Free v. Baker et al
MEMORANDUM OPINION AND ORDER is DENIED and that Defendant R&L Transportation, LLC, is DISMISSED as a party to this case. Signed by Honorable William Keith Watkins on 6/19/2009. (cb, )
IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION B IL L Y FREE, P la in tif f , v. J A M E S BAKER, et al., D e f e n d a n ts. ) ) ) ) ) ) ) ) )
CASE NO. 2:09-CV-26-WKW [WO]
M E M O R A N D U M OPINION AND ORDER B e f o r e the court is a Motion to Remand (Doc. # 8), filed by Plaintiff Billy Free (" F re e " ). Defendants James Baker, R+L Carriers Shared Services, LLC, and Greenwood M o to r Lines ("Defendants") submitted an Opposition to Motion to Remand. (Doc. # 13.) For the reasons set forth below, the court finds that the Motion to Remand is due to be d e n ie d . I . FACTS AND PROCEDURAL HISTORY O n or about December 8, 2008, Mr. Free filed this lawsuit in the Circuit Court of M o n tg o m e ry County, Alabama, against Defendants. The complaint relates to a motor vehicle c o l l is io n that occurred in April 2007 between a tractor-trailer operated by Mr. Free and a tra c to r- t ra ile r alleged to be under the ownership or control of Defendants. The four-count c o m p la in t sounds in negligence and wantonness. It asserts in Count One that Mr. Free " in c u rre d medical expenses, suffered back surgery, suffered physical and mental pain, [and] lo s t income/jobs because of his inability to work and will continue to suffer in the future."
(Compl. 3.) These allegations are incorporated into the remaining three counts, each of w h ic h requests both unspecified compensatory and punitive damages for Mr. Free's injuries. (Compl. 4-5.) Defendants removed the case on January 9, 2009, basing federal jurisdiction upon 2 8 U.S.C. §§ 1332 and 1441(a) & (b). (Notice Removal ¶¶ 15 & 16 (Doc. # 1).) Defendants a s s e rt that a detailed demand letter received by Defendants from Mr. Free requesting $ 6 5 0 ,0 0 0 in settlement funds satisfies the amount in controversy requirement. The demand le tte r is attached as an exhibit to the Notice of Removal. Defendants also assert that the citizenship of R&L Transportation, LLC, the only n o n -d iv e rse defendant, should not be considered for diversity purposes because it was f ra u d u le n tly joined. (Notice Removal ¶ 26.) In his Motion to Remand, Mr. Free does not a d d re s s whether R&L Transportation, LLC, is a fraudulently-joined defendant, but instead f o c u s e s on the amount in controversy. Mr. Free contends that the amount in controversy is n o t met, stating that the complaint invokes only the jurisdictional minimum for circuit courts in Alabama (which is an amount exceeding $10,000), but is otherwise silent as to the amount in controversy. (Mot. Remand ¶ 2 (Doc. # 8).) He also asserts that, "even though
D e f e n d a n ts suggest that [his] pre-suit settlement correspondence demands $650,000, [his] k n o w n out of pocket damages . . . are actually less than $45,000." (Mot. Remand ¶ 3.) Mr. F re e attaches affidavits supporting this contention.
