaims and cross-claims in the same lawsuit. BancorpSouth's statement that the Harrison Defendants' probate filing was actually the “original complaint” in a new lawsuit is unreasonable in light of the cases cited above. The ongoing action in the Probate Court of Jefferson County was not an administrative proceeding, and the Harrison Defendants' counterclaims did not somehow transform the non-removable action into a removable one. Given the clarity of the relevant case law on this issue and the well-established rules of removal, this court cannot conclude that BancorpSouth's removal was objectively reasonable.

         Now, BancorpSouth argues it had an objectively reasonable basis for removal because “any procedural hurdles to removal were waivable or curable via the court's exercise of its authority to re-align parties.” (Doc. 7 at 4). But in its Notice of Removal, BancorpSouth never mentioned anything about realignment. Instead, it stated “Plaintiffs Phyllis H. Ballantine, Scott Preston Harrison, and Renee Dupont Harrison, on July 25, 2017, commenced a civil action against [BancorpSouth] in the Probate Court of Jefferson County.” (Doc. 1 at 3). Then, in a footnote, BancorpSouth provided: “Plaintiffs styled their lawsuit as ‘Verified Counterclaims and Cross-claims.' However, no original claim to counter nor co-party to cross-claim exist. Plaintiffs' filing is the original complaint in this action and the first pleading.” (Doc. 1 at 3, n.2).

         BancorpSouth clearly represented to this court that it understood the Harrison Defendants' counterclaims to be the first pleading in a brand new lawsuit. BancorpSouth removed the case under the erroneous theory that the Harrison Defendants were the true plaintiffs in the action, and “used an administrative proceeding for which they were not a party as a vehicle to commence a lawsuit.” BancorpSouth simply declared the Harrison Defendants were actually the plaintiffs in the probate court, and removed the case based on that theory that was not founded on any case law or statutory authority. To the contrary, Alabama law is clear that a petition for final settlement initiates a judicial ...

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