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Breland Homes, LLC v. Wrigley

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

April 3, 2019

BRELAND HOMES, LLC; SMART LIVING, LLC; CANAL ROAD, LLC; B&W LAND COMPANY, LLC; and OCEAN SPRINGS DEVELOPMENT, INC., Plaintiffs,
v.
RANDY WRIGLEY and RANDALL CORPORATION OF MISSISSIPPI, Defendants.

          MEMORANDUM OPINION

         This case originally was filed in the Circuit Court of Madison County, Alabama, [1] and subsequently removed here on the basis of the parties' diversity of citizenship. See 28 U.S.C. § 1332.[2] It now is before the court on plaintiffs' motion to remand, [3] plaintiffs' amended motion to remand, [4] and defendants' motion to dismiss or, in the alternative, to transfer venue.[5] The following opinion addresses the motions to remand.

         I. STANDARDS OF REVIEW

         Federal district courts are tribunals of limited jurisdiction, “‘empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,' and which have been entrusted to them by a jurisdictional grant authorized by Congress.” University of South Alabama v. The American Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)). Accordingly, an “Article III court must be sure of its own jurisdiction before getting to the merits” of any action. Ortiz v. Fiberboard Corp., 527 U.S. 815, 831 (1999) (citing Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 88-89 (1998)). A removing defendant bears the burden of proving that federal jurisdiction exists. See, e.g., Leonard v. Enterprise Rent A Car, 279 F.3d 967, 972 (11th Cir. 2002); Williams v. Best Buy Co., 269 F.3d 1316, 1319-20 (11th Cir. 2001).

         Removal statutes must be construed narrowly, and “all uncertainties as to removal jurisdiction are to be resolved in favor of remand.” Russell Corp. v. American Home Assurance Co., 264 F.3d 1040, 1050 (11th Cir. 2001) (citing Burns v. Windsor Insurance Co., 31 F.3d 1092, 1095 (11th Cir. 1994)). Most importantly, the court must focus upon jurisdictional facts alleged on the date the case was removed from state court. See, e.g., Burns, 31 F.3d at 1097 n.13 (“Jurisdictional facts are assessed on the basis of plaintiff's complaint as of the time of removal.”) (emphasis in original) (citations omitted).

         II. THE ALLEGATIONS OF PLAINTIFFS' COMPLAINT

         The state court action was commenced by five plaintiffs: (1) Breland Homes, LLC, a Delaware limited liability company with its principal place of business in Alabama; (2) Smart Living, LLC, a Delaware limited liability company with its principal place of business in Alabama; (3) Canal Road, LLC, a Delaware limited liability company with its principal place of business in Alabama; and (4) B & W Land Company, LLC, a Delaware limited liability company whose sole member and owner is (5) Ocean Springs Development, Inc., a Delaware corporation with its principal place of business in Mississippi.[6] The defendants are: (1) Randy Wrigley, an individual resident of Mississippi, and (2) Randall Corporation of Mississippi, a Mississippi Corporation with its principal place of business in Mississippi.[7]

         Breland Homes, LLC, is a homebuilding and development business that not only constructs homes, but also develops the subdivisions and residential lots on which the homes are constructed.[8] Smart Living, LLC, and Canal Road, LLC, are two limited liability companies that Breland Homes, LLC, uses in the residential lot development side of its business.[9] Breland Homes, LLC, also uses Smart Living, LLC, to further the commercial development side of its business.[10] The complaint refers to Breland Homes, LLC, Smart Living, LLC, and Canal Road, LLC, collectively, as “the Breland Parties.”

