Stokes et al v. Clayton Homes, Inc. et al

Filing 11

MEMORANDUM OPINION AND ORDER that: (1) Plaintiffs' 4 Motion to Remand is GRANTED; (2) This case is REMANDED to the Circuit Court of Covington County, AL; and (3) The Clerk of the Court is DIRECTED to take appropriate steps to effect the remand. Signed by Honorable William Keith Watkins on 2/18/2009. (Attachments: # 1 Civil Appeals Checklist)(cb, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION W IL L I A M STOKES, et al., P l a i n t if f s , v. C L A Y T O N HOMES, et al., D e f e n d a n ts . ) ) ) ) ) ) ) ) )

CASE NO. 2:08-CV-806-WKW

M E M O R A N D U M OPINION AND ORDER B e f o re the court is a Motion to Remand (Doc. # 4), filed by Plaintiffs William Stokes a n d Kelli Burgess (collectively "Plaintiffs"). Defendants Clayton Homes, CMH Homes, Inc., a n d CMH Manufacturing, Inc. ("Defendants"), submitted a Response to Motion to Remand (D o c . # 7). For the reasons set forth below, the court finds that the Motion to Remand (Doc. # 4) is due to be granted. I . FACTS AND PROCEDURAL HISTORY O n or about August 9, 2008, Plaintiffs filed this lawsuit in the Circuit Court of C o v in g to n County, Alabama, alleging federal and state law claims arising from their p u rc h a se of a manufactured home from Defendants. (Compl. 4 (Ex. to Doc. # 5).) For each c la im ­ breach of express warranty, breach of implied warranties, violation of the MagnusonM o s s Warranty Act ("Act"), 15 U.S.C. § 2301, and three counts of negligence ­ Plaintiffs

se e k unspecified damages. (Compl. 5-8.) In particular, on their claim brought pursuant to th e Act, Plaintiffs seek damages for "loss of value, loss of use, and mental anguish" (Compl. ¶ 19), but do not quantify the value of these damages. On October 2, 2008, Defendant CMH Manufacturing, Inc., removed the case to f e d era l court on the basis of the complaint, predicating subject matter jurisdiction and re m o v a l on 28 U.S.C. §§ 1331, 1441, and 1446. (Notice Removal (Doc. # 5).) Specifically, C M H Manufacturing, Inc., alleges that the court may exercise federal question jurisdiction o v e r the complaint because one of the counts alleges a cause of action under the Act. (Notice R e m o v a l 3.) The other two named Defendants joined in the removal. (Notice Removal 3 ( E x . C).) Defendants contend that the $50,000 jurisdictional amount-in-controversy

re q u ire m e n t under the Act is satisfied. (Notice Removal 3.) Contesting this assertion, P lain tiff s filed the present Motion to Remand within thirty days of removal and, in support o f their motion, submitted the affidavit of their counsel, Thomas B. Albritton, Esq. ("Mr. A lb ritto n " ). (Albritton Aff. (Ex. A to Doc. # 4).) I I . STANDARD OF REVIEW " [ F ]e d e ra l courts have a strict duty to exercise the jurisdiction that is conferred upon th e m by Congress." Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). However, " [ f ]e d e ra l courts are courts of limited jurisdiction." Burns v. Windsor Ins. Co., 31 F.3d 1092, 1 0 9 5 (11th Cir. 1994). Thus, with respect to cases removed to this court pursuant to 28 U .S .C . § 1441, the law of the Eleventh Circuit favors remand where federal jurisdiction is