II. STANDARD OF REVIEW F e d e ra l courts have a strict duty to exercise the jurisdiction conferred on them by C o n g re s s . Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). However, "[f]ederal c o u r t s are courts of limited jurisdiction." Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (1 1 th 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 not a b s o lu te ly clear. "[R]emoval statutes are construed narrowly; where plaintiff and defendant c la s h about jurisdiction, uncertainties are resolved in favor of remand." Id. I I I . DISCUSSION A. A m o u n t in Controversy
In his Motion to Remand, Mr. Free challenges the propriety of the removal on the g ro u n d that the jurisdictional amount in controversy requirement is not met. (Mot. Remand ¶ 9.) Federal district courts may exercise diversity jurisdiction over cases involving citizens o f different states where the amount in controversy, exclusive of interest and costs, exceeds $ 7 5 ,0 0 0 . 28 U.S.C. §§ 1332(a)-1332(b). The issue at this stage is the propriety of the removal. A defendant may base removal ju ris d ic tio n either (1) on "an initial pleading" or (2) at a later time, on "`an amended p le a d in g , motion, order or other paper.'" Lowery v. Ala. Power Co., 483 F.3d 1184, 1212 (1 1 th Cir. 2007) (citing 28 U.S.C. § 1446(b)), cert. denied, 128 S. Ct. 2877 (2008). In the
second scenario, the amended pleading, motion or other paper must have been "received" by th e defendant from the plaintiff. Id. at 1213 n.63. In Lowery, the court expressly noted that a demand letter establishing an amount in controversy exceeding $75,000 constitutes an " o th e r paper" upon which removal may be based. Id. at 1212 n.62; see also Bankhead v. Am. S u z u k i Motor Corp., 529 F. Supp. 2d 1329, 1333 (M.D. Ala. 2008) (A settlement letter can q u a lif y as "`other paper,' which under . . . § 1446(b) can serve as a basis for removal" and, w h e n part of the removing documents, can be "admissible evidence of the amount in c o n tro v e rsy at the time of removal." (citing Lowery, 483 F.3d at 1212 n.62)). If a plaintiff's challenge to a diversity-based removal is timely, the court is limited to re v ie w in g the documents presented at the time of removal. Lowery, 483 F.3d at 1213-14 (c itin g 28 U.S.C. § 1447(c)). Moreover, when the complaint alleges unspecified damages, th e removing defendant must establish the amount in controversy by a preponderance of the e v id e n c e , id. at 1208, but may not conduct post-removal discovery to do so. Therefore, the c o u rt is strictly tied to the notice of removal and its accompanying documents when e x a m in in g its jurisdiction. "[N]either the defendants nor the court may speculate in an a t t e m p t to make up for the notice's failings," id. at 1214-15, and unless the jurisdictional a m o u n t "is either stated clearly on the face of the [removal] documents before the court, or re a d ily deducible from them," id. at 1211, the case must be remanded. H e re , Defendants removed this action on the basis of a pre-suit settlement demand le tte r received from Mr. Free. For purposes of ascertaining the amount in controversy,
consideration of the pre-suit demand letter is permitted by Lowery. See 483 F.3d at 1212 n .6 2 . The issue is whether the demand letter written by Mr. Free's attorney establishes by a preponderance of the evidence that the amount sought in the complaint, although u n s p e c if ie d , is greater than $75,000. In the demand letter, Mr. Free seeks to recover the a m o u n t he has paid in medical bills, valued at "over $69,000," as well as lost wages, which h e has valued at $27,642.16 per year. (Notice Removal, Ex. B.) The demand letter states th a t Mr. Free will "settle this claim for $650,000." (Notice Removal, Ex. B.) This demand le tte r clearly establishes that $650,000 is at issue, and, notably, Mr. Free has not disputed the v a l i d ity of the amount of damages contained in the demand letter. ju ris d ic tio n a l amount, therefore, is met. In his Motion to Remand, however, Mr. Free argues that, although his "pre-suit s e ttle m e n t correspondence demands $650,000, the known out of pocket damages of Mr. Free a re actually less than $45,000," pointing to attached affidavits as support for this contention. (Mot. Remand ¶ 3.) Courts have considered post-removal affidavits that clarify the amount in controversy at the time of removal where the complaint is silent as to damages. See Hardy v . Jim Walter Homes, Inc., No. 06-0687-WS-B, 2007 WL 1889896, at *3 n. 6 (S.D. Ala. June 2 8 , 2007) (collecting cases). In the first affidavit, Doug Kitchens, the risk manager for Mr. F re e 's employer, states that Mr. Free has been paid a total of $44,899.23, consisting of w o rk e rs ' compensation benefits and medical bills, as a result of the accident at issue. (Mot. R e m a n d , Ex. A.) In the second affidavit, Mr. Free states that his medical bills have been paid The minimum