Over the course of forty years, Breland Homes, LLC, Smart Living, LLC, and Canal Road, LLC, have retained Randy Wrigley and his business, Randall Corporation, “to perform work in numerous residential and commercial development deals.”[11] Sometimes, Randy Wrigley and Louis Breland, the owner of all of the entities comprising “the Breland Parties, ” also acquired and developed property through two jointly-owned entities, plaintiffs B & W Land Company, LLC, and Ocean Springs Development, Inc.[12] More commonly, however, when Wrigley worked with the Breland Parties, neither he nor his company had an ownership interest in the project. Instead, Randy Wrigley and/or Randall Corporation contracted with the Breland Parties “to perform project management services in furtherance of the Breland Parties' development activities, ” and in exchange for a predetermined fee.[13] Those services included clearing and maintaining land, removing and disposing of trash and debris, coordinating surveying and engineering, and obtaining government permits.[14] Wrigley and Randall Corporation typically were compensated at the rate of $2, 000 for each finished lot. Sometimes a different rate was verbally negotiated, but none of the agreements between the Breland Parties and Wrigley and Randall Corporation were reduced to writing.[15]

         “Over the course of the parties' business relationship, the Breland Parties paid Defendants nearly $2, 000, 000.00 for their services.”[16]

Beginning on May 22, 2018, and on multiple occasions in the last two (2) months, Defendants have demanded that the Breland Parties pay them a total of more than $165, 000.00 for development services they purportedly performed in four (4) deals. The details for each of these demands, including the name of the project, the date of the demand and the amount claimed, are set forth in subparagraphs (a) through (d) below:
(a) On May 22, 2018, Defendants demanded that the Breland Parties pay $88, 500.00 for project management services purportedly performed in Phase 5 of Magnolia Springs subdivision in Harrison County, Mississippi. Defendants submitted a conclusory invoice in conjunction with this demand, which calculated the amount owed as a 25% draw against a total of $2, 000.00 per finished lot multiplied by 177 lots planned for Phase 5.
(b) On June 30, 2018, Defendants demanded that the Breland Parties pay $21, 000.00 for project management services purportedly performed in Phase 6 of Magnolia Springs subdivision in Harrison County, Mississippi. Defendants submitted this demand via email, calculating the amount owed as $300.00 per finished lot multiplied by 70 lots planned for Phase 6.
(c) On June 30, 2018, Defendants demanded that the Breland Parties pay $24, 000.00 for project management services purportedly performed over the course of ten (10) years on the Canal Road Commercial Tract adjacent to the Magnolia Springs subdivision in Harrison County, Mississippi. On July 12, 2018, Defendants emailed the Breland Parties a new demand in the form of an invoice for services performed on the Canal Road Commercial Tract, increasing the amount claimed to $30, 000.00 without explanation. Defendants' July 12th invoice expressly acknowledges that the substantial majority of their work on the Canal Road Commercial Tract was performed more than six (6) years ago. Defendants further concede that they allowed a decade to elapse before ever submitting a claim for payment, describing this July 12th invoice as their first and final invoice for work to date (project management) on the above referenced project.”
(d) On July 12, 2018, Defendants demanded that the Breland Parties pay $27, 000.00 for project management services purportedly performed since 2015 on the Safe Mini-Storage Property in Gulfport, Mississippi. Defendants submitted a conclusory invoice in conjunction with this demand, which did not provide any calculation or supporting documentation for the amount claimed.

         Doc. no. 1-1 (Complaint), at ¶ 21 (emphasis in original). The Breland Parties have requested defendants to provide documentation supporting the amounts claimed on these projects, but defendants have failed to do so.[17] The Breland Parties dispute the amounts claimed by defendants, because, “[a]mong other things, some of the services performed by Defendants were not authorized, requested or agreed to by the Breland Parties.”[18]

         Defendants have made additional demands for unspecified sums of money purportedly owed by the Breland Parties for development services performed in connection with five other Mississippi properties, but the Breland Parties deny owing those amounts as well.[19]

         Finally, plaintiffs allege that:

26. [Randy] Wrigley also claims an interest in a tenth property - Phases 2 and 3 of Talla point subdivision in Jackson County, Mississippi. On June 30, 2018, Wrigley demanded that the Breland Parties pay him 50 % of the profits from the impending sale of Phases 2 and 3 of Talla Point subdivision to an unrelated third-party buyer (“Buyer”).
27. Smart Living[, LLC] (not B & W Land [Company, LLC] or [Ocean Springs Development, Inc.]) currently owns Phase 2, and neither of Defendants has any equity interest in Smart Living[, LLC]. The Breland Parties estimate that meeting Wrigley's demand would require a payment of approximately $450, 000.00 of the sale proceeds to Wrigley.