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n o t absolutely clear. "[R]emoval statutes are construed narrowly; where plaintiff and d e f en d a n t clash about jurisdiction, uncertainties are resolved in favor of remand." Burns, 31 F .3 d at 1095. I I I . DISCUSSION T h e Act implicates the court's federal question jurisdiction under 28 U.S.C. § 1331. T h e re is generally no congressionally-mandated amount in controversy requirement when s u b je c t matter jurisdiction is based upon a federal question stemming from a violation of the C o n s titu tio n , laws, or treaties of the United States. See § 1331. However, the Act specifies th a t unless there is more than $50,000 at issue, any action brought under the Act is to be h e a rd in state court. 15 U.S.C § 2310(d)(3)(B) ("No claim shall be cognizable [in federal d is tric t court] if the amount in controversy is less than the sum or value of $50,000 (exclusive o f interest[] and costs) computed on the basis of all claims to be determined in this suit."). A s grounds for their Motion to Remand, Plaintiffs contend that Defendants have not m e t their burden of establishing that the Act's $50,000 jurisdictional amount-in-controversy re q u ire m e n t is met. "When the complaint does not claim a specific amount of damages, `the re m o v in g defendant must prove by a preponderance of the evidence that the amount in c o n tro v e rs y exceeds the jurisdictional requirement.'" Allen v. Toyota Motor Sales, U.S.A., In c ., 155 F. App'x 480, 481 (11th Cir. 2005) (quoting Williams v. Best Buy Co., Inc., 269

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F .3 d 1316, 1319 (11th Cir. 2001)).1 For purposes of assessing the amount-in-controversy r e q u ir e m e n t under the Act, a court may consider "economic losses relating to the purchase o f the home[,] . . . as well as personal injury damages arising only from §§ 2304(a)(2), (a)(3), o r 2308," Grant v. Cavalier Mfg., Inc., 229 F. Supp. 2d 1332, 1336 (M.D. Ala. 2002) (citing H u g h e s v. Segal Enters., Inc., 627 F. Supp. 1231,1239 (W.D. Ark. 1986)). Under the Act, th e court cannot consider any damages sought for the state law claims. See Ansari v. Bella A u t o . Group, Inc., 145 F.3d 1270, 1272 (11th Cir. 1998) (per curiam) ("[T]he amount in c o n tro v e rs y for purposes of Act § 2310(d)(3)(B) does not include damages flowing from any p en d en t state law claim brought by a plaintiff."). In their Notice of Removal, Defendants assert that the base price of the home at issue w a s $59,918.24, which alone satisfies the jurisdictional requirement of the Act (Notice R e m o v a l 3), but this would only be the correct measure of the amount in controversy if P la in tif f s indicated that they were seeking a refund of the purchase price of their home. P la in tif f s have made no such assertion.2

The Eleventh Circuit, albeit in an unpublished opinion, applied the preponderance-of-theevidence standard when evaluating whether the removing defendant had established that the Act's amount-in-controversy requirement was satisfied where the complaint contained unspecified damages, Allen, 155 F. App'x at 481; see also Anderson v. Lotus Cars USA, Inc., No. 8:06-cv-1944, 2007 WL 1229105 at *1 (M.D. Fla. Apr. 26, 2007) (same). No contrary argument having been advanced, this court shall do the same. If they had, it is not certain that they would recover more than $50,000, since the refund amount would be reduced by the value that Plaintiffs received from their use of the home. See Ready v. River Birch Homes, No. 07-0031-WS, 2007 WL 841740, at *4 (S.D. Ala. Mar. 15, 2007) (Regarding a mobile home purchased for $58,277.39, "Plaintiffs do not automatically, necessarily stand to gain $58,277.39 or more if they prevail on a claim for refund based upon breach of warranty.").
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N o t only have Plaintiffs not claimed a refund for the purchase price of their home, but th e y also have asserted that, "[w]hen they filed the [] Complaint, [they] did not intend to seek d a m a g e s in an amount that exceeds $49,999.00, exclusive of interest and costs, on the claims b ro u g h t pursuant to the . . . Act," (Albritton Aff. ¶ 2), and that they "will not seek nor will th e y accept, damages or a judgment [for violation of the Act] in an amount that exceeds $ 4 9 ,9 9 9 .0 0 " (Albritton Aff. ¶ 3). In response to this affidavit, Defendants argue that Plaintiffs' "post-removal" affidavit " c an n o t divest the [c]ourt of jurisdiction." (Resp. 2.) Defendants are correct that a plaintiff c a n n o t reduce his claim after removal to defeat federal court jurisdiction. (Resp. 4 (citing S t. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289-90 (1938).) Here, in the c o m p la in t, the amount of damages requested under the Act is unspecified, which makes the a m o u n t in controversy sufficiently unclear to deter the court from exercising jurisdiction.3 T h e affidavit serves only to clarify the amount in controversy by providing that, when the c o m p l ain t was filed, less than $49,999 was sought under the Act (Albritton Aff. ¶ 2), and th e re is no indication that the damages sought changed prior to the date when the action was re m o v e d . Cf. Hardy v. Jim Walter Homes, Inc., No. 06-0687-WS-B, 2007 WL 1889896, at * 3 n.6 (S.D. Ala. June 28, 2007) (noting that, "[u]nder firmly entrenched Circuit precedent, [ p o st-re m o v a l] affidavits are properly considered to clarify the amount in controversy at the

