United States District Court, S.D. Alabama, Northern Division
ORDER
WILLIAM H. STEELE UNITED STATES DISTRICT JUDGE
This
matter comes before the Court on Plaintiff's Motion to
Remand (doc. 4). The Motion has been briefed and is now ripe.
I.
Background.
Plaintiff,
Southern Tank Leasing, Inc., brought this action in the
Circuit Court of Marengo County, Alabama, against defendants,
K & M Express, Inc. and Robin H. Burrow. In the two-page
Complaint (doc. 1-2), Southern Tank alleges that it entered
into a Master Lease Agreement (the “Agreement”)
with K & M, pursuant to which K & M leased tank
trailers from Southern Tank. The Complaint further alleges
that defendant Burrow executed a Personal Guaranty in
Southern Tank's favor to guarantee full payment of all
amounts owed by K & M under the Agreement. According to
the Complaint, K & M breached the Agreement by failing to
pay for repair costs, labor and equipment (namely, tank
trailer tires), and Burrow breached the Guaranty by failing
to pay K & M's debts as promised. On that basis,
Southern Tank asserts a claim against K & M for breach of
the Agreement, and a claim against Burrow for breach of the
Guaranty. For each claim, the Complaint includes an ad
damnum clause, stating that Southern Tank demands
judgment in the amount of $74, 500. The Count Two clause
further states that Southern Tank demands “specifically
less than Seventy-Five Thousand and No/100s ($75, 000.00)
Dollars.”
Defendants
timely removed this action to this District Court on January
30, 2019. (See doc. 1.) In their Notice of Removal,
defendants indicated that federal jurisdiction is proper
pursuant to the diversity provisions of 28 U.S.C. §
1332. In that regard, defendants showed that Southern Tank is
an Alabama citizen for diversity purposes, and that both K
& M and Burrow are Arkansas citizens for diversity
purposes. As to amount in controversy, the Notice of Removal
stated that notwithstanding the demands specified in the
Complaint, “the amount in controversy well exceeds $75,
000” (doc. 1, ¶ 7), as reflected by a collection
of invoices that Southern Tank sent to K & M on September
11, 2018, reflecting a total invoice balance of $126, 231.05.
(Doc. 1, Exh. 6, at 47.)
Plaintiff
has now filed a Motion to Remand for lack of subject matter
jurisdiction, arguing that the necessary
amount-in-controversy threshold is not satisfied. In support
of that Motion, Southern Tank has filed the Affidavit of
Daniel C. Duke, who avers that as an authorized
representative of Southern Tank, he “stipulates to this
Honorable Court that said amount claimed is less than
Seventy-Four Thousand Five and No/100s ($74, 500.00)
Dollars.” (Doc. 4-1.) In the course of briefing the
Motion to Remand, plaintiff's counsel has repeatedly
“relay[ed] to this Court as an officer of this Court
that the amount in controversy is less than Seventy-Four
Thousand Five Hundred and No/100s ($74, 500.00)
Dollars.” (Doc. 17, at 2.)
II.
Analysis.
“For
federal diversity jurisdiction to attach, all parties must be
completely diverse … and the amount in controversy
must exceed $75, 000.” Underwriters at Lloyd's,
London v. Osting-Schwinn, 613 F.3d 1079, 1085
(11th Cir. 2010) (citations omitted). As the
parties invoking federal jurisdiction, K & M and Burrow
bear the burden of satisfying the requirements of §
1332, including the requisite amount in controversy, by a
preponderance of the evidence. See Dudley v. Eli Lilly
and Co., 778 F.3d 909, 913 (11th Cir. 2014)
(“We have repeatedly held that the removing party bears
the burden of proof to establish by a preponderance of the
evidence that the amount in controversy exceeds the
jurisdictional minimum.”). To meet this burden, the
removing defendants are “not required to prove the
amount in controversy beyond all doubt or to banish all
uncertainty about it.” Pretka v. Kolter City Plaza
II, Inc., 608 F.3d 744, 754 (11th Cir. 2010).
Rather, the necessary jurisdictional showing is either that
it is “facially apparent from the pleading itself that
the amount in controversy exceeds the jurisdictional minimum,
” or that there is “additional evidence
demonstrating that removal is proper.” Roe v.
Michelin North America, Inc., 613 F.3d 1058, 1061
(11th Cir. 2010).
Here,
it is not facially apparent from the Complaint that the
amount in controversy exceeds the sum of $75, 000; to the
contrary, Southern Tank has taken pains to plead its breach-
of-contract claims in a manner demanding judgment only in the
amount of $74, 500. Accordingly, defendants must resort to
the “additional evidence” prong to establish the
jurisdictional amount in controversy. In this regard,
defendants point to (i) invoices and statements showing that
Southern Tank originally sought payment from K & M of
$126, 231.05; and (ii) pre-litigation settlement
negotiations, including Southern Tank's “last and
final offer” of $80, 000.
The
Court finds this evidence insufficient to carry Southern
Tank's burden of establishing subject matter
jurisdiction.[1] As an initial matter, it is a bedrock
principle that “plaintiffs are the master of the
complaint and are free to avoid federal jurisdiction.”
Scimone v. Carnival Corp., 720 F.3d 876, 882
(11th Cir. 2013) (citation and internal quotation
marks omitted). “As a general proposition, if plaintiff
wants to cap its damages recovery at an amount below that
which the pleadings might otherwise support, it is
plaintiff's prerogative to do so.” Land
Clearing Co. v. Navistar, Inc., 2012 WL 206171, *5 (S.D.