         Doc. no. 1-1 (Complaint), at ¶¶ 26-27 (alterations supplied).

         Plaintiffs' complaint asserts two state law claims for declaratory judgment. In the first, the Breland Parties “request the Court to enter an Order and Judgment finding that they do not owe Defendants any amount” in connection with any of the properties for which defendants claim to have performed property management services; or, if the court should find that the Breland Parties do owe defendants some amount in connection with those properties, to determine the amount owed.[20]

         In the second claim, Smart Living, LLC, B & W Land Company, LLC, and its sole member and owner, Ocean Springs Development, Inc., “request the Court to enter an Order and Judgment finding that [Randy] Wrigley is not entitled to any share of the profits as a result of the sale of Talla Point Phases 2 and 3”; or, if the court should find that Wrigley is entitled to a share of the profits, to determine the amount owed.[21]

         Plaintiffs' complaint also asserts a state law claim for an accounting, alleging that:

42. The Breland Parties have paid Defendants nearly $2, 000, 000.00 for project management services rendered in connection with properties owned by the Breland Parties (and other entities owned by Breland), including, without limitation, certain of the nine (9) properties identified in paragraphs 21 through 24 above.[22]
43. Defendants demand more from the Breland Parties, maintaining that they have failed to pay Defendants all that is owed.
44. The exact amount which the Breland Parties may owe Defendants with respect to the Subject Properties, if any, is unknown to the Breland Parties and cannot be ascertained without an accounting of the financial records, expense reports, receipts, invoices and/or other documentation that Defendants contend support the amounts they claim.
45. The Breland Parties have repeatedly requested Defendants to provide an accounting as to all moneys they claim are owed by the Breland Parties, including financial records, expense reports, receipts, invoices and/or other documentation to support those claims.
46. Defendants have failed or refused, and continue to fail or refuse, to render such an accounting and provide the requested information, and the Breland Parties have no adequate remedy at law.

         Doc. no. 1-1 (Complaint), at ¶¶ 42-46 (footnote supplied).

         III. DEFENDANTS' NOTICE OF REMOVAL AND PLAINTIFFS' MOTIONS TO REMAND

         Defendants removed the state case here on August 23, 2018, asserting federal jurisdiction based upon satisfaction of the requirements of the diversity statute.[23] See 28 U.S.C. § 1332(a) (“The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between - (1) citizens of different States.”). An amended Notice of Removal was filed on September 19, 2018, asserting the same jurisdictional grounds.[24]

         It is apparent from plaintiffs' complaint that more than $75, 000 is in controversy. The jurisdictional problem is that two of the plaintiffs - B & W Land Company, LLC, a Delaware limited liability company whose sole member and owner is Ocean Springs Development, Inc., a Delaware corporation with its principal place of business in Mississippi - are alleged to be Mississippi residents, as are both of the defendants. See 28 U.S.C. § 1332(c)(1) (“[A] corporation shall be deemed to be a citizen of every State and foreign state by which it has been incprporated and of the State or foreign state where it has its principal place of business . . . .”) (alteration supplied); Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004) (“[A] limited liability company is a citizen of any state of which a member of the company is a citizen.”) (alteration supplied). Thus, it appears from the face of the complaint that the requirements of diversity jurisdiction have not been satisfied.

         Defendants argue, however, that B & W Land Company, LLC, and Ocean Springs Development, Inc., actually are ...


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