in full by his employer and that the amount of out-of-pocket expenses "that [he] can quantify a t this time" is limited to the $44,899.23 subrogation claim paid by his employer. (Mot. R e m a n d , Ex. B.) Mr. Free claims that, because $44,899.23 is less than the jurisdictional m in im u m , see 28 U.S.C. § 1332(a), the amount in controversy is not met. What neither of th e s e affidavits claims, however, is that the amount in controversy was $75,000 or less at th e time of removal.1 r a tio n a le . B. F r a u d u le n t Joinder The affidavits, therefore, cannot be considered under Hardy's
In the Notice of Removal, Defendants assert that there is complete diversity of parties w ith the exception of Defendant R&L Transportation, LLC, which they contend is f r a u d u l e n tly joined. (Notice Removal ¶ 5.) Fraudulent joinder is an exception to the re q u ire m e n t of complete diversity. Where a defendant shows that "there is no possibility the p la in tif f can establish a cause of action against the resident defendant," the plaintiff is said to have fraudulently joined the non-diverse defendant. Henderson v. Washington Nat. Ins. C o ., 454 F.3d 1278, 1281 (11th Cir. 2006) (citing Crowe v. Coleman, 113 F.3d 1536, 1538 (1 1 th Cir. 1997)). In such a situation, the federal court must dismiss the non-diverse d e f e n d a n t. See Florence v. Crescent Resources, LLC, 484 F.3d 1293, 1297 (11th Cir. 2007). Although when assessing fraudulent joinder courts may consider, in addition to the plaintiff's p le a d in g s, affidavits and deposition transcripts submitted by either party, Legg v. Wyeth, 428
The affidavits submitted address only the medical costs and lost wages, but say nothing of the compensatory and punitive damages sought in the complaint.
F.3d 1317, 1322 (11th Cir. 2005), "the jurisdictional inquiry must not subsume substantive d e te rm in a tio n ," Crowe, 113 F.3d at 1538 (internal quotation marks and citation omitted). In his complaint, Mr. Free asserts that R&L Transportation, LLC, has its principal p la c e of business in Jefferson County, Alabama (Compl. ¶ 5), but presents no information re g a r d i n g the citizenship of the members of the LLC. See Rolling Greens, MHP, L.P. v. C o m c a s t SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004) (holding that, for p u rp o s e s of assessing diversity of citizenship, "a limited liability company is a citizen of any s ta te of which a member of the company is a citizen"). Defendants contend that, regardless o f R&L Transportation, LLC's citizenship, it "has no connection or affiliation with any of th e other defendants, any company related to these other defendants, or the facts and tra n s a c tio n s upon which the Complaint is based" (Notice Removal ¶ 5), and this contention is supported by an attached affidavit (Notice Removal ¶¶ 7 & 8, Ex. C). Hence, Defendants c o n te n d that there is no possibility that Mr. Free can establish a cause of action against R&L T ra n s p o rta tio n , LLC. Mr. Free does not address Defendants' assertions that this defendant w a s fraudulently joined. Defendants' evidence stands unrebutted, and the court finds that th e evidence establishes that R&L Transportation, LLC, was fraudulently joined.2 It, th e re f o re , is due to be dismissed. Accordingly, there is complete diversity.
Thus, it is unnecessary to resolve R&L Transportation, LLC's citizenship
IV. CONCLUSION F o r the foregoing reasons, it is ORDERED that Mr. Free's Motion to Remand (D o c . # 8) is DENIED and that Defendant R&L Transportation, LLC, is DISMISSED as a party to this case. D O N E this 19th day of June, 2009. /s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE
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