Ala. Jan. 24, 2012) (citations omitted). By stating in its
Complaint that it demands judgment only in the amount of $74,
500 and further averring via the Duke Affidavit that it is
stipulating to an amount claimed of less than $74, 500,
Southern Tank appears to be attempting to cap its recovery in
this manner, notwithstanding defendants' showing that the
evidence could plausibly support a higher damages award. If
Southern Tank wishes to claim less than it might otherwise be
entitled to receive, it has the right to do so.
In
response, defendants correctly observe that Alabama law does
not confine a plaintiff's potential recovery to the
amount demanded in the pleadings; rather, a jury may award
more if it sees fit to do so. See, e.g., General Motors
Acceptance Corp. v. Covington, 586 So.2d 178, 183 (Ala.
1991) (“an amount of recovery requested in the
pleadings does not prohibit the jury from awarding the
plaintiff what it views as an appropriate award based on the
facts and evidence presented”). Because Southern Tank
has not definitively pleaded or stipulated that it will not
accept an award greater than $75, 000, defendants argue, the
amount in controversy is not limited to the $74, 500 figure
recited in the Complaint and the Duke Affidavit, particularly
given that invoices submitted by Southern Tank prior to
litigation might support a higher damages
award.[2]
Southern
Tank counters this argument with clear representations of
counsel. In litigating the Motion to Remand, plaintiff's
counsel unambiguously represents to this Court that (i)
“the total debt claimed by the Plaintiff and against
the Defendants does not equal or exceed Seventy-Five Thousand
and No/100s ($75, 000.00) Dollars” (doc. 4, at 2); and
(ii) “Plaintiff again relays to this Court as an
officer of this Court that the amount in controversy is less
than Seventy-Four Thousand Five Hundred and No/100s ($74,
500.00) Dollars” (doc. 17, at 2). In the absence of
some reason to discredit such statements, courts in the
Eleventh Circuit generally defer to these sorts of valuation
representations by plaintiffs' attorneys in the §
1332 jurisdictional analysis. See, e.g., Burns v. Windsor
Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994)
(“So, plaintiff's claim, when it is specific and in
a pleading signed by a lawyer, deserves deference and a
presumption of truth. We will not assume - unless given
reason to do so - that plaintiff's counsel has falsely
represented, or simply does not appreciate, the value of his
client's case.”).[3]
Defendants
posit that plaintiff's counsel's representations are
not entitled to deference or a presumption of truth in this
case for two reasons. First, defendants point out that the
amount in controversy must be measured as of the date of
removal, and that post-removal developments cannot divest the
court of jurisdiction that properly existed as of the date of
removal. See, e.g., Adventure Outdoors, Inc. v.
Bloomberg, 552 F.3d 1290, 1294-95 (11th Cir.
2008) (“The existence of federal jurisdiction is tested
at the time of removal.”); Leonard v. Enterprise
Rent a Car, 279 F.3d 967, 972 (11th Cir.
2002) (“we note that for purposes of this challenge ...
the critical time is the date of removal.... If jurisdiction
was proper at that date, subsequent events, even the loss of
the required amount in controversy, will not operate to
divest the court of jurisdiction.”); Poore v.
American-Amicable Life Ins. Co. of Texas, 218 F.3d 1287,
1291 (11th Cir. 2000) (“events occurring
after removal which may reduce the damages recoverable below
the amount in controversy requirement do not oust the
district court's jurisdiction”). Second, defendants
assert that Southern Tank's counsel's representations
about valuation are unworthy of credence because (i) Southern
Tank's own invoices show that it demanded payment of more
than $126, 000 and (ii) plaintiff's last and final
settlement offer was $80, 000.
After
careful consideration, the Court finds that defendants'
attempts to discredit plaintiff's counsel's valuation
representations are unpersuasive. With regard to timing, the
law is clear that post-removal developments are properly
considered where they shed light on the amount in controversy
at the time of removal. See Pretka, 608 F.3d at
772-73; Sierminski v. Transouth Financial Corp., 216
F.3d 945, 949 (11th Cir. 2000). “[W]hat is
prohibited are post-removal changes in the amount in
controversy, not post-removal clarifications of the amount
that was in controversy at the moment of removal.”
Jackson v. Select Portfolio Servicing, Inc., 651
F.Supp.2d 1279, 1282 (S.D. Ala. 2009). Thus, where a
plaintiff comes forward after removal and clarifies (as
opposed to altering) facts bearing on the amount in
controversy, courts in this Circuit routinely accept such
evidence in determining whether § 1332 jurisdiction
existed at the moment of removal. The Duke Affidavit and
plaintiff's counsel's representations in the remand
filings are not properly characterized as altering
jurisdictional facts about the amount in controversy, but
rather as clarifying what Southern Tank intended when it
pleaded in the Complaint that it was demanding judgment in
the amount of $74, 500. Such clarification is entirely proper
and permissible. As for the invoices and settlement demands,
no legal principle requires a plaintiff to sue for the full
amount of unpaid invoices or the full amount of
pre-litigation settlement demands.[4] Southern Tank characterizes
the settlement negotiations as mere “posturing”
that “ended before said matter was turned over
to the undersigned attorney for litigation, ” and that
...