Under the well-pleaded complaint rule,"jurisdiction exists only when a federal question is affirmatively and distinctly present on the face of the plaintiffs' properly pled complaint." Ferrari v. Am. Home Products Corp., No. 02-CV-1300-CAP, 2002 WL 34459574 at *3 (citing Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 (1998).)

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tim e of removal" in diversity actions where damages sought in the complaint are u n s p e c if ie d ). On this record, the affidavit neither repudiates nor reduces the jurisdictional a m o u n t sought in the removed complaint. To the contrary, the court finds that the affidavit c la rif ie s that, at the time the complaint was removed, the amount in controversy was less than $ 5 0 ,0 0 0 . Accordingly, the court finds that Defendants' sole argument for rejecting the a f f i d a v i t is not persuasive and that Defendants have not met their burden of showing by a p re p o n d e ra n c e of the evidence that more than the jurisdictional amount under the Act has b e e n sought. Consequently, the court cannot exercise jurisdiction on the basis of federal q u e stio n jurisdiction. In their response, Defendants raise an additional and separate jurisdictional argument f o r why removal is appropriate. (Resp. 6.) Citing Mr. Albritton's affidavit, Defendants now c la im that there is more than $75,000 at issue on all claims, which is sufficient to invoke the c o u rt's diversity jurisdiction, see 28 U.S.C. § 1332.4 (Resp. 6.) Specifically, Defendants p o in t to Mr. Albritton's attestations that, while damages are capped under the Act (Albritton A f f . ¶ 2), the damages sought on the state law claims "exceed[] $50,000" (Albritton Aff. ¶ 3 ). (Resp. 6.) Defendants assert that § 1332's amount-in-controversy requirement is met by a d d in g together $49,999 (the amount Defendants say Plaintiffs seek under the Act) and $ 5 0 ,0 0 0 (the minimum amount Plaintiffs seek on their state law claims). (Resp. 6.) In other

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That there is complete diversity of citizenship between Plaintiffs and Defendants is not in dispute.

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w o rd s , Defendants assert that Mr. Albritton's affidavit provides an additional jurisdictional b a s is upon which to base removal. (Resp. 6.) A s s u m in g , without deciding, that Defendants properly raised a new and independent b a sis for removal in their responsive brief,5 the issue concerns the propriety of the removal b a se d upon diversity jurisdiction, which turns on the sufficiency of the evidence supporting th e amount in controversy presented by Plaintiffs' claims. When a plaintiff challenges removal pursuant to 28 U.S.C. § 1447(c) in a timely m o tio n to remand, the plaintiff is specifically challenging the propriety of removal itself on th e basis of either a procedural defect or lack of subject-matter jurisdiction.6 Lowery v. Ala. P o w e r Co., 483 F.3d 1184, 1213 & 1215 n.64 (11th Cir. 2007). In this case, the affidavit f ro m Mr. Albritton, see supra note 5, and the notice of removal constitute the universe of d o c u m e n ts that the court may consider. See Lowery, 483 F.3d at 1213-14. This evidence and th e notice of removal must "unambiguously establish federal jurisdiction." Id. at 1213 (e m p h a sis added); see also id. at 1213 n.63 ("[T]he documents received by the defendants

There is no challenge to the manner in which Defendants raise this alternative ground for removal. The sole basis for removal was predicated on federal question jurisdiction, but after receipt of Mr. Albritton's affidavit, Defendants asserted diversity jurisdiction as an additional ground for removal. See Lowery v. Ala. Power Co., 483 F.3d 1184, 1214 n.66 (11th Cir. 2007) ("[I]n some limited circumstances, a defendant may effectively amend a defective notice of removal upon receipt of additional evidence that supplements the earlier-filed notice. For example, such a situation might arise where, after filing an insufficient notice of removal but before remand is ordered, the defendant receives a paper from the plaintiff that would itself provide sufficient grounds for removal."). If the plaintiff challenges removal after the thirty-day period for a timely remand motion, the issue is no longer the propriety of removal, "but instead, whether subject matter jurisdiction exists at all." Lowery, 483 F.3d at 1214 n.64.
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m u s t contain an unambiguous statement that clearly establishes federal jurisdiction." (e m p h a s is added)). The jurisdictional amount must be "either stated clearly on the face of th e documents before the court, or readily deducible from them," Id. at 1211, or the case m u st be remanded. "[N]either the defendants nor the court may speculate in an attempt to m a k e up for the notice's failings." Id. at 1214-15. T h e two statements upon which Defendants rely in Mr. Albritton's affidavit ­ that no m o r e than $49,999 is sought for the claim under the Act, and that Plaintiffs seek at least $ 5 0 ,0 0 0 on their state law claims ­ do not clearly or unambiguously show that more than $ 7 5 ,0 0 0 is at issue in this case. (Albritton Aff. ¶ 3.) The court declines to impute meaning to these statements which Plaintiffs, as masters of their complaint, did not intend, by interpre tin g Plaintiffs' statements as an indication that they are seeking $99,999 or more ($ 4 9 ,9 9 9 under the Act and $50,000 or more under state law) in damages. First, Defendants a ss e r t that the affidavit represents that Plaintiffs "intend to seek damages in the amount of $ 4 9 ,9 9 9 pursuant to the [Act]." (Resp. 6.) That, however, is not what the affidavit says; it s a ys that "damages in an amount that exceeds $49,999" are not being sought. (Albritton Aff. ¶ 2.) The affidavit does not provide that Plaintiffs are seeking $49,999 under the Act, and n o th i n g less. Thus, the affidavit is ambiguous as to whether it is stating a maximum amount o f damages or merely declaring that the Act's $50,000 threshold has not been met and the am o u n t in controversy has not been unambigiously established, as required under Lowery, 4 8 3 F.3d at 1213 n.63. ("[T]he documents received by the defendants must contain an

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u n a m b ig io u s statement that clearly establishes federal jurisdiction."). Second, Defendants o m it reference to the attestation that "Plaintiffs only filed a claim under [the Act] for the p u rp o s e s of recovering attorney's fees." (Albritton Aff. ¶ 3.) In Ansari, the Eleventh Circuit h e ld that attorney's fees are costs within the meaning of § 2310(d)(3)(B), and are not in c l u d e d in the amount in controversy. 145 F.3d at 1271. Plaintiffs' attestation cuts against D e f en d a n ts ' argument that $49,999 is a plausible number to be used in the jurisdictional e q u a tio n above because Mr. Albritton's affidavit creates an ambiguity as to the amount in c o n t r o v e r s y. D e f e n d an ts simply have not satisfied their burden under Lowery of showing that § 1332's amount in controversy requirement is unambiguously met. Accordingly, the court c a n n o t exercise jurisdiction and must remand the case. I V . CONCLUSION F o r the foregoing reasons, it is ORDERED: 1. 2. 3. re m a n d . D O N E this 18th day of February, 2009. /s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE P la in tif f s ' Motion to Remand (Doc. # 4) is GRANTED. T h is case is REMANDED to the Circuit Court of Covington County, Alabama. T h e Clerk of the Court is DIRECTED to take appropriate steps to effect